Etsy delivered quarterly results on Tuesday that missed expectations. In its first report since going public, the e-commerce company announced a loss of 84 cents per share on revenue of $59 million.
The loss per share was not immediately comparable to analysts' estimates for earnings of 3 cents per share. Wall Street had expected the company to report $59 million in revenue, according to a consensus estimate from Thomson Reuters.
The company's shares were down more than 18 percent in extended hours trading.
Etsy reported a net loss for the first quarter of $36.6 million, widening from about $500,000 in the year-earlier period. The shortfall was a result changes to its corporate structure, the company said.
Kenny Polcari, director of NYSE floor operations at O'Neil Securities, said investors should give Etsy another chance.
"The problem with these stocks that are brand new like this is the guidance is off and then investors buy into it and then they hear those numbers and they bail right out," he said in an interview on CNBC's "Closing Bell" on Tuesday. "I think it's an overreaction. But I think you have to give it an opportunity. I think it is cutting edge."
The company said gross profit grew faster than revenue because of "leverage in the cost of revenue for employee-related and hosting and bandwidth costs."
Etsy also reported total operating expenses were up $42.7 million in the first quarter, a rise of 72.6 percent year over year. This came from marketing, higher employee-related expenses and product development expenses.
"Our recent IPO is a milestone in our mission to reimagine commerce in ways that build a more fulfilling and lasting world," said CEO Chad Dickerson, in a press release. "At the end of the first quarter of 2015, the Etsy community included more than 1.4 million active sellers and 20.8 million active buyers. ... We will continue to concentrate on creating long-term value for Etsy and our community, which we believe will result in sustainable long-term returns for our investors."