Etsy Inc. Beats Revenue Estimates as Marketplace Growth Improves
Etsy Inc. reported first-quarter results that exceeded revenue expectations, supported by strengthening marketplace trends. The company also recorded its first year-over-year growth in gross merchandise sales (GMS) in more than two years, signaling a potential turnaround in performance.
Strong Revenue Performance Despite Slight EPS Miss
Etsy posted $631.3 million in revenue, surpassing analyst expectations of $621.1 million by 1.6%. However, adjusted earnings per share came in slightly below forecasts at $0.60 versus $0.61 expected.
Marketplace revenue increased 7.6% year-over-year, contributing to overall growth. Meanwhile, gross merchandise sales rose 5.5% YoY to $2.5 billion, a notable improvement compared to the 0.5% decline recorded in Q4 2025.
Stock Rises as Investors React to Growth Signals
Following the earnings release, Etsy shares climbed 6.3%, reflecting growing investor confidence in the company’s improving fundamentals. The company also reported adjusted EBITDA of $185 million, with a solid 29.3% margin.
Customer Trends Show Early Signs of Recovery
Management highlighted encouraging shifts in customer behavior, pointing to progress in its strategic initiatives. Notably, active buyers increased sequentially for the first time in two years, alongside year-over-year growth in new buyers, active sellers, and GMS per buyer.
Outlook for Q2 2026 Points to Continued Momentum
For the second quarter of 2026, Etsy expects gross merchandise sales between $2.48 billion and $2.53 billion, representing 3%–5% YoY growth. The midpoint estimate of $2.505 billion suggests continued positive momentum.
The company also projects a take rate of approximately 25.7% and an adjusted EBITDA margin between 27% and 29%.
Full-Year 2026 Guidance Improves
Looking ahead, Etsy now forecasts low single-digit GMS growth for the full year, an upgrade from its previous outlook. The company maintained its adjusted EBITDA margin guidance of 28%–30%, signaling confidence in profitability.
Depop Sale to eBay Excluded from Results
The reported figures exclude Depop, which Etsy agreed to sell to eBay for $1.2 billion in February. The transaction is expected to close by the end of the third quarter of 2026.
