Etsy, Inc.
ETSY · NYSE
Next quarter
Consensus is $1.35 EPS for Dec 2026 across 3 estimates, ranging $1.22 to $1.42.
ETSY Sep 2026
- 46.43%
- -0.82%
- $0.84
- $1.23
- —
- $692.47M
Reported results
- $692.47M
- 72.66%
- $111.43M
- 16.09%
- $853.52M
- $7.31
Highlights
- Marketplace growth: Etsy Marketplace GMS rose 8.8% year over year to $2.65 billion, or 9.1% currency-neutral; excluding FX, growth accelerated about 190 basis points sequentially for a sixth consecutive quarter.
- Buyer and seller trends: Active buyers increased 1.0% year over year to 87.5 million, the first annual increase in two years, while active sellers grew 6.5% to 5.84 million; trailing-twelve-month GMS per buyer rose 3.9%.
- Revenue and monetisation: Revenue grew 10.9% to $692.5 million, with Marketplace revenue up 9.1% and Services up 15.0%; take rate increased 50 basis points to 26.2%, mainly on Etsy Ads improvements.
- Profitability: Adjusted EBITDA rose 14.6% to $210.4 million and margin expanded 100 basis points to 30.4%. GAAP operating income was $111.4 million, essentially flat year over year, after $33.9 million of restructuring costs.
- EPS and Depop: The supplied consensus data lists EPS of $1.23 versus $0.84 expected, a 46.4% beat. Filed diluted EPS was $7.31, including $6.31 from discontinued operations and the $839.7 million gain on Depop’s sale; diluted EPS from continuing operations was $1.00.
- Capital return and liquidity: Etsy repurchased about $394.6 million of stock, retiring approximately 5.2 million shares in the quarter. Cash, cash equivalents and investments totaled about $2.46 billion at quarter-end; on October 1 the company paid $648.6 million to settle its remaining 2019 Notes.
- Outlook: Q4 GMS guidance is $3.46–$3.52 billion, up 5–7% year over year, with an adjusted EBITDA margin of about 30%; full-year GMS growth is expected to be approximately 7%.
Analysis
Etsy’s quarter was defined by a continued recovery in its core marketplace, with growth broadening across buyers and sellers and improving monetisation. GMS increased 8.8% year over year to $2.65 billion, accelerating about 190 basis points sequentially on a currency-neutral basis; revenue rose 10.9% to $692.5 million. Revenue was up from $668.3 million in Q2, while operating income of $111.4 million was down from $125.3 million sequentially and broadly unchanged from $111.0 million a year ago. Continuing-operations net income was $113.6 million, up 8.6% year over year. Adjusted EBITDA grew faster than revenue, rising 14.6% to $210.4 million, with margin up to 30.4% from 29.4% a year ago. The supplied consensus comparison shows EPS of $1.23 versus $0.84 expected; separately, filed diluted GAAP EPS was $7.31, heavily affected by Depop’s sale, while continuing-operations diluted EPS was $1.00.
The operating indicators support management’s view that the marketplace is healthier: active buyers returned to annual growth for the first time in two years, active sellers grew 6.5%, and GMS per buyer increased 3.9%. Etsy attributed momentum to personalization, discovery and more efficient marketing, while noting some external GMS tailwinds remain. The quarter also marked the completed Depop divestiture: its $839.7 million gain lifted reported net income to $853.5 million. Etsy repurchased about $394.6 million of shares and guided to Q4 GMS growth of 5–7%, with an adjusted EBITDA margin near 30%.
Marketplace momentum
- GMS acceleration: Etsy Marketplace GMS reached $2.65 billion, up 8.8% year over year and 9.1% currency-neutral. Currency-neutral growth accelerated approximately 190 basis points from Q2, marking six straight quarters of sequential improvement.
- Broader participation: Active buyers grew 1.0% to 87.5 million, their first year-over-year increase in two years, and rose about 540,000 sequentially. Gross buyer additions increased 6.2%; active sellers grew 6.5% to 5.84 million, their fastest growth in two years.
- Spend and engagement: Trailing-twelve-month GMS per active buyer rose 3.9% to $126, with purchase frequency still modestly lower year over year. App GMS grew 10.4% and non-App GMS 7.5%; mobile represented about 47% of GMS.
- Product contribution: Etsy estimates personalization improvements alone added about two percentage points to its annualized year-over-year GMS growth rate by Q3. Buyer profiles now support personalized feeds, recommendations and marketing for four out of five active buyers.
Revenue and take rate
- Revenue growth: Revenue increased 10.9% to $692.5 million, from $624.2 million a year earlier and $668.3 million in Q2. Marketplace revenue rose 9.1% to $468.1 million, while Services revenue grew 15.0% to $224.3 million.
- Services and advertising: Advertising revenue was the principal driver of Services growth, rising on higher Etsy Ads click volume. Etsy said improved matching and ranking raised ad relevance and conversion, while better budget pacing helped sellers direct spend to valuable opportunities.
- Higher take rate: Take rate increased 50 basis points year over year to 26.2%. Etsy attributed the increase mainly to Etsy Ads enhancements and, to a lesser extent, Offsite Ads contribution associated with higher paid marketing spend.
- Marketing mix: Marketing expense increased 19.4% to $207.0 million, or 29.9% of revenue versus 27.8% a year ago. Paid GMS represented 26% of overall GMS, up from 23%; management said returns on marketing spend improved meaningfully year over year.
Margins and earnings
- Adjusted profitability: Adjusted EBITDA increased 14.6% to $210.4 million, and margin widened to 30.4% from 29.4%. Etsy said adjusted EBITDA grew faster than revenue for a second consecutive quarter.
- GAAP operating result: Operating income was $111.4 million versus $111.0 million a year ago, despite revenue growth. Total operating expenses rose 12.9% to $391.7 million, faster than revenue, including higher marketing and product development costs.
- Restructuring costs: The August restructuring reduced the Etsy Marketplace workforce by approximately 12%, or 220 employees, and was substantially complete by quarter-end. Etsy recorded $33.9 million of related costs, primarily severance and benefits; adjusted EBITDA excludes these costs.
- EPS context: The supplied consensus dataset reports EPS of $1.23 against $0.84 expected, a 46.4% beat. The filing reports diluted GAAP EPS of $7.31, including $6.31 from discontinued operations; diluted EPS from continuing operations was $1.00, compared with $0.86 a year earlier.
Depop and capital
- Divestiture: Etsy completed the Depop sale to eBay on July 30 for $1.4 billion in cash consideration. The company recognized an $839.7 million gain, contributing to total net income of $853.5 million versus $75.5 million a year earlier; Depop’s operating loss partly offset the gain.
- Cash generation: Continuing-operations operating cash flow was $242.9 million and free cash flow was $236.4 million, compared with $226.1 million and $214.3 million, respectively, in Q3 2025. Quarter-end cash, cash equivalents and short- and long-term investments totaled approximately $2.46 billion.
- Share repurchases and debt: Etsy repurchased approximately $394.6 million of stock and reduced shares outstanding by about 5.2 million during the quarter, with $2.2 billion of authorized repurchase capacity remaining. On October 1, it paid $648.6 million to settle the remaining 2019 Notes principal and conversion notices.
Fourth-quarter outlook
- Q4 expectations: Etsy forecasts GMS of $3.46–$3.52 billion, or 5–7% year-over-year growth, a take rate near 25.6%, and an adjusted EBITDA margin of about 30%.
- Full-year view: The company expects approximately 7% GMS growth and an adjusted EBITDA margin near 30% for FY2026, assuming macro conditions remain relatively consistent and foreign currency is a modest growth headwind.
- Comparison and risk: Management expects prior-year comparisons to become less favorable. The outlook is for continuing operations—the Etsy Marketplace—and assumes exchange rates remain at current spot levels.
