Etsy Inc., the leading online marketplace renowned for connecting independent sellers with consumers seeking unique and handmade goods, has released its annual report for the fiscal year 2025. The results reflect a year marked by strategic transitions, challenges in consumer spending, and a focus on enhancing marketplace services.

1. Financial Performance Overview

Etsy's total revenue for 2025 reached $2.88 billion, representing a modest increase compared to $2.80 billion in 2024. However, this growth masked a decline in marketplace revenue and reflected significant changes in the company's structure due to the sale of non-core businesses.

Marketplace and Services Revenue

In a notable shift, services revenue surged by $62.2 million, primarily driven by increased advertising revenue from Etsy Ads, which saw a higher average price per click. In contrast, marketplace revenue dipped by $47.1 million, largely due to the sale of Reverb Holdings, with a further $16.8 million decline in transaction fee revenue.

Revenue by Products or Services in 2025

Gross Merchandise Sales

Gross merchandise sales (GMS) fell by $670.1 million to approximately $11.92 billion. This decline has been attributed to a challenging macroeconomic environment affecting consumer discretionary spending, although improved marketing efforts in the latter half of the year led to some recovery, particularly in Q4.

2. Revenue by Geography

Etsy’s revenue distribution across various geographies in 2025 indicates a mixed performance:

United States: $1.46 billion (no significant change from 2024)

United Kingdom: $296.1 million (down 7.71% from 2024)

All Other Regions: $1.12 billion (up 9.97% from 2024)

Revenue by Geography in 2025

3. Cost and Operating Expenses

Etsy's operational costs reflected both challenges and strategic measures:

Total Costs and Expenses rose to $2.61 billion, up from $2.42 billion in 2024. This increase was partly due to higher costs associated with refunds and cloud services.

Marketing expenses increased significantly, aligning with the company's efforts to enhance visibility and engagement in its advertising services.

The company recorded a goodwill impairment charge of $101.7 million related to Reverb, impacting overall profitability.

4. Cash Flow and Liquidity

Etsy showcased a healthy liquidity position, with cash and cash equivalents totaling $1.6 billion as of December 31, 2025. The company generated $693.4 million in operating cash flow, bolstered by positive operating profit despite the market challenges.

Stock Repurchase Program

In a strategic move to bolster shareholder value, Etsy's Board of Directors authorized a stock repurchase program totaling $750 million in December 2025, adding to the previously approved $1 billion program. By year-end, $973.2 million remained available for repurchase.

5. Future Outlook

Looking ahead, Etsy is poised to navigate the evolving e-commerce landscape while focusing on its core marketplace. The anticipated sale of Depop for $1.2 billion in cash, pending regulatory approval, is expected to provide further financial flexibility for investments and share repurchases.

Leadership Transition

Etsy is also undergoing significant leadership changes, with Kruti Patel Goyal set to become the new CEO effective January 1, 2026, as Josh Silverman transitions to Executive Chair. This leadership evolution comes at a crucial time as the company seeks to execute its growth strategy amid changing market dynamics.

6. Conclusion

Etsy Inc. faced various challenges in 2025, including a decline in GMS and active buyers, largely due to macroeconomic factors. Nevertheless, strategic sales of non-core businesses and a focus on enhancing marketplace services have contributed to a diversified revenue stream and a solid liquidity position. As Etsy continues to invest in marketing and product development, it aims to strengthen its marketplace and drive future growth in the increasingly competitive e-commerce environment.

Income Statement of Etsy Inc

	Feb 2025	Feb 2026
Net Income	303.2M	162.9M
Profit	303.2M	162.9M
Net Income Continuing	303.2M	162.9M
Income Tax Expense	107.4M	83.68M
Pretax Income	410.7M	246.6M
Non-operating Income	30.56M	-19.54M
Operating Income	380.2M	266.2M
Revenue	2.80B	2.88B
Costs and Expenses	2.42B	2.61B
Cost of Revenue	774.5M	817.8M
Operating Expenses	1.65B	1.79B
Impairment Expense	0	101.7M
Research & Development	443.0M	450.1M
Selling, General & Administrative	1.21B	1.24B

Balance Sheet of Etsy Inc

	Feb 2025	Feb 2026
Total Assets	2.41B	2.82B
Total Current Assets	1.32B	1.96B
Cash and Equivalents	811.1M	1.39B
Short-term Investments	228.3M	224.0M
Accounts Receivable	8.70M	8.69M
Prepaid Expenses	89.93M	127.3M
Other Current Assets	189.5M	205.0M
Total Non-current Assets	1.09B	866.2M
Intangible Assets	550.9M	335.4M
Long-term Investments	111.7M	134.3M
Non-current Deferred Tax Assets	145.6M	119.3M
Net PP&E	236.7M	229.1M
Other Non-current Assets	45.04M	47.96M
Total Liabilities and Equity	2.41B	2.82B
Total Liabilities	3.17B	3.92B
Total Current Liabilities	665.1M	1.36B
Accounts Payable and Accrued Liabilities	400.9M	421.8M
Current Debt	6.14M	649.0M
Current Deferred Revenue	19.21M	27.04M
Other Current Liabilities	238.8M	265.7M
Total Non-current Liabilities	2.51B	2.56B
Long-term Debt	2.28B	2.33B
Non-current Deferred Tax Liabilities	7.95M	8.80M
Other Non-current Liabilities	215.4M	219.6M
Total Equity and Non-controlling Interests	-758.8M	-1.09B
Total Equity	-758.8M	-1.09B

Cash Flow Statement of Etsy Inc

	Feb 2025	Feb 2026
Net Change in Cash	-103.1M	593.1M
Effect of Exchange Rate Changes	-15.34M	37.56M
Net Cash from Operating Activities	752.4M	693.4M
Operating Profit	303.2M	162.9M
Adjustment to Operating Profit	449.1M	530.4M
Net Cash from Investing Activities	-53.10M	32.08M
Business & Interest in Affiliates	0	-100.4M
Investments	9.60M	13.74M
Productive Assets	43.49M	54.66M
Net Cash from Financing Activities	-787.1M	-169.8M
Debt	-6.09M	693.8M
Equity Issuance/Repurchase	-719.9M	-759.2M
Other Financing Activities	-61.08M	-104.4M

Original filing: sec.gov