Etsy Inc. Reports Strong Q3 2025 Results Amid Strategic Growth Initiatives
Etsy, Inc. (NYSE: ETSY), the well-known online marketplace connecting millions of buyers and sellers, released its financial results for the third quarter of 2025 on October 29, 2025. The results showcased a blend of resilience and strategic focus, indicating a positive trajectory for both Etsy and its subsidiary, Depop.
1. Key Financial Highlights
Chief Executive Officer Josh Silverman expressed optimism about the results, stating, "Etsy's third quarter consolidated results surpassed expectations across all three of our key financial metrics — and GMS for Etsy and Depop combined returned to year-over-year growth."
Gross Merchandise Sales (GMS)
- Consolidated GMS: $2,724.7 million, reflecting a modest 0.9% increase year-over-year and a 0.1% increase on a currency-neutral basis. Notably, this figure represents a decline of 6.5% year-over-year when including the GMS from Reverb, which was sold earlier this year.
- Etsy Marketplace GMS: $2,432.6 million, down 2.4% year-over-year and down 3.2% on a currency-neutral basis.
- Depop GMS: $292.1 million, a robust increase of 39.4% year-over-year, driven by enhanced user engagement and marketing initiatives.
Revenue and Profitability
- Total Revenue: $678.0 million, up 6.1% year-over-year, excluding Reverb from the previous year, and up 2.4% on an as-reported basis.
- Take Rate: The take rate increased to 24.9%, primarily supported by strong performance in on-site advertisements for both Etsy and Depop.
- Net Income: $75.5 million, a significant increase from $57.4 million in the prior year, resulting in a net income margin of 11.1%.
- Non-GAAP Adjusted EBITDA: Recorded at $171.9 million, with a margin of approximately 25.4%.
Etsy ended the quarter with a healthy cash position, boasting $1.6 billion in cash and cash equivalents, along with short- and long-term investments. The company also executed a stock repurchase program, buying back approximately $120 million worth of its shares during the quarter.
2. Marketplace Performance
Etsy Marketplace
Etsy's marketplace continues to evolve with customer-centric initiatives:
- Growth in Mobile Transactions: The GMS transacted through the Etsy App grew by 5% year-over-year, now accounting for about 46% of total GMS.
- Strategic Partnerships: A notable partnership with OpenAI was established, allowing users of ChatGPT to discover unique items from U.S. sellers directly within the interface, capitalizing on the growing trend of AI-driven shopping experiences.
- New Seller Tools and App Enhancements: Etsy launched several tools aimed at improving seller efficiency and user engagement, including AI-powered features to assist sellers in optimizing their listings.
Despite a decrease in active sellers (down 10.9% year-over-year), Etsy reported a modest sequential increase in sellers, with active buyers totaling 86.6 million, reflecting a 5% decrease year-over-year.
Depop Marketplace
Depop, known for its resale clothing focus, exhibited impressive growth:
- User Engagement: Active sellers grew by 40.8% year-over-year to 3.0 million, while active buyers increased by 38.8% to 6.6 million.
- Marketing Campaigns: The launch of Depop's largest-ever brand campaign in September helped elevate brand awareness in the U.S. market, fostering a surge in new user sign-ups.
Financial Summary
The third quarter financial summary underscores the following:
| Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | Year-Over-Year Change |
|---|---|---|---|
| GMS | $2,724,665 | $2,915,256 | (6.5%) |
| Revenue | $678,026 | $662,410 | 2.4% |
| Net Income | $75,503 | $57,366 | 31.6% |
| Adjusted EBITDA | $171,928 | $183,587 | (6.4%) |
3. Future Outlook
For the fourth quarter of 2025, Etsy has provided guidance anticipating consolidated GMS in the range of $3.5 billion to $3.65 billion, alongside a take rate near 24.5%. The company plans to continue investing in brand marketing, particularly for Depop, which may compress margins but is seen as a strategic move to capture growth in the apparel resale market.
Chief Financial Officer Lanny Baker remarked, "Better than expected performance at both Etsy and Depop enabled us to exceed the top end of our consolidated GMS guidance range."
As Etsy navigates market challenges and competition, its focus on innovation, strategic partnerships, and enhanced user experiences positions the company well for future growth.
