Etsy, Inc. (NYSE: ETSY), the well-known online marketplace connecting creative buyers and sellers, announced its financial results for the fourth quarter and full year ending December 31, 2025. The results reflect a pivotal year for the company, marked by strategic decisions and a focus on sustainable growth.

"Our clear strategic focus and solid execution are driving progress on the journey to bring the Etsy marketplace back to sustained growth," said Kruti Patel Goyal, Etsy's President and CEO. Goyal emphasized the company's dedication to enhancing connections between buyers and sellers, thus seizing opportunities for increased engagement and market share.

Fourth Quarter 2025 Highlights

Etsy's fourth-quarter performance showcased a mix of growth and challenges, particularly due to the sale of Reverb earlier in the year.

Gross Merchandise Sales (GMS): $3.59 billion, an increase of 2.4% year-over-year, but down 3.8% when including Reverb's prior year figures.

Revenue: $881.6 million, reflecting a 6.6% year-over-year increase when excluding Reverb, and a 3.5% increase on an as-reported basis.

Take Rate: The revenue take rate rose to 24.5%, driven mainly by strong performance in consolidated on-site advertising.

Net Income: $110.7 million, down from $129.9 million year-over-year, attributed to a lack of comparable foreign exchange gains that had benefitted the previous year.

Non-GAAP Adjusted EBITDA: $222.5 million, translating to a margin of approximately 25.2%.

Etsy ended the quarter with a robust cash position of $1.8 billion in cash and cash equivalents, signaling a strong liquidity position.

Etsy Marketplace Performance

The Etsy marketplace demonstrated resilience amidst various challenges:

GMS: Reached $3.29 billion, showing a slight increase of 0.1% year-over-year.

Active Sellers: Totaled 5.6 million, reflecting a 1.5% decrease year-over-year but a positive sequential improvement.

Active Buyers: Counted 86.5 million, down 3.4% year-over-year, although there was sequential growth in U.S. buyers.

New Buyers: Etsy acquired 6.8 million new buyers during the quarter, highlighting effective marketing initiatives.

Goyal noted that the company's marketing strategies, including curated gift ideas and seasonal promotions, contributed positively to the buyer engagement metrics, particularly in the Home and Living category.

Depop Marketplace Performance

Etsy's fashion resale platform, Depop, showcased remarkable growth:

GMS: Increased by a staggering 37.2% year-over-year to $299.7 million, driven by strong momentum in the U.S. market.

Active Sellers: Rose to 3.2 million, a 41.1% increase from the previous year.

Active Buyers: Increased to 7.0 million, marking a 37.7% rise.

The success of Depop was attributed to effective marketing campaigns and enhancements in product recommendations and search capabilities.

Strategic Moves and Future Guidance

In a significant strategic move, Etsy announced its plans to sell Depop to eBay for $1.2 billion in cash, expected to close in the second quarter of 2026. This transaction will classify Depop's results as discontinued operations beginning in the first quarter of 2026, allowing Etsy to focus on its core marketplace.

Looking ahead to 2026, Etsy provided guidance for the first quarter, projecting GMS between $2.38 billion and $2.43 billion, with expectations of slight year-over-year growth throughout the year. The anticipated Adjusted EBITDA margin is expected to hover around 28-30%, reflecting confidence in the ongoing stabilization of customer metrics.

Conclusion

Etsy's fourth-quarter results underline a company in transition, leveraging strategic sales and marketing initiatives to foster growth. As it prepares for the sale of Depop and focuses on its core marketplace, the company aims for a return to sustained growth, driven by a commitment to enhancing the unique shopping experience it offers to buyers and sellers alike.

Original press release