Key Highlights
- First-quarter revenue reached $631.3M, surpassing Wall Street’s $621M projection
- Marketplace sales climbed 5.5% year-over-year to $2.5B — marking the first annual increase in more than two years
- Earnings per share from continuing operations totaled $0.89, crushing the $0.62 consensus estimate
- The platform’s active buyer count increased sequentially for the first time since early 2024
- Shares of ETSY climbed approximately 11% in response to the quarterly report
The online marketplace operator delivered first-quarter 2026 revenue of $631.3 million, exceeding analyst expectations clustered around $621 million. The upside surprise stemmed primarily from renewed expansion in gross merchandise sales, which advanced 5.5% from the year-ago period to reach $2.5 billion across the Etsy platform.
This GMS performance is particularly noteworthy as it ends a prolonged period of contraction. The fourth quarter of 2025 registered a 0.5% year-over-year decline, making the latest quarter the first to show positive annual comparison in more than 24 months.
Earnings per share from continuing operations landed at $0.89, significantly exceeding the Street’s $0.62 forecast. Income from continuing operations totaled $104.7 million, a dramatic reversal from the $35.1 million loss reported in the first quarter of 2025, when results were impacted by a $101.7 million asset impairment charge.
Adjusted EBITDA from continuing operations reached $184.7 million, translating to a 29.3% margin. The company executed approximately $145 million in share repurchases throughout the quarter, reducing the outstanding share count by roughly 2.7 million.
Chief Executive Kruti Patel Goyal characterized the quarter as displaying “encouraging signals” that the company’s growth initiatives are gaining traction, expressing heightened confidence in converting recent progress into sustained expansion.
User Engagement Metrics Show Improvement
The platform recorded sequential growth in active buyers for the first time in two years. Spending per active buyer hit $122 on a twelve-month trailing basis — the first year-over-year gain since the fourth quarter of 2022 and the fourth consecutive quarter showing sequential advancement.
Mobile application GMS expanded 11.2% compared to the prior year, with app-based transactions representing approximately 47% of overall GMS.
Chief Financial Officer Lanny Baker shared with Reuters that consumer demand on Etsy has remained consistent across different income segments, despite inflation pressures and tariff-related uncertainty affecting consumer spending. He emphasized that the company faces minimal direct tariff risk, given that roughly 90% of materials sellers utilize for product creation are domestically sourced.
Traffic originating from artificial intelligence channels is expanding on the marketplace, though Baker noted it currently represents only a low single-digit percentage of total activity, meaning the financial impact remains limited at this stage.
Forward Guidance and Depop Transaction
For the second quarter of 2026, the company projected marketplace GMS in the range of $2.48 billion to $2.53 billion, implying 3% to 5% year-over-year expansion. Management anticipates a take rate of roughly 25.7% and an adjusted EBITDA margin between 27% and 29%.
For the complete 2026 fiscal year, Etsy now forecasts low single-digit GMS growth for its core marketplace — representing an upgrade from previous guidance — while reaffirming its full-year adjusted EBITDA margin target of 28% to 30%.
Management indicated it expects positive year-over-year GMS growth in every quarter throughout 2026.
Etsy ended the first quarter holding $1.6 billion in cash, cash equivalents, and short-term investments.
These financial results exclude Depop, which the company agreed to divest to eBay for $1.2 billion in February. The transaction is anticipated to finalize by the conclusion of the third quarter of 2026.
