Etsy reported first-quarter revenue of $631.3 million, beating Wall Street expectations as gross merchandise sales on its marketplace climbed 5.5% year-over-year to $2.5 billion. Analysts had projected revenue of $620.9 million, according to Reuters, citing LSEG data.
Diluted earnings per share from continuing operations came in at $0.89, compared with analyst estimates of $0.62. Net income from continuing operations reached $104.7 million, against a net loss of $35.1 million in the same period a year earlier, when results included a $101.7 million asset impairment charge.
Active buyers grew sequentially for the first time in two years, the company said. GMS per active buyer reached $122 on a trailing twelve-month basis, rising year-over-year for the first time since late 2022 and marking the fourth straight quarter of sequential improvement. Mobile app GMS grew 11.2% year-over-year, with app transactions accounting for about 47% of total GMS.
Adjusted EBITDA from continuing operations was $184.7 million, representing a margin of 29.3%. Etsy repurchased about $145 million in stock during the quarter, reducing its outstanding share count by about 2.7 million shares.
“We saw encouraging signals during the first quarter that our growth priorities are taking hold,” CEO Kruti Patel Goyal said in a statement. “I have even more conviction in our focus, and confidence in our ability to execute and translate recent momentum into durable growth.”
Despite the pressure on household budgets from inflation and tariff uncertainty, CFO Lanny Baker said in comments to Reuters that demand on Etsy has remained stable regardless of shoppers’ income level. He added that direct exposure to tariffs is limited because domestic sourcing accounts for roughly 90% of what sellers on the platform use to make their goods.
AI-driven traffic has been climbing, though Baker noted it makes up only a small fraction of total activity — a low single-digit share — meaning the financial contribution remains modest for now, he told Reuters.
For the second quarter, Etsy forecast marketplace GMS of $2.48 billion to $2.53 billion, representing year-over-year growth of 3% to 5%. The company maintained its full-year adjusted EBITDA margin outlook of 28% to 30% and said it expects year-over-year GMS growth in each quarter of 2026.
Etsy closed the quarter with $1.6 billion in cash, cash equivalents, and investments. The pending sale of its Depop fashion resale platform to eBay for $1.2 billion, announced in February, is expected to close by the end of the third quarter of 2026.
