Key Highlights
- First quarter revenue reached $631.3M, surpassing the $621M analyst forecast
- Gross merchandise sales expanded 5.5% YoY to $2.5B — marking the first expansion in more than two years
- Diluted EPS from continuing operations reached $0.89, significantly exceeding the $0.62 forecast
- Active buyers increased sequentially for the first time in more than two years
- ETSY shares climbed approximately 11% after the earnings release
Etsy delivered first quarter 2026 revenue of $631.3 million, exceeding the analyst consensus forecast of approximately $621 million. The strong performance stemmed from renewed expansion in gross merchandise sales, which climbed 5.5% year-over-year to $2.5 billion across the Etsy marketplace.
This GMS performance represents a significant milestone, ending a prolonged period of contraction. The previous quarter registered a 0.5% decline, making the current period the first time year-over-year GMS has posted positive growth in more than two years.
Diluted earnings per share from continuing operations totaled $0.89, meaningfully surpassing the $0.62 analyst forecast. Net income from continuing operations reached $104.7 million, representing a substantial reversal from the net loss of $35.1 million recorded in Q1 2025, which included a $101.7 million asset impairment charge.
Adjusted EBITDA from continuing operations totaled $184.7 million, yielding a margin of 29.3%. The company repurchased approximately $145 million worth of stock during the quarter, reducing its outstanding share count by roughly 2.7 million.
CEO Kruti Patel Goyal characterized the quarter as demonstrating “encouraging signals” that the company’s growth initiatives are gaining traction, stating she has “even more conviction” in Etsy’s capacity to transform recent positive momentum into sustained growth.
Customer Engagement Metrics Strengthen
Active buyers expanded sequentially for the first time in more than two years. GMS per active buyer hit $122 on a trailing twelve-month basis — rising year-over-year for the first time since late 2022 and marking the fourth consecutive quarter of sequential gains.
Mobile application GMS expanded 11.2% year-over-year, with app-based transactions comprising approximately 47% of total GMS.
CFO Lanny Baker informed Reuters that consumer demand on Etsy has remained consistent across various income segments, despite inflation pressures and tariff uncertainty impacting household spending power. He emphasized that direct tariff exposure remains minimal, given that approximately 90% of materials sellers utilize for production are procured domestically.
AI-generated traffic continues to expand on the platform, though Baker indicated it currently represents only a low single-digit percentage of overall activity, meaning the financial impact remains limited at this stage.
Forward Guidance and Depop Transaction
For the second quarter of 2026, Etsy projected marketplace GMS between $2.48 billion and $2.53 billion, indicating 3% to 5% year-over-year expansion. The company anticipates a take rate of roughly 25.7% and an adjusted EBITDA margin ranging from 27% to 29%.
For the complete year, Etsy now forecasts low single-digit GMS growth for the Etsy marketplace — representing an upgrade from earlier guidance — while reaffirming its full-year adjusted EBITDA margin projection of 28% to 30%.
The company indicated it anticipates year-over-year GMS expansion throughout each quarter of 2026.
Etsy concluded Q1 holding $1.6 billion in cash, cash equivalents, and investments.
The reported results exclude Depop, which Etsy reached an agreement to sell to eBay for $1.2 billion in February. The transaction is anticipated to finalize by the conclusion of Q3 2026.
