Etsy, Inc. Reports Third Quarter 2025 Results

Core Insights - Etsy's third quarter consolidated results exceeded expectations across key financial metrics, with Gross Merchandise Sales (GMS) for Etsy and Depop showing year-over-year growth [2][5] - The Etsy marketplace's GMS improved sequentially, driven by customer-centric strategies and enhanced AI-powered features [2][5] - Depop continued to gain traction in the U.S. resale clothing market, contributing to overall GMS growth [2][5] Financial Performance - Third quarter consolidated GMS was $2.7 billion, up 0.9% year-over-year excluding Reverb, with Etsy marketplace GMS improving approximately 300 basis points sequentially [5][7] - Revenue for the third quarter was $678 million, reflecting a 2.4% increase year-over-year, while the revenue take rate increased to 24.9% [6][7] - Adjusted EBITDA was $172 million, representing a consolidated margin of 25.4%, with Etsy marketplace margin just shy of 30% [5][7] User Metrics - Active sellers totaled 5.5 million, a 10.9% year-over-year decrease, while active buyers were 86.6 million, down 5.0% year-over-year [7][8] - GMS per active buyer on a trailing twelve-month basis was $121, down 1.6% year-over-year, but improved sequentially [7][8] - Depop saw significant growth with active sellers increasing by 40.8% year-over-year to 3.0 million and active buyers up 38.8% to 6.6 million [7][8] Strategic Initiatives - Etsy signed a partnership with OpenAI to allow U.S. ChatGPT users to discover and purchase items directly from Etsy sellers [7] - Key initiatives included improving search ranking models, launching new seller tools, and enhancing the Etsy App for a more personalized shopping experience [7][8] - Depop launched its largest brand campaign in September and introduced a new in-app styling feature [7][8] Fourth Quarter Guidance - For the fourth quarter of 2025, Etsy expects GMS to be between $3.5 billion and $3.65 billion, with an adjusted EBITDA margin around 24% [10][11] - The guidance reflects stable profitability for the Etsy marketplace and increased brand marketing investment at Depop [10][11]