Etsy Sells Depop, Pushes AI and Mobile to Restart Growth

Core Insights - Etsy is significantly enhancing its engagement with the Prompt Economy, focusing on artificial intelligence (AI) and mobile-first strategies for sustainable growth [2][3][5] Financial Performance - In Q4, Etsy reported a consolidated gross merchandise sales (GMS) of $3.6 billion, reflecting a year-over-year increase of 2.4% [14] - Active buyers totaled 86.5 million, remaining largely flat sequentially, while consolidated revenue reached a record $882 million, up 6.6% year over year [14] - For Q1 2026, Etsy anticipates GMS between $2.38 billion and $2.43 billion, indicating a year-over-year growth of 2% to 4% [15] AI and Technology Integration - Etsy is leveraging AI to enhance product discovery rather than replacing its marketplace model, with agentic traffic increasing approximately 15 times year over year [3][4] - The company has expanded integrations with Microsoft Copilot and Google, and established an agentic payments agreement with Stripe, focusing on AI-generated recommendations leading to Etsy listings [5] User Engagement and Mobile Strategy - The app's share of GMS reached 46% in Q4, up five percentage points since the end of 2023, with app users generating about 40% higher lifetime value than non-app users [11] - Etsy added 6.8 million new buyers and reactivated 10.4 million lapsed buyers in Q4, marking the first year-over-year increase in gross additions in over two years [12] Market Trends and Buyer Behavior - U.S. buyer GMS grew 0.3% year over year, the first positive comparison in four years, while trailing 12-month GMS per active buyer stabilized at $121 [12] - Personalized categories, particularly in Home and Living, showed growth, driven by higher-ticket subcategories [16]