Etsy (NasdaqGS:ETSY) Q4 2025 Earnings call February 19, 2026 08:30 AM ET Company ParticipantsBryan Smilek - VP of Internet Equity ResearchDeb Wasser - VP of Investor RelationsJason Helfstein - Managing Director and Head of Internet ResearchKruti Patel Goyal - CEOLanny Baker - CFOConference Call ParticipantsDeepak Mathivanan - Senior Internet Research AnalystJohn Colantuoni - Equity Research AnalystKen Gawrelski - Managing Director and Senior Internet AnalystMichael Morton - Senior Research AnalystRick Patel ...

Financial Data and Key Metrics Changes - In 2025, Gross Merchandise Volume (GMV) increased by 29%, reaching $378 billion, while revenue grew by 30% to $11.5 billion, accelerating from 2024's growth of 26% [9][38] - Q4 marked the first quarter with revenue exceeding $3 billion, surpassing total revenue for the entire year of 2020 [10] - Free cash flow for 2025 exceeded $2 billion, achieving a free cash flow margin of 17% [45][46] Business Line Data and Key Metrics Changes - Revenue from Merchant Solutions grew by 35%, driven by strong GMV and increased penetration of Shopify Payments, with $84 billion of GMV processed on Shopify Payments in Q4 [39] - Subscription Solutions revenue increased by 17%, with Monthly Recurring Revenue (MRR) growing by 15% year-over-year [40] - Offline channel revenue grew by 27% to $748 million, while B2B GMV surged by 84% in Q4 and 96% for the year [11][12] Market Data and Key Metrics Changes - North America saw a revenue increase of 28%, now powering over 14% of the U.S. e-commerce market [10] - International revenue grew by 36% year-over-year, with nearly half of the merchant base located outside North America [11] - European merchants experienced a 45% increase in Q4 GMV, indicating strong growth in that region [37] Company Strategy and Development Direction - The company aims to leverage AI to enhance commerce experiences, focusing on creating a new normal in the AI shopping era [5][6] - The Universal Commerce Protocol (UCP) was co-developed with Google to standardize AI shopping experiences, allowing merchants to sell on major AI platforms [7][19] - The strategy includes expanding global reach, with Shopify Payments now available in 60 new countries and the introduction of cryptocurrency options [25] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges faced by merchants in 2025, including tariffs and geopolitical changes, and emphasized the company's role in helping them adapt [32] - The outlook for Q1 2026 anticipates revenue growth in the low 30s year-over-year, driven by robust growth in payments and continued international expansion [47] - Management expressed confidence in the long-term value of the business, supported by a strong balance sheet and a share repurchase program of up to $2 billion [46] Other Important Information - The company reported a gross profit growth of 25% in Q4, with operating expenses improving to 29% of revenue [41][42] - The company has achieved 10 consecutive quarters of double-digit free cash flow margin, reflecting strong operational efficiency [46] Q&A Session Summary Question: Changes in Shopify's ability to monetize transactions through AI surfaces - Management clarified that transactions through AI surfaces will still utilize Shopify's checkout, ensuring consistent monetization for merchants [51][52] Question: Key milestones for agentic commerce adoption - Management noted that orders from AI searches have increased by 15x since January 2025, indicating early adoption and the potential for significant growth [59][60] Question: Economics and competitive dynamics of agentic commerce - Management reiterated that the economics for merchants remain the same regardless of the sales surface, emphasizing the importance of maintaining a reliable backend for transactions [64][66]

Financial Data and Key Metrics Changes - In 2025, GMV increased by 29%, reaching $378 billion, while revenue grew by 30% to $11.5 billion, accelerating from 2024's growth of 26% [9] - Q4 marked the first-ever quarter with revenue exceeding $3 billion, surpassing total revenue for the entire year of 2020 [10] - Free cash flow for 2025 exceeded $2 billion, achieving a free cash flow margin of 17% [46] Business Line Data and Key Metrics Changes - Revenue from Merchant Solutions grew by 35%, driven by strong GMV and increased penetration of Shopify Payments, with $84 billion of GMV processed on Shopify Payments in Q4 [39] - Subscription Solutions revenue increased by 17%, supported by a larger percentage of subscriptions from higher-priced plans [39] - Offline channel revenue grew by 27% to $748 million, while B2B GMV surged by 84% in Q4 and 96% for the year [11][37] Market Data and Key Metrics Changes - North America saw a revenue increase of 28%, now powering over 14% of the U.S. e-commerce market [10] - International revenue grew by 36% year-over-year, with nearly half of the merchant base located outside North America [11] - European merchants achieved a Q4 GMV growth of 45%, or 35% in constant currency [36] Company Strategy and Development Direction - The company aims to leverage AI to enhance commerce experiences, focusing on selling everywhere and operating smarter [13][27] - The Universal Commerce Protocol (UCP) was co-developed with Google to standardize AI shopping experiences [18] - The strategy includes expanding into offline retail and enhancing the Shop App for better consumer discovery [20][21] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges faced by merchants in 2025, including tariffs and geopolitical changes, and emphasized the company's role in helping them adapt [32] - The outlook for Q1 2026 anticipates revenue growth in the low 30s year-over-year, driven by robust growth in payments and international expansion [48] - Management expressed confidence in the long-term value of the business, supported by a strong balance sheet and a share repurchase program of up to $2 billion [47] Other Important Information - The company reported a gross profit growth of 25% in Q4, with a gross margin of 36.8% for Merchant Solutions [41] - Operating expenses for Q4 were $1 billion, or 29% of revenue, reflecting a 3-point improvement over 2024 levels [42] - The company has been investing in AI tools to enhance merchant operations, with the Sidekick AI assistant generating significant automations and task lists [28][29] Q&A Session Summary Question: Changes in Shopify's ability to monetize transactions through AI surfaces - Management clarified that transactions through AI surfaces will still utilize Shopify's checkout, ensuring consistent monetization for merchants [54][56] Question: Key milestones for accelerating adoption of agentic commerce - Management highlighted the importance of building products that become the standard across agentic applications, emphasizing the need for continuous improvement and merchant engagement [63] Question: Economics and competitive dynamics of agentic commerce - Management reiterated that the economics for Shopify merchants remain the same regardless of the sales channel, with a focus on ensuring a seamless experience across all platforms [66][68]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The global e-commerce market continues to grow but at a stabilizing rate, with emerging markets (India, Southeast Asia, Latin America) becoming the main growth drivers [5] - Social e-commerce and AI technology are reshaping consumer experiences, with platforms like TikTok Shop promoting "community-driven consumption" [5] - A trend towards rational consumption is emerging, with consumers focusing more on cost-effectiveness, making alternative products (Dupe) the new norm [5] - Cross-border e-commerce faces regulatory and tariff challenges, with platforms like SHEIN and Temu accelerating localization and compliance transformations [5] - Generative AI and AI customer service enhance personalized shopping experiences, becoming new engines for e-commerce growth [5] Summary by Sections Research Background Assessment - The research is conducted by transcosmos, covering e-commerce market data from 30 countries and regions globally [3] - The report primarily focuses on data from 2024, with some forecasts extending to 2034, ensuring high timeliness and forward-looking analysis [3] Scope and Boundaries Confirmation - The report covers B2C e-commerce, including physical goods, services, cross-border e-commerce, social e-commerce, live-streaming e-commerce, and AI applications [4] - The geographical market includes 30 countries and regions, segmented into Asia-Pacific, North America, Latin America, Europe, and the Middle East & Africa [4] Key Data Capture and Presentation - The global B2C e-commerce market is projected to reach approximately $7.5 trillion in 2024, with a year-on-year growth of 11.5%, and is expected to grow to $15.57 trillion by 2034, with a CAGR of 7.6% [6][7] - The Asia-Pacific region holds a 52% share of the global e-commerce market, with emerging markets like India, Mexico, and Vietnam showing leading growth rates [6][9] - The social e-commerce market is expected to reach $683.9 billion in 2024, with China accounting for 76% of this market [6][9] - The cross-border e-commerce market is estimated at approximately $1.5 trillion, with significant growth in markets like Singapore and Indonesia [6][7]

鞭牛士 文章的开始我们先来思考一个问题，要成为一个盈利的跨境商家，需要满足什么条件？ 在过去很长一段时间里，这个问题的答案是一长串令人望而生畏的清单：你需要精通外语；你需要懂得复杂的物流；你还需要一支庞大的运营团队，来应 对不同国家、不同电商平台繁琐的规则和素材制作。 除此之外，你还需要具备极强的前瞻性，在夏天就要预判大洋彼岸半年后的冬天会流行什么颜色的羽绒服。 这些技术或者人力门槛，在内贸与外贸之间筑起了一道"叹息之墙"。数据显示，中国内贸电商卖家数量超过一千万，而真正活跃的跨境商家仅有一百多 万，两者相差十倍。 然而，阿里1688近日发布的AI智能体遨虾（海外名AlphaShop），似乎正在试图推倒这堵墙。 官方宣称该智能体能够做到用户只需发起对话，或上传产品图片、输入商品链接，即可一键启动从市场调研到工厂对接的全流程。 除下单和付款需用户确认外，其余环节均可由AI自动完成。 带着"遨虾究竟是营销噱头还是真生产力"以及"如何跨越复杂的跨境链路"等好奇，我们与1688遨虾相关产品负责人进行了交流。 遨虾来消除不确定性 跨境生意最难的是什么？是"时空错位"带来的极高不确定性。 在国内做电商，抖音上哪个款式火了 ...

Core Insights - Black Friday in India has evolved into a major shopping event, characterized by significant discounts and a surge in consumer engagement, transforming it into a spectacle rather than just a sale [2][30] - E-commerce platforms are leveraging the momentum from Diwali sales, with a record Gross Merchandise Value (GMV) of Rs 1.24 lakh crore, to boost their earnings during Black Friday [3][30] - The event has seen a 25% annual increase in demand for fashion items, particularly driven by consumers from Tier 2 and Tier 3 cities [6][30] E-commerce Trends - Major players like Amazon, Flipkart, Myntra, Nykaa, and Tata Cliq are leading the Black Friday trend in India, launching special deals days in advance [7][30] - Amazon's Black Friday Sale, set to go live on November 28, offers discounts of up to 80% along with cashback and credit card offers, showcasing a strong collaboration with sellers and brands [8][30] - Nykaa's 'Pink Friday Sale' offers discounts of up to 60% on beauty products and up to 80% on fashion items, reflecting a significant growth in customer acquisition and GMV [11][12][30] Marketing Strategies - Retailers are employing extensive pre-sale marketing strategies, including influencer collaborations and digital teasers, to create buzz around Black Friday [13][15][30] - Myntra's marketing approach includes performance-led campaigns and influencer-driven content to enhance customer engagement and purchase intent [16][30] - Brands are utilizing celebrity endorsements and influencer hype to attract consumers, with Nykaa partnering with notable figures for its campaigns [14][30] Retail Experience - Shopping malls are preparing for increased footfall during Black Friday, enhancing the shopping experience with festive decor and extended hours [20][24][30] - Malls are implementing pre-sale strategies to build anticipation, including loyalty member updates and immersive digital content [22][24][30] - The event is expected to deepen customer loyalty and enhance tenant performance, with a focus on premium products and family-oriented outings [25][26][30] Consumer Behavior - Black Friday has become a highly anticipated shopping week in India, with consumers planning big-ticket purchases and seeking attractive deals across various categories [18][31][30] - The ongoing wedding season and early winter have spurred demand for premium and luxury items, indicating a shift in consumer preferences [28][31]

Financial Data and Key Metrics Changes - Consolidated GMS for the third quarter was $2.72 billion, exceeding guidance, with a year-over-year decline of 2.4% for Etsy Marketplace GMS [22][23] - Consolidated revenue grew 6.1% year-over-year to $678 million, with adjusted EBITDA at $172 million, representing a margin of 25.4% [23][30] - Active buyer count was 86.6 million, down 5% year-over-year, but new and reactivated buyers totaled 11.4 million for the quarter [25][26] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS was down 2.4% year-over-year, while Depop's GMS grew 39.4% year-over-year to $292 million [10][23] - Depop's third quarter growth accelerated by 400 basis points sequentially, driven by new user growth and improved buyer conversion [10][11] - Services revenue grew 12.7% year-over-year, primarily from on-site ad revenue at both Etsy and Depop [29] Market Data and Key Metrics Changes - GMS per active buyer was stable at $121, with encouraging month-by-month improvements in purchase frequency and average item values [25][26] - The app's contribution to total GMS increased to 46%, with app users visiting five times more often than non-app users [28][27] - Strong performance was noted in vintage home and living, jewelry above $100, and wedding rings, with GMS comparisons improving across most top categories [26] Company Strategy and Development Direction - The company is focusing on four strategic priorities: enhancing shopper discovery, deepening loyalty, amplifying seller creativity, and improving the overall shopping experience [12][18] - A partnership with OpenAI aims to leverage AI for personalized shopping experiences, integrating Etsy listings into ChatGPT for seamless transactions [13][40] - The company is reallocating marketing spend towards upper funnel channels like social video and streaming to enhance engagement [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about consumer spending, anticipating a stable macro environment for the holiday season [33][55] - The leadership transition is seen as timely, with new CEO Kruti Patel Goyal expected to drive growth through a focus on creativity and human connection [5][12] - The company expects Q4 consolidated GMS to be between $3.5 billion and $3.65 billion, indicating further sequential improvement [33] Other Important Information - The company completed the sale of Reverb, which impacted year-over-year comparisons [22] - Free cash flow exceeded $200 million in the quarter, with $1.6 billion in cash and investments at the end of the quarter [33] - The company repurchased 2.1 million shares at a cost of approximately $120 million, reducing share count by 17% since December 2023 [33] Q&A Session Summary Question: About the OpenAI partnership and its integration - Management highlighted the excitement around the OpenAI partnership, emphasizing the unique opportunity it presents for Etsy in agentic commerce [38][39] - The integration allows users to purchase items directly through ChatGPT, with Etsy covering the transaction fee for now [40][41] Question: Engagement improvements on the app - Management discussed meaningful investments in reshaping the app's home screen to enhance discovery and engagement, leading to higher user interaction [44][46] Question: Fourth quarter guidance and holiday opportunities - Management indicated uncertainty in consumer health but expects continued progress in initiatives, with a strong holiday campaign planned [53][55][56] Question: Balancing traffic from GenAI platforms versus direct mobile - Management believes that both channels can coexist and benefit Etsy, enhancing brand consideration and app usage [78][81] Question: Investments planned for Depop and margin compression - Management confirmed that the brand campaign for Depop is a long-term investment aimed at expanding awareness, which may compress margins in the near term [79][83]

Core Insights - The article emphasizes the importance of operational efficiency and cost control in the rapidly evolving e-commerce industry, highlighting the emergence of AI-driven solutions like Qinghu AI's "Batch Link Upload" to address these challenges [1][18]. Group 1: Core Mechanism - The "Batch Link Upload" system seamlessly connects the entire process from data capture to cross-platform synchronization, allowing merchants to input product links and automatically upload essential information to their stores [3]. - The system operates within a compliant environment, ensuring data isolation and security for multi-account operations, which is crucial for entrepreneurs managing multiple stores [3]. Group 2: Scenario Coverage - The intelligent system can handle bulk uploads from platforms like 1688, optimizing information formats and reducing human error [5]. - It supports simultaneous distribution of products across multiple platforms, addressing data fragmentation issues [5]. - Automated task flows enable continuous operations, particularly beneficial during high-traffic sales periods [5]. - The system creates a closed-loop ecosystem that integrates sourcing, purchasing, uploading, and selling processes, minimizing human intervention [5]. Group 3: Pain Point Resolution - The system addresses four major challenges faced by e-commerce merchants: time consumption, cross-platform collaboration issues, multi-account management pressures, and scalability constraints [9]. - It automates repetitive tasks with over 99% accuracy, significantly reducing labor costs and operational bottlenecks [9]. - The cloud-based architecture ensures data security and compliance, mitigating risks associated with platform bans [9]. - Intelligent task scheduling maximizes resource utilization by automating uploads during low-traffic periods [9]. Group 4: Empowerment Practices - The system enables various user groups, including seasonal product sellers and part-time entrepreneurs, to streamline their operations and reduce manual workload [12][14]. - It allows users with no technical background to create tasks easily, lowering the barrier to entry for new users [14]. Group 5: Technological Evolution - The intelligent system's open and extensible nature allows for rapid product deployment, significantly reducing time-to-market [14]. - Future expansions may include compatibility with emerging platforms, enhancing overall market coverage [15]. - Data analytics capabilities can optimize product selection strategies, creating a feedback loop for decision-making [15]. Group 6: Strategic Implications - The essence of the "Batch Link Upload" system is to liberate operational staff from mundane tasks, enabling them to focus on market insights and strategic optimization [18]. - As e-commerce competition intensifies, such AI-driven solutions are evolving from mere tools to essential digital assets, providing a competitive edge in a saturated market [18].

Core Viewpoint - AI is increasingly penetrating Taobao, aiming to enhance user shopping experiences by reducing decision-making time and costs through various AI search products [6][12][17]. Group 1: AI Search Products - Taobao has launched several AI search products, including "AI万能搜," which allows users to ask questions and receive comprehensive answers that include text, images, and videos [6][8]. - "AI助手" is currently in small-scale testing, providing a conversational interface to help users clarify their shopping needs and recommend suitable products [6][9]. - The "AI找低价" feature enables users to find the lowest prices for similar products through image recognition, enhancing the shopping experience [8][9]. Group 2: User Experience Focus - The development of these AI products has prioritized user experience over traditional efficiency metrics, aiming to provide personalized and precise services [8][19]. - "AI万能搜" and "AI助手" are designed to simplify complex shopping needs, transforming vague requirements into clear recommendations [12][13]. - The AI products integrate various shopping scenarios, such as outfit guides and product comparisons, to streamline the decision-making process for users [9][14]. Group 3: Market Positioning and Strategy - Taobao's AI initiatives align with Alibaba's broader strategy to integrate AI into consumer-facing products, marking a shift from previous B2B-focused AI applications [12][20]. - The AI search products are not currently monetized, focusing instead on enhancing user engagement and experience [11][19]. - The potential for these AI tools to disrupt traditional search models is acknowledged, but they are still in early stages compared to established search functionalities [18][19]. Group 4: Future Prospects - Future developments may include more personalized recommendation mechanisms and predictive suggestions based on user behavior and preferences [19][20]. - The integration of AI capabilities across all shopping scenarios on Taobao is anticipated, expanding beyond retail to encompass various consumer needs [19][20].

Financial Data and Key Metrics Changes - Shopify reported Q2 revenue of $2.7 billion, up 31% year over year, with a free cash flow margin of 16% [5][8][57] - Gross profit grew 25%, exceeding expectations, with overall gross margin at 48.6%, down from 51.1% in the prior year [52][54] - Operating income for the quarter was $291 million, representing an 11% operating income margin, compared to 9% last year [56] Business Line Data and Key Metrics Changes - GMV in Q2 was $88 billion, up 31%, with offline GMV increasing by 29% [46][29] - Merchant solutions revenue increased by 37%, driven primarily by GMV growth, while subscription solutions revenue grew by 17% [49][50] - The Shop app saw a 140% year-over-year growth in native GMV, indicating strong engagement [26] Market Data and Key Metrics Changes - International GMV was up 42% year over year, with Europe leading the growth [5][34] - Cross-border GMV remained consistent at 15% of total GMV in Q2 [60] - Shopify Payments penetration reached 64%, up from 61% last year, indicating strong adoption [22][49] Company Strategy and Development Direction - Shopify is focused on expanding its reach internationally, particularly in Europe, and enhancing its product offerings to support merchants [5][34] - The company is investing in AI-driven commerce solutions, including the launch of Universal Cart and CheckoutKit, to enhance the shopping experience [12][91] - Shopify aims to build a unified commerce platform that integrates online and offline sales channels [4][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their merchant base amid changing economic conditions, noting strong performance in both North America and Europe [58][59] - The company anticipates continued growth in Q3, with revenue growth expected in the mid to high 20s year over year [61] - Management highlighted the importance of ongoing product innovation and market expansion as key drivers of future growth [85][86] Other Important Information - Shopify has expanded its payments product into 16 new countries this year, nearly doubling its market accessibility [21] - The company has introduced a USDC stablecoin option for payments, enhancing flexibility for merchants [23] - Shopify's capital business continues to grow, with new tools providing merchants more financing options [55] Q&A Session Summary Question: How would you characterize the demand in the US and any potential pull forward due to tariffs? - Management noted no significant pull forward in demand, with consistent performance observed in Q2 and July, indicating strong business health [69][71] Question: What is the status of international growth and localization for merchants? - Management highlighted ongoing product updates and successful expansion into new countries, with significant growth in international GMV, particularly in Europe [74][76] Question: How does the company view long-term growth potential? - Management expressed confidence in maintaining growth rates above 25%, driven by past investments and new product offerings [81][84] Question: Will Universal Cart and Checkout Kit be available for the holiday season? - Management confirmed ongoing development of these products, emphasizing their importance in enhancing the shopping experience through AI integration [89][91]