Key Highlights
- Quarterly revenue reached $631.3M, surpassing Wall Street’s $621M projection
- Marketplace gross merchandise sales climbed 5.5% year-over-year to $2.5B — ending a prolonged decline
- Earnings per share from continuing operations of $0.89 significantly exceeded the $0.62 forecast
- Sequential growth in active buyers recorded for the first time since 2024
- Shares of ETSY rallied approximately 11% in response to the quarterly report
The e-commerce marketplace delivered first-quarter 2026 revenue totaling $631.3 million, topping the Street’s consensus expectation of approximately $621 million. The upside surprise stemmed from renewed expansion in gross merchandise sales, which posted a 5.5% year-over-year increase to reach $2.5 billion across the Etsy platform.
This GMS performance is particularly significant as it ends a consecutive string of contractions. The previous quarter registered a 0.5% decline, making the current period the first instance of positive year-over-year GMS momentum in more than two years.
Diluted earnings per share from continuing operations registered at $0.89, substantially beating the analyst consensus of $0.62. Net income from continuing operations totaled $104.7 million, representing a dramatic reversal from the $35.1 million net loss recorded in the year-ago period, which had been impacted by a $101.7 million asset impairment charge.
Adjusted EBITDA from continuing operations came to $184.7 million, yielding a margin of 29.3%. The company also executed approximately $145 million worth of share repurchases throughout the quarter, reducing its share count by roughly 2.7 million.
Chief Executive Kruti Patel Goyal characterized the quarter as displaying “encouraging signals” that strategic growth initiatives are gaining traction, expressing heightened “conviction” in the organization’s capacity to transform recent positive trends into sustained expansion.
Customer Metrics Show Improvement
The platform recorded sequential growth in active buyers for the first time in two years. Spending per active buyer hit $122 on a trailing twelve-month basis — representing the first year-over-year increase since the fourth quarter of 2022 and marking the fourth consecutive quarter of sequential advancement.
Mobile application GMS expanded 11.2% compared to the prior year, with app-based transactions now representing roughly 47% of aggregate GMS.
Chief Financial Officer Lanny Baker informed Reuters that consumer demand on Etsy has remained consistent across different income segments, despite ongoing inflation pressures and tariff-related uncertainty affecting consumer spending. He emphasized that the company’s direct tariff exposure remains minimal, as approximately 90% of materials sellers utilize for product creation are procured domestically.
Artificial intelligence-driven traffic continues expanding on the marketplace, though Baker acknowledged it currently represents only a low single-digit percentage of overall activity, meaning its financial impact remains limited at this juncture.
Forward Guidance and Depop Divestiture
For the second quarter of 2026, the company projected marketplace GMS ranging from $2.48 billion to $2.53 billion, implying year-over-year growth of 3% to 5%. Management anticipates a take rate of roughly 25.7% alongside an adjusted EBITDA margin spanning 27% to 29%.
For the complete fiscal year, Etsy now forecasts low single-digit GMS growth for its core marketplace — representing an upgrade from previous guidance — while reaffirming its full-year adjusted EBITDA margin target of 28% to 30%.
Management indicated it anticipates positive year-over-year GMS growth throughout each quarter of 2026.
The company concluded the first quarter with $1.6 billion in cash, cash equivalents, and short-term investments.
These financial results exclude Depop, the fashion resale platform that Etsy agreed to divest to eBay for $1.2 billion in February. The transaction is anticipated to finalize by the conclusion of the third quarter of 2026.
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