Key Highlights
- First-quarter revenue reached $631.3M, exceeding Wall Street’s $621M projection
- Marketplace gross merchandise sales increased 5.5% year-over-year to $2.5B, marking the first expansion in more than two years
- Earnings per share from continuing operations totaled $0.89, significantly surpassing the $0.62 consensus forecast
- Sequential growth in active buyers achieved for the first time since early 2024
- Shares of ETSY climbed approximately 11% in response to the quarterly performance
The online marketplace platform delivered first-quarter 2026 revenue totaling $631.3 million, topping Wall Street’s consensus projection of approximately $621 million. The strong performance was fueled by a resurgence in gross merchandise sales activity, which expanded 5.5% compared to the same period last year, reaching $2.5 billion across the Etsy marketplace.
This GMS milestone is particularly significant as it represents the company’s first year-over-year increase after a prolonged period of contraction. The previous quarter registered a 0.5% decline, making this the initial positive comparison in more than 24 months.
Diluted earnings per share from continuing operations registered $0.89, substantially exceeding analyst expectations of $0.62. Net income from continuing operations totaled $104.7 million, marking a dramatic reversal from the $35.1 million net loss recorded in the first quarter of 2025, which had been impacted by a $101.7 million impairment charge on assets.
Adjusted EBITDA from continuing operations stood at $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 Officer Kruti Patel Goyal characterized the quarter as displaying “encouraging signals” that the company’s growth initiatives are gaining traction, expressing increased confidence in the organization’s capacity to transform recent positive trends into sustainable long-term expansion.
Customer Engagement Metrics Show Recovery
The platform experienced 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 improvement in this metric.
Mobile application GMS expanded 11.2% year-over-year, with transactions conducted through the app representing approximately 47% of total gross merchandise sales.
Chief Financial Officer Lanny Baker informed Reuters that consumer demand on Etsy has remained consistent across various income demographics, despite ongoing inflation pressures and tariff-related uncertainty affecting household spending power. He emphasized that the company’s direct tariff exposure remains minimal, given that roughly 90% of materials sellers utilize for creating their products are obtained domestically.
Traffic driven by artificial intelligence technologies is expanding on the platform, though Baker noted it currently represents only a low single-digit percentage of overall activity, meaning the financial impact remains relatively modest at this stage.
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 between 27% and 29%.
For the complete fiscal year, the company now forecasts low single-digit GMS growth for its core Etsy 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.
