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Etsy, Inc. Reports Q4 and Full Year 2025 Financial Results

On February 19, 2026, Etsy, Inc. (NYSE: ETSY), the operator of a popular online marketplace for creative goods, unveiled its financial results for the fourth quarter and full year ending December 31, 2025. Under the leadership of President and CEO Kruti Patel Goyal, Etsy emphasizes its dedication to uniting passionate buyers with creative sellers through an innovative two-sided marketplace model.

Financial Overview

During the fourth quarter of 2025, Etsy's Gross Merchandise Sales (GMS) reached $3.6 billion, reflecting a year-over-year increase of 2.4% when excluding sales from Reverb, a marketplace Etsy sold earlier in the year. This inconsistency in growth was largely attributed to the significant effects of that sale on the overall company's performances. Revenue increased by 6.6% year-over-year, reaching $881.6 million, primarily due to robust on-site advertising efforts which drove revenue growth.

However, Net Income saw a decline of $19.2 million year-over-year, amounting to $110.7 million. This drop was influenced partly by a non-cash foreign exchange gain recorded in the previous year, which was not replicated in the current figures.

At the conclusion of Q4, Etsy reported $1.8 billion in cash and cash equivalents, alongside short- and long-term investments, showcasing its strong liquidity position. Additionally, the company repurchased approximately $133 million worth of its stock, reflecting confidence in its long-term value despite recent fluctuations.

Marketplace Performance Highlights

The Etsy marketplace alone generated $3.3 billion in GMS, reflecting almost flat growth at just 0.1% year-over-year. Interestingly, the Etsy app demonstrated a 6.6% year-over-year increase in transactions, accounting for 46% of GMS. The platform, however, saw a slight dip in active sellers, falling to 5.6 million, indicating the need for engagement strategies to retain vendors. Conversely, active buyers totaled 86.5 million, approximately 3.4% lower than the previous year, which raises questions about user retention and market reach.

Etsy successfully acquired 6.8 million new buyers and reactivated 10.4 million buyers during the quarter, leading to a gross addition of 17.2 million buyers. Despite these efforts, GMS per active buyer decreased slightly to $121. Yet, there was a positive sign of stabilization in customer metrics, hinting at potential recovery.

Strategic Initiatives

In response to the marketplace's challenges, Etsy launched several strategic initiatives. These included an expansion of their third-party shipping partnerships into countries such as Bulgaria and Italy, aiming to enhance reliability for cross-border shipping and improve delivery duties coverage. Other notable projects involve partnerships with tech giants Google and Microsoft to integrate Etsy shopping into their platforms, marking a significant move towards future-proofing its online presence via AI-assisted shopping experiences.

Furthermore, the Depop marketplace reported $299.7 million in GMS for the fourth quarter—a substantial 37.2% increase year-over-year—indicating a successful quarter driven by a strong marketing campaign and enhanced product features.

Looking Ahead: 2026 Guidance

The financial guidance for the first quarter of 2026 indicates a GMS projection of between $2.38 billion and $2.43 billion, with expectations for slight sustained growth throughout the year. Etsy remains optimistic about rebuilding momentum and stability, focusing solely on its core marketplace after the anticipated sale of Depop to eBay for $1.2 billion.

As Etsy reflects on 2025's results, the company's journey forward will hinge on its ability to revitalize growth while efficiently managing expenses and retaining both buyers and sellers in a competitive landscape. The management expresses confidence that the strategies set in motion will foster an environment for recovery and reinvestment in the platform’s future, reassuring stakeholders of its long-term value.