Etsy, Inc. Shows Resilient Growth in Third Quarter 2025 Financial Results

Etsy, Inc. Reports Strong Performance in Q3 2025

Etsy, Inc. continues to make waves in the online retail space with its latest financial results for the third quarter ended September 30, 2025. The renowned marketplace has connected millions of buyers and sellers while preserving its commitment to unique and creative goods. This quarter's performance is particularly noteworthy as the company has made significant strides in improving key financial metrics.

Financial Highlights

Under the leadership of CEO Josh Silverman, Etsy has reported a consolidated Gross Merchandise Sales (GMS) of $2,724.7 million, reflecting a modest year-over-year growth of 0.9%. Notably, when excluding Reverb's results from the previous year, the company registered a 0.1% increase on a currency-neutral basis. This signifies Etsy's ongoing ability to adapt and grow, even as external conditions fluctuate.

Etsy’s revenue hit $678.0 million, up 6.1% year-over-year when adjusted for Reverb’s previous performance, indicating the efficacy of their robust advertising strategies. The company’s take rate rose to 24.9%, driven primarily by sustained strong performance in onsite ads for Etsy and Depop, its fast-growing resale platform.

Profitability and Costs

Etsy’s net income showed a remarkable improvement at $75.5 million, reflecting an increase of 31.6% year-over-year. This growth is attributed, in part, to overcoming previous foreign exchange losses that had impacted the bottom line. The consolidated net income margin now stands at 11.1%, with a diluted net income per share reported at $0.63. Furthermore, with an approximately 25.4% Adjusted EBITDA margin, Etsy's profitability remains solid amid ongoing investments.

Marketplace Performance

In terms of marketplace activity, Etsy reported 2,432.6 million in GMS, which was down 2.4% year-over-year. Despite this decrease, active buyers totaled 86.6 million, a slight decline from the previous year but with continued efforts to reactivate buyers showing promise. 6.6 million buyers were reactivated in the quarter, indicating a strong push towards engaging the existing customer base.

The company’s efforts to utilize AI in enhancing user experience have also paid off. The launch of new seller tools and improved search rankings indicates a strategic focus on enhancing shop visibility and aiding sellers in connecting with customers more effectively. Additionally, continuous development of the Etsy App has made shopping more personalized, catering to user preferences and increasing engagement.

Innovative Partnerships

Etsy has also inked an innovative partnership with OpenAI, enabling U.S. ChatGPT users to discover unique sellers directly within the chat interface. This partnership highlights Etsy’s commitment to embracing technology to improve visibility and reduce friction in the shopper’s journey.

Depop Acceleration

On the other hand, the Depop platform has shown remarkable acceleration, with GMS hitting $292.1 million, up 39.4% year-over-year. This surge is primarily driven by a significant increase in new users and better buyer conversion rates, especially within the U.S. market. The strong growth in Australia is also substantial, with new user sign-ups seeing over 100% year-on-year growth. Depop launched its largest-ever marketing campaign this quarter to further raise brand awareness and engage its community.

Looking Ahead

Looking towards the future, the company remains optimistic about its Q4 guidance, anticipating GMS ranging from $3.5 billion to $3.65 billion. The management is focused on sustaining profitability, while significantly increasing marketing investments, particularly for Depop, to capitalize on the burgeoning apparel resale market. Lanny Baker, CFO, expressed confidence in exceeding growth expectations and reinforcing Etsy's market presence.

In summary, Etsy's third-quarter results reflect a blend of resilience and strategic innovation, ensuring its position as a leading online marketplace amidst evolving consumer needs. The emphasis on community, creative commerce, and digital transformation portrays a promising outlook for the company as it enters the final quarter of 2025.