Etsy, Inc. (NYSE:ETSY) shares slipped Wednesday as strong earnings were overshadowed by weaker Gross Merchandise Sales (GMS) trends and a CEO transition that clouded near-term momentum.
The company reported third-quarter earnings per share of 63 cents, beating the analyst consensus estimate of 53 cents.
Quarterly sales of $678 million (+6.1% year over year) outpaced the Street view of $655.304 million.
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On an as-reported basis, including Reverb’s third quarter 2024 revenue of $23.2 million, consolidated revenue was up 2.4% year-over-year.
Etsy completed the sale of Reverb on June 2, 2025.
“Etsy marketplace GMS improved sequentially, reflecting growing traction in our customer-centric priorities — from showing up where shoppers discover, to enhancing AI-powered matching, retaining and rewarding our most valuable customers, and further amplifying the human connection that makes Etsy so unique,” said CEO Josh Silverman.
Leadership Transition
Kruti Patel Goyal will become CEO and join Etsy's board on Jan. 1, 2026.
Josh Silverman steps down Dec. 31, 2025, becoming Executive Chair through 2026; Fred Wilson exits as Chair but remains on the board.
Quarterly Metrics
For the Etsy marketplace, GMS was $2.432 billion, down 2.4% year-over-year, and down 3.2% on a currency-neutral basis.
GMS transacted on the Etsy App grew 5% year-over-year, and represented approximately 46% of GMS.
The take rate reached 24.9%, with revenue growth fueled by strong Etsy and Depop on-site ads performance.
Active buyers declined 5% year-over-year to 86.6 million, while active sellers decreased 10.9% to 5.5 million, reflecting the impact of the seller set-up fee implemented in April.
Gross profit gained 1.4% to $483.381 million.
Adjusted EBITDA in the quarter under review was $171.9 million (down 6.4%), with an adjusted EBITDA margin of approximately 25.4% (down 230 bps).
Etsy ended the third quarter with $1.6 billion in cash and cash equivalents and short- and long-term investments.
Under Etsy’s stock repurchase program, during the third quarter of 2025 Etsy repurchased an aggregate of approximately $120 million, or 2.1 million shares, of its common stock.
Outlook
Etsy projects fourth-quarter GMS of $3.5 billion to $3.65 billion.
It also expects an adjusted EBITDA margin of roughly 24%.
Tariffs Impact
In its earnings conference call, Etsy's management noted tariffs and trade-lane pressures modestly impacted results, mainly after the de minimis exemption expired in late August, which briefly slowed imports before stabilizing.
Stronger U.S. domestic trade routes helped offset the impact. Management remains cautious about future tariff risks but noted Etsy's resilience, supported by abundant marketplace inventory and quick replacement of disrupted items.
Consumer outlook remains uncertain. Management noted a higher-than-normal degree of uncertainty around consumer spending heading into the holiday season.
Price Action: ETSY shares were trading lower by 8.85% to $68.16 at last check Wednesday.
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