Etsy, Inc. Reports Second Quarter 2025 Results

, /PRNewswire/ -- Etsy, Inc. (NASDAQ: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, today announced results for its second quarter ended June 30, 2025. "We are encouraged by our second quarter performance, which reflects tangible progress in our key investment areas," said Josh Silverman, Etsy, Inc. Chief Executive Officer. "These efforts are designed to strengthen customer relationships on the Etsy marketplace, deepen buyer engagement, and reignite GMS growth. We're seeing early success in our efforts to build a more browsable shopping experience, particularly on our App, amplified by more personalized marketing and emergent AI technologies. We believe this is creating a significant runway for growth, as well as an opportunity to generate sustainable value for our stakeholders by capitalizing on what makes Etsy special." Second Quarter 2025 Highlights Etsy completed the sale of Reverb on June 2, 2025. Reverb is included in our consolidated results for the first two months of the second quarter of 2025, representing $153.0 million of GMS and $17.6 million of revenue, and for the full three months of the second quarter of 2024, when it represented $225.2 million of GMS and $24.4 million of revenue. Below are select consolidated results: GMS was $2.8 billion, down 4.8% year-over-year and down 5.8% on a currency-neutral basis. Excluding Reverb, consolidated GMS was $2.7 billion in the second quarter of 2025, down 2.6% year-over-year on the same basis. Revenue was $672.7 million, up 3.8% versus the second quarter of 2024, with a take rate of 24.0%. Our positive revenue growth was driven primarily by the performance of on-site ads and, to a lesser extent, payments for both Depop and Etsy. Net income was $28.8 million, down $24.2 million year-over-year, reflecting a non-cash foreign exchange loss of $25.4 million as compared to a non-cash foreign exchange gain of $4.9 million in the second quarter of 2024. Consolidated net income margin was approximately 4.3% and diluted net income per share was $0.25. Non-GAAP Adjusted EBITDA was $169.0 million, with consolidated non-GAAP Adjusted EBITDA margin of approximately 25.1%. During the quarter Etsy completed a private placement of convertible notes, raising approximately $700 million in cash. Etsy ended the second quarter with $1.5 billion in cash and cash equivalents and short- and long-term investments. Under Etsy's stock repurchase program, during the second quarter of 2025 Etsy repurchased an aggregate of approximately $335 million, or 6.4 million shares, of its common stock. Performance highlights for the Etsy marketplace include: GMS was $2.4 billion, down 5.4% year-over-year and down 6.3% on a currency-neutral basis. After a softer start to the quarter, which was magnified by the shift in Easter timing, we saw more favorable GMS trends across the remainder of the quarter. On an as reported basis, Etsy marketplace GMS improved 3.5 percentage points in the second quarter of 2025 as compared to the first quarter of 2025. GMS on the Etsy App grew on a year-over-year basis and sequentially, and represented approximately 45% of Etsy marketplace GMS. Key product initiatives in the quarter included advancing search quality by testing more signals in our algorithms, growing our AI-powered discovery experience with additional themes, and releasing new seller tools to simplify shop operations. Key marketing initiatives included growing GMS through more personalized retention and engagement strategies, strong performance in paid social channels, optimization of product listing ad data feeds, and brand investments that amplified Etsy's differentiation. Active buyers decreased 4.6% year-over-year to 87.3 million. We reactivated 6.5 million buyers in the quarter, a 2.8% increase from the number of buyers reactivated in the prior year, and up 1.3% sequentially. During the quarter, Etsy acquired 4.8 million new buyers, and our trailing twelve month count of habitual buyers was 6.1 million at quarter end. GMS per active buyer on a trailing twelve month basis was $120, showing signs of stabilization. This metric held steady sequentially, and declined 2.9% year-over-year. Monthly GMS per active buyer trends strengthened over the course of the quarter, inflecting into positive year-over-year comparisons in May and June, even on an FX-adjusted basis. Depop continued to see strong top-line growth, with second quarter 2025 GMS of $249.6 million, up 35.3% year-over-year; and 54% year-over-year growth in the United States. Key performance highlights for the quarter included: Improving search and recommendation relevance and freshness through ranking model updates, as well as leveraging more frequent model training. Driving greater early visibility and success for new sellers by enabling free item boosts for recently onboarded sellers and enhancing price recommendations. Record quarter for sign-ups driven from paid media acquisition channels. "Second quarter GMS and revenue came in ahead of expectations, and adjusted EBITDA was in line with our guidance, as we are managing the business to invest in future growth while also delivering very healthy margins," said Lanny Baker, Chief Financial Officer. "Our take rate was very strong, at 24%, primarily driven by the expansion of Etsy Ads revenue from continued improvements to our bidding algorithms, as well as some benefit from payments. We also strengthened our balance sheet through a highly successful convertible notes offering and repurchased approximately $335 million of Etsy stock, in line with our high conviction in Etsy's long-term opportunities. With approximately $1.5 billion in cash and cash equivalents and short- and long-term investments at the end of the period, and expectations for continued strong free cash flow generation, we are very confident in Etsy's financial flexibility to continue stock repurchases, manage our debt balance, and make ongoing investments in Etsy and Depop." Second Quarter 2025 Financial Summary(in thousands, except percentages; unaudited) The financial results of Reverb have been included in our consolidated financial results until June 2, 2025 (the date of sale) and for all periods presented in this table, except as noted below. The financial measures and key operating metrics we use are: Three Months Ended June 30, % (Decline) Growth Y/Y Six Months Ended June 30, % (Decline) Growth Y/Y 2025 2024 2025 2024 GMS (1) $ 2,806,249 $ 2,949,254 (4.8) % $ 5,599,585 $ 5,935,754 (5.7) % Revenue $ 672,663 $ 647,806 3.8 % $ 1,323,839 $ 1,293,760 2.3 % Revenue take rate (2) 24.0 % 22.0 % 200 bps 23.6 % 21.8 % 180 bps Marketplace revenue $ 468,169 $ 470,377 (0.5) % $ 926,664 $ 937,359 (1.1) % Services revenue $ 204,494 $ 177,429 15.3 % $ 397,175 $ 356,401 11.4 % Gross profit $ 479,115 $ 463,716 3.3 % $ 938,230 $ 922,537 1.7 % Operating expenses $ 402,686 $ 393,547 2.3 % $ 884,128 $ 784,278 12.7 % Net income (loss) $ 28,840 $ 53,005 (45.6) % $ (23,256) $ 116,009 (120.0) % Net income (loss) margin (3) 4.3 % 8.2 % (390) bps (1.8) % 9.0 % (1,080) bps Adjusted EBITDA (Non-GAAP) $ 169,020 $ 179,375 (5.8) % $ 340,122 $ 347,310 (2.1) % Adjusted EBITDA margin (Non-GAAP) (4) 25.1 % 27.7 % (260) bps 25.7 % 26.8 % (110) bps Active sellers (5) 8,118 8,801 (7.8) % 8,118 8,801 (7.8) % Active buyers (5) 93,334 96,610 (3.4) % 93,334 96,610 (3.4) % (1) Consolidated GMS for the three and six months ended June 30, 2025 includes Etsy marketplace GMS of $2.4 billion and $4.7 billion, respectively. (2) Revenue take rate is consolidated revenue divided by consolidated GMS. (3) Consolidated net income (loss) margin is net income (loss) divided by revenue. (4) Consolidated non-GAAP Adjusted EBITDA margin is consolidated non-GAAP Adjusted EBITDA divided by consolidated revenue. (5) Consolidated active sellers and active buyers includes Etsy marketplace active sellers and active buyers of 5.4 million and 87.3 million, respectively, and excludes Reverb active sellers and active buyers as of June 30, 2025. Consolidated Third Quarter 2025 Financial Guidance Q3 25 Guidance GMS $2.6B to $2.7B Take Rate ~24.5% Adjusted EBITDA Margin ~25% Please note that our guidance assumes currency exchange rates remain unchanged at current levels. Investors can visit the second quarter earnings presentation on our website to see select Reverb historical quarterly financial GMS and revenue results. "Getting the Etsy marketplace back to GMS growth in the near term is our number one priority, and we have four strategic initiatives designed with this in mind," said Mr. Silverman. "These include showing up where shoppers discover, matching shoppers with the right content through better machine learning, retaining and rewarding our most valuable customers, and further amplifying the human connection that makes Etsy unique. In addition, with Depop now at a $1 billion dollar annualized GMS run rate, we are working to further capitalize on its momentum. We're accelerating marketing investments designed to reach and engage an expanded U.S. audience via a broader channel mix and more robust community-led programs." Mr. Baker added, "We are pleased to see compounding impacts from Etsy marketplace product and marketing investments as we head into the second half of the year, and that our third quarter consolidated GMS guidance represents a quarter-over-quarter improvement in the apples-to-apples growth rate at the midpoint. In addition, our guidance reflects sequential expansion and strong profitability for the core Etsy business, where we consistently manage adjusted EBITDA margins to the high-20% range." With respect to our expectations under "Consolidated Third Quarter 2025 Financial Guidance" above, reconciliation of Adjusted EBITDA margin guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to the charges excluded from Adjusted EBITDA; in particular, stock-based compensation expense and related payroll taxes, foreign exchange loss (gain), interest and other non-operating income, net, provision for income taxes, acquisition, divestiture, and corporate structure-related expenses, and other non-recurring expenses. Webcast and Conference Call Information Etsy will host a video webcast conference call to discuss these results at 8:30 a.m. Eastern Time today, which will be live-streamed via our Investor Relations website (investors.etsy.com) under the Events section. A copy of the earnings call presentation will also be posted to our website.A replay of the video webcast will be available through the same link following the conference call starting at 12:00 p.m. Eastern Time today, for at least three months thereafter. About Etsy Etsy, Inc. operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world. These marketplaces share a mission to "Keep Commerce Human," and we're committed to using the power of business and technology to strengthen communities and empower people. Our primary marketplace, Etsy.com, is the global destination for unique and creative goods. Buyers come to Etsy to be inspired and delighted by items that are crafted and curated by creative entrepreneurs. For sellers, we offer a range of tools and services that address key business needs. Etsy, Inc. also owns fashion resale marketplace Depop. Our marketplaces operate independently, while benefiting from shared expertise in product, marketing, technology, and customer support. Etsy was founded in 2005 and is headquartered in Brooklyn, New York. Etsy has used, and intends to continue using, its Investor Relations website and the Etsy News Blog (etsy.com/news) to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the Etsy News Blog in addition to following our press releases, SEC filings, and public conference calls and webcasts. Investor Relations Contact: Deb Wasser, Vice President, Investor Relations Sarah Marx, Senior Director, Investor Relations[email protected] Media Relations Contact:Kelly Clausen, Vice President, Communications & Community[email protected] Cautionary Statement Regarding Forward-Looking Statements This press release contains or references forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements relating to our financial guidance for the third quarter of 2025 and the underlying assumptions; our ability to accelerate our customer relationship flywheel; our expectations for strong free cash flow generation; our ability to drive growth and success; our ability to capitalize on Depop's momentum; our future opportunities to support GMS improvement; the impact of our product development and marketing initiatives; the ability of our product and marketing investments to create a runway for growth and sustainable value for our stakeholders; and our financial flexibility to continue stock repurchases, manage our debt balance, and make ongoing investments in the business. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as "aim," "anticipate," "believe," "could," "enable," "estimate," "expect," "goal," "intend," "may," "optimistic," "outlook," "plan," "potential," "target," "will," or similar expressions and derivative forms and/or the negatives of those words. Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include but are not limited to: (1) macroeconomic, geopolitical, and other events outside of our control; (2) the level of demand for our services or products sold in our marketplaces; (3) the importance to our success of the trustworthiness of our marketplaces and our ability to attract and retain active and engaged communities of buyers and sellers; (4) any real or perceived inaccuracies in our operational metrics; (5) if we or our third-party providers are unable to protect against technology vulnerabilities, service interruptions, security breaches, or other cyber incidents; (6) our dependence on continued and unimpeded access to third-party services, platforms, and infrastructure; (7) operational and compliance risks related to our payments systems; (8) the global scope of our business; (9) our ability to recruit and retain employees; (10) our ability to compete effectively; (11) our ability to enhance our current offerings and develop new offerings to respond to the changing needs of sellers and buyers; (12) risks related to our environmental, social, and governance activities and disclosures; (13) barriers to international trade and our efforts to grow our marketplace globally; (14) acquisitions, dispositions, or strategic partnerships that may prove unsuccessful or divert management attention; (15) our ability to deal effectively with fraud or other illegal activity; and (16) litigation and evolving global legal and regulatory requirements, including privacy and data protection laws, tax laws, product liability laws, laws regulating speech and platform moderation, antitrust laws, and intellectual property and counterfeiting regulations. These and other risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission, including in the section entitled "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements. Etsy, Inc. Condensed Consolidated Balance Sheets (in thousands; unaudited) As ofJune 30,2025 As ofDecember 31,2024 ASSETS Current assets: Cash and cash equivalents $ 1,183,357 $ 811,178 Short-term investments 228,979 228,322 Accounts receivable, net 6,474 8,702 Prepaid and other current assets 88,593 89,931 Funds receivable and seller accounts 140,596 189,558 Total current assets 1,647,999 1,327,691 Property and equipment, net 230,233 236,706 Goodwill 38,072 137,089 Intangible assets, net 317,015 413,898 Deferred tax assets 156,124 145,630 Long-term investments 126,640 111,725 Other assets 41,066 45,043 Total assets $ 2,557,149 $ 2,417,782 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 15,165 $ 25,979 Accrued expenses 254,204 374,947 Finance lease obligations—current 6,295 6,148 Funds payable and amounts due to sellers 140,596 189,558 Deferred revenue 23,598 19,213 Other current liabilities 46,504 49,268 Total current liabilities 486,362 665,113 Finance lease obligations—net of current portion 90,302 93,482 Deferred tax liabilities 5,425 7,957 Long-term debt, net 2,978,971 2,288,083 Other liabilities 120,659 122,013 Total liabilities 3,681,719 3,176,648 Total stockholders' deficit (1,124,570) (758,866) Total liabilities and stockholders' deficit $ 2,557,149 $ 2,417,782 Etsy, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts; unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $ 672,663 $ 647,806 $ 1,323,839 $ 1,293,760 Cost of revenue 193,548 184,090 385,609 371,223 Gross profit 479,115 463,716 938,230 922,537 Operating expenses: Marketing 212,110 183,063 401,114 374,874 Product development 111,861 114,493 222,371 224,339 General and administrative 78,715 95,991 158,940 185,065 Asset impairment charge — — 101,703 — Total operating expenses 402,686 393,547 884,128 784,278 Income from operations 76,429 70,169 54,102 138,259 Other (expense) income, net (25,283) 8,808 (36,275) 20,373 Income before income taxes 51,146 78,977 17,827 158,632 Provision for income taxes (22,306) (25,972) (41,083) (42,623) Net income (loss) $ 28,840 $ 53,005 $ (23,256) $ 116,009 Net income (loss) per share attributable to common stockholders: Basic $ 0.28 $ 0.46 $ (0.22) $ 0.99 Diluted $ 0.25 $ 0.41 $ (0.22) $ 0.89 Weighted-average common shares outstanding: Basic 103,212 116,432 105,246 117,445 Diluted 121,514 133,118 105,246 134,263 Etsy, Inc. Condensed Consolidated Statements of Cash Flows (in thousands; unaudited) Six Months Ended June 30, 2025 2024 Cash flows from operating activities Net (loss) income $ (23,256) $ 116,009 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Stock-based compensation expense 120,618 145,400 Depreciation and amortization expense 52,688 53,933 Provision for expected credit losses 4,908 7,321 Deferred benefit for income taxes (1,018) (4,291) Asset impairment charge 101,703 — Other non-cash expense (income), net 34,283 (11,556) Changes in operating assets and liabilities (net of impact of sale of business) (132,606) (86,722) Net cash provided by operating activities 157,320 220,094 Cash flows from investing activities Purchases of property and equipment (10,112) (5,908) Website and app development (21,464) (14,093) Purchases of investments (197,570) (192,863) Sales and maturities of investments 184,207 185,120 Proceeds from sale of business, net of cash 100,485 — Net cash provided by (used in) investing activities 55,546 (27,744) Cash flows from financing activities Payment of tax obligations on vested equity awards (28,959) (33,007) Repurchase of stock (523,852) (308,726) Proceeds from exercise of stock options 5,654 2,735 Proceeds from issuance of convertible senior notes 700,000 — Payment of debt issuance costs (10,500) — Payments on finance lease obligations (3,045) (3,086) Other financing, net (17,226) 3,821 Net cash provided by (used in) financing activities 122,072 (338,263) Effect of exchange rate changes on cash 37,241 (9,199) Net increase (decrease) in cash and cash equivalents 372,179 (155,112) Cash and cash equivalents at beginning of period 811,178 914,323 Cash and cash equivalents at end of period $ 1,183,357 $ 759,211 Currency-Neutral GMS We calculate currency-neutral GMS by translating current period GMS for goods sold that were listed in non-U.S. dollar currencies into U.S. dollars using prior year foreign currency exchange rates. As reported and currency-neutral GMS decline for the periods presented below are as follows: Quarter-to-Date Period Ended Year-to-Date Period Ended As Reported Currency-Neutral FX Impact As Reported Currency-Neutral FX Impact June 30, 2025 (4.8) % (5.8) % 1.0 % (5.7) % (5.8) % 0.1 % June 30, 2024 (2.1) % (1.9) % (0.2) % (2.9) % (3.0) % 0.1 % Non-GAAP Financial Measures Reconciliation of Net Income (Loss) to Adjusted EBITDA and the Calculation of Adjusted EBITDA Margin (in thousands, except percentages; unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net income (loss) $ 28,840 $ 53,005 $ (23,256) $ 116,009 Excluding: Stock-based compensation expense and related payroll taxes(1)(2) 60,974 74,717 124,547 145,400 Depreciation and amortization 25,398 27,087 52,688 53,933 Provision for income taxes 22,306 25,972 41,083 42,623 Interest and other non-operating income, net (4,939) (3,947) (9,841) (9,257) Foreign exchange loss (gain) 25,444 (4,861) 41,338 (11,116) Asset impairment charge — — 101,703 — Acquisition, divestiture, and corporate structure-related expenses 5,903 234 7,166 2,132 Loss on sale of business 5,097 — 5,097 — Retroactive non-income tax expense (3) — 7,244 — 7,244 Restructuring and other exit (income) costs (3) (76) (403) 342 Adjusted EBITDA $ 169,020 $ 179,375 $ 340,122 $ 347,310 Divided by: Revenue $ 672,663 $ 647,806 $ 1,323,839 $ 1,293,760 Adjusted EBITDA margin 25.1 % 27.7 % 25.7 % 26.8 % (1) Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for the periods presented below is as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cost of revenue $ 7,382 $ 8,787 $ 14,910 $ 16,491 Marketing 5,195 5,882 5,759 12,319 Product development 31,843 38,441 66,553 72,505 General and administrative 14,090 21,607 33,396 44,085 Stock-based compensation expense $ 58,510 $ 74,717 $ 120,618 $ 145,400 (2) Beginning in the first quarter of 2025, the Company is excluding payroll tax expense related to stock-based compensation from Adjusted EBITDA because these taxes are directly related to stock-based compensation expense which is excluded from Adjusted EBITDA. The Company did not retrospectively apply this change to prior periods as the impact was immaterial to such periods. In the three and six months ended June 30, 2024 payroll tax expense related to stock-based compensation was $3.1 million and $4.1 million, respectively. (3) Retroactive non-income tax expense related to the digital services tax legislation in Canada, which was enacted on June 28, 2024 retroactive to January 1, 2022. SOURCE Etsy, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Etsy, Inc. Reports Second Quarter 2025 Results

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