ETSY Q4 Earnings & Revenues Surpass Estimates, EPS Declines Y/Y

Etsy ETSY reported fourth-quarter 2025 earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 4.55% but declined 10.68% year over year.

Fourth-quarter 2025 revenues increased 3.46% year over year to $881.64 million. The figure also exceeded the Zacks Consensus Estimate by 0.2%. Revenue growth was primarily driven by continued strong on-site advertising performance across both Etsy and Depop.

Etsy, Inc. Price, Consensus and EPS Surprise

Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. Quote

ETSY's Top-Line Details

Marketplace revenues were $612.4 million (69% of total revenues), up 0.8% from the year-ago quarter's level. The figure missed the Zacks Consensus Estimates by 0.67%.

Services revenues were $269.2 million (31% of total revenues), up 9.9% on a year-over-year basis, driven by growth in on-site ad revenue at both Etsy and Depop. The figure surpassed the Zacks Consensus Estimates by 0.2%.

ETSY's Active User Base & GMS

Etsy's consolidated active buyer base decreased 2% year over year to 93.5 million. The figure exceeds the consensus mark of 92.8 million.

The active seller base was 8.76 million, up 7.7% year over year. The figure beat the consensus mark of 8.68 million.

Gross buyer additions totaled 17.2 million in the quarter, comprising 6.8 million new buyers and 10.4 million reactivated buyers, up 2.7% year over year.

Consolidated GMS was $3.59 billion, up 2.4% year over year excluding Reverb and down 3.8% on a reported basis including Reverb. The figure missed the consensus mark by 0.38%. On a currency-neutral basis, consolidated GMS was down 4.9% year over year. The Etsy marketplace GMS specifically grew 0.1% year over year.

The consolidated take rate for the fourth quarter reached 24.5%, expanding 170 basis points (bps) year over year. Take rate expansion reflects tailwinds from the Reverb divestiture and continued strong on-site advertising performance across both Etsy and Depop.

ETSY’s Operating Results

In the fourth quarter of 2025, total operating expenses were $514.7 million, representing a 7.4% year-over-year increase. As a percentage of revenues, the figure expanded approximately 210 bps year over year to 58.4%.

Marketing expenses increased 7.3% year over year to $305.9 million. As a percentage of revenues, marketing expenses increased 120 bps year over year to 34.7%, with the increase driven primarily by accelerated brand marketing investment at Depop. The Etsy marketplace itself delivered year-over-year marketing leverage through favorable paid search dynamics, a mix shift toward OTT and social channels and improved owned-channel efficiency.

Product development expenses increased 2.7% year over year to $114.4 million. As a percentage of revenues, product development expenses declined 10 bps year over year to 13%.

General and administrative (G&A) expenses increased 14.1% year over year to $94.4 million. As a percentage of revenues, G&A expenses expanded 100 bps year over year to 10.7%. 

Adjusted EBITDA declined 11.2% year over year to $222.5 million. The adjusted EBITDA margin contracted 420 bps on a year-over-year basis to 25.2%. Operating income was $129.4 million, down 16.57% from the prior-year quarter.

ETSY's Balance Sheet

As of Dec. 31, 2025, cash and cash equivalents totaled $1.4 billion, up from $1.25 billion as of Sept. 30, 2025, reflecting a sequential increase in liquidity partly from the issuance of $700 million in new convertible notes. 

Long-term debt stood at $2.33 billion as of Dec. 31, 2025, with an additional $649 million in short-term debt on the balance sheet. Short-term investments were $224.1 million, and long-term investments were $134.4 million.

Under its stock repurchase program, Etsy repurchased approximately $133 million or 2.3 million shares of its common stock in the fourth quarter of 2025, bringing the full-year total to $777 million.

ETSY's Q1 2026 Guidance

With Depop classified as a discontinued operation beginning Q1 2026, all guidance reflects the core Etsy marketplace only.

For the first quarter of 2026, Etsy anticipates the take rate to be approximately 25.5%. Marketplace GMS is projected to be between $2.38 billion and $2.43 billion, representing approximately 2% to 4% year-over-year growth.

The adjusted EBITDA margin is expected to be in the range of 28% to 30%.

For the year 2026, management expects slight year-over-year GMS growth with positive year-over-year comparisons in each quarter, with the first quarter expected to be potentially the strongest quarter of the year.

ETSY’s Zacks Rank & Stocks to Consider

Currently, Etsy carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Retail-Wholesale sector are Dillard’s DDS, BJ’s Restaurants BJRI and The TJX Companies TJX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dillard’s shares have appreciated 22% in the past six months. Dillard’s is set to report first-quarter fiscal 2026 results on Feb. 24.

BJ’s Restaurants shares have appreciated 34.2% in the past six months. BJ’s Restaurants is set to report first-quarter fiscal 2026 results on Feb. 25.

The TJX Companies shares have appreciated 13.7% in the past six months. The TJX Companies is set to report first-quarter fiscal 2026 results on Feb. 25.

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This article originally published on Zacks Investment Research (zacks.com).

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