Etsy 2025 Q2 Earnings Revenue Growth Amid 45.6% Net Income Decline

Etsy (ETSY) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. Etsy's results slightly exceeded revenue expectations with a 3.8% increase to $672.66 million, surpassing analyst predictions of $647.81 million. However, the company's net income saw a substantial decline of 45.6%, falling from $53.01 million in the previous year's Q2 to $28.84 million this quarter. Despite the net income drop, Etsy remains focused on strategic investments. The company anticipates continued improvement in GMS trends, aiming to leverage AI technologies and personalized marketing strategies for future growth. Guidance remains in-line with previous forecasts, as Etsy's leadership expresses confidence in sustainable profitability.

Revenue
Etsy's total revenue for the second quarter of 2025 reached $672.66 million, marking a 3.8% increase from $647.81 million in the same quarter of 2024. The Marketplace segment contributed $468.17 million, while the Services segment added $204.49 million to the overall revenue.

Earnings/Net Income
Etsy's earnings per share (EPS) decreased by 39.1%, dropping from $0.46 in 2024 Q2 to $0.28 in 2025 Q2. Net income also fell significantly to $28.84 million in 2025 Q2, a 45.6% decline from the $53.01 million in the previous year. The earnings report reflects a challenging quarter for Etsy's profitability.

Post-Earnings Price Action Review
Investors employing the strategy of purchasing Etsy shares following a revenue increase and holding them for 30 days experienced significant underperformance. This approach yielded a negative compound annual growth rate (CAGR) of -7.77% and an excess return of -120.46%, starkly underperforming compared to the benchmark return of 87.35%. The strategy's maximum drawdown reached 55.82%, and the Sharpe ratio stood at -0.14, indicating a high-risk investment with substantial losses. The results underscore the volatility and risk involved in this particular investment strategy, highlighting the necessity for more cautious and diversified approaches when considering Etsy's stock performance.

CEO Commentary
"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. He highlighted efforts to strengthen customer relationships, deepen buyer engagement, and reignite GMS growth, noting early success in enhancing the shopping experience on the App through personalized marketing and AI technologies. Silverman emphasized the potential for significant growth and sustainable value creation, underscoring Etsy's unique market position.

Guidance
Etsy anticipates continued improvement in GMS trends, driven by ongoing investments in customer engagement and marketing strategies. The company remains focused on enhancing the shopping experience and expects to capitalize on AI advancements to support future growth. Etsy's leadership expresses confidence in managing the business for sustainable profitability while investing in initiatives that foster long-term value for stakeholders.

Additional News
Recently, Etsy unveiled a significant upgrade to its logistics services, requiring sellers in the U.S., Canada, Turkey, Germany, and France to switch to designated shipping partners for improved efficiency and inventory management. This initiative, announced on July 25, aims to enhance fulfillment reliability, although it may temporarily affect some sellers' operations. Additionally, Etsy experienced a pricing system glitch on July 15, causing sellers' prices to revert to previous settings, sparking controversy. Despite these technical challenges, Etsy continues to refine platform infrastructure. Furthermore, the company relaxed a longstanding policy on July 2, allowing sellers to offer customization services for products, creating new business opportunities and supporting Etsy’s transition to a more flexible e-commerce model.