Etsy's 2025 Q2 Earnings: Key Contradictions in App Growth, Profit Margins, and Insider Strategy

App-based solution growth strategy, profitability outlook and margin management, Etsy Insider and funding strategy, marketing spend and strategy, Etsy Insider and subscription opportunities are the key contradictions discussed in Etsy's latest 2025Q2 earnings call.



Improved GMS and App Adoption:
- Etsy's GMS in the second quarter was down 5.4% year-over-year, which is an improvement from the previous quarter. App GMS grew year-over-year, rising to almost 45% of total GMS.
- This improvement was due to enhanced customer experience and engagement, particularly through a more browsable app and increased usage of the app by consumers.

Strategic Investment and Marketplace Momentum:
- The company increased its consolidated marketing spend by 16% to $212 million in Q2, primarily driven by investments in performance marketing and paid social channels.
- This strategy was effective in boosting Etsy's visibility and engagement amidst favorable external factors like competitive trends in paid search, contributing to the positive GMS trajectory.

Depop's Growth and Market Penetration:
- Depop achieved a GMS growth of 35% year-over-year, reaching an annualized run rate of $1 billion in GMS.
- The growth was fueled by a strong focus on brand awareness and enhanced marketing efforts, positioning Depop as the fastest-growing player in the online fashion resale market.

Efficiency in Marketing and Profitability:
- Etsy achieved a consolidated take rate expansion of 200 basis points to 24%, driven by improved efficiency in Google Shopping listings and increased paid social investments.
- This efficiency resulted from better segmentation and prioritization in Google PLA auctions, leading to improved return on marketing investments.