Etsy Q2 2025 Results Show Promising Growth Despite Revenue Decline

Etsy reported Q2 2025 revenue of $673 million, a 4% YoY increase, despite a 5.4% decline in gross merchandise sales. Analysts' price targets suggest potential volatility, with a one-year average target of $54.59, a 15.37% downside from the current price. GuruFocus estimates a notable upside potential, highlighting the stock's undervaluation with a projected GF Value of $95.72 within one year, a 48.38% increase from the current price.

Etsy Inc. (ETSY) reported its Q2 2025 financial results, showing a 4% year-over-year (YoY) increase in revenue to $673 million, despite a 5.4% decline in gross merchandise sales (GMS) [1]. The company's earnings per share (EPS) for the quarter were $0.25, compared to $0.41 a year ago, representing a surprise of -53.7% over the Zacks Consensus Estimate of $0.54 [1].

Key metrics for Etsy's Q2 2025 performance include:
- Total GMS: $2.81 million, compared to the $2.77 million average estimate based on 10 analysts [1].
- Active buyers: 93,334 versus 94,648 estimated by seven analysts on average [1].
- Active sellers: 8,118 compared to the 8,155 average estimate based on three analysts [1].
- Revenue from services: $204.49 million versus $189.56 million estimated by eight analysts on average, representing a +15.3% change compared to the year-ago quarter [1].
- Revenue from the marketplace: $468.17 million versus the eight-analyst average estimate of $459.65 million, showing a -0.5% year-over-year change [1].

Etsy's Q2 results exceeded expectations, with the company achieving a 25.1% adjusted EBITDA margin on $169 million in adjusted EBITDA [2]. The company maintained a strong take rate of 24%, helping to drive revenue growth despite the decline in overall transaction volume. Etsy completed the sale of its Reverb marketplace on June 2, 2025, with Reverb's contribution included for only the first two months of the quarter [2].

Shares of Etsy have returned +17.4% over the past month versus the Zacks S&P 500 composite's +3.4% change, with the stock currently holding a Zacks Rank #2 (Buy) [1]. Analysts' price targets suggest potential volatility, with a one-year average target of $54.59, a 15.37% downside from the current price. GuruFocus estimates a notable upside potential, highlighting the stock's undervaluation with a projected GF Value of $95.72 within one year, a 48.38% increase from the current price [1].

Etsy's strategic initiatives for driving future GMS growth include improving discovery, leveraging machine learning, retaining valuable customers, and enhancing human connection. The company's focus on AI and personalization appears to have resonated with investors, as evidenced by the positive premarket stock movement following the Q2 results [2].

References:
[1] https://www.nasdaq.com/articles/etsy-etsy-q2-earnings-taking-look-key-metrics-versus-estimates
[2] https://ng.investing.com/news/company-news/etsy-q2-2025-slides-revenue-grows-38-despite-gms-decline-stock-jumps-93CH-2033764