Etsy Q2 Earnings: Revenue Beats Expectations, Shares Rise

Etsy reported Q2 revenue of $672.66mln, beating estimates, but earnings missed at 25 cents per share. Total revenue was up 3.8% YoY, driven by on-site ads. Gross merchandise sales (GMS) totaled $2.8bln, down 4.8% YoY. Active buyers decreased 4.6% YoY to 87.3mln. The company repurchased $335mln of its common stock and ended with $1.5bln in cash. Etsy expects Q3 GMS to be between $2.6bln and $2.7bln and adjusted EBITDA margin of approximately 25%.

Etsy Inc. (NASDAQ: ETSY) reported its second-quarter (Q2) 2025 financial results, showing revenue growth despite a decline in gross merchandise sales (GMS). The company's consolidated revenue for the period was $672.66 million, up 3.8% year-over-year (YoY), surpassing analysts' expectations of $647.2 million [4]. However, earnings per share (EPS) fell short of estimates at 25 cents per share, missing the expected 48 cents [2].

The company's GMS totaled $2.8 billion, down 4.8% YoY, and down 5.8% on a currency-neutral basis [2]. This decline was partially offset by strong performance in on-site advertising, which contributed to the revenue boost [3]. Etsy's take rate, the portion of revenue the platform keeps from each transaction, remained at 24% [3].

The number of active buyers on the Etsy marketplace decreased 4.6% YoY to 87.3 million, while GMS per active buyer declined 2.9% to $120 [1]. Despite these declines, the company's mobile app continued to show growth, with app GMS representing approximately 45% of total Q2 GMS [1].

Etsy repurchased $335 million of its common stock during the quarter and ended with $1.5 billion in cash and cash equivalents [2]. The company expects Q3 GMS to be between $2.6 billion and $2.7 billion, with an adjusted EBITDA margin of approximately 25% [1].

Etsy's strategic focus on AI and personalization appears to be resonating with investors, as evidenced by the positive premarket stock movement. The company's management emphasized its commitment to enhancing product discovery, improving matching of shoppers with inventory through machine learning, retaining valuable customers, and amplifying human connection on the platform [1].

References:
[1] https://www.investing.com/news/company-news/etsy-q2-2025-slides-revenue-grows-38-despite-gms-decline-stock-jumps-93CH-4160000
[2] https://seekingalpha.com/news/4474135-etsy-gaap-eps-of-025-misses-by-024-revenue-of-67266m-beats-by-2492m
[3] https://ih.advfn.com/market-news/article/13751/etsy-surpasses-q2-revenue-expectations-despite-rising-ai-and-marketing-costs
[4] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TR138:0-etsy-beats-quarterly-revenue-estimates-on-strong-demand/