Etsy reports $3.6b Q4, eyes 2026 growth with AI push

Etsy, Inc. reported its Q4 and full year 2025 results, ending December 31, with a return to slight Gross Merchandise Sales (GMS) growth.

GMS was US$3.6 billion, up 2.4% year-over-year on an adjusted basis, but down 3.8% including Reverb, which was sold in June 2025.

Revenue reached US$881.6 million, a 6.6% rise excluding Reverb.

Active buyers declined 3.4% to 86.5 million, while active sellers decreased 1.5% to 5.6 million.

App-based GMS grew 6.6%, representing nearly half of total GMS. The company ended the quarter with US$1.8 billion in cash and repurchased approximately US$133 million of stock.

Net income was US$110.7 million, with non-GAAP EBITDA of US$222.5 million.

Etsy expects GMS growth to continue in 2026, supported by product and marketing initiatives, including expanded cross-border shipping and AI-driven shopping partnerships.

🔗 Source: Etsy

🧠 Food for thought

Implications, context, and why it matters.

Etsy is growing revenue from fewer, higher-spending buyers

Etsy’s Gross Merchandise Sales (GMS) rose in Q4 even as active buyers fell. Trailing twelve-month GMS per active buyer climbed to $121, helped by a higher average order value 1.
Revenue grew faster than GMS because Etsy increased its “take rate,” meaning the share it keeps from each sale, to 24.5% 2.
Services revenue, which includes payments plus other services, increased 9.9%. Marketplace revenue inched up 0.8%, with the shift also tied to the Reverb divestiture plus advertising growth 2.
Gross buyer additions increased for the first time in over two years. Habitual buyers, Etsy’s highest-value group, dropped 8.6% year over year and 1.4% sequentially 1.

Etsy is selling Depop and sharpening focus on the core marketplace and capital returns

Etsy signed a definitive agreement to sell Depop (a secondhand fashion marketplace) to eBay for $1.2 billion in cash. The deal is expected to close in the second quarter of 2026, subject to closing conditions 2.
The sale removes a fast-growing unit that still loses money. Depop’s negative adjusted EBITDA margin reduced Etsy’s consolidated adjusted EBITDA margin by 350 basis points in 2025 1.
Etsy expects to use the proceeds for general corporate purposes, including share repurchases plus investment in the Etsy marketplace 2.
Agentic (AI-powered) traffic to Etsy in Q4 was about 15 times higher than the prior year. It still accounted for less than 1% of total traffic 1.