Etsy ETSY reported first-quarter 2026 earnings of 89 cents per share from continuing operations, surpassing the Zacks Consensus Estimate of 62 cents by 43.55%. This compares favorably with a loss of 33 cents per share in the year-ago quarter.
First-quarter 2026 revenues rose 3.1% year over year to $631.3 million. The figure surpassed the Zacks Consensus Estimate of $616 million by 2.4%. Revenue growth was primarily driven by strength in advertising and services.
Year-over-Year continuing operations comparisons include Reverb in the first quarter of 2025 but reflect the Etsy marketplace only in the first quarter of 2026, following Reverb's divestiture in June 2025.
Etsy, Inc. Price, Consensus and EPS Surprise
Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. Quote
ETSY's Q1 Top-Line Details
Marketplace revenues were $432.8 million (68.5% of total revenues), up 1.1% year over year on a continuing operations basis. On an Etsy marketplace standalone basis, marketplace revenues grew 6.3% year over year.
Services revenues were $198.5 million (31.5% of total revenues), up 7.9% year over year on a continuing operations basis. On an Etsy marketplace standalone basis, services revenues rose 10.5% year over year, led by Etsy Ads and Offsite Ads, with Etsy Payments also contributing. The stronger expansion in services reflects Etsy's ongoing shift toward monetizing seller services, particularly advertising, which continues to enhance take rate and overall revenue mix. Etsy Payments also contributed to services growth.
ETSY's Active User Base & GMS
Etsy's trailing 12-month active buyer base was 86.6 million, down 2.1% year over year but up 0.1% sequentially, marking the first quarter of sequential growth in two years. New buyers totaled 5 million, up 2.3% year over year and reactivated buyers reached 6.9 million, up 6.6% year over year. Combined gross buyer additions were 11.9 million, up 4.8% year over year.
The active seller base was 5.6 million, up 3.3% year over year, representing the first period of year-over-year growth since the introduction of the seller setup fee.
Etsy marketplace GMS was $2.5 billion, up 5.5% year over year and representing a 540-basis-point improvement over the fourth-quarter 2025 growth rate. On a currency-neutral basis, Etsy marketplace GMS grew 3.6% year over year.
Mobile app GMS grew 11.2% year over year, accelerating from 6.6% last quarter, with app share reaching approximately 47% of total GMS, expanding 240 basis points (bps) year over year. Non-app GMS also improved, growing 1% year over year versus a decline of 4.8% last quarter. GMS per active buyer reached $122 on a trailing 12-month basis, up 1.5% year over year for the first time since 2022 and marking a fourth consecutive quarter of sequential improvement.
The Etsy marketplace take rate for the first quarter reached 25.7%, expanding 180 bps year over year. Take rate expansion was led by Etsy Ads on the back of machine learning improvements to ad relevance and seller budget pacing. Offsite Ads and Etsy Payments also contributed to the take rate expansion.
ETSY’s Operating Results
In the first quarter of 2026, total operating expenses were $335.8 million on a continuing operations basis, down 25.1% year over year. The prior-year period included a $101.7 million asset impairment charge; absent that, total operating expenses declined modestly year over year on a like-for-like basis.
Marketing expenses were $174.2 million. As a percentage of revenues, marketing expenses declined 40 bps year over year to 27.6% on a continuing operations basis, reflecting targeted portfolio mix shifts toward paid search and owned channels and the full in-sourcing of paid social efforts.
Product development expenses were $99.1 million. As a percentage of revenues, product development expenses declined 60 bps year over year to 15.7%, as modestly higher employee costs were offset by savings in other areas.
General and administrative (G&A) expenses were $62.5 million. As a percentage of revenues, G&A expenses contracted 190 bps year over year to 9.9%, benefiting from a one-time reversal of non-income tax expense and stable employee costs on a larger revenue base.
Adjusted EBITDA grew 6.4% year over year to $184.7 million on a continuing operations basis. The adjusted EBITDA margin expanded 100 bps year over year to 29.3%. Operating income was $119.8 million, compared to an operating loss of $3.9 million in the year-ago quarter, with the prior period weighed by the asset impairment charge.
ETSY's Balance Sheet
As of March 31, 2026, cash and cash equivalents totaled $1.21 billion, down sequentially from $1.36 billion as of Dec. 31, 2025. Total liquidity, including short and long-term investments, was approximately $1.58 billion, a sequential decline from approximately $1.71 billion at year-end 2025.
Long-term debt stood at $2.33 billion as of March 31, 2026, up marginally from $2.33 billion as of Dec. 31, 2025, with short-term debt also stable at $649.3 million, unchanged sequentially. Net cash provided by continuing operations was $102.5 million in the quarter, representing free cash flow conversion of approximately 50% of adjusted EBITDA, compared to approximately 29% in the year-ago quarter.
Under its share repurchase program, Etsy repurchased approximately $145 million or 2.7 million shares of common stock in the first quarter of 2026. As of March 31, 2026, $827.9 million remained on the current board-authorized repurchase programs.
ETSY's Q2 2026 Guidance
With Depop classified as a discontinued operation beginning in the first quarter of 2026, all guidance pertains to the Etsy marketplace only. The pending sale of Depop to eBay for $1.2 billion is expected to close by the end of the third quarter of 2026.
For the second quarter of 2026, Etsy anticipates the take rate to be approximately 25.7%. Marketplace GMS is projected to be between $2.48 billion and $2.53 billion, representing 3% to 5% year-over-year growth. The adjusted EBITDA margin is expected to be in the range of 27% to 29%.
For 2026, management now expects the Etsy marketplace GMS to grow in the low single-digit range, an improvement from prior guidance, with year-over-year growth expected in each quarter. The full-year adjusted EBITDA margin outlook of 28% to 30% is unchanged from prior guidance.
ETSY's Zacks Rank & Stocks to Consider
Currently, Etsy carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Retail-Wholesale sector are Dutch Bros BROS, Global-E Online Ltd. GLBE and Portillo's Inc. PTLO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dutch Bros shares have declined 9.5% year to date. Dutch Bros is set to report first-quarter 2026 results on May 6.
Global-E Online shares have fallen 18.7% year to date. Global-E is slated to report its first-quarter 2026 results on May 13.
Portillo's shares have gained 33.9% year to date. Portillo is scheduled to report its first-quarter 2026 results on May 5.
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