Executive Summary

Q1 2025 revenue was $651.2M (+0.8% y/y), take rate reached a new quarterly high of 23.3%, and adjusted EBITDA margin was 26.3%; GAAP diluted EPS was $(0.49) due largely to a $101.7M non-cash impairment tied to Reverb .
GMS declined 6.5% y/y to $2.8B; Etsy marketplace GMS fell 8.9% y/y to $2.3B, with habitual buyers down 11% and GMS per active buyer down 3.5% to $120 .
Q2 2025 guidance: consolidated GMS decline similar to or slightly better than Q1, take rate similar to Q1, and adjusted EBITDA margin ~25% (reflecting higher marketing and people costs); guidance excludes Reverb sale impact .
Management emphasized growing app engagement (app reached an all-time high 44.5% of Etsy marketplace GMS) and personalization via AI/ML; Depop delivered strong growth, and Etsy announced sale of Reverb for $105M cash post-quarter, focusing resources on Etsy/Depop .

What Went Well and What Went Wrong

What Went Well

App engagement and conversion improved; the app reached 44.5% of Etsy marketplace GMS, with upward trends in MAUs and first-time downloads: “the app reached an all-time high of 44.5% of total Etsy marketplace GMS” .
Take rate expanded 170 bps y/y to 23.3% on ads growth, seller setup fee, and payments expansion; adjusted EBITDA margin of 26.3% slightly exceeded expectations .
Depop posted its strongest quarter since acquisition with notable U.S. momentum, supported by performance and mid-funnel marketing efficiency .

What Went Wrong

Core Etsy marketplace GMS fell 8.9% y/y and active buyer metrics remained muted; habitual buyers declined 11% y/y and GMS per active buyer fell 3.5% to $120 .
GAAP net loss $(52.1)M driven by a $101.7M goodwill impairment for Reverb; net loss margin was (8.0)% .
Gross margin saw modest deleverage from higher ML/search compute and free shipping costs tied to the loyalty beta; marketing mix leaned more to paid social with lower ROIs than search/PLA, pressuring margins near term .

Financial Results

Consolidated Financials vs Prior Quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$662.4	$852.2	$651.2
GAAP Diluted EPS ($)	$0.45	$1.03	$(0.49)
Net Income Margin (%)	8.7%	15.2%	(8.0)%
Adjusted EBITDA ($USD Millions)	$183.6	$250.6	$171.1
Adjusted EBITDA Margin (%)	27.7%	29.4%	26.3%
Take Rate (%)	22.7%	22.8%	23.3%

Segment Revenue Breakdown

Metric	Q3 2024	Q4 2024	Q1 2025
Marketplace Revenue ($USD Millions)	$476.1	$607.3	$458.5
Services Revenue ($USD Millions)	$186.3	$244.9	$192.7

KPIs and Operating Metrics

Metric	Q3 2024	Q4 2024	Q1 2025
Consolidated GMS ($USD Billions)	$2.92	$3.74	$2.79
Etsy Marketplace GMS ($USD Billions)	$2.5	$3.3	$2.3
Active Buyers (Etsy marketplace, Millions)	91.2	89.6	88.5
Habitual Buyers (Millions)	6.8	6.4	6.2
GMS per Active Buyer ($)	$123	$121	$120
Active Sellers (Etsy marketplace, Millions)	6.2	5.6	5.4
App Share of Etsy Marketplace GMS (%)	—	42% (FY 2024)	44.5% (Q1)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated GMS	Q1 2025	Decline similar to Q4 2024	—	—
Consolidated GMS	Q2 2025	—	Decline similar to or slightly better than Q1 2025	Maintained cautious outlook
Take Rate	Q1 2025	~23%	—	—
Take Rate	Q2 2025	—	Similar to Q1 25	Maintained
Adjusted EBITDA Margin	Q1 2025	~25–26%	—	—
Adjusted EBITDA Margin	Q2 2025	—	~25%	Lower vs Q1 guide midpoint

Notes: Guidance assumes FX at current levels and excludes impact from planned Reverb sale .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
App engagement and personalization	Emphasis on app as marquee experience; ML in ads ranking	App reached 42% of FY GMS; discovery-infused experiences	App conversion up; app at 44.5% of marketplace GMS; “algotorial” curated discovery with AI/LLMs	Strengthening
Ads and take rate	Scaling paid social; ML-adjusted feeds	Etsy Ads drove Services revenue; bidding algorithm improvements	On-site Ads growth; take rate 23.3% (+170 bps y/y)	Improving efficiency
Loyalty (Etsy Insider)	Beta introduced, free shipping benefit	Beta continued; holiday campaigns	Beta continued; free shipping cost a gross margin headwind	Testing/optimization phase
Tariffs/de minimis exposure	Not highlighted	Macro/trade headwinds acknowledged	“Just over 1%” of GMS is U.S. imports from China; de minimis $800 threshold key; replacement effects likely; watch demand impact	Low direct exposure; macro demand risk
Quality/Search	Search quality standards; reduce image duplicates	ML for delivery estimates; Quality initiatives	Rebuilt search with quality score; dynamic scoring reducing low-review purchases; seller guidance	Advancing execution
Subsidiaries	Depop fee changes; momentum	Depop strong; Reverb holiday strategies	Depop strong; Reverb sale for $105M to refocus on Etsy/Depop	Portfolio simplification

Management Commentary

CEO: “the app reached an all-time high of 44.5% of total Etsy marketplace GMS… we’re creating truly personalized browsing and discovery journeys… genuinely game-changing for Etsy” .
CFO: “we delivered a small beat on take rate and adjusted EBITDA margin… take rate improved to 23.3%… adjusted EBITDA margin 26.3%” .
CEO on tariffs/agents: “just over 1% of GMS comes from U.S. imports… agents will offer choice… Etsy has something different… partnerships with leading GenAI providers” .
President/Chief Growth Officer: “biggest opportunities… give shoppers more compelling reasons to choose Etsy… build a more personalized, more delightful shopping experience” .

Q&A Highlights

Marketing mix: Greater spend in paid social (lower ROI than search/PLA), but improving efficiency; Q2 margin guide reflects higher marketing and compensation costs .
App roadmap: Push to highly personalized browsable surfaces; aim to shift mobile web to app over time .
Active sellers/buyers: New $29 seller setup fee intentionally reduced low-probability sellers; buyer softness attributed to macro vs churn; habitual buyers stable at ~42% of GMS .
Gross margin headwinds: ML/search compute and free shipping in loyalty beta both modest headwinds; will continue but not dramatic .
Tariffs/de minimis: Low direct exposure from China; watch for broader demand impacts and process changes if de minimis evolves .

Estimates Context

Q1 2025 results vs S&P Global consensus: Revenue $651.2M vs $641.6M* (beat); Primary EPS (normalized) $1.21 vs $1.01* (beat). Etsy does not report non-GAAP EPS in the release; S&P’s Primary EPS represents normalized earnings. Values retrieved from S&P Global.
Q2 2025 consensus: Revenue $647.6M*; Primary EPS $1.09*; Management guides Q2 adjusted EBITDA margin ~25% and similar take rate to Q1 . Values retrieved from S&P Global.

Metric	Q1 2025 Actual	Q1 2025 Consensus*	Surprise	Q2 2025 Consensus*
Revenue ($USD Millions)	$651.2	$641.6*	+$9.6	$647.6*
Primary EPS ($)	$1.21*	$1.01*	+$0.20	$1.09*

Values retrieved from S&P Global.

Key Takeaways for Investors

Near-term: Revenue and adjusted EBITDA were resilient despite GMS declines; the impairment-driven GAAP loss is non-cash. Expect margin compression in Q2 on higher marketing and people costs, but take rate should remain elevated .
Strategic: App-led personalization (“algotorial” + LLMs) is gaining traction; data flywheel from broader signal ingestion (ads + recommendations) should compound engagement/frequency .
Ads monetization: On-site Ads and Payments continue to lift take rate; sustained efficiency gains can support monetization even in softer demand environments .
Portfolio focus: Reverb divestiture streamlines capital allocation toward Etsy and Depop; Depop’s momentum provides diversification and growth optionality .
Risk monitor: Macro discretionary softness and evolving tariff/de minimis policies could weigh on buyer frequency; management sees high replacement and low direct exposure to China but remains cautious on demand elasticity .
KPI watch: Habitual buyer count and GMS per buyer remain pressured; app share and personalized engagement metrics are the leading indicators to track for inflection .
Estimates: Street likely nudges near-term margin expectations lower in line with guidance while acknowledging revenue/Primary EPS beat; sustained take rate and ad momentum can support multi-quarter monetization if engagement improvements continue .

Citations: Press release and 8-K Q1 2025 ; Q4 2024 press release ; Q3 2024 press release . Earnings call transcript Q1 2025 .

ETSY INC (ETSY)·Q1 2025 Earnings Summary