Executive Summary

Q2 2025 revenue was $672.7M, up 3.8% YoY, with consolidated take rate at 24.0%; Adjusted EBITDA was $169.0M (25.1% margin). GMS was $2.8B, down 4.8% YoY; Etsy marketplace GMS was $2.4B, down 5.4% YoY but improved sequentially vs Q1 .
Results vs consensus: revenue beat ($672.7M vs ~$647.6M*) while Primary EPS missed (actual $0.689* vs ~$1.090*); GAAP diluted EPS was $0.25 . Values retrieved from S&P Global*.
Management guided Q3 2025 GMS to $2.6–$2.7B, ~24.5% take rate, and ~25% Adjusted EBITDA margin; guidance explicitly framed as QoQ improvement “apples-to-apples” post-Reverb sale .
Catalysts: stronger take rate from on-site ads, app-led engagement gains (App GMS ~45%), Depop acceleration (GMS +35% YoY), and balance sheet flexibility after ~$700M convertible notes and $335M buybacks .

What Went Well and What Went Wrong

What Went Well
- Strong revenue/take rate from Etsy Ads improvements and payments; take rate up 200 bps YoY to 24% .
- App momentum: App GMS ~45% of Etsy marketplace, MAUs +7% YoY; app experience more browsable and personalized .
- Depop strength: GMS $249.6M (+35.3% YoY), U.S. GMS +54% YoY; positioned as fastest-growing U.S. online fashion resale platform .
- Quote: “Our take rate was very strong, at 24%, primarily driven by the expansion of Etsy Ads revenue…” — CFO Lanny Baker .
- Quote: “We’re seeing early success… more browsable shopping experience… amplified by more personalized marketing and emergent AI technologies.” — CEO Josh Silverman .
What Went Wrong
- GMS and buyers down YoY: consolidated GMS -4.8%; Etsy marketplace GMS -5.4%; active buyers -4.6% YoY to 87.3M .
- Profitability pressure: GAAP net income margin 4.3% (down ~390 bps YoY) due to FX loss; Adjusted EBITDA margin down 260 bps YoY to 25.1% .
- EPS optics: GAAP diluted EPS $0.25; Primary EPS missed consensus*; non-GAAP adjustments include excluding payroll tax on SBC from Adjusted EBITDA beginning Q1’25 .
- Analyst concern: core Etsy EBITDA managed to “high-20s” (below 30%+) near-term; management is investing to reaccelerate growth (app, paid social, ML) .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$647.8	$651.2	$672.7
GAAP Diluted EPS ($)	$0.41	$(0.49)	$0.25
Net Income ($USD Millions)	$53.0	$(52.1)	$28.8
Net Income Margin (%)	8.2%	(8.0)%	4.3%
Gross Profit ($USD Millions)	$463.7	$459.1	$479.1
Total Operating Expenses ($USD Millions)	$393.5	$481.4	$402.7
Adjusted EBITDA ($USD Millions, Non-GAAP)	$179.4	$171.1	$169.0
Adjusted EBITDA Margin (%)	27.7%	26.3%	25.1%
Consolidated GMS ($USD Billions)	$2.95	$2.79	$2.81
Take Rate (%)	22.0%	23.3%	24.0%

Segment/Revenue Mix

Metric	Q2 2024	Q2 2025
Marketplace Revenue ($USD Millions)	$470.4	$468.2
Services Revenue ($USD Millions)	$177.4	$204.5

Marketplace KPIs

KPI	Q2 2025	YoY	Seq
Etsy Marketplace GMS ($USD Billions)	$2.4	-5.4%	+3.5 ppt vs Q1
Active Buyers (TTM, Millions)	87.3	-4.6%	-1.3%
Reactivated Buyers (Millions)	6.5	+2.8%	+1.3%
New Buyers (Millions)	4.8	n/a	n/a
Habitual Buyers (TTM, Millions)	6.1	n/a	n/a
GMS per Active Buyer (TTM, $)	$120	-2.9%	Stable
App Share of Etsy Marketplace GMS (%)	~45%	n/a	n/a

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated GMS ($USD Billions)	Q3 2025	n/a	$2.6–$2.7	New range provided
Take Rate (%)	Q3 2025	“Similar to Q1 25” (23.3%)	~24.5%	Raised vs prior baseline
Adjusted EBITDA Margin (%)	Q3 2025	~25%	~25%	Maintained
Consolidated GMS (YoY trend commentary)	Q2 2025	“Decline similar to or slightly better than Q1 25”	Actual -4.8%	Delivered in-line/slightly better than guide

Management framed Q3 guidance as sequential improvement “apples-to-apples” at midpoint post-Reverb divestiture .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
App and Discovery	App share 42% in 2024; revamp homepage for inspiration; app improvements and Apple features (App Intents) in Q1	App MAUs +7% YoY; App GMS ~45%; more browsable UI; personalized email/push up to ~40% with plans near-fully personalized by YE	Accelerating
Paid Social and Marketing Mix	Scaled mid-funnel paid social in 2024; increased personalized direct marketing in Q1	Strong Paid Social with partners (Pinterest, Meta, TikTok); creator collective spend +~50% seq; PLA segmentation improved ROI	Improving ROI/diversifying
AI/ML and Agentic Shopping	Introduced “algotorial” collections using AI; integrated with AI shopping experiences (OpenAI Operator, Microsoft Copilot)	Re-tooling ranking platform to leverage LLMs; early signals of agentic traffic; featured in Apple WWDC visual intelligence	Building capability/early traction
Tariffs/Macro	Q1 commentary: task force for tariffs; consumer volatility	Consumer spend stabilized in May/June; favorable competitive dynamics in Google auctions	Stabilizing macro; tactical tailwinds
Loyalty (Etsy Insider)	Beta loyalty program with perks; testing economics	V2 program by holiday; focus on rewards, free shipping with guardrails	Iterating toward scalable economics
Depop Momentum	2024 fastest-growing U.S. online resale; strong Q4 growth	Q2 GMS +35.3% YoY; U.S. +54%; permanent CEO (Peter Semple); marketing acceleration in Q3	Accelerating U.S. growth
Balance Sheet & Capital Allocation	2024 FCF conversion ~90%; buybacks reduced share count	~$700M converts; $335M buybacks in Q2; cash & investments ~$1.5B	Enhanced flexibility

Management Commentary

“Second quarter GMS and revenue came in ahead of expectations, and adjusted EBITDA was in line with our guidance… take rate was very strong, at 24%… strengthened our balance sheet through a highly successful convertible notes offering… repurchased approximately $335 million of Etsy stock.” — CFO Lanny Baker .
“We’re seeing early success… more browsable shopping experience… amplified by more personalized marketing and emergent AI technologies.” — CEO Josh Silverman .
“We are retooling our ranking platform to more effectively leverage capabilities of large language models… deliver better search results… more diverse and engaging recommendations.” — President & Chief Growth Officer Kruti Patel Goyal .
“We currently expect Q3 consolidated GMS to be between $2.6B and $2.7B… take rate ~24.5% and adjusted EBITDA margin ~25%.” — CFO Lanny Baker .

Q&A Highlights

GMS trajectory and margin philosophy: Sequential GMS improvement driven by app adoption, personalized owned channels, Paid Social, and PLA optimization; core Etsy margins managed to “high-20s” with growth investments to re-accelerate revenue .
App acquisition and behavior: App increases LTV; pushing app adoption via mobile web prompts, email/push, and modest paid app marketing; gradual approach to acquisition spend .
Marketing ROI: Benefited from reduced competition in Google auctions (Amazon/Temu/Shein pullbacks) and segmentation tactics; diversifying spend earlier in discovery via social channels .
Agentic shopping: Early days; Etsy’s unique inventory positions it well; genAI to personalize landing experiences and broaden category exposure .
Loyalty program economics: Etsy Insider V2 aims for scalable economics (e.g., shipping benefits with guardrails; rewards on purchases), focusing on top buyers .

Estimates Context

Results vs S&P Global consensus (Primary EPS and Revenue):

Metric	Q2 2025 Consensus*	Q2 2025 Actual*	Surprise
Revenue ($USD Millions)	647.6*	672.7*	+$25.1M (Beat)*
Primary EPS ($)	1.090*	0.689*	-0.401 (Miss)*

Notes:

GAAP diluted EPS reported by Etsy was $0.25 , which differs from S&P Global’s “Primary EPS” construct.
Values retrieved from S&P Global*.

Forward estimates context:

Metric	Q3 2025 Consensus*	FY 2025 Consensus*	FY 2026 Consensus*
Revenue ($USD Millions)	657.1*	2,886.0*	2,961.9*
Primary EPS ($)	1.038*	4.195*	4.641*
EBITDA ($USD Millions)	164.7*	724.6*	723.3*

Values retrieved from S&P Global*.

Key Takeaways for Investors

Revenue beat driven by Etsy Ads optimization and payments; take rate expansion to 24% underscores monetization strength even with YoY GMS declines .
Sequential marketplace stabilization: Etsy marketplace GMS improved vs Q1; app-led engagement (MAUs +7% YoY, App GMS ~45%) indicates product/marketing flywheel gaining traction .
Depop is becoming a meaningful growth vector (U.S. +54% YoY), with expanded Q3 marketing investments and a permanent CEO, supporting consolidated growth narrative .
Near-term margin trade-off is intentional: management prioritizes growth re-acceleration (app, Paid Social, ML) while managing core Etsy Adjusted EBITDA in the high-20% range .
Balance sheet optionality: ~$700M converts at 1.00% due 2030 and $335M Q2 buybacks provide flexibility to manage maturities and pursue repurchases and investments .
Q3 outlook signals QoQ improvement: GMS $2.6–$2.7B, ~24.5% take rate, ~25% margin — look for sustained momentum in app engagement, marketing ROI, and agentic shopping integrations .
Watch estimate revisions: Post revenue beat and guidance clarity, sell-side models may raise revenue/take rate assumptions but keep margins near ~25% as investment cadence persists*. Values retrieved from S&P Global*.

Appendix: Additional Data

Convertible Notes Details (June 12, 2025):

$650M 1.00% converts due 2030; initial conversion price ~$85.79; ~$150M of proceeds used to repurchase shares at $60.20; balance for general corporate purposes .

Cross-Period FX and Non-GAAP notes:

Q2 2025 GAAP net income was impacted by a $25.4M non-cash FX loss vs a $4.9M FX gain in Q2 2024 .
Beginning Q1 2025, payroll tax on SBC excluded from Adjusted EBITDA (immaterial prior period impact) .

ETSY INC (ETSY)·Q2 2025 Earnings Summary