Executive Summary

Q3 2025 exceeded expectations: consolidated GMS $2.72B, revenue $678.0M, adjusted EBITDA $171.9M; Etsy/Depop combined returned to YoY GMS growth, and results topped the high end of prior GMS guidance .
Revenue beat Wall Street consensus by ~$20.9M (~3.2%); normalized “Primary EPS” was a slight miss versus consensus (actual $1.019 vs $1.038*), while GAAP diluted EPS printed $0.63*, pointing to non-GAAP adjustments driving the delta. Values retrieved from S&P Global.
Q4 2025 outlook guides GMS to $3.5B–$3.65B, take rate ~24.5%, and adjusted EBITDA margin ~24%, implying sequential improvement in apples-to-apples growth and stable core Etsy profitability with stepped-up Depop brand investment .
Strategic catalysts: OpenAI partnership with Instant Checkout (agentic commerce), app-led engagement and conversion gains, and a leadership transition—Kruti Patel Goyal becomes CEO on Jan 1, 2026; Josh Silverman to Executive Chair through 2026 .

What Went Well and What Went Wrong

What Went Well

Exceeded top end of consolidated GMS guidance; revenue grew 6.1% YoY excluding Reverb; adjusted EBITDA margin 25.4% with Etsy marketplace margin just shy of 30% .
App-led improvements: app GMS share rose to ~46% with strong engagement (+20% app home GMS), higher visit frequency and conversion versus web; downloads +9% YoY .
Depop momentum: GMS +39.4% YoY with +59% U.S. GMS; largest-ever brand campaign and new features (Outfits) supporting growth .

What Went Wrong

Etsy marketplace GMS declined 2.4% YoY; active buyers down 5% YoY; active sellers down 10.9% YoY (Etsy marketplace), reflecting continued buyer/seller pressure despite sequential improvement .
De minimis exemption expiration created a modest headwind and immediate pressure on U.S. import trade lanes, though domestic routes offset some impact .
Consolidated adjusted EBITDA down YoY and margin compressed versus Q3 2024 (25.4% vs 27.7%), reflecting greater brand investment at Depop and the Reverb divestiture comparison base .

Financial Results

Summary Financials vs Prior Periods and Estimates

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$662.4	$672.7	$678.0
Net Income ($USD Millions)	$57.4	$28.8	$75.5
Diluted EPS (GAAP, $)	$0.45	$0.25	$0.63
Adjusted EBITDA ($USD Millions)	$183.6	$169.0	$171.9
Adjusted EBITDA Margin (%)	27.7%	25.1%	25.4%
Take Rate (%)	22.7%	24.0%	24.9%

Segment Revenue Breakdown

Segment Revenue ($USD Millions)	Q3 2024	Q2 2025	Q3 2025
Marketplace Revenue	$476.1	$468.2	$468.1
Services Revenue	$186.3	$204.5	$210.0

KPIs and Operating Metrics

KPI	Q3 2024	Q2 2025	Q3 2025
Consolidated GMS ($USD Billions)	$2.915	$2.806	$2.725
Etsy Marketplace GMS ($USD Billions)	—	$2.4	$2.433
Depop GMS ($USD Millions)	—	$249.6	$292.1
App GMS Share (%)	42.8%	~45%	~46%
Active Buyers (Consolidated, Millions)	96.7	93.3	93.2
Active Sellers (Consolidated, Millions)	8.52	8.12	8.50

Actual vs Wall Street Consensus (S&P Global)

Metric	Q3 2025 Actual	Q3 2025 Consensus	Q4 2025 Consensus
Revenue ($USD Millions)	678.0	657.1*	883.3*
Primary EPS (Normalized, $)	1.019*	1.038*	1.353*
EBITDA ($USD Millions)	106.97*	164.67*	213.39*

Values retrieved from S&P Global. Note: Company reports Adjusted EBITDA; consensus EBITDA may reflect a different definition than company “Adjusted EBITDA,” explaining differences.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
GMS ($USD Billions)	Q4 2025	—	$3.5–$3.65	New
Take Rate (%)	Q4 2025	—	~24.5%	New
Adjusted EBITDA Margin (%)	Q4 2025	—	~24%	New

Q3 Guidance vs Actual

Metric	Period	Prior Guidance (Q2 PR)	Actual (Q3)	Outcome
GMS ($USD Billions)	Q3 2025	$2.6–$2.7	$2.725	Beat top end
Take Rate (%)	Q3 2025	~24.5%	24.9%	Above
Adjusted EBITDA Margin (%)	Q3 2025	~25%	25.4%	Above

No explicit Q4 guidance was provided previously on revenue, OpEx, OI&E, or tax rate; only GMS, take rate, and adjusted EBITDA margin were disclosed .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025, Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology initiatives	Q1: App personalization, “algotorial” collections, Apple App Intents; integrated with OpenAI Operator/Microsoft Copilot . Q2: Search quality improvements, AI discovery themes, PLA data feed optimization .	OpenAI Instant Checkout partnership; improved ML for buyer/item understanding; app redesign; stronger engagement and conversion .	Intensifying AI personalization and distribution; early agentic commerce foothold .
Supply chain/tariffs/macro	Q1: Tariff task force, “shop local,” domestic surfacing .	De minimis expiration created immediate pressure; modest quarterly headwind; domestic trade lanes offset .	Headwinds moderated; resilience via domestic supply and replacement rates .
Product performance (App)	Q1: Highest-ever app share, MAU/download growth . Q2: App ~45% of GMS; improved personalized marketing .	App GMS share ~46%; app home GMS +20% YoY; users visit ~5x more, view ~3x pages/visit, and convert ~1.5x more than web .	Consistent app-led gains; deeper personalization driving loyalty .
Regional trends	—	Strongest performance among highest-income U.S. buyers; Depop U.S. +59% YoY GMS; Australia sign-ups >100% .	Higher-income buyer strength; Depop expanding awareness geographically .
Loyalty/Retention	Q1: Insider beta, perks to test economics .	Insider 2.0 beta: shipping discounts + 5% Etsy credit; targeted offers to top buyers; frequency uplift observed in v1 .	Scaling retention; focus on high-value buyers .
R&D/Product Dev spend	—	Product development spend +5.7% YoY to $113M; majority of engineering hires aligned to growth initiatives .	Disciplined growth investment .
Leadership/Org	—	Kruti Patel Goyal named CEO (effective Jan 1, 2026); Josh Silverman to Executive Chair through 2026 .	Transition to growth-focused leadership leveraging AI and app-centric strategy .

Management Commentary

“Etsy’s third quarter consolidated results surpassed expectations across all three of our key financial metrics — and GMS for Etsy and Depop combined returned to year-over-year growth” — CEO Josh Silverman .
“Third quarter consolidated GMS was $2.7 billion, up 0.9% year-over-year excluding Reverb… Adjusted EBITDA was $172 million… Etsy marketplace’s margin was just shy of 30%” — CFO Lanny Baker .
“In September, Etsy became the first live partner for [OpenAI] Instant Checkout… eligible purchases… completed seamlessly within the chat experience, processed through Etsy Payments” — Kruti Patel Goyal .
“App users visited roughly five times more often… viewed three times more pages per visit and were 1.5 times more likely to convert” — CFO Lanny Baker .

Q&A Highlights

OpenAI economics: CPA-based success fee paid by Etsy (not passed to sellers currently); transactions process through Etsy Payments; higher-intent agent traffic observed, though early/small scale .
App engagement/product roadmap: Discovery-focused home, ML-powered recommendations, multiple pathways to inspiration; learnings inform 2026 product plans to deepen personalization .
Q4 outlook mechanics: Range implies further sequential improvement with uncertainty around consumer health; gift mode now integrated into search/home, supported by improved recommendations .
Loyalty program: Insider 2.0 emphasizes benefits per purchase (shipping discounts, 5% credit), with v1 showing frequency lifts; long-term lever is raising GMS per buyer (~$120 TTM) .
Depop investment: Brand campaign compresses near-term margin; expected to continue into 1H 2026, with spending adjustable based on performance; goal to scale awareness and long-term profitability .

Estimates Context

Revenue: Beat by ~$20.9M (~3.2%) versus consensus (Actual $678.0M vs $657.1M*). Values retrieved from S&P Global.
EPS: Normalized “Primary EPS” slight miss (Actual $1.019* vs $1.038*), while GAAP diluted EPS was $0.63 . Values retrieved from S&P Global.
EBITDA: Company reported Adjusted EBITDA $171.9M ; consensus “EBITDA” uses a different definition (Q3: 164.7M*), explaining directional differences. Values retrieved from S&P Global.

Key Takeaways for Investors

Near-term beat: Revenue/Take rate upside and GMS at the high end validate app/AI-driven engagement improvements and owned channel performance .
Sequential trajectory: Q4 guide implies further apples-to-apples improvement in GMS with stable core Etsy margins; watch Depop brand spend’s temporary compression and longer-term awareness benefits .
Strategic moat: Agentic commerce integration (OpenAI) plus deeper personalization and loyalty are expanding Etsy’s top-of-funnel reach and frequency, supporting estimate revisions on revenue and take rate .
Risk monitors: Tariff/trade lane changes (post-de minimis) present ongoing headwinds; domestic inventory depth and replacement rates mitigate but require vigilance on U.S. consumer health .
Leadership transition: Goyal’s elevation to CEO is aligned with growth priorities (AI, app experience, loyalty), a potential narrative catalyst heading into 2026 .
Depop optionality: U.S. growth (+59% GMS) and geographic expansion (Australia) support brand investment; scale could unlock multi-billion asset value over time .
Actionable: Bias estimates up for revenue/take rate; maintain margin discipline assumptions for core Etsy while modeling Depop spend through 1H 2026; monitor holiday elasticity and agentic commerce traffic quality .

ETSY INC (ETSY)·Q3 2025 Earnings Summary