Etsy reports mixed Q2 2025: Revenue up and gross merchandise sales down

Etsy announced its second-quarter 2025 results, revealing a mixed performance with revenue growth driven by advertising and payments, despite a decrease in overall gross merchandise sales (GMS). The company also highlighted strategic efforts to enhance the buyer experience and reignite growth on its core marketplace.

Etsy reported consolidated GMS of 2.8 billion dollars, a 4.8 percent decrease year-over-year, or 5.8 percent on a currency-neutral basis. Excluding the recently sold Reverb, consolidated GMS stood at 2.7 billion dollars, down 2.6 percent year-over-year. Revenue for the quarter reached 672.7 million dollars, marking a 3.8 percent increase compared to the second quarter of 2024. This growth was primarily attributed to the strong performance of on-site advertisements and, to a lesser extent, payments across both Depop and the Etsy marketplace.

Net income for the second quarter was 28.8 million dollars, a decrease of 24.2 million dollars year-over-year. Consolidated net income margin was approximately 4.3 percent, with diluted net income per share at 25 cents. Non-GAAP adjusted EBITDA was reported at 169 million dollars, with a consolidated non-GAAP adjusted EBITDA margin of approximately 25.1 percent.

Josh Silverman, Etsy, Inc. Chief Executive Officer, expressed optimism about the results, stating, "We are encouraged by our second quarter performance, which reflects tangible progress in our key investment areas." He emphasised efforts to strengthen customer relationships, deepen buyer engagement, and drive GMS growth through initiatives like building a more browsable shopping experience, particularly on the Etsy App, amplified by personalised marketing and emergent AI technologies. Silverman believes these efforts are creating a "significant runway for growth."

The Etsy marketplace itself saw GMS of 2.4 billion dollars, down 5.4 percent year-over-year. Depop, Etsy's fashion resale platform, continued its strong growth trajectory with second-quarter GMS of 249.6 million dollars, a strong 35.3 percent increase year-over-year. Growth in the United States was particularly strong, up 54 percent.

For the third quarter of 2025, Etsy anticipates consolidated GMS to be in the range of 2.6 billion dollars to 2.7 billion dollars, with a take rate of approximately 24.5 percent and an adjusted EBITDA margin of around 25 percent.