Etsy, Inc. Q4 FY2025 earnings call

Kruti Patel Goyal discussed focusing on improving Etsy's core marketplace, sold Depop to eBay to focus on Etsy. Conducted a diagnostic of the business, identified priorities like showing up earlier in shopping journey, using ML to match buyers, deepening loyalty, leaning into human connection. Reorganized the company around customer outcomes. App improvements led to increased GMS growth, personalized marketing engagement, and improved customer support satisfaction. Expanded AI and agentic commerce partnerships. Lanny Baker covered financial results, sale of Reverb, Etsy marketplace GMS, Depop growth, operating expenses, and outlook.

Fourth quarter consolidated GMS was $3.6 billion, up 2.4% year-over-year excluding Reverb. Consolidated revenue was $882 million, up 6.6% excluding Reverb. Etsy marketplace GMS was up 0.1% year-over-year in Q4, first positive since Q3 2023. Depop Q4 2025 GMS up nearly 38% to $300 million. Etsy marketplace adjusted EBITDA margin slightly above 30% in Q4. Services revenue grew 9.9% year-over-year, Marketplace revenue grew 0.8%.

Anticipates Q1 2026 GMS in range of $2.38 billion to $2.43 billion, up 2% to 4% year-over-year. Expect first quarter take rate ~25.5% and adjusted EBITDA margin 28%-30%. Expect Etsy marketplace to improve from down 4% in 2025 to slight growth in 2026 with positive GMS comparisons each quarter. Full year take rate and adjusted EBITDA margin roughly consistent with first quarter view.

Uncertainty around the impact of agentic commerce on Etsy's take rates and business model. Macroeconomic conditions impacting consumer discretionary spending could affect results.

Q: Trevor Young on improvement in gross buyer adds, reactivated buyers, etc.

A: Charles Baker said it's cumulative effect of investments in product, app, marketing.

Q: Bryan Smilek on sustaining GMS growth, drivers.

A: Kruti Goyal and Charles Baker discussed 4 priorities as system, discovery, matching, loyalty, human connection driving growth.

Q: Michael Morton on AI platforms traffic, impact on on-site ads.

A: Kruti Goyal and Charles Baker talked about early stage of agentic, encouraging signs, flow-through, and optimizing Etsy Ads.

Q: Rakesh Patel on buyer acquisition, acquiring younger buyers, reengaging lapsed buyers.

A: Charles Baker and Kruti Goyal discussed social channels, mobile app, TikTok spending for younger buyers, and reengaging lapsed buyers.

Q: Kenneth Gawrelski on agentic discussion, cash uses.

A: Kruti Goyal and Charles Baker talked about leveraging AI for better experience, and capital allocation.

Q: Jason Helfstein on strategy and outlook post Depop sale.

A: Charles Baker discussed different conditions for Depop and Etsy, continued investment in Etsy's product experience.

Q: Deepak Mathivanan on learnings from agentic traffic, technical approach.

A: Kruti Goyal and Charles Baker talked about early signals, and using agentic for improving experiences.

Q: John Colantuoni on channel trends, app vs website.

A: Kruti Goyal discussed app as most valuable platform with room to grow.

Q: Shweta Khajuria on agentic commerce risk, frequency.

A: Kruti Goyal talked about early days of agentic, and confidence in evolving with changes, and frequency trends.