Etsy Reports $631.3 Million Revenue in Q1 2026, Achieves Net Income Turnaround

Etsy, Inc. reported a revenue of $631.3 million for the first quarter of 2026, reflecting a 3.1% increase from $612.2 million in the same period last year. The growth was primarily driven by a 7.9% rise in services revenue, which reached $198.5 million, alongside a slight increase in marketplace revenue to $432.8 million. The company also achieved a net income of $104.7 million, a significant turnaround from a net loss of $35.1 million in the prior year, resulting in a net income margin of 16.6%. This improvement in profitability was attributed to a reduction in operating expenses, which decreased by 25.1% to $335.8 million, largely due to the sale of its Reverb marketplace in June 2025.

Etsy's operational metrics showed a decline in active sellers and buyers, with active sellers totaling 5,563, down 0.7% year-over-year, and active buyers at 86,618, a decrease of 2.9%. The company reported a gross merchandise sales (GMS) of $2.46 billion, a decline of 3.9% compared to the previous year, primarily due to the absence of Reverb's contributions. However, GMS from the Etsy marketplace alone increased by 5.5%, indicating a positive trend in its core business. The company also noted a revenue take rate of 25.7%, up from 23.9% in the prior year.

Strategically, Etsy announced the planned sale of its Depop marketplace to eBay for $1.2 billion, expected to close by the end of the third quarter of 2026, pending regulatory approval. This divestiture is part of Etsy's focus on enhancing its core marketplace operations. The company has indicated that proceeds from the sale will be utilized for general corporate purposes, including share repurchases and investments in the Etsy marketplace. As of March 31, 2026, Etsy had $1.3 billion in cash and cash equivalents, providing a solid liquidity position to support its ongoing operations and strategic initiatives.

In terms of employee metrics, Etsy's workforce remains stable, with no significant changes reported in headcount. The company continues to invest in its technology and infrastructure to enhance user experience and operational efficiency. Looking ahead, Etsy's management expressed optimism about the potential for growth in the Etsy marketplace, driven by strategic investments and improvements in customer engagement. However, they acknowledged ongoing macroeconomic uncertainties that could impact consumer spending and overall business performance.