Etsy Reports Q2 2025 Revenue of $672.7 Million, Net Income Declines to $28.8 Million

Etsy, Inc. reported its financial results for the second quarter of 2025, revealing total revenue of $672.7 million, a 3.8% increase from $647.8 million in the same period last year. The company recorded a net income of $28.8 million for the quarter, a significant decline from the $53.0 million reported in the second quarter of 2024. For the first half of 2025, Etsy experienced a net loss of $23.3 million, compared to a profit of $116.0 million in the prior year. The decline in profitability was attributed to a $101.7 million non-cash goodwill impairment charge related to the sale of its Reverb marketplace, which was completed on June 2, 2025.

Etsy's marketplace revenue for the second quarter was $468.2 million, slightly down from $470.4 million a year earlier, while services revenue increased by 15.3% to $204.5 million, driven by higher on-site advertising revenue. The company reported a gross profit of $479.1 million, up from $463.7 million in the previous year, reflecting a gross margin of 71.2%. Adjusted EBITDA for the quarter was $169.0 million, down from $179.4 million in the same quarter of 2024, resulting in an adjusted EBITDA margin of 25.1%.

The company’s operational metrics showed a decrease in active sellers and buyers, with 8.1 million active sellers and 93.3 million active buyers as of June 30, 2025, down from 8.8 million sellers and 96.6 million buyers a year prior. Gross merchandise sales (GMS) for the quarter totaled $2.8 billion, a decline of 4.8% year-over-year. The decrease in GMS was attributed to a challenging retail environment and a decline in consumer discretionary spending, although there was some momentum in the second quarter due to improved app performance and effective marketing initiatives.

Strategically, Etsy completed the sale of Reverb to focus on its core marketplaces, Etsy and Depop. The sale resulted in a loss of $5.1 million, reflecting the difference between the fair value of the consideration received and the carrying amount of Reverb’s net assets. Additionally, Etsy issued $700 million in convertible senior notes in June 2025, with plans to use the proceeds for general corporate purposes, including stock repurchases. The company repurchased approximately 2.5 million shares for $150 million concurrently with the issuance of the notes.

Looking ahead, Etsy's management expressed cautious optimism about its ability to navigate the current macroeconomic challenges and improve its financial performance. The company aims to leverage its technology and marketing expertise to enhance user engagement and drive growth in its core marketplaces. However, ongoing uncertainties in consumer spending and competitive pressures remain significant factors that could impact future results.