Key Takeaways:
Etsy (NASDAQ: ETSY) reported Q2 adjusted EPS of $0.98, beating the $0.73 consensus, while revenue of $668.3 million topped estimates by $23.7 million.
"Our greatest strength is our differentiation as a human-centered marketplace," Chief Executive Kruti Patel Goyal said, adding the company sees a "massive market opportunity ahead."
Etsy marketplace GMS grew 7.5% year over year to $2.6 billion, the third consecutive quarter of growth after high single-digit declines in early 2025. Active buyers rose 350,000 sequentially to about 87 million, while habitual and repeat buyer cohorts each posted slight sequential growth for the first time since 2023. Mobile app GMS grew 12.5% year over year and now represents about 47% of total GMS.
Despite the beat, shares fell 6.34% after hours to $80.42 as investors weighed a restructuring that cuts 220 jobs, or about 12% of the workforce, and guidance that was steady rather than aggressive. The company raised its full-year adjusted EBITDA margin outlook to 29-30% and authorized a new $2 billion share repurchase program funded partly by the $1.4 billion Depop sale to eBay.
Revenue rose 6.2% on a continuing operations basis and 9.3% for the Etsy marketplace standalone. Marketplace revenue grew 8.4% and services revenue increased 11.2%. Adjusted EBITDA reached $195 million, a 29.2% margin, with nearly half of year-over-year revenue growth flowing through to adjusted EBITDA, Chief Financial Officer Lanny Baker said.
Take rate expanded 130 basis points year over year to 25.9%, including an 80 basis point benefit from the Reverb divestiture. Trailing 12-month GMS per active buyer rose 2.8% to $124.
For Q3, Etsy guided marketplace GMS of $2.53 billion to $2.58 billion, representing 4-6% year-over-year growth, with take rate of about 26% and adjusted EBITDA margin of 28-30%. Full-year GMS growth is expected in the mid-single-digit range, up from prior guidance.
The restructuring, concentrated in product and engineering, will incur about $35 million in charges and is expected to be substantially complete by the end of Q3. Management said the move is designed to reduce silos and deepen machine learning capabilities, not to cut costs. Marketing investments shifted toward social platforms including TikTok and YouTube, where visits from Millennial and Gen Z audiences grew five-fold in the first half of 2026.
Etsy repurchased approximately $250 million in stock during Q2, reducing share count by 3.9 million shares. The company held $1.3 billion in cash and investments as of June 30.
The guidance raise shows management expects growth momentum to persist through the second half. Investors will watch Q3 results for evidence that the restructuring accelerates execution without disrupting the recovery.
This article is for informational purposes only and does not constitute investment advice.
