Etsy Q3 Revenue Rises 10.9% to $692.5 Million as Buyer Growth Resumes

Etsy, Inc. (ETSY ) reported revenue of $692.5 million (U.S. dollars) for the third quarter ended September 30, 2026, up 10.9% year-over-year, in results the company announced on October 28, 2026. Gross merchandise sales on the Etsy marketplace reached $2.65 billion, up 8.8% from a year earlier, or 9.1% on a currency-neutral basis, and the revenue take rate was 26.2%, up 50 basis points.

The results are detailed in Etsy’s third quarter 2026 Shareholder Letter, signed by Chief Executive Officer Kruti Patel Goyal and dated October 28, 2026. Etsy completed the sale of Depop on July 30, 2026, and its results are presented on a continuing operations basis, with Depop reported as a discontinued operation through the closing date. Continuing operations for the third quarter represent the Etsy marketplace only.

Net income from continuing operations was $113.6 million, up 8.6% year-over-year, representing a 16.4% net income margin. Diluted net income from continuing operations per share was $1.00, compared with $0.86 in the third quarter of 2025. Adjusted EBITDA, a non-GAAP measure, was $210.4 million, up 14.6%, and the adjusted EBITDA margin was 30.4%, compared with 29.4% a year earlier.

Total net income, including discontinued operations, was $853.5 million, compared with $75.5 million in the third quarter of 2025. Discontinued operations included a gain on sale of $839.7 million related to Depop, and net income from discontinued operations was $739.9 million, compared with a loss of $29.1 million a year earlier. Total diluted net income per share was $7.31, compared with $0.63. Depop’s gross merchandise sales, which are excluded from the consolidated tables, were $199.8 million in the quarter, compared with $292.1 million in the same period of 2025.

Buyer Metrics and Revenue Mix

Active buyers increased 1.0% year-over-year to approximately 88 million on a trailing-twelve-month basis, which the letter describes as the first year-over-year increase in two years. Active buyers rose by approximately 540,000 compared with the second quarter of 2026, and third-quarter gross buyer additions grew 6.2% year-over-year. GMS per buyer increased 3.9% year-over-year on a trailing-twelve-month basis.

App GMS rose 10.4% and non-App GMS rose 7.5% year-over-year, with mobile GMS share stable with the first half of 2026 at about 47%. Excluding foreign exchange, GMS growth accelerated by approximately 190 basis points from the second quarter of 2026, which the letter describes as the sixth consecutive quarter of sequential improvement in GMS growth. The company estimates that personalization improvements alone contributed approximately two percentage points to its annualized year-over-year GMS growth rate.

“After three consecutive quarters of accelerating growth this year, I’m increasingly confident that our business is now firmly in growth mode,” Goyal wrote in the letter.

Marketplace revenue was $468.1 million, up 9.1%, and Services revenue was $224.3 million, up 15.0%. The letter attributes the take-rate increase primarily to further enhancements to Etsy Ads and, to a lesser extent, contribution from Offsite Ads.

Expenses, Cash Flow and 2026 Outlook

Marketing expense was $207.0 million, or 29.9% of revenue, compared with $173.4 million, or 27.8%, a year earlier. Product development expense was $110.8 million, or 16.0% of revenue, compared with $99.8 million, also 16.0%. General and administrative expense was $73.9 million, or 10.7% of revenue, compared with $73.8 million, or 11.8%. Restructuring and other exit costs were $33.9 million in the quarter, compared with $1.9 million in the third quarter of 2025; the letter ties the adjusted EBITDA performance partly to the impact of the company’s restructuring in August 2026.

Gross profit was $503.1 million, up 9.9%, and total operating expenses were $391.7 million, up 12.9%.

Net cash provided by operating activities of continuing operations was $242.9 million in the quarter, and free cash flow was $236.4 million; the company states it converted 112% of its adjusted EBITDA to free cash flow during the quarter. Etsy repurchased approximately $394.6 million of stock during the period, reducing its outstanding share count by approximately 5.2 million shares, and $2.2 billion of authorized capacity for future share repurchases remained.

Cash, cash equivalents and short- and long-term investments totaled $2.5 billion as of September 30, 2026, a balance the letter says was aided by proceeds from the Depop sale. On October 1, 2026, Etsy paid $648.6 million in cash to settle the remaining aggregate principal amount of its outstanding 2019 Notes.

Because Reverb was sold on June 2, 2025, continuing operations results for the nine-month periods are not directly comparable year-over-year, and the letter presents non-GAAP Etsy marketplace figures for the nine months ended September 30, 2025 as a basis for comparison. For the nine months ended September 30, 2026, continuing-operations GMS was $7.69 billion, up 1.9%, and revenue was $1.99 billion, up 6.8%; on the Etsy marketplace basis, GMS grew 7.3% and revenue grew 9.3%.

For the fourth quarter of 2026, the company forecast GMS of $3.46 billion to $3.52 billion, up 5% to 7% year-over-year, a revenue take rate of approximately 25.6%, and an adjusted EBITDA margin of approximately 30%. For the full year 2026, it forecast GMS growth of approximately 7%, a take rate of approximately 25.8%, and an adjusted EBITDA margin of approximately 30%. The outlook pertains to continuing operations only and assumes currency exchange rates remain unchanged at current spot levels.

Etsy said it would host a webcast conference call to discuss the results at 8:30 a.m. Eastern Time on October 28, 2026, with a replay available through its Investor Relations website from 12:00 p.m. Eastern Time for at least three months.