Etsy (ETSY) Q1 2025 earnings summary

Executive summary

• Q1 2025 results met expectations, with consolidated GMS at $2.8B (down 6.5% YoY) and revenue up 0.8% to $651.2M; adjusted EBITDA was $171.1M (26.3% margin), and net loss was $52.1M due to a $101.7M Reverb impairment.

• Depop delivered record GMS and seller acquisition, while Etsy marketplace GMS fell 8.9% YoY to $2.3B.

• Leadership changes included a new President and Chief Growth Officer, and the company entered a definitive agreement to sell Reverb for $105M.

• The company is focused on reigniting core marketplace growth through product innovation, AI/ML-driven personalization, and marketing.

• Active buyers declined 3.4% YoY to 88.5M, and active sellers fell 11.3% to 5.4M.

Financial highlights

• Consolidated GMS was $2.8B (down 6.5% YoY); Etsy marketplace GMS was $2.3B (down 8.9% YoY).

• Revenue grew 0.8% YoY to $651.2M; marketplace revenue decreased 1.8% to $458.5M, services revenue grew 7.7% to $192.7M.

• Adjusted EBITDA was $171.1M (26.3% margin), up 1.9% YoY and ahead of guidance.

• Take rate improved to 23.3%, up 170 bps YoY, driven by ads and payments.

• Free cash flow was $35.3M for Q1; cash and investments at quarter end were $997.2M.

• Net loss was $52.1M, reflecting a $101.7M non-cash impairment charge for Reverb.

Outlook and guidance

• Q2 2025 consolidated GMS is expected to decline at a similar or slightly better rate than Q1 YoY.

• Take rate and adjusted EBITDA margin guidance are ~25%, similar to Q1.

• Guidance excludes the impact of the planned Reverb sale and assumes stable currency rates.

• Macro conditions and consumer discretionary spending are expected to remain challenging.

• Product and marketing initiatives, including AI/ML, are expected to drive improved GMS through 2025 and beyond.