E-commerce firm Etsy reported a strong first-quarter (Q1) performance in 2026, with gross merchandise sales (GMS) on its core marketplace increasing 5.5% year-on-year (YoY) to $2.5bn.
Quarterly revenue totalled $631.2m, up from $612.2m in the corresponding period last year.
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This comprised $432.8m in marketplace revenue and $198.5m in services revenue.
On a standalone Etsy marketplace basis, excluding the divested Reverb platform, marketplace revenue increased 6.3% YoY while services revenue rose 10.5%.
Net income from continuing operations was $104.7m, compared with a net loss of $35.1m in the same quarter a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) from continuing operations reached $184.7m, with a margin of 29.3%.
Etsy said comparisons of continuing operations against the prior-year period are not straightforward because the earlier quarter included both the Etsy and Reverb marketplaces, whereas the latest quarter reflects only the Etsy marketplace.
Depop continues to be treated as a discontinued operation in all reported periods after the February 2026 agreement to sell the platform to eBay for $1.2bn.
The deal has passed regulatory review in the US and Germany, while assessments remain ongoing in the UK and Australia.
Completion is expected by the end of Q3 2026.
Mobile remained a source of growth in the quarter.
App-based GMS rose 11.2% year on year, compared with 6.6% in the previous quarter, and represented roughly 47% of total GMS.
Non-app GMS also returned to growth, rising 1.0% year on year after a 4.8% decline in the fourth quarter of 2025.
Etsy CEO Kruti Patel Goyal said: “Etsy’s path back to long-term growth is grounded in a focused plan: expanding how and where buyers discover us, connecting them with items that feel personal and relevant, and building relationships that go beyond transactions.
“This is how we are working to turn the uniqueness and scale of our marketplace into a lasting advantage, in order to drive greater engagement and stronger frequency.”
During the quarter, Etsy changed the allocation of its marketing spending towards paid search, where it reported strong returns, while reducing spend on lower-funnel paid social and above-the-line activity.
The company also said it had fully brought its paid social operations in-house during the period.
For the second quarter of 2026, Etsy forecast GMS of between $2.48bn and $2.53bn, implying year-on-year growth of 3–5% for the Etsy marketplace.
The company also raised its full year outlook and now expects Etsy marketplace GMS to increase in the low single digits.
It said this was an improvement on the guidance issued in mid-February and confirmed that it expects GMS growth in each quarter of the year.
