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Etsy (ETSY) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Aug 6, 2026

Source: earnings call transcript

Executive summary

Etsy Q2 FY26 — Strong GMS Growth and Share Repurchase Authorization

Etsy delivered strong Q2 FY26 results, with accelerating GMS and revenue growth driven by strategic focus on discovery, personalization, and buyer loyalty. The company authorized a new $2 billion share repurchase program, reflecting confidence in its execution and capital allocation strategy, while also announcing a workforce restructuring to optimize for future growth and efficiency.

Highlights

5

  • Etsy marketplace GMS grew 7.5% year-over-year to $2.6 billion, marking the third consecutive quarter of growth.

  • Revenue was $668 million, up 9.3% for the Etsy Marketplace stand-alone.

  • Adjusted EBITDA was $195 million, representing a 29.2% margin.

  • Active buyers improved by 350,000 sequentially to approximately 87 million, with sequential growth in habitual and repeat buyer cohorts.

  • New $2 billion share repurchase program authorized, following $250 million in buybacks during Q2.

Concerns

3

  • Restructuring plan will reduce workforce by approximately 220 employees (12%), incurring $35 million in charges.

  • Year-over-year continuing operations results are not directly comparable due to the sale of Depop and Reverb.

  • Purchase frequency remains below prior year levels, though the year-over-year decline moderated.

Guidance & targets

CategoryTargetConfidence
Etsy Marketplace GMS
$2.53 billion and $2.58 billion
high materiality
High
Take rate
approximately 26%
medium materiality
High
Adjusted EBITDA margin
28% to 30%
high materiality
High
Etsy Marketplace GMS growth
mid-single-digit range
high materiality
High
Full year take rate
roughly equal to what we reported in the first half of the year
medium materiality
High
Full year adjusted EBITDA margin
29% to 30%
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Etsy Marketplace
Etsy Marketplace GMS grew year-over-year for the third consecutive quarter, reflecting continued improvement across marketplace fundamentals. Revenue growth accelerated in tandem with GMS strength, with both marketplace and services revenue delivering solid year-over-year growth.
GMS: $2.6 billionGMS growth: 7.5% year-over-yearTake rate: 25.9%
$668 million9.3%—29.2% adjusted EBITDA margin

ETSY operating KPIs by quarter

ETSY operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call Jun 2026 Q2 FY26Change vs prior quarter
Active buyers
86.6M Q1 '26 trailing 12-month active buyer count was $86.6 million, representing the first quarter of sequential growth in the past 2 years. Source: earnings call transcript
~87M Active buyers improved, growing by 350,000 sequentially to approximately 87 million, roughly stable on a year-over-year basis. Source: earnings call transcript
—
GMS per active buyer
$122 Encouragingly, GMS per active buyer improved sequentially for the fourth consecutive quarter and grew year-over-year for the first time since 2022, reaching $122 on a trailing 12-month basis. Source: earnings call transcript
$124 Trailing 12-month GMS per active buyer grew 2.8% year-over-year to $124. Source: earnings call transcript
+1.6%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

eBay Sale of Depop to eBay. $1.4 billion

Cash proceeds received from the sale of Depop. Etsy's results are presented on a continuing operations basis, while Depop's results are presented within discontinued operations.

Not stated Sale of Reverb.

Reverb was sold in June of last year (Q2 2025) and is included in Q2 2025 continuing operations, whereas Q2 2026 reflects only the Etsy Marketplace.

Risks & headwinds

Workforce Restructuring Charges Substantially complete by the end of Q3 2026

Approximately $35 million in charges

Mitigation:Aimed at building a more focused organization, accelerating execution, and deepening expertise in strategically critical areas like machine learning, rather than primarily cost-cutting.

Comparability of Financials Q2 FY26 vs Q2 FY25

Year-over-year continuing operations results are not directly comparable

Mitigation:Provided Etsy stand-alone marketplace comparisons where most relevant to evaluate go-forward operations.

Purchase Frequency Below Prior Year Q2 FY26

Purchase frequency remains below prior year levels

Mitigation:The year-over-year decline moderated compared to the first quarter, indicating improving overall customer experience efforts.

Impact of Gas Prices on Consumer Spending Q2 FY26

Not a discernible impact right now

Mitigation:Consumer demand held up well across the second quarter, with growth in GMS in the United States and across all household income segments, though the high end is growing faster.

What to watch in Q3 FY26

Etsy Marketplace GMS growth

Q3 FY26
Current 7.5% YoY in Q2 FY26
Target 4%-6% YoY in Q3 FY26

Why it matters

Key indicator of marketplace health and growth momentum, reflecting the impact of strategic initiatives.

We currently anticipate that Etsy Marketplace third quarter GMS will be between $2.53 billion and $2.58 billion, representing year-over-year growth of approximately 4% to 6% for the quarter.

Find out whether ETSY delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the most effective drivers of Q2 GMS growth and opportunities for improvement? How is Etsy tackling discovery among young buyers and are there early signs of progress?

Kruti highlighted strong execution against strategic priorities, product and marketing improvements (efficient marketing, better on-site experience, richer buyer profiles), and the app as a clear proof point. For younger buyers, she noted shifting marketing investments to social channels (YouTube, TikTok) and cultural partnerships (Olivia Rodrigo) to resonate with this audience.

“our research showed that our value proposition resonates with this younger audience as much as it does with older audiences. But what wasn't happening was that we weren't showing up where these shoppers are discovering and with relevant content as much as we could.”

asked by Rakesh Patel · answered by Kruti Goyal

2 min read 5 chapters

Detailed narrative

Strategic Priorities Driving Performance

Etsy's focus on human-centered marketplace differentiation, discovery, matching, loyalty, and human connection is translating into stronger marketplace fundamentals. This includes improved active buyer metrics, moderated decline in purchase frequency, and accelerated mobile app growth. The company's product and marketing improvements are working together to drive growth, with more efficient marketing and a meaningfully better on-site experience.

Organizational Restructuring for Future Growth

The company announced a restructuring, reducing its workforce by approximately 220 employees (12%), primarily in product and engineering. This move is aimed at creating flatter, faster teams, reducing silos, and deepening expertise in strategically critical areas like machine learning. Management emphasized this is not a cost-cutting measure but an investment in execution to accelerate growth and innovation.

Capital Allocation and Share Repurchase Program

Etsy completed the sale of Depop, receiving $1.4 billion in cash proceeds. In Q2, the company repurchased $250 million in stock, reducing the outstanding share count by approximately 3.9 million shares. A new $2 billion share repurchase program was authorized, reflecting confidence in strategic execution and commitment to returning excess capital to shareholders.

Marketing Efficiency and Investment Strategy

Etsy achieved leverage across marketing, product development, and G&A, with nearly half of the Etsy Marketplace revenue growth flowing through to adjusted EBITDA. The company is seeing increased efficiency in paid search and PLA performance due to better segmentation and bidding strategies. This efficiency allows for flexibility to invest in social channels and marketing partnerships to reach younger demographics, such as the Olivia Rodrigo collaboration.

AI and Machine Learning Focus

Etsy is deepening its investment in machine learning to enhance discovery, matching, and personalization, aiming to connect buyers with sellers more effectively. The company is also experimenting with AI-native shopping experiences, such as a gifting assistant, to understand buyer intent. Traffic from agentic experiences remains less than 1% but shows higher intent and average order value.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.