Etsy sales rise 8.8%, net income jumps to $853.517 million on Depop sale
Key Facts
Etsy reported gross merchandise sales of $2.6 billion on its marketplace in the third quarter of 2026, up 8.8% year over year, or 9.1% excluding the impact of foreign exchange, according to its shareholder letter. Currency-neutral growth accelerated by about 190 basis points from the second quarter, marking the sixth consecutive sequential improvement. Active buyers returned to annual growth for the first time in two years, rising 1.0% to about 88 million on a trailing twelve-month basis, and increased by about 540,000 from the previous quarter. The indicators show improving marketplace activity, while the jump in net income was affected by a gain on the sale of Depop. The company said net income was $853.517 million, compared with $75.503 million in the same period last year.
Net income from continuing operations was $113.637 million, while discontinued operations recorded income of $739.880 million. That figure included a pretax gain of $839.7 million from the sale of Depop, explaining much of the expansion in total net income compared with last year. Etsy completed the sale of Depop to eBay on July 30, 2026, for about $1.4 billion in cash. The consideration included a purchase price of $1.2 billion, plus $200 million in net purchase price adjustments and interest. Etsy said the deal allows it to focus exclusively on its core marketplace.
In terms of shopper spending, gross merchandise sales per buyer rose 3.9% year over year, based on the trailing twelve-month measure in the third quarter. But the purchase rate remained slightly below its level a year earlier. Etsy attributed its efforts to support this trend to improving search relevance and personalization and strengthening quality signals. The company estimated that personalization improvements alone added about two percentage points to the annualized year-over-year gross merchandise sales growth rate by the third quarter. This suggests the company links improved spending per buyer to a better shopping experience, despite a modest ongoing weakness in purchase frequency.
The revenue take rate on gross merchandise sales also rose to 26.2%, up 50 basis points from a year earlier. Etsy said the improvement mainly resulted from enhancements to Etsy Ads, and to a lesser extent from off-platform advertising. Cash, cash equivalents and short- and long-term investments totaled $2.5 billion on September 30. The company repurchased about $394.6 million of shares during the quarter, reducing the share count by about 5.2 million shares. These figures follow the completion of the Depop sale and show the company's cash resources and capital-return activity during the period.
In premarket trading after the results were announced on October 28, Etsy shares jumped 8.54%, according to Investing.com. Adjusted earnings per share were $1.00, beating the average analyst estimate of $0.76. Revenue also reached $692.47 million, compared with a prior estimate of $668.05 million. Revenue rose 10.9% year over year. The market's reaction followed results that combined sales growth and improved buyer metrics with overall earnings that included a substantial impact from the Depop sale gain.
For the fourth quarter, Etsy expects gross merchandise sales of between $3.46 billion and $3.52 billion, representing year-over-year growth of between 5% and 7%. It also forecast an adjusted EBITDA margin of about 30%. For full-year 2026, the company expects gross merchandise sales to grow about 7%. In a separate management transition, Chief Financial Officer Lanny Baker is expected to leave his role effective March 1, 2027, and remain as an adviser through July 1, 2027. Etsy said it has retained a search firm to find his successor.