Etsy beats Q3 estimates but sees fewer buyers and sellers, names new CEO

[Woman buying custom and hand made jewelry online]
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Etsy (ETSY [https://seekingalpha.com/symbol/ETSY]) shares are under pressure in early Wednesday trading as the company’s latest quarterly results [https://seekingalpha.com/news/4510096-etsy-gaap-eps-of-0_63-beats-by-0_11-revenue-of-678m-beats-by-20_86m] beat Wall Street’s expectations but also showed a decline in active buyers and sellers on the marketplace, as well as a modest drop in gross merchandise sales (GMS) despite the exclusion of the recently sold Reverb unit.

Additionally, the company announced [https://seekingalpha.com/pr/20283788-etsy-announces-leadership-transition-kruti-patel-goyal-to-become-chief-executive-officer-josh]that after eight years at the helm of the company, CEO Josh Silverman will step down effective December 31 and will be succeeded by Chief Growth Officer Kruti Patel Goyal.

During the third quarter, Etsy (ETSY [https://seekingalpha.com/symbol/ETSY]) earned a profit of $0.63 per share, up 40% from a year ago and $0.11 better than expected. While the company’s costs increased, including those for marketing and product development, these were partially offset by a modest increase in revenue to a better-than-expected $678M.

However, as a result of increased restructuring costs, adjusted EBITDA declined 6.5%, compressing the adjusted EBITDA margin by 230 basis points.

The company also reported a 6.5% drop in GMS for the quarter, 0.2% decline in active sellers, and 3.7% decline in active buyers from the same quarter last year (including Reverb until June 2). And although GMS per active buyer improved sequentially, the metric was down 1.6% year-over-year.

Looking at the current quarter, Etsy (ETSY [https://seekingalpha.com/symbol/ETSY]) forecasts GMS to be within a range of $3.5B to $3.65B, up from $2.72M in the reported quarter. Take rate is expected to be ~24.5% while the adjusted EBITDA margin is expected to narrow another 40 basis points to ~24%, below the 27% consensus estimate.

Etsy (ETSY [https://seekingalpha.com/symbol/ETSY]) shares last traded more than 9% lower in premarket.

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* Etsy, Inc. (ETSY) Presents At Goldman Sachs Communacopia + Technology Conference 2025 Transcript [https://seekingalpha.com/article/4821180-etsy-inc-etsy-presents-at-goldman-sachs-communacopia-technology-conference-2025-transcript]
* Etsy: Trade War Bodes Well But Challenges Remain [https://seekingalpha.com/article/4817015-etsy-trade-war-bodes-well-but-challenges-remain]
* Etsy names new CEO [https://seekingalpha.com/news/4510136-etsy-names-new-ceo]
* Etsy GAAP EPS of $0.63 beats by $0.11, revenue of $678M beats by $20.86M [https://seekingalpha.com/news/4510096-etsy-gaap-eps-of-0_63-beats-by-0_11-revenue-of-678m-beats-by-20_86m]