If your marketplace sales were down in the first three months of 2025, you are not alone. Etsy reported first-quarter earnings this morning, reporting a decline in GMS (Gross Merchandise Sales) for the Etsy Marketplace of 8.9% year-over-year (or down 8.1% on a currency-neutral basis).
Active buyers dropped by 3.4% year-over-year to 88.5 million, and the number of habitual buyers was 6.2 million, down 11% year-over-year.
Etsy also owns Depop and Reverb; GMS for all three marketplaces (“consolidated GMS”) was down 6.5% year-over-year (or down 5.7% on a currency-neutral basis).
Etsy said “Depop continued to see strong top line growth, particularly in the United States; first quarter GMS was the highest it has been since the business was acquired in 2021.” And it reminded investors that “On April 22, 2025, Etsy announced that it signed a definitive agreement to sell Reverb. We currently expect the transaction to close in the coming months.”
While consolidated GMS was down 6.5% year-over-year, consolidated revenue was up 0.8% year-over-year. Etsy attributed its positive revenue growth primarily to three factors:
- significant growth in on-site advertising revenue for both Etsy and Depop;
- a full quarter impact of the seller set-up fee;
- and continued benefit from Payments expansion.
That means sellers pay Etsy and Depop more in advertising fees and more sellers pay Etsy payment-processing fees.
Etsy CEO Josh Silverman discussed the second factor – the seller set-up fee – during his earnings conference call with Wall Street analysts Wednesday morning. He said Etsy had raised the fee it charges sellers to open a new shop – instituted last year – from $15 to $29.
The fee hike was news to us, we could not find any place on Etsy where it spelled out the fee for opening a new shop or when Etsy raised the fee to $29.
Etsy CEO Josh Silverman was quoted in today’s earnings press release:
“Etsy’s first quarter 2025 financial results were aligned with our expectations, with solid adjusted EBITDA performance despite pressure on the top line. We’re excited to see green shoots, particularly in our App metrics, indicating that our work to build deeper connections with buyers and encourage more frequent visits is taking hold. By leveraging the power of artificial intelligence and machine learning, we’re creating a more inspiring and engaging app experience that provides us with richer insights to personalize Etsy in meaningful ways for each buyer. We believe our seasoned team is ready to drive the next phase of Etsy’s growth and success, and that our resilient two-sided marketplace business model can help us weather macroeconomic volatility.”
The full press release is on the Etsy Investor Relations website.