Gross Merchandise Sales (GMS) on the Etsy Marketplace dropped 5.4% in the second quarter of 2025 (April, May, June), year-over-year – and down 6.3% on a currency-neutral basis. Etsy released its Q2 results on Wednesday morning along with a slide presentation that showed Etsy Marketplace’s top six categories, which declined year-over-year, represented 86% of GMS:
Second-Quarter Etsy Marketplace GMS by Category:
Home and Living: 33%
Jewelry & Accessories: 19%
Apparel: 13%
Craft Supplies: 9%
Paper & Party Supplies: 8%
Toys & Games: 4%
Other: 14%
The number of active buyers on the Etsy Marketplace decreased 4.6% year-over-year to 87.3 million.
Etsy reactivated 6.5 million buyers in the quarter, a 2.8% increase from the number of buyers reactivated in the prior year, and up 1.3% sequentially. Etsy Marketplace acquired 4.8 million new buyers, and “Habitual buyers” were 6.1 million at the end of the quarter.
GMS per active buyer on a trailing twelve month basis declined 2.9% year-over-year to $120, which Etsy said showed signs of stabilization. “Monthly GMS per active buyer trends strengthened over the course of the quarter, inflecting into positive year-over-year comparisons in May and June, even on an FX-adjusted basis,” Etsy said.
Additional information about the Etsy Marketplace performance included the following:
- GMS on the Etsy App grew on a year-over-year basis and sequentially, and represented approximately 45% of Etsy marketplace GMS.
- Key product initiatives in the quarter included advancing search quality by testing more signals in our algorithms, growing our AI-powered discovery experience with additional themes, and releasing new seller tools to simplify shop operations.
- Key marketing initiatives included growing GMS through more personalized retention and engagement strategies, strong performance in paid social channels, optimization of product listing ad data feeds, and brand investments that amplified Etsy’s differentiation.
Etsy completed the sale of Reverb on June 2, 2025, and it operates the Depop marketplace. See Etsy’s press release for the consolidated financials and further details about Q2-2025 performance (Etsy said its positive consolidated revenue growth “was driven primarily by the performance of on-site ads and, to a lesser extent, payments for both Depop and Etsy.”)
Here’s what Etsy’s top executives said in Wednesday’s press release:
Josh Silverman, Etsy Chief Executive Officer:
“We are encouraged by our second quarter performance, which reflects tangible progress in our key investment areas. These efforts are designed to strengthen customer relationships on the Etsy marketplace, deepen buyer engagement, and reignite GMS growth. We’re seeing early success in our efforts to build a more browsable shopping experience, particularly on our App, amplified by more personalized marketing and emergent AI technologies. We believe this is creating a significant runway for growth, as well as an opportunity to generate sustainable value for our stakeholders by capitalizing on what makes Etsy special.”
Lanny Baker, Etsy Chief Financial Officer:
“Second quarter GMS and revenue came in ahead of expectations, and adjusted EBITDA was in line with our guidance, as we are managing the business to invest in future growth while also delivering very healthy margins. Our take rate was very strong, at 24%, primarily driven by the expansion of Etsy Ads revenue from continued improvements to our bidding algorithms, as well as some benefit from payments. We also strengthened our balance sheet through a highly successful convertible notes offering and repurchased approximately $335 million of Etsy stock, in line with our high conviction in Etsy’s long-term opportunities. With approximately $1.5 billion in cash and cash equivalents and short- and long-term investments at the end of the period, and expectations for continued strong free cash flow generation, we are very confident in Etsy’s financial flexibility to continue stock repurchases, manage our debt balance, and make ongoing investments in Etsy and Depop.”