Etsy Shares Sink 7% Despite Q3 Earnings Beat as Seller Base Shrinks

Font: Financial Modeling Prep  • Oct 29, 2025

Etsy Inc. (NASDAQ: ETSY) posted stronger-than-expected third-quarter earnings on Wednesday, but its shares fell 7% in intra-day trading as investors focused on declining active users and cautious fourth-quarter guidance.

The e-commerce platform reported adjusted earnings per share of $0.63, beating analyst estimates of $0.52. Revenue grew 6.1% year-over-year to $678 million, above expectations of $655.87 million, excluding the recently divested Reverb business.

Gross Merchandise Sales (GMS) totaled $2.72 billion, up 0.9% from the prior year excluding Reverb. While Etsy marketplace GMS declined 2.4%, Depop’s GMS surged 39.4%. The company’s take rate improved to 24.9%, up 220 basis points year-over-year, helped by stronger on-site advertising performance.

For the fourth quarter, Etsy guided for GMS between $3.5 billion and $3.65 billion and an adjusted EBITDA margin of about 24%, compared with 25.4% in Q3. The company expects its take rate to remain around 24.5%.

Active buyers fell 5% year-over-year to 86.6 million, while active sellers declined 10.9% to 5.5 million, reflecting headwinds from the seller set-up fee introduced in April.