Etsy delivered stronger-than-expected first-quarter revenue, benefiting from stable consumer demand, rising buyer activity, and higher spending per customer despite a cautious economic backdrop.
The online marketplace exceeded Wall Street estimates after reporting continued momentum in gross merchandise sales (GMS), helped by an increase in active shoppers and improved average spending across purchases. While broader consumer sentiment has been pressured by inflation and tariff-related concerns, Etsy continued attracting buyers through competitively priced products and seller-friendly listing fees.
According to Chief Financial Officer Lanny Baker, purchasing trends on the platform have remained healthy across income groups. He also noted that Etsy has been relatively shielded from direct tariff disruptions, as nearly 90% of sellers on the marketplace source materials within their domestic markets.
During the quarter, Etsy marketplace GMS rose 5.5% year-on-year to $2.5 billion, while GMS per buyer increased by 2%, highlighting stronger engagement from existing users.
The company also reported that its operations across Middle Eastern markets—including the United Arab Emirates, Saudi Arabia, and Israel—have not faced any significant disruption from the prolonged regional conflict. Management said the platform’s flexible seller network and ability to redirect supply channels have helped maintain stability.
Etsy added that traffic generated through AI-driven tools is expanding rapidly, though it currently contributes only a low single-digit percentage of total business, limiting its immediate impact on revenue performance.
Facing competition from major players such as Amazon.com, Etsy said it will continue making measured investments in artificial intelligence to strengthen discovery, personalization, and user experience.
For the first quarter, Etsy’s core marketplace generated revenue of $631 million, surpassing analysts’ expectations of $620.9 million, according to LSEG data.
Earlier this year, the company also completed the sale of its Gen Z-focused resale platform Depop to eBay for nearly $1.2 billion.
Looking ahead, Etsy forecast second-quarter gross merchandise sales in the range of $2.48 billion to $2.53 billion, signaling confidence in continued marketplace resilience.
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