TLDR
- Etsy beat Q4 EPS estimates with $0.92 vs. $0.84 expected, but revenue of $882M and GMS of $3.59B both missed
- Etsy agreed to sell Depop to eBay for $1.2 billion in cash
- Stock jumped over 9% on the news, reaching around $48.23
- Active sellers rose 7.7% YoY to 8.76M; active buyers fell 2% to 93.54M
- Q1 2025 GMS guidance of $2.38–$2.43B came in well below analyst estimates of $2.68B
Etsy shares surged more than 9% on Thursday after the company announced it would sell its fashion resale app Depop to eBay for $1.2 billion in cash.
The deal stole the spotlight from a mixed set of fourth-quarter earnings results that showed strength on the bottom line but softness in revenue and sales volume.
Etsy reported Q4 earnings per share of $0.92, beating analyst estimates of $0.84. Revenue came in at $882 million, just under the $885 million analysts expected.
Gross merchandise sales, the total value of goods sold on the platform, fell 3.8% year over year to $3.59 billion. That missed the $3.6 billion estimate. Etsy blamed the decline partly on the sale of its musical instrument marketplace Reverb, completed last June.
Net income for the quarter dropped 14.8% year over year to $110.7 million, or $0.92 per share, compared with $129.9 million, or $1.03 per share, in the same period a year ago.
Adjusted EBITDA came in at $222 million, with a margin of 25.2%. Etsy ended the year with $1.8 billion in cash and equivalents.
Depop Deal Drives Investor Enthusiasm
CEO Kruti Patel Goyal said the Depop sale would allow Etsy to “focus exclusively” on its core marketplace. The deal, announced Wednesday, gives Etsy a clean exit from a business it acquired in 2021 for $1.6 billion.
eBay said Depop fits well with its push into fashion, one of its fastest-growing categories.
Shares of eBay also rose Thursday on the news.
The Depop deal will add to Etsy’s already solid cash position. CFO Lanny Baker pointed to internal investment in the Etsy marketplace as the best use of capital, saying, “The best returns that we see are investing internally in the Etsy business.”
User Metrics Tell a Mixed Story
On the user side, active sellers grew 7.7% year over year to 8.76 million, ahead of the 8.5 million analysts expected.
Active buyers, however, slipped 2% year over year to 93.54 million. That was slightly better than the Wall Street estimate of 93.1 million, but still a decline.
Etsy has been leaning into AI and machine learning to improve the shopping experience and attract younger buyers through mobile and social channels.
The company’s annual filing noted pressure from a pullback in consumer discretionary spending and “evolving buyer behavior.”
For Q1 2026, Etsy guided for GMS of $2.38 billion to $2.43 billion, well below analyst estimates of $2.68 billion and also below the $2.8 billion posted in Q1 of last year.
Etsy said it expects positive year-over-year GMS comparisons in each quarter of 2026, with slight overall growth for the full year.
Etsy stock was trading at $48.23 as of Thursday morning, up from its 52-week low of $40.05.
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