💰 Market Cap: $7.4B | 🏢 2.4K Employees | 🌍 Global Two-Sided Marketplace

👨‍💼 CEO Josh Silverman → Kruti Patel Goyal (Jan 2026) | 🎯 AI-Powered Personalization | 🇺🇸 Brooklyn, NY

$69.84

📉 -$4.94 (-6.61%) Post-Earnings

+30% YTD | Q3 2025 Beat on Top & Bottom Line

🚀 Needs:

New CEO Kruti Patel Goyal successfully drives buyer growth reversal with AI-powered personalization and app engagement (5x visit frequency advantage creating powerful flywheel) • Etsy marketplace GMS returns to +3-5% growth as monthly GMS/buyer trends (improving since April) accelerate from $121 TTM to $150+ through frequency gains • Depop momentum continues with 35%+ GMS growth expanding to $1.6B+ run rate, brand campaign delivers awareness breakthrough • Take rate expands to 25.5% through Etsy Ads optimization and seller services without pricing pushback • ChatGPT integration and agentic shopping drive material new customer acquisition as "higher intent than search" traffic scales • Owned marketing channels (email/push) become 15-20% of attributed GMS with zero external spend • Tariff environment and 60M US listings create structural advantage over Temu/Shein

⚖️ Needs:

Leadership transition proceeds smoothly with minimal disruption as Silverman stays Executive Chair through 2026 and Goyal already running day-to-day operations • Etsy marketplace GMS stabilizes at flat to +1% growth as Q4 delivers "further sequential improvement" at midpoint but buyer count remains challenged • Consolidated revenue grows low-single-digits (2-3%) driven by take rate improvements to 24.5-25% and Depop scaling to $1.3B run rate • EBITDA margins maintain 24-25% range as Depop brand investment continues into H1 2026 per plan • Active buyers stabilize around 86-88M as new/reactivated buyers (11.4M/quarter) offset churn, monthly GMS/buyer trends continue improving from $121 TTM • Competitive pressures from Amazon, Temu, Shein persist but 60M US listings provide defensive moat

⚠️ Risk:

CEO transition creates execution uncertainty despite planning—Goyal inheriting "so much more we need to do" not finished turnaround • Active buyers accelerate decline below -5% as Q4's "higher than normal uncertainty about consumer spending" materializes negatively • Etsy marketplace GMS declines -4% to -6% as sequential improvement stalls and competition from Temu, Shein, Amazon intensifies despite tariff headwinds • Seller count stabilization proves temporary as +1.7% sequential reverses under fee pressure and competitive alternatives • Margin compression accelerates as Depop brand campaign continues into 2026 with unclear ROI, could "step it up" per CFO creating further pressure • Depop growth slows materially below 30% as brand spend fails to deliver awareness breakthrough, making $1.6B acquisition look expensive vs $1.2B run rate • ChatGPT/agentic commerce remains "very small base" indefinitely while cannibalizing direct traffic and on-site ad revenue

💰

What Happened

Revenue Beat: $678M (+6.1% YoY ex-Reverb) vs $656M est, driven by take rate expansion to 24.9%

EPS Crushed It: $0.63 vs $0.52 est (+21% beat), with adj EBITDA of $172M at 25.4% margin (Etsy Marketplace at ~30%)

App Momentum Accelerating: Mobile app GMS grew mid-single-digits, now 46% of total (vs 42.8% YoY). App users visit 5x more often, view 3x more pages, 1.5x higher conversion

Seller Stabilization: Active sellers +1.7% sequentially to 5.5M after bottoming, new sellers with sales up double-digits YoY

Depop Shines: GMS +39.4% to $292M with US growth +59% YoY, active buyers +40% to 6.6M, now $1.2B+ annualized run rate

📈

Why It Matters

Monetization Success: Take rate up 220bps shows pricing power. Etsy Ads growth driven by model enhancements optimizing seller budget pacing and ad quality

ML/AI Delivering Results: New buyer understanding models drove double-digit engagement increases in app feed, positive impact on email/web. Item understanding improved conversion across search/ads

Leadership Continuity: Goyal has 15+ years Etsy experience, already leading day-to-day operations. Silverman stays as Executive Chair through 2026 for smooth transition

Competitive Resilience: Despite Temu/Shein pressure, Etsy showed "resilience and responsiveness" with 60M+ US listings and proactive seller support on tariff alternatives

GMS per Buyer Inflection: Monthly GMS/buyer trends improving since April 2025 with higher AOV and purchase frequency, especially among highest income buyers

🎯

What's Next

Q4 Guidance Details: GMS $3.5-3.65B (sequential improvement at midpoint), take rate ~24.5% (seasonality), EBITDA margin ~24% driven by Depop brand campaign

Depop Investment Cycle: "Significant sequential increase" in brand marketing to expand awareness, not a one-quarter event—will continue into H1 2026 to scale the business

ChatGPT Early Traction: Higher conversion than traditional search, success-based CPA fee to OpenAI (like affiliate), not passed to sellers yet. Agent traffic "very small base" but growing

Loyalty Program V2.0: Etsy Insider beta relaunch focused on top buyers—shipping discounts and 5% Etsy credit back on every purchase to drive frequency

Owned Marketing Channels: Email and push notifications becoming "meaningful high growth drivers" with no external ad spend, powered by ML buyer profiling from app data

💡

Bottom Line for Retail Investors

Etsy delivered a solid earnings beat but the 6.6% post-earnings drop to $69.84 reflects investor concerns about margin guidance (24% vs 27% expected due to Depop marketing ramp) and ongoing buyer base questions. However, the transcript reveals encouraging execution momentum: app users now 46% of GMS (up from 43%) with 5x more visits and 3x page views driving powerful network effects, sellers stabilizing with sequential growth returning, and ML models already delivering "double-digit engagement increases." Management emphasized GMS per buyer inflection since April with improving frequency/AOV among high-income cohorts—the $121 annual spend per buyer has "5-10x upside" through better retention per CFO Baker. The bull case to $92 (+32%) centers on Goyal's proven Depop playbook (doubled GMS in 2 years) now applied to Etsy's 86M buyers, with four strategic priorities already showing traction in months not years. The base case to $82 (+17%) assumes stabilization with modest sequential improvement continuing as Q4 guidance suggests. The bear case to $52 (-26%) plays out if Depop brand investment fails to deliver ROI while buyer declines accelerate below -5%. For StockTwits traders: the 30%+ selloff from August highs creates a compelling risk/reward at 25x forward earnings if management can deliver on "sustainable growth mode" positioning—watch Q4 for proof of sequential GMS improvement.

👑

Proven New CEO with Depop Track Record

Depop Transformation: Led 3 years of flat GMS to 2 years accelerating growth, doubled GMS and users, tripled listings—"incredible product market fit"

15+ Years Etsy Veteran: Former CPO, led Seller Services, International Growth, Trust & Safety. Knows the playbook at scale, not external hire risk

Already Running Operations: "Taken on leadership of day-to-day operations" in 2025, laid groundwork for 4 strategic priorities showing "early traction"

Smooth Transition Setup: Silverman personally recruited her back as CGO with "an eye to her being the right person to lead," Board "deeply engaged in succession planning"

💳

Take Rate Expansion Drives Revenue Growth

24.9% Take Rate: Up 220bps YoY showing strong pricing power and monetization efficiency

On-Site Ads Momentum: Both Etsy and Depop ads performing well, sellers willing to pay for visibility

Revenue vs GMS Decoupling: Revenue +6.1% despite flat GMS proves model resilience

Room for Expansion: Take rate can reach 26-27% with enhanced seller services and advertising tools

🤖

AI-Powered Product Roadmap

ChatGPT First Mover: First live Instant Checkout partner, buyers can complete purchase within ChatGPT via Etsy Payments with clear Etsy branding and seller info

Buyer Understanding Models: New ML models using "advanced ML and emerging LLM techniques" drove double-digit engagement increases in app discovery feed, positive email/web impact

Item Understanding Gains: "Richer insights from listing images" delivered "measurable conversion gains across search and ads" with "rapid time to market"

Agentic Commerce Positioning: Higher conversion than traditional search, "at the table early to help shape what agentic commerce can be"—data feed covers "substantial majority" of listings

🇺🇸

US Supply Advantage & Tariff Resilience

Massive US Inventory: 60M+ active US listings, been highlighting domestic inventory to buyers proactively, "very high replacement rate on disrupted items"

De Minimis Impact Modest: "Couple weeks of pause" after August exemption removal but "business stabilized," only "modest headwind to quarterly results" per CFO

Proactive Seller Support: Team "extremely proactive" providing non-US sellers with "information, advice, and viable alternative solutions" to continue US shipping

Sequential Trade Route Improvement: US domestic trade route gains "helped offset" US import pressure, proving model flexibility and seller adaptability

📉

Accelerating User Base Decline

TTM Buyers Down -5%: 86.6M active buyers (not 93.2M as initially reported), down 0.8% sequentially. New + reactivated buyers 11.4M only "slight improvement" from Q2

Sellers Stabilizing Not Growing: Sequential gain of +1.7% still leaves YoY decline, both US and international "began growing again" but from depressed levels

GMS Per Buyer Flat TTM: $121 GMS/buyer "stable YTD" on trailing basis despite monthly improvements since April—needs sustained acceleration to move needle

Post-Pandemic Hangover: Management admits Etsy has "struggled to grow business since pandemic e-commerce boom" with fundamental market share loss to competitors

⚔️

Brutal Competitive Environment

Temu/Shein Onslaught: Chinese fast-fashion taking massive market share despite tariffs

Amazon Handmade: Amazon's scale and Prime shipping advantage in artisan goods category

Shopify Merchants: Many sellers going direct-to-consumer bypassing Etsy's fees

TikTok Shop: Social commerce emerging as powerful alternative distribution for creators

💸

Margin Compression Risk

Depop Marketing Ramp: Q4 margin compression driven by "significant sequential increase" in brand campaign, not one-time—"will carry over into first half of next year"

Etsy Marketplace Still Strong: Etsy margin "just shy of 30%" in Q3, but consolidated 24% in Q4 shows Depop dilution as they chase awareness expansion

Investment Uncertainty: CFO said "we might step it up" if performance exceeds expectations, creating ongoing margin pressure risk if Depop scaling accelerates

Consumer Spending Risk: Management cited "higher than normal degree of uncertainty about consumer spending into holiday" as guidance assumption—downside if macro weakens

🔄

CEO Transition Execution Risk

Scale Jump Question: Goyal took Depop from flat to $1.2B annualized run rate, but Etsy marketplace is $2.4B+ quarterly—10x bigger scale with entrenched challenges

Chairman Departure: Fred Wilson stepping down as Board Chair after being "part of growth journey since 2007"—losing institutional knowledge at critical inflection point

Recent C-Suite Churn: New CFO Lanny Baker just joined, plus prior departures of CTO, COO/CMO suggests deeper organizational instability beyond normal transitions

Execution Pressure: Goyal acknowledged "there is so much more we need to do" and "far from satisfied with growth"—inheriting incomplete turnaround not victory lap