$ETSY · ETSY INC
Etsy filed its Q3 2026 10-Q, reporting revenue of $692.5M (+10.9% YoY), gross margin of 72.7%, and operating margin of 16.1%. GMS from continuing operations grew 8.8% YoY, a dramatic turnaround from the (10.1)% decline in Q3 2025. Net income from continuing operations was $113.6M, while total net income reached $853.5M — inflated by a $739.9M gain from the completed sale of Depop, which generated $1.4B in net proceeds. The Depop divestiture removes a loss-generating unit that posted a $98.1M operating loss in the quarter.
- Revenue of $692.5M (+10.9% YoY) driven by marketplace revenue +9.1% and services revenue +15.0%.
- GMS from continuing operations grew 8.8% YoY (9.1% currency-neutral), reversing prior-year declines.
- Net income from continuing operations was $113.6M; total net income $853.5M including $739.9M from Depop discontinued ops.
- Gross margin held at 72.7%; operating margin was 16.1%.
- Marketing spend jumped 19.4% YoY to $207M, with paid GMS rising to 26% of total GMS from 23%.
Extended-hours trading shows ETSY at $92.45, up 5.46% vs the regular-session close and 8.22% above the filing-time price, signaling a strong positive reaction to the revenue acceleration and Depop sale completion.
Etsy delivered its strongest GMS growth in years while simultaneously exiting a money-losing subsidiary, fundamentally reshaping both its growth narrative and balance sheet.
Etsy's 8.8% GMS growth marks a sharp reversal from the (10.1)% decline in the year-ago quarter, suggesting the specialty e-commerce platform is regaining transaction momentum after a prolonged post-pandemic normalization.
Marketing spend is growing faster than revenue (+19.4% vs +10.9%), squeezing operating leverage. Paid GMS dependency rose to 26% from 23%, increasing exposure to ad-platform cost inflation. Tariff and de minimis rule changes threaten cross-border trade, a key growth vector.