Q3 FY2026
Filed Oct 28, 2026Etsy marketplace GMS grew 8.8% year-over-year to $2,646,888 (in thousands), revenue grew 10.9% to $692,469 (in thousands), and adjusted EBITDA margin reached 30.4%.
Etsy marketplace GMS growth accelerated to 8.8% year-over-year, revenue outgrew GMS, adjusted EBITDA grew 14.6% and margin expanded 100 bps, while active buyers returned to year-over-year growth and the company repurchased approximately $394.6 million in stock during the quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 GMS, continuing operationsother | $2.65B | – | 8.8 % |
| Q3 2026 GMS, currency-neutral, continuing operationsother | 9.1 % | – | – |
| Q3 2026 revenue, continuing operationsGAAP | $692.5M | – | 10.9 % |
| Q3 2026 revenue take rate, continuing operationsother | 26.2 % | – | 50 bps |
| Q3 2026 gross profit, continuing operationsGAAP | $503.1M | – | 9.9 % |
| Q3 2026 operating expenses, continuing operationsGAAP | $391.7M | – | 12.9 % |
| Q3 2026 income from operationsGAAP | $111.4M | – | – |
| Q3 2026 net income from continuing operationsGAAP | $113.6M | – | 8.6 % |
| Q3 2026 net income margin, continuing operationsGAAP | 16.4 % | – | (40) bps |
| Q3 2026 total net incomeGAAP | $853.5M | – | – |
| Q3 2026 basic net income from continuing operations per share attributable to common stockholdersGAAP | $ 1.25 | – | – |
| Q3 2026 diluted net income from continuing operations per share attributable to common stockholdersGAAP | $ 1.00 | – | – |
| Q3 2026 total basic net income per share attributable to common stockholdersGAAP | $ 9.37 | – | – |
| Q3 2026 total diluted net income per share attributable to common stockholdersGAAP | $ 7.31 | – | – |
| Q3 2026 adjusted EBITDA, continuing operationsnon-GAAP | $210.4M | – | 14.6 % |
| Q3 2026 adjusted EBITDA margin, continuing operationsnon-GAAP | 30.4 % | – | 100 bps |
| Q3 2026 net cash provided by operating activities, continuing operationsGAAP | $242.9M | – | – |
| Q3 2026 free cash flow, continuing operationsnon-GAAP | $236.4M | – | – |
| Nine months ended September 30, 2026 revenue, continuing operationsGAAP | $1.99B | – | 6.8 % |
| Nine months ended September 30, 2026 net income from continuing operationsGAAP | $332.6M | – | 188.9 % |
| Nine months ended September 30, 2026 adjusted EBITDA, continuing operationsnon-GAAP | $590.4M | – | 11.9 % |
| Nine months ended September 30, 2026 adjusted EBITDA margin, continuing operationsnon-GAAP | 29.6 % | – | 130 bps |
| Trailing twelve months free cash flow as of September 30, 2026, continuing and discontinued operationsnon-GAAP | $557.1M | – | (12.3) % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Marketplace revenue, Q3 2026Higher third quarter GMS drove growth. | $468.1M | – | 9.1 % |
| Services revenue, Q3 2026Further enhancements to Etsy Ads and, to a lesser extent, contribution from Offsite Ads supported take rate. | $224.3M | – | 15.0 % |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Q4 26 and FY 26 Outlook for Continuing Operations outlook
- NoteQ4 26 GMS: $3.46B to $3.52B
- NoteFY 26 GMS: +5-7% Y/Y
- NoteQ4 26 take rate: ~25.6%
- NoteFY 26 take rate: ~25.8%
- NoteQ4 26 Adjusted EBITDA Margin: ~30%
- NoteFY 26 Adjusted EBITDA Margin: ~30%
Capital returns
- Repurchased approximately $394.6 million in stock during the third quarter.
- Reduced the outstanding share count by approximately 5.2 million shares during the third quarter.
- $2.2 billion in authorized capacity for future share repurchases.
- Repurchase of stock for the nine months ended September 30, 2026: $ (789,432) (in thousands).
What drove it
- Etsy marketplace GMS reached $2.6 billion in the third quarter, up 8.8% year-over-year, or 9.1% on a currency-neutral basis.
- Active buyers increased 1.0% to approximately 88 million on a trailing-twelve-month basis, and increased by approximately 540,000 compared to Q2 2026.
- GMS per buyer increased 3.9% year-over-year on a trailing-twelve-month basis.
- App and Non-App GMS were up 10.4% and 7.5% year-over-year, respectively.
- Personalization improvements alone were estimated to contribute approximately two percentage points to the annualized year-over-year GMS growth rate by the third quarter.
- Take rate increased 50 bps year-over-year, primarily from Etsy Ads enhancements and, to a lesser extent, Offsite Ads.
- Adjusted EBITDA grew faster than revenue for the second consecutive quarter.
- Marketing return increased meaningfully year-over-year, reflecting mix optimization, efficiency and messaging progress.
Concerns
- Purchase frequency remained modestly down year-over-year.
- The outlook assumes foreign currency is a modest growth headwind and prior-year comparisons become less favorable.
- Marketing expense grew as a percentage of revenue year-over-year.
- Net income margin declined to 16.4% from 16.8% year-over-year.
- Trailing-twelve-month free cash flow, including continuing and discontinued operations, declined 12.3% year-over-year to $ 557,125 (in thousands).
- Depop was sold on July 30, 2026 and is presented as a discontinued operation through the closing date; reported results are on a continuing operations basis.
What to watch
- Q4 2026 GMS performance against the $3.46B to $3.52B outlook.
- Whether active-buyer growth, retention improvement and GMS per buyer growth continue to broaden.
- The durability of Etsy Ads and Offsite Ads contribution to the ~25.6% Q4 2026 take-rate outlook.
- Adjusted EBITDA margin performance against the ~30% Q4 2026 outlook as Etsy gradually adds product and engineering headcount.
- The pace of accelerated share repurchases following the October 1, 2026 settlement of the outstanding 2019 Notes.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $ 2,065,658 (in thousands).
- Short-term investments as of September 30, 2026: 245,043 (in thousands).
- Long-term investments as of September 30, 2026: 150,392 (in thousands).
- Short-term debt, net as of September 30, 2026: 1,298,793 (in thousands).
- Long-term debt, net as of September 30, 2026: 1,688,345 (in thousands).
- Total assets as of September 30, 2026: $ 3,167,676 (in thousands).
- Total liabilities as of September 30, 2026: 3,845,512 (in thousands).
- Total stockholders’ deficit as of September 30, 2026: (677,836) (in thousands).
- On October 1, 2026, Etsy paid $648.6 million in cash to settle the remaining aggregate principal amount of its outstanding 2019 Notes.
- Nine months ended September 30, 2026 net cash provided by operating activities of continuing operations: 511,293 (in thousands).
- Nine months ended September 30, 2026 purchases of property and equipment: (4,122) (in thousands).
- Nine months ended September 30, 2026 website and app development: (19,994) (in thousands).
Analysis
Etsy reported a materially stronger third quarter for its continuing Etsy marketplace operations. GMS increased 8.8% year-over-year to $ 2,646,888 (in thousands), while revenue rose 10.9% to $ 692,469 (in thousands). Revenue growth exceeded GMS growth as take rate increased 50 bps to 26.2%. Marketplace revenue increased 9.1% and Services revenue increased 15.0%, with management attributing the take-rate gain primarily to Etsy Ads improvements and, to a lesser extent, Offsite Ads.
Marketplace engagement indicators improved. Active buyers increased 1.0% to approximately 88 million on a trailing-twelve-month basis, the first year-over-year active-buyer growth in two years, and the company said active buyers increased by approximately 540,000 from Q2 2026. GMS per buyer increased 3.9% year-over-year on a trailing-twelve-month basis. App GMS rose 10.4% and Non-App GMS rose 7.5% year-over-year. Management cited stronger personalization, search relevance, higher-quality inventory matching, marketing efficiency, acquisition, reactivation and retention. Purchase frequency, however, remained modestly down year-over-year.
Profitability expanded at the adjusted EBITDA level despite greater marketing investment. Adjusted EBITDA increased 14.6% to $ 210,364 (in thousands), faster than revenue growth, and adjusted EBITDA margin expanded 100 bps to 30.4%. GAAP net income from continuing operations increased 8.6% to $ 113,637 (in thousands), while net income margin declined 40 bps to 16.4%. Restructuring and other exit costs were $ 33,864 (in thousands) in the adjusted EBITDA reconciliation. Marketing expense was $ 207,002 (in thousands), up from $ 173,369 (in thousands), and management said it grew as a percentage of revenue year-over-year.
Cash generation remained strong in the quarter. Continuing-operations operating cash flow was $ 242,852 (in thousands) and continuing-operations free cash flow was $ 236,369 (in thousands). Etsy held $ 2,065,658 (in thousands) of cash and cash equivalents, plus short- and long-term investments of 245,043 (in thousands) and 150,392 (in thousands), respectively, at September 30, 2026. The company repurchased approximately $394.6 million of stock during the quarter, reducing shares outstanding by approximately 5.2 million, and then paid $648.6 million in cash on October 1, 2026 to settle the remaining principal amount of its outstanding 2019 Notes.
For Q4 2026, Etsy guided GMS to $3.46B to $3.52B, take rate to ~25.6%, and adjusted EBITDA margin to ~30%. The full-year outlook calls for GMS growth of +5-7% Y/Y, take rate of ~25.8%, and adjusted EBITDA margin of ~30%. The outlook covers continuing operations only following the July 30, 2026 sale of Depop, and assumes relatively consistent macroeconomic factors, a modest foreign-currency growth headwind, and less favorable prior-year comparisons.
Management, verbatim
After three consecutive quarters of accelerating growth this year, I’m increasingly confident that our business is now firmly in growth mode.
Kruti Patel Goyal, Chief Executive Officer
We have sustainable momentum, and clear evidence that the changes we’ve made to how we operate and invest are strengthening our business and driving more durable performance.
Kruti Patel Goyal, Chief Executive Officer
We’re making our marketing investments more effective, enabling us to show up in new places and build relationships with both new and existing audiences.
Kruti Patel Goyal, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- GAAP gross margin was not reported.
- Q3 2026 prior-quarter values for revenue, revenue take rate, gross profit, operating expenses, operating income, net income, EPS, adjusted EBITDA, operating cash flow and free cash flow were not reported on the respective metric rows.
- Q4 2026 and FY 2026 revenue guidance was not reported.
- Q4 2026 and FY 2026 gross margin, operating expenses and tax-rate guidance were not reported.
- A quarterly dividend was not reported.
- Segment operating income or segment profitability was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.