Online marketplace Etsy beats revenue estimates on steady demand
By Krisha Bhatt
Etsy’s First-Quarter Performance and Market Insights
April 29 (Reuters) - Online marketplace Etsy beat Wall Street expectations for first-quarter revenue on Wednesday, helped by growth in gross merchandise sales as more active buyers joined the platform and shoppers spent more on each purchase.
Consumer Spending Trends and Etsy’s Strategy
Consumer spending has been under pressure amid persistent inflation concerns, partly triggered by strict tariff policies. Yet, Etsy managed to draw customers by offering lower-priced goods, supported by the relatively low listing fees it charges sellers.
Resilience Across Income Cohorts
"Buying on Etsy has continued to hold up pretty well across all income cohorts," Chief Financial Officer Lanny Baker told Reuters. Its shares jumped about 8% in premarket trading.
Insulation from Tariff Pressures
The Brooklyn-based company continues to remain largely insulated from direct tariff pressures, as about 90% of sellers on its marketplace source their supplies domestically.
Key Metrics and Regional Performance
Gross Merchandise Sales Growth
Gross merchandise sales — a key sales metric — on the Etsy marketplace rose 5.5% to $2.5 billion during the quarter. GMS per buyer increased 2%.
Impact of Regional Conflicts
Etsy's marketplace, accessible across most Middle Eastern countries, including the UAE, Saudi Arabia and Israel, has not seen any material impact on operations or demand from the ongoing prolonged regional conflict, Baker said, citing the platform's ability to quickly replace sellers and reroute supply.
Technology Investments and Future Outlook
AI-Driven Growth
The company also plans to continue investing steadily in AI amid intense competition from ecommerce giants such as Amazon.com.
Current Impact of AI Tools
Traffic driven by AI tools on the marketplace is growing rapidly, but still accounts for a low single-digit share of overall business, Baker said, limiting its near-term impact on revenue.
Financial Results and Forecasts
The company reported first-quarter revenue of $631 million from the core Etsy marketplace, compared with analysts' average estimate of $620.9 million, according to data compiled by LSEG.
Its earnings per share from continuing operations came in at 89 cents, compared with the estimate of 62 cents.
Etsy, which sold its Gen Z-focused fashion resale platform Depop to eBay for nearly $1.2 billion in February, forecast second-quarter GMS between $2.48 billion and $2.53 billion.
(Reporting by Krisha Bhatt in Bengaluru; Editing by Shilpi Majumdar)
