Etsy Inc. (NASDAQ:ETSY) reported first-quarter results that topped Wall Street estimates, sending its shares up more than 10% in early trading as a return to growth in merchandise sales signaled a potential turnaround for the online marketplace.
“The first quarter of 2026 showed encouraging signals that our growth initiatives are starting to resonate,” Chief Executive Kruti Patel Goyal said in a statement. She expressed heightened confidence in the company’s ability to translate recent progress into sustained long-term expansion.
The operator of the popular online market for handmade and vintage goods posted revenue of $631.3 million on earnings per share of 89 cents. The results significantly outpaced analyst expectations for $621 million in revenue and 62 cents in earnings per share.
The crucial gross merchandise sales (GMS) figure for its core Etsy marketplace expanded 5.5% from the year-ago period to $2.5 billion, marking the first increase after more than two years of year-over-year declines. The platform also added active buyers on a sequential basis for the first time since early 2024, another sign of renewed momentum.
For the second quarter, Etsy projected marketplace GMS between $2.48 billion and $2.53 billion, which implies year-over-year growth of 3% to 5%. Following the strong start to the year, management upgraded its full-year forecast from flat to low single-digit GMS growth for the Etsy marketplace, while reaffirming its adjusted EBITDA margin target of 28% to 30%.
The strong performance and improved outlook suggest Etsy's strategic initiatives are gaining traction with consumers. Investors will watch the second-quarter results, due in July, to see if the rebound in buyer growth and spending can be sustained.
This article is for informational purposes only and does not constitute investment advice.
