Etsy surprised investors with stronger-than-expected revenue for the second quarter of 2025, reporting $672.7 million in sales – approximately $26 million above analyst forecasts. This performance triggered nearly 9% pre-market stock gains despite concerning metrics on other fronts. The e-commerce platform’s earnings per share disappointed at just $0.25 compared to the anticipated $0.48, partly due to a $25.4 million non-cash foreign currency loss that impacted net income. Meanwhile, gross merchandise sales (GMS) continued their downward trend, falling 4.8% to $2.8 billion, though this marked an improvement from the previous quarter’s 6.5% decline.
Mobile Strategy Shows Promise
The company’s mobile strategy offers a bright spot amid the mixed results, with app users growing 7% and nearly 45% of all transactions now occurring through the application. This digital shift coincides with Etsy’s enhanced personalization efforts, which management views as increasingly effective. Looking ahead, the company’s guidance suggests cautious optimism with projected Q3 gross merchandise volume between $2.6-2.7 billion and an adjusted EBITDA margin of approximately 25%. Investment firms remain upbeat, with Canaccord Genuity raising its price target from $68 to $76 while highlighting Etsy’s impressive 72.3% operating margin as a key strength despite ongoing customer retention challenges.
