Etsy Marketplace Gross Merchandise Sales grew 5.5% in the first quarter of 2026, year-over-year, to $2.5 billion (or 3.6% on a currency neutral basis), Etsy announced on Wednesday. Etsy said it provided standalone numbers for the Etsy Marketplace for comparison purposes since it sold Reverb in June 2025 and is selling Depop to eBay this year.
Excluding Reverb and Depop numbers for the three months ended March 31, 2025, Etsy Marketplace revenue grew 6.3% year-over-year to $432.8 million. Services revenue was $198.5 million, up 10.5% year-over-year for the Etsy marketplace. Total Etsy revenue was $631 million in the first quarter, including Depop.
Etsy earns revenue from services including ads, payments, and shipping labels.
In its quarterly filing with the SEC, Etsy said revenue increased primarily driven by an increase in services revenue, and, to a lesser extent, an increase in marketplace revenue.
“Services revenue increased primarily due to a $14.4 million increase in advertising revenue, primarily driven by an increase in average price per click on Etsy Ads.
“Marketplace revenue increased primarily due to an $11.5 million increase in Etsy payments revenue and a $9.7 million increase in Etsy transaction fee revenue, both driven by an increase in Etsy marketplace GMS. These increases in marketplace revenue were partially offset by a decrease of $21.3 million related to the sale of Reverb on June 2, 2025.”
In a post on LinkedIn, Etsy CEO Kruti Patel Goyal said Etsy was seeing early signs of healthier customer behavior – active buyers grew sequentially for the first time in two years, new buyers and active sellers returned to growth, and GMS per buyer increased year-over-year for the first time since 2022. “These are early indicators,” she said, “but they matter. They reflect real improvements in the customer experience and give us confidence that our strategy is starting to take hold.”
She outlined the company’s four priorities: “showing up where shoppers discover, matching them with the right inventory, retaining and rewarding our most valuable customers, and amplifying human connection – designed to work together to drive engagement, frequency, and long-term growth.”
Etsy’s deeper approach to matching is helping it better understand each buyer’s intent, taste, and context, Goyal said, “so we can surface the right items for the right moment. AI is accelerating that shift, helping us make sense of Etsy’s breadth and move faster from insight to impact.
“We’re also focused on strengthening loyalty – giving our most engaged buyers and sellers more reasons to come to, and sell on, Etsy – while leaning more intentionally into what I believe is one of our strongest differentiators: human connection.”
Etsy could make a lot more money if they had capacity to show all the handmade things we sell. I put up a new listing, which i haven’t done in a few years, and it got 3 views. Previously, new listings were promoted.
Etsy has been threatening to hide listings with shipping over $6. My current shipping fee on a $10 item was $6.30 this week not including box, bubblewrap, tape, & label – and Etsy’s double-dipping commission on shipping fees.
In June, when USPS fees go up again, I would have to raise my “free” shipping rolled into the item price, as Etsy has been demanding, to $20. Then, Etsy promises they’ll promote for “free” an unsellable item that used to be a best seller at $10 when they didn’t make the listing invisible for non-compliance with their terrible “free shipping” farce.
They could make more money simply by showing handmade items, instead of filling the search results page with the endless repetitive listings of ebay factory-made junk and 4th-party custom printed tee shirts and mugs (AKA drop shippers). Then they wouldn’t need to take more fees from sellers to give to shareholders. They’d be making money on FVF.
Imagine if realtors were so bad at selling that they had to make it up by charging 30% commission instead of 3%. That’s Etsy!
My Etsy shop saw good demand in Q1. However, I associate this demand to larger than normal income tax refunds. We shall see how Etsy does in Q2 when those refunds have already been spent.