Online marketplace Etsy (NASDAQ:ETSY) reported better-than-expected third-quarter 2025 revenue, with sales up 2.4% year-over-year to $678 million. Its GAAP earnings of $0.63 per share were 21.1% higher than analysts’ consensus estimates.
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Income: $678 million versus $656.6 million estimated by analysts (growth of 2.4% year-on-year, exceeded by 3.3%)
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EPS (GAAP): $0.63 versus analyst estimates of $0.52 (21.1% beat)
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Adjusted EBITDA: $171.9 million versus $164.7 million estimated by analysts (25.4% margin, 4.4% overrun)
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Forecast Q4 EBITDA margin of 24%, well below expectations of 27%
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Operating margin: 12.2%, in line with the same quarter last year
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Free cash flow margin: 27.1%, compared to 13.4% in the previous quarter
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Active buyers: 93.16 million, down 3.55 million year-on-year
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Market capitalization: $7.41 billion
Founded by struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NASDAQ: ETSY) is one of the world’s largest online marketplaces focused on handmade or vintage items.
A company’s long-term business performance can indicate its overall quality. Any business can experience short-term success, but the most successful ones experience sustained growth for years. Over the past three years, Etsy has grown its sales at a compound annual growth rate of 4.9%. This figure is below our standard for the consumer internet sector and is a rough starting point for our analysis.
This quarter, Etsy reported modest year-over-year revenue growth of 2.4%, but beat Wall Street estimates of 3.3%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration from the past three years. This projection is disappointing and implies that its products and services will face some demand challenges.
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As an online marketplace, Etsy generates revenue growth by increasing both the number of users on its platform and the average order dollar amount.
