Etsy, Inc. ETSY paired a stronger 2026 outlook with a restructuring aimed at faster product execution. Management said search, personalization and marketing are improving marketplace fundamentals and buyer engagement.
The call reinforced management’s preference for sustained GMS and revenue growth over structural margin expansion as Etsy redirects talent toward machine learning and customer operations.
ETSY Raises Full-Year Growth Outlook
CFO Charles Baker guided third-quarter Etsy marketplace GMS to $2.53 billion to $2.58 billion, representing 4% to 6% year-over-year growth. He expects a take rate of about 26% and a 28% to 30% adjusted EBITDA margin.
Baker said full-year GMS growth is now expected in the mid-single-digit range, above the prior outlook. Full-year adjusted EBITDA margin guidance increased to 29% to 30% from 28% to 30%.
Second-quarter earnings were $1.34 per share, which surpassed the Zacks Consensus Estimate of $1.17. Revenues of $668.31 million topped the $649.7 million consensus mark.
Etsy Reshapes Product and Engineering
CEO Kruti Goyal said the restructuring will simplify product and engineering, reduce overlap and create flatter teams. The plan eliminates roughly 220 positions, or about 12% of the workforce.
Goyal said the goal is faster execution rather than cost-cutting. She wants talent aligned with discovery, matching and personalization, with deeper machine-learning expertise.
CFO Charles Baker expects about $35 million of restructuring charges and roughly 1,600 employees afterward. He said near-term savings are reflected in 2026 margin guidance, but the move is not intended to structurally lift margins.
ETSY Connects Marketing With Personalization
A Raymond James analyst asked what drove stronger GMS growth. Goyal cited better product-listing-ad segmentation, continued SEO strength and more efficient acquisition feeding into an improved on-site experience.
Goyal said real-time search personalization, fresher recommendations and richer buyer profiles reinforce one another. Those profiles cover more than 65 million buyers, improving Etsy’s ability to tailor later visits.
Goyal highlighted the app as a proof point, with GMS up 12.5% year over year. Visits per monthly active user and orders per visit increased, while younger-buyer outreach expanded through social channels.
Etsy Buyer Trends Show Early Stabilization
Baker said active buyers rose about 350,000 sequentially to roughly 87 million. Repeat and habitual buyers each posted slight sequential growth for the first time since 2023, while the decline in purchase frequency moderated.
A Morgan Stanley analyst pressed on average order value. Baker said higher seller listing prices have been durable, while search improvements increasingly surface higher-quality, higher-priced items that better match buyer intent.
Baker added that existing app users buying more drive most app GMS growth. He said younger buyers have lower near-term lifetime values but higher growth rates as they move through life stages.
ETSY Builds AI Around Better Matching
A Wedbush analyst asked how machine learning connects with agentic commerce. Goyal said Etsy’s largest AI opportunity remains on its marketplace, where AI can improve buyer understanding, inventory understanding and matching.
Goyal said agentic traffic remains below 1% of traffic but carries higher intent and higher average order value. Etsy is testing conversational shopping through its Gifting Assistant and partnering with major AI platforms.
A Wells Fargo analyst raised live commerce. Goyal said Etsy sees potential for sellers with strong maker stories but has no current launch plan. Baker said higher AI compute spending remains within planned infrastructure costs.
Etsy Keeps Growth Ahead of Margin Expansion
Baker said nearly half of year-over-year Etsy marketplace revenue growth flowed through to adjusted EBITDA in the second quarter, but one quarter does not establish a permanent incremental-margin model.
Baker said restructuring, marketing efficiency and capital allocation are meant to support durable growth. Etsy also authorized a new $2 billion repurchase program after receiving about $1.4 billion from the Depop sale.
ETSY’s Zacks Signals Stay Mixed
ETSY carries a Zacks Rank #3 (Hold), with a Growth Score of A, Value and Momentum Scores of D and a VGM Score of B. Under the Zacks framework, Growth and VGM are favorable, while Value and Momentum are weaker. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Style Scores complement the Zacks Rank, with the strongest combinations pairing a Zacks Rank #1 or #2 (Buy) with A or B scores. ETSY lacks that top-rank combination, and its Zacks Rank can change as analyst estimates are revised after the just-reported results.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Etsy, Inc. (ETSY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
