Online marketplace Etsy beats revenue estimates on steady demand

By Krisha Bhatt

April 29 (Reuters) - Online ‌marketplace Etsy ​beat Wall ​Street expectations for first-quarter revenue on Wednesday, helped by growth in gross merchandise sales as more active buyers joined the platform ‌and shoppers spent more on each purchase.

Consumer spending has been ⁠under pressure amid persistent inflation concerns, partly triggered by strict tariff policies. Yet, Etsy managed ‌to draw customers by offering ‌lower-priced goods, supported by the relatively low listing fees it charges sellers.

"Buying on Etsy has continued to hold up pretty well across all income ​cohorts," Chief Financial Officer Lanny Baker told Reuters.

Etsy's shares jumped more than 7% in early trading.

The Brooklyn-based company continues to remain largely insulated from ⁠direct tariff pressures, as about 90% of sellers on its marketplace source their supplies domestically.

Gross merchandise sales — ​a key sales metric — on the Etsy marketplace rose 5.5% to $2.5 billion during the quarter. GMS per buyer increased 2%.

Etsy's ​marketplace, accessible across most Middle Eastern countries, including ‌the UAE, Saudi Arabia and Israel, has not seen any material impact on operations or demand from the ongoing ⁠prolonged regional conflict, Baker said, citing the platform's ability to quickly replace sellers and reroute supply.

The company also plans to continue investing steadily in AI amid intense competition ⁠from ecommerce giants such as Amazon.com.

Traffic driven by AI tools on the marketplace is growing ​rapidly, but still accounts for a low single-digit share of overall business, Baker said, limiting its near-term impact on revenue.

The company reported first-quarter revenue of $631 million from the core ‌Etsy marketplace, compared with analysts' average estimate of $620.9 million, according to data compiled by LSEG.

Its earnings per share from ‌continuing operations came in at 89 cents, compared with the estimate of 62 cents.

Etsy, ⁠which sold its Gen Z-focused ‌fashion resale platform Depop ​to eBay for nearly $1.2 billion in February, forecast second-quarter GMS between $2.48 billion and $2.53 billion.

(Reporting by Krisha Bhatt in Bengaluru; Editing by ‌Shilpi Majumdar)

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