Etsy

After two long years of declining sales, Etsy just returned to growth. Q4 marketplace gross sales rose 0.1% year over year and consolidated GMS climbed 2.4% excluding the divested Reverb business. Management is guiding to positive growth in every quarter of 2026. Active buyer declines moderated and the company added 17.2 million new and reactivated buyers in just three months.

Etsy is one of the first retailers wired into AI shopping assistants. They just signed integrations with OpenAI's ChatGPT Instant Checkout, Google's AI Mode and Gemini, and Microsoft Copilot Checkout that let users buy Etsy items inside the chat. They also sold Depop to eBay for 1.2 billion dollars in cash, freeing up the team to focus on the core marketplace.

Etsy still has fewer active buyers than a year ago, down 3.4% to 86.5 million. The average buyer also spends 0.5% less per year. Without growing both the number of buyers and how much each one spends, the company has to lean entirely on take rate hikes and ads, which can only push so far.

Adjusted EBITDA margin compressed to 25.2% in Q4 from 29.4% a year ago, a 420 basis point drop. Net income fell 14.8% in the quarter and 46% for the full year. The company has been spending more on marketing and product just to keep growth flat, which has dented profitability hard.