Oct 28, 2026 earnings call — Marketplace growth and AI-driven personalization
Etsy reported marketplace GMS of $2.6 billion and raised confidence in growth with Adjusted EBITDA $210 million (30.4% margin).
Revenue $0.7B (est $0.7B) · EPS $1.00 (est $0.76)
Key quotes
"By using AI and machine learning to more deeply understand shoppers' tastes and interests, we're helping buyers find what they want and discover things they didn't know they were looking for."
"In the third quarter, we increased our marketing spending on a year-over-year basis, but the GMS from marketing grew faster than that."
"Active buyers grew year-over-year for the first time in two years, and our focus on improved customer relationships is driving an acceleration in growth in GMS per active buyer."
Analyst Q&A 16
Personalization on app vs web
Q (Nikhil Devnani · Bernstein): Analyst asked how personalization improvements from the app were applied to non-app shopping and what technical hurdles remain.
A: Management said the app was used to test deeper personalization because users are signed in, and the learnings have been expanded across web and app. They said there are no significant technical hurdles; it was mainly sequencing work to learn before applying broadly.
"As we have learned about how to effectively personalize the experience, deliver much more relevant inventory and personalization, we have expanded those learnings and that personalization work across platforms and throughout the experience." — Kruti Patel Goyal (CEO)
Gifting assistant and gifting share
Q (Steven Forbes · Guggenheim): Analyst asked what problems the Gifting Assistant will solve and the percent of GMS from gifting for the year and fourth quarter.
A: Management said the Gifting Assistant is a first shopping agent experiment, launched in gifting to teach users when and how to use a conversational interface. They said it helps with broader, complex queries to narrow searches and they will expand use cases and access points; they also said about 30% of GMS comes from gifting.
"It has really been an opportunity for us to learn and experiment with a more conversational interface to understand how that enables people to shop more effectively." — Kruti Patel Goyal (CEO)
Buyer purchase frequency
Q (Andrew Boone · Citizens): Analyst asked about trends in buyer frequency and cohorts given personalization efforts.
A: Management said frequency is a long-term driver and hard to move quarter-to-quarter, but they see early engagement signs like responsiveness to recommendations, favoriting, app usage and repeat visits improving. They also noted new and reactivated buyers buy less frequently and higher-priced special items can reduce purchase cadence, so overall frequency is not yet up year-over-year.
"As we look forward, I think we are very encouraged to start now to see, for a couple of quarters in a row, growth in the number of repeat buyers and the growth in the number of habitual buyers." — Lanny Baker (CFO)
Marketing channels and ROI
Q (Eric Sheridan · Goldman Sachs): Analyst asked for learnings from diversifying marketing channels and how that affects volume and medium-term marketing ROI.
A: Management said 2026 has been a strong year for marketing, with branding around human connection and improved direct marketing performance. They highlighted better paid search segmentation, scaling paid social on TikTok and YouTube with attractive ROIs, an in-person activation, and that in Q3 marketing spend rose but GMS from marketing grew faster with improved ROIs.
"Within paid social, we've been able to scale at really attractive ROIs, the spending that we do in places like TikTok and YouTube, which are expanding our reach to younger audiences and to new buyers coming into Etsy." — Lanny Baker (CFO)
Digital vs physical item mix
Q (Rob Coolbrith · Evercore): Analyst asked how much of the marketplace is digital and how prominence of digital items affects GMS and ad revenue.
A: Management said they have not broken out digital versus physical and are not doing so now. They said improving buyer intent profiling helps infer whether a buyer wants digital or physical, and adjusting presentment has shifted mix and helped average order value.
"I think the goal has been to better meet the buyer intent, and it's had sort of the bank shot outcome of shifting the mix a little bit, and it's actually been a little bit of a help to average order value as well." — Lanny Baker (CFO)
Audio connection check
Q (John Colantuoni · Jefferies): Analyst asked if the call hosts could hear him.
A: The operator confirmed the analyst could proceed. There was no substantive management discussion in this exchange.
Pricing mix and sustainability
Q (John Colantuoni · Jefferies): Analyst asked how Etsy is shifting spend toward higher-value items and how sustainable that mix shift is.
A: Management said they focus on improving customer experience quality rather than driving price, changing algorithms to optimize for quality over conversion. They said personalization and better use of buyer and inventory profiles allow them to personalize at scale, which supports the durability of the improvement.
"A big part of that has been thinking through how we change our algorithms to not just optimize for conversion, but to optimize for quality." — Kruti Patel Goyal (CEO)
Highlighting sellers in feeds
Q (Bryan Smilek · JPMorgan): Analyst asked about progress showing top sellers in the feed and the Android takeover impact on GMS and AOV.
A: Management said the focus was on showing information about the seller, not just promoting top sellers, and the Android test helped find where seller information is most valuable. They said showing seller info gives buyers more understanding and trust, which drives engagement, and they are expanding those learnings across the experience while also seeing seller growth and GMS per seller growth.
"I think that the really interesting insight that we gathered there was that by showing that information through the experience, it gives buyers not only a deeper understanding of what it is that they're buying, but it conveys more trust in a way that drives more engagement." — Kruti Patel Goyal (CEO)
External vs internal growth drivers
Q (Bernie McTernan · Needham & Company): Analyst asked to define and quantify external GMS tailwinds and other internal products besides personalization driving growth.
A: Management said early 2026 growth was largely from external factors like inflation, tariffs, and favorable currency, but as those waned, product improvements are driving more growth. They quantified personalization as contributing a couple of points of growth and also cited improved search relevance and marketing efficiency as additional internal contributors.
"At the start of 2026, the large portion of our growth was coming from what we kind of deemed external factors, which would be the effect of inflation and tariffs on listing prices, currency exchange rates that were going in our favor at that time." — Lanny Baker (CFO)
Active buyer additions and recruitment
Q (Rick Patel · Raymond James): Analyst asked about gross buyer additions being up ~6% and which strategies recruited buyers and opportunities ahead.
A: Management said growth has come from both new buyers and importantly reactivation, with social media proving very effective for reactivating prior buyers. They also said shifting spend toward channels like TikTok reached younger audiences and personalization and owned channels helped reactivate buyers; they noted half of TikTok impressions reached 18-29 year olds.
"As we've gone into social media, that has really proved to be a very effective channel for us in reactivating prior buyers." — Lanny Baker (CFO)
Agentic shopping and AI impact
Q (Naved Khan · B. Riley): Analyst asked how agentic shopping will affect personalization and consideration as adoption grows.
A: Management said AI is a major shift and Etsy is well-positioned because of differentiated human-made inventory and a trusted brand that signals quality. They said on-site AI-driven personalization and agentic experiences are the near- to medium-term opportunity, and they are also working with partners so sellers' items show up wherever shopping begins, though agentic discovery is still early.
"We believe Etsy is incredibly well-positioned, not just to participate in this shift towards AI-powered commerce, but to really thrive." — Kruti Patel Goyal (CEO)
Category strength and occasions
Q (Nick Jones · BNP Paribas): Analyst asked which categories are showing strength or weakness and any macro ties like home goods to housing trends.
A: Management said trends have been broad-based across incomes, geographies and categories and that they think in terms of occasions like gifting, personalization, handmade, fandom. They noted home and living, jewelry, and vintage have been pretty strong in the last three to six months.
"In the last few months, call it three to six months, home and living, jewelry, vintage, those have been categories that have been pretty strong." — Lanny Baker (CFO)
Guidance range drivers
Q (Marvin Fong · BTIG): Analyst asked what could push results to the low or high end of guidance, including personalization and marketing assumptions.
A: Management said the range reflects normal uncertainty around holiday consumer behavior and timing of product benefits paying off. They said marketing spend will be allocated to achieve acceptable ROI, spending to their ROI target and flexing with external dynamics and on-site competitiveness, and those factors are built into the outlook range.
"The high end, low end of our outlook includes, I would say at the highest level, the natural variability of predicting the future and guessing what consumers are going to do through the holiday." — Lanny Baker (CFO)
Audio connection check 2
Q (Anna Andreeva · Piper Sandler): Analyst asked if hosts could hear her and then said she was all set.
A: The operator confirmed and there was no substantive management comment in this exchange. Management did not provide additional content beyond the connection confirmation.
Frequency trend and income cohorts
Q (Anna Andreeva · Piper Sandler): Analyst asked if frequency improved sequentially since prioritizing higher-quality listings and whether lower-income cohorts improved.
A: Management said frequency is down modestly and is a long-term focus; they emphasized engagement metrics as near-term indicators, noting more recommendations engagement, favoriting, cross-category orders, repeat visits and improving repeat-visit rates. They also said higher-income households grew a bit faster recently but growth is across cohorts and Etsy's broad inventory serves many wallet sizes.
"When I look at that, we are doing a great job at bringing buyers back into the funnel." — Kruti Patel Goyal (CEO)
AI listing policy and human-made stance
Q (Maria Ripps · Canaccord): Analyst asked whether stricter AI listing policies will affect GMS soon and how the human-made policy affects agent ranking versus competitors.
A: Management said the policy changes aim to protect human creativity and make listings clearer for buyers, including requiring at least one unaltered photo with a real background and banning AI-generated functional guides like patterns and recipes. They said they expect stronger enforcement and transparency, see this as a long-term differentiation with no material near-term GMS impact, and believe it will benefit marketplace trust and growth over time.
"The goal of this was to make sure that sellers understood what tools they could use and how they could represent their products on the marketplace, and we want to make sure that buyers understand with confidence what they're going to be receiving." — Kruti Patel Goyal (CEO)