Earnings Preview: Can Etsy’s Massive $2B Buyback Save Declining Revenue on Oct. 28?
Etsy (NASDAQ:ETSY | ETSY Price Prediction) reports third-quarter results on October 28. With a fresh $2 billion buyback authorized and shares up 56.8% year to date, this report tests whether marketplace momentum can offset a shrinking headline revenue line. A…
Etsy (NASDAQ:ETSY | ETSY Price Prediction) reports third-quarter results on October 28. With a fresh $2 billion buyback authorized and shares up 56.8% year to date, this report tests whether marketplace momentum can offset a shrinking headline revenue line.
A Leaner Etsy Heads Into Tougher Comparisons
Last quarter, revenue of $668M beat the $646.7M consensus. Etsy marketplace GMS rose 7.5% to $2.6 billion, its third straight quarter of growth. Take rate expanded 130 basis points to 25.9%, and adjusted EBITDA margin landed at 29.2%.
Management raised its full-year outlook to mid-single-digit GMS growth. CEO Kruti Patel Goyal called it “a more than 10 percentage point improvement in performance” from early 2025’s declines.
Since then, Etsy closed the Depop sale to eBay (NASDAQ:EBAY) on July 30, 2026, collecting $1.4 billion in cash, and began cutting roughly 12% of its workforce. Shares gained 17.95% over the past month before slipping 4.33% on Friday.
Consensus Points to Higher Profits on Lower Revenue
| Metric | Consensus | Prior Year | YoY Change |
|---|---|---|---|
| Q3 2026 Normalized EPS | $0.7561 | $0.63 | +20.0% |
| Q3 2026 Revenue | $668.3 million | $678.0 million | -1.4% |
| FY 2026 Normalized EPS | $3.447 | Not available | Not available |
| FY 2026 Revenue | $2.85 billion | $2.88 billion | -1.1% |
The revenue decline is largely optical. Year-ago figures still included Depop, which now sits in discontinued operations.
GMS Range and Buyback Pace Will Set the Tone
Management guided third-quarter marketplace GMS to $2.53 billion and $2.58 billion, or 4% to 6% growth, with take rate near 26% and adjusted EBITDA margin of 28% to 30%. I’ll be watching where GMS lands within that range, since Etsy noted fading currency boosts and harder prior-year comparisons.
Capital return comes next. Etsy bought back $250 million of stock in Q2, retiring about 3.9 million shares. CFO Lanny Baker said Etsy doesn’t “see a place to spend all of it in the business right now.” With 81% of adjusted EBITDA converting to free cash flow, you should look at how quickly Depop proceeds become buybacks, and whether that pace strains a debt-heavy capital structure.
Buyer health matters too. Purchase frequency remained below prior-year levels, though the decline moderated. App GMS grew 12.5% and now represents about 47% of GMS, while active buyers sit near 87 million.
Finally, I want an update on the roughly $35 million restructuring, scheduled to be substantially complete by quarter-end, and on quality control as users voice anxiety regarding AI-generated items and mass-produced goods.
Proving the Turnaround Can Fund Itself
Etsy is now a pure-play marketplace, and analysts expect 2027 EPS of $4.5456, 31.9% above the 2026 estimate. That path depends on GMS growth holding as comparisons get harder. If marketplace growth stays within guidance while buybacks accelerate, the per-share story strengthens on two fronts. If growth fades, the $2 billion authorization carries a larger load, and this report will show which path Etsy is on.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
