seller
- What changed
- Etsy Q3 GMS up 8.8% to $2.65B, take rate 26.2%
- When
- Reported October 28, 2026 (quarter ended Sep 30)
- Who it affects
- Etsy sellers, especially small shops buying Etsy Ads
- What to do
- Recheck Etsy margins after ads and fees before Q4
Key takeaways
- Etsy Q3 2026 GMS rose 8.8% to $2.65 billion and revenue rose 10.9% to $692.5 million.
- Active buyers grew 1% to about 88 million, the first growth in two years.
- Take rate rose to 26.2%, driven mainly by Etsy Ads; no fee changes were announced.
Etsy Q3 2026 in four numbers
What Etsy reported for Q3 2026
Etsy's shareholder letter, filed with the SEC on October 28, shows marketplace GMS of $2.65 billion, up 8.8% year over year and 9.1% on a currency neutral basis. Total revenue was $692.5 million, up 10.9%. Marketplace revenue, mostly transaction and listing fees, rose 9.1% to $468.1 million, while services revenue, which includes Etsy Ads, rose 15.0% to $224.3 million.
Adjusted EBITDA was $210.4 million, a 30.4% margin, and net income from continuing operations rose 8.6% to $113.6 million. Figures exclude Depop, which Etsy sold to eBay on July 30, 2026.
Active buyers grew for the first time in two years
Etsy said trailing twelve month active buyers reached about 88 million, up 1.0% year over year and about 540,000 more than the prior quarter. It is a small gain, but it ends two years of buyer declines. Chief executive Kruti Patel Goyal also said GMS per seller grew in the quarter and that the active seller base grew at its fastest rate in two years. Etsy did not give the seller count in the text of the letter.
More sellers chasing a buyer base that grew only 1% means more competition for each order.
Etsy in 2026
Etsy sells Depop to eBay
Q3 quarter ends
Q3 results: GMS +8.8%, buyers +1%
GMS guided to $3.46B to $3.52B
Etsy Ads pushed take rate to 26.2%
Take rate, the share of GMS that Etsy keeps as revenue, was 26.2%, up 50 basis points from a year earlier. Etsy said the increase was primarily driven by further enhancements to Etsy Ads, and to a lesser extent Offsite Ads. The letter also says most Etsy Ads revenue comes from sellers with less than $100,000 in annual GMS, the solo makers and microbusinesses that make up the bulk of the marketplace.
The Q3 letter does not announce any fee changes. The higher take rate comes from sellers spending more on ads and from Etsy improving how ads are placed, not from a new base fee.
New seller tools and AI shopping
Etsy listed several seller side changes in the quarter.
- Shared shop access so more than one person can manage a shop
- An expanded appeals process for account and listing decisions
- Easier Etsy Ads management
- AI tools for creating listings and answering buyer messages
- A test of an AI assistant that gives shop level insights
Gen AI shopping is a new discovery channel
Etsy called Gen AI powered shopping an increasingly important discovery channel, and said shoppers who arrive this way often keep browsing on Etsy before they buy. It cited partnerships with AI discovery platforms and natural language product feeds, without naming them, and is testing a Gifting Assistant, which the CEO called its first on site shopping agent. Clear, specific titles and attributes now help listings get picked up by AI assistants, a trend we track in our guide to AI agents for ecommerce.
Etsy Q4 2026 guidance and stock reaction
For Q4 2026, Etsy guided GMS of $3.46 to $3.52 billion, up 5% to 7%, with take rate of about 25.6%. For the full year it expects GMS growth of about 7%. Etsy bought back about $394.6 million of stock in Q3, and shares rose 4.2% in premarket trading to $91.36 after the release, Investing.com reported.
What sellers and brands should do
Etsy is growing again, but slowly, and a larger share of each sale is going to ads. Use these steps before the holiday rush.
- Calculate Etsy margin after transaction fees, payment fees, Etsy Ads and Offsite Ads, not just after the listing fee
- Set a daily Etsy Ads budget per listing group and cut listings that spend without orders
- Rewrite titles and attributes in plain, specific language so Etsy search and AI shopping assistants can match them to gift queries
- Review the Etsy AI and listing photo policy before uploading new holiday images
- Use shared shop access to split ads, listings and customer messages across your team
- Compare Etsy results with Amazon and Walmart so ad budget goes to the channel with the best return
Etsy seller checklist for Q4
- Work out margin after ads
- Cap Etsy Ads per listing group
- Rewrite titles for gift queries
- Check AI photo policy
- Turn on shared shop access
- Compare Etsy with Amazon ROI
What this means for sellers and brands
The lesson from Etsy's quarter is the same one Amazon and eBay sellers are learning: marketplaces are growing ad revenue faster than sales, so organic reach is shrinking. Treat ads as a cost of selling, track it per channel, and make listings easy for both search engines and AI assistants to read. For brands that sell on several marketplaces, our marketplace management service runs Walmart and other channels, more updates are on the marketplace news channel, and our free Amazon audit checks your Amazon ad spend and margins so you can compare them with Etsy.
Sources
- Etsy, Inc. (SEC Form 8-K): Q3 2026 shareholder letter (sec.gov/Archives/edgar/data/0001370637/000137063726000090/q326shareholderletter.htm)
- Investing.com: Earnings call transcript, Etsy beats Q3 2026 estimates as growth accelerates (investing.com/news/transcripts/earnings-call-transcript-etsy-beats-q3-2026-estimates-as-growth-accelerates-93CH-4979561)
- Retail Insight Network: Etsy reports third quarter GMS and revenue growth (retail-insight-network.com/news/etsy-reports-third-quarter-gms-and-revenue-growth/)
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