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Etsy gross merchandise sales grew to $3.04 billion, CEO Josh Silverman said. That's a 1.2% year-over-year increase.

Etsy Inc. reported that it grew both revenue and gross merchandise sales for its fiscal third quarter ended Sept. 30, 2023.

Despite the growth, CEO Josh Silverman said on an earnings call with investors that “significant pressure” on consumer discretionary spending, including high inflation, elevated interest in mortgage rates and declining savings balances, “have meant that there’s little leftover for many consumers after paying for food, gas, rent and child care.”

“These issues are magnified for lower-income buyers, and we feel the impact on the Etsy marketplace,” he said.

Etsy ranks No. 17 in Digital Commerce 360’s new 2023 Global Online Marketplaces Report. The Global Online Marketplaces Database ranks the 100 largest such marketplaces by 2023 third-party gross merchandise value (GMV).

Etsy gross merchandise sales (GMS) in Q3

In line with expectations, Silverman said, Etsy gross merchandise sales grew to $3.04 billion. That’s a 1.2% year-over-year increase. Meanwhile, Etsy revenue grew 7% year over year to reach $636 million.


This comes as Etsy once again reached a new record in active buyers, at 92 million. In Q2, Etsy active buyers had reached 91 million.

“We’ve been laser focused all year on knocking down barriers that stop buyers from shopping or shopping more often on Etsy,” Silverman said. “We know that buyers turn to Etsy most often for low-risk items, but we believe our opportunity is so much larger than that.”

Etsy’s sellers tend to offer luxuries, said James Risley, research data manager and senior analyst at Digital Commerce 360. And in the macroeconomic environment, he said, buyers may be pulling back from the handmade items Etsy is known for, in favor of off-the-shelf goods. This is reflected in the reduced gross merchandise sales reported by Etsy for the first nine months of the year, he said.


“However, sellers are fighting harder for those dollars, and services revenue is up significantly as sellers spend on ads to gain those dollars,” Risley said. “With this quarter’s increase in GMV, Etsy may have benefited from earlier holiday shopping starts amid Amazon’s early holiday push. It’s pushed more into promotional offers that increase order values, helping it compete on those days when shoppers are primed to spend.”

AI and machine learning power up Etsy

Silverman said Etsy has seen a nine-fold increase in the number of human-curated Etsy listings. Etsy expects the listings to top 1.5 million by the end of the year. Etsy is using machine-learning models designed to determine the visual appeal of items and incorporating that information into search algorithms, he said.

He added that Etsy has “launched a variety of experiments with the help of Gen AI” to evolve its head query searches. Head queries are those that get searched most frequently and get the majority of the engagement.

“As we move into 2024, when a buyer searches for broad queries, we expect to be able to show a far more diverse and compelling set of ideas,” Silverman said.


Etsy looks forward to the holidays

“It’s game time for holiday,” Silverman said.

Etsy’s message for the holiday season, he said, is that the marketplace will “make you a gifting hero.”

This comes with four key initiatives, he said.

  1. Etsy has launched a “new and improved” curated gift finder. That’s now available on the Etsy app and featured more prominently on mobile web, Silverman said.
  2. New deals tab. This replaces the Etsy app’s “updates” tab. That makes it easier to find personalized deals and gifts at an affordable price, Silverman said.
  3. The marketplace continues to selectively test Etsy-funded offers.
  4. “Etsy gifts will be delivered on time or your money back,” Silverman said. “Our estimated delivery date performance and Etsy purchase protection program enable us to stand behind purchases and work to disrupt buyer perceptions.”

Etsy earnings

For the fiscal third quarter ended Sept. 30, Etsy Inc. reported:

  • Active buyers reached 92 million. That’s a new company record, following the previous quarter’s then-record 91 million.
  • Etsy gross merchandise sales, or GMS, grew to $3.04 billion. That’s a 1.2% increase from the third quarter of fiscal 2022.
  • Etsy revenue grew to $636.3 million. That’s up 7.0% from $594.5 million in the year-ago period.

For the nine months ended Sept. 30, Etsy Inc. reported:

  • Etsy gross merchandise sales, or GMS, decreased to $9.15 billion. That’s down 1.4% from $9.28 billion in the first nine months of fiscal 2022.
  • Etsy revenue grew to $1.91 billion. That’s up 8.4% from $1.76 billion in the year-ago period.

Percentage changes may not align exactly with dollar figures due to rounding.


Check back for more earnings reports. Here’s last quarter’s Etsy report.

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