Etsy beats revenue estimates as active buyers and spending rise

Personalized gifts are holding their place in the basket even as shoppers stay careful with spending. Etsy said more active buyers returned to the marketplace in the first quarter and shoppers spent more per purchase, a sign that customized, made-for-someone-else buying is moving further into everyday gifting, not just special occasions.

The company said active buyers grew sequentially for the first time in two years, a notable turn after a long stretch of contraction. Etsy still had fewer buyers than a year earlier, but the improvement came alongside year-over-year growth in new buyers, active sellers and gross merchandise sales per buyer. The company also said every key performance indicator was in line with or ahead of its quarterly outlook, reinforcing that demand was not just broader, but healthier across the platform.

That matters for anyone tracking the gift market because Etsy has been leaning hard into discovery and personalization as its central growth strategy. The company has been building its app into a more important channel and framing the experience around helping buyers find items that feel personal and relevant, rather than simply completing a transaction. It is also pressing ahead with AI, machine learning and large language models, including expanded AI-driven tools and insights, agentic shopping partnerships with OpenAI, Google Gemini, Microsoft Copilot and Stripe, and personalized browsing features designed to surface better matches.

The technology push is still early. Etsy said AI-driven traffic is growing, but it remains only a low single-digit share of overall business. That helps explain why the company is still betting on the basics of gifting: lower-priced goods, clearer curation and more relevant recommendations. In a cautious economy, that mix can make a custom item or a thoughtful small purchase feel more intentional than a bigger, generic buy.

Etsy’s filing also pointed to the other forces shaping its business. On February 15, 2026, the company agreed to sell Depop to eBay for $1.2 billion, with U.S. and German regulatory clearance already in hand and closing expected by the end of the third quarter. Because of that pending sale, Etsy presented its first-quarter results on a continuing-operations basis, and it noted that the 2025 sale of Reverb makes some year-over-year comparisons less clean than usual.

For now, the clearest read is that Etsy is gaining traction with buyers who want something more personal without paying luxury-pricing for the privilege. The company said most sellers source domestically, which helps insulate it from direct tariff pressure, even as barriers to international trade and AI-amplified fraud remain material risks. After a long buyer slide, the first sequential gain in two years suggests that customized gifting is no longer a niche reflex. It is becoming a mainstream habit.