by The company recently announced it also has reduced its workforce by about 220 employees to align the size of the operation with its long-term strategy
BROOKLYN — Like most quarterly reports, online marketplace Etsy’s recently released Q2 results had a mix of good and bad news.
First the bad news. The company said in its report released last week that it was reducing its workforce by about 220 employees, or about 12%. This is part of a restructuring plan the board approved that aims to better align the size of the organization with the company’s long-term strategic priorities. Among these priorities is to simplify the company’s structure “to improve coordination and speed of decision making.”
With the reduction in workforce, the company will employ about 1,600, while also incurring about $35 million in charges including severance payments, employee benefits and other related costs. It expects to incur the charges and complete the restructuring by the end of the third quarter.
According to company CEO Kruti Patel Goyal, most of the reductions are in the company’s product and engineering group.
“We are changing our structure — with fewer silos to reduce handoffs, and flatter, faster teams built to solve broader more complex problems,” she said in a letter to shareholders. “And we’ll invest in an organization capable of accelerating initiatives to drive customer frequency and retention. This is not a cost-cutting move — it is meant to lean in during a period of strong momentum so that we can move faster and execute with even greater force.”
Indeed, the company’s financial performance during the second quarter ended June 30 shows that Etsy is connecting with consumers in a host of categories including furniture.
It cited revenue of $668 million, up 6.2% on a continuing operations basis and 9.3% for the Etsy marketplace, which includes sales of anything from jewelry, apparel and gifts to art and collectibles, plus furniture, rugs and other home décor. It also reported net income of $114 million for the quarter, or a margin of 17.1%.
For the six-month period, it reported revenue of $1.3 billion, up 4.7% on a continuing operations basis and up 8.5% for the Etsy marketplace. Net income for the period totaled $219 million, for a margin of 16.9% for the first half.
According to our HNN 125 Furniture & Bedding Retailers, Etsy’s furniture sales were estimated at $120 million, or just a fraction of the overall revenue and down about 4% from a year earlier. At that level of sales, it ranked at No. 72 on the list.
In its earnings statement, the company made reference to the appeal of furniture and other collectible items.
“Vintage reached its strongest recent pace of growth in 2026 as buyers increasingly turned to Etsy for distinctive, hard-to-find vintage items across collectible watches, furniture and home décor,” the company said.
The company also defines its sales activity in terms of Gross Merchandise Sales, which include sales tax, shipping charges and other charges customers pay for the convenience of ordering products on its platform. In the second quarter, the company said, GMS totaled $2.6 billion, up 7.5% year over year. It noted that both U.S. and international buyer GMS grew year over year, while U.S. growth improved sequentially, and showed “broad-based strength across all household income levels. While Etsy continued to capitalize on some external factors that support GMS growth, our product and marketing strategies are delivering meaningful benefits that are reflected in improving buyer trends and stronger marketplace health.”
That said, it noted there are three key metrics that drive the company’s GMS, including active buyers, purchase frequency and average order value.
+ It noted that the number of active buyers improved during the quarter, growing sequentially by about 350,000 to about 87 million. “Gross buyer additions accelerated, increasing 7.1% year over year, with growth across both new and reactivated buyers. We were also encouraged to see early signs of growth among our most valuable buyers, with habitual, and repeat buyer cohorts each showing slight sequential gains for the first time since 2023.”
+ It noted that while purchase frequency was modestly below prior-year levels on a trailing 12-month basis, the rate of decline slowed sequentially. “We also saw improvement in the 30-day repeat purchase rate, a good signal coming from a faster-moving metric. We believe these encouraging trends reflect the cumulative impact of our efforts to improve the overall Etsy customer experience.”
+ It also noted that average order value was the largest contributor to overall GMS growth, “with higher listing prices being the prevailing driver. Our efforts to elevate higher-quality items on-and-offsite across search, discovery and marketing are increasingly contributing to a shift toward higher AOV items. Reflecting these trends, GMS per active buyer increased to $124 on a trailing 12-month basis, up 2.8% year over year.”
The company also reported holding $1.3 billion in cash, cash equivalents and short-and-long-term investments. Net cash provided by operating activities of continuing operations for the six months ended June 30 was $266.4 million.
While furniture is just one of many categories sold on the platform, these results show the resilience of a marketplace concept that has gained traction with consumers of all income levels. We expect furniture will continue to remain an important part of the mix, which sends the following message: Etsy continues to take market share in the home furnishings segment. Retailers and suppliers alike should take notice.
