Etsy (NYSE:ETSY) reports strong Q3 2026, stock soars
Online marketplace Etsy (NYSE:ETSY) reported Q3 2026 results topping the market’s revenue expectations, with revenue rising 10.9% year on year to $692.5 million. Its GAAP profit of $1 per share was 34.3% above analysts’ consensus estimates.
For more on Etsy, read the full research report for free.
Etsy (ETSY) Q3 2026 highlights:
- Revenue $692.5 million vs S&P analysts’ consensus estimates of $667.3 million (10.9% year-on-year growth, 3.8% beat)
- EPS (GAAP) $1 vs analysts’ consensus estimates of $0.74 (34.3% beat)
- Adjusted EBITDA $210.4 million vs analysts’ consensus estimates of $195.9 million (30.4% margin, 7.4% beat)
- Operating margin 16.1%, up from 13.3% in the same quarter last year
- Free cash flow margin 34.1%, up from 4.9% in the previous quarter
- Market capitalization $8.05 billion
Revenue growth
A company’s long-term revenue performance is one signal of its overall quality. Even a poor business can perform well for one or two quarters, but a high-quality one grows for years. Over the last three years, Etsy grew its revenue at a weak 1.3% compounded annual growth rate, falling short of our standards.
This quarter, Etsy reported year-on-year revenue growth of 10.9%, and its $692.5 million of revenue exceeded Wall Street’s consensus estimates by 3.8%.
Looking ahead, sell-side analysts expect revenue to grow 3.9% over the next 12 months, according to S&P. Although this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector.
Cash flow
Although EBITDA is valuable for assessing company performance, cash flow is critical because accounting profits alone can’t pay the bills.
Etsy has shown strong cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors and stay ahead of the competition while maintaining an ample cash cushion. The company’s free cash flow margin was among the best in the consumer internet sector, averaging 23.2% over the last two years.
Etsy’s margin dropped by 1.7 percentage points over the last few years. If its declines continue, it could signal increasing investment needs and capital intensity.
Etsy’s free cash flow was $236.4 million in Q3, equivalent to a 34.1% margin. This was a good result as its margin was 1.3 percentage points higher than in the same quarter last year, but short-term results warrant caution because investment needs can be seasonal, causing temporary swings. Long-term trends matter more than short-term fluctuations.
Key takeaways from Etsy’s Q3 results
Etsy delivered a solid quarter, topping analysts’ consensus estimates for both EBITDA and revenue. Shares surged 6.7% to $93.42 immediately after the results.
Etsy had a solid quarterly earnings result, but is the stock a good investment? The latest quarter matters, but not nearly as much as longer-term fundamentals and valuation when deciding if the stock is a buy. For more on these considerations, read our full research report here (it’s free).