Green Shoots Emerging: Etsy GMS Forecast Stabilizes Ahead of Q2 Earnings
After several quarters of disappointing Gross Merchandise Sales (GMS) trends, the latest data signals from Etsy are starting to turn a corner. We expect current quarter GMS to be in-line:
TickerTrends’ FQ2’25 Forecast: $2.76B
ETSY Guidance FQ2’25: $2.76B
However… we see green chutes forming for what Q3 2025 guidance might be for several reasons we will dig into below.
TickerTrends’ KPI forecast for Etsy’s fiscal Q2 2025 GMS currently stands at $2.76 billion, based on a blend of alternative data. While that figure is still slightly down year-over-year, the directional revision trend has moved upward week over week. We think based on real-time alternative data metrics these revisions will continue to drift higher before our final prediction.
For the first time in several quarters, we're seeing clear green shoots.
What the Data Is Telling Us
Our proprietary KPI model incorporates high-frequency indicators that have historically correlated with Etsy’s marketplace performance. For Q2, we’ve tracked a steady improvement in:
Google Search interest for both Etsy and Depop related brand and product queries. We have seen a 500 basis point increase over the last 4 weeks YoY from -2.9% to +2.1% YoY.
Android app usage statistics, which show significant seasonal outperformance starting in April and especially seen throughout May in the combined Etsy and Depop unique daily users shown YoY.
Global Etsy and Depop website traffic, which began seasonally improving in late May, although still in decline. Collectively the website traffic improved roughly 200 basis points over the last 4 weeks.
The revision trend has tilted upward over the past three weeks, bringing our forecast from sub-$2.72B just a few weeks ago up to $2.76B as of this week.
While this still represents a modest year-over-year decline, the stabilization is meaningful. Last quarter’s reported GMS was $2.79B, and management guided for Q2 to show a "similar or slightly better" YoY trajectory compared to Q1’s –6.5% decline. At $2.76B, our forecast would imply a –5.8% YoY decline, modestly better than last quarter and a potential signal that GMS contraction is bottoming. We believe there is a strong chance ETSY’s guidance comes in better than feared.
What This Means for Revenue
Etsy guided to a Q2 2025 take rate of 23.3%, which is the percentage of GMS the company captures as revenue through fees, ads, and services.
At our current GMS forecast of $2.76B, that implies:
Estimated Revenue = $2.76B × 23.3% ≈ $643.1 million
This would put revenue in line with current street expectations at ~$645 million, and possibly even slightly ahead if our final-week revisions continue to move higher like we expect. More importantly, if ETSY retains this 23.3% take rate, we may easily see a $2.80B GMS implied guide for Q3 2025, equating to about $652 million in FQ3’25 revenue vs $641 million Wall Street is currently at.
With a base of stabilized GMS, left tail risks on revenue may be coming off the table — a key concern for many investors watching Etsy’s discretionary exposure.
Revising the Narrative
Etsy’s stock has traded cautiously this year, weighed down by fears that GMS could continue decelerating in the face of weak consumer spending and elevated competition. But the latest digital activity suggests otherwise.
Our revision trend has been consistently positive and more importantly, supported by real-time consumer behavior data across multiple data sources. That gives us growing confidence that Etsy’s Q2 performance may mark a turning point.
If Etsy pairs in-line revenue with stronger Q3 guidance (which appears increasingly likely given the search and traffic trajectory into July), it could catalyze a re-rating of the stock, particularly as concerns over further downside in core GMS begin to fade.
Bottom Line
Our updated forecast calls for Etsy to report $2.76B in GMS for fiscal Q2 2025, implying stable YoY performance and a likely $643M revenue print using guided take rate assumptions.
With web and mobile traffic improving, and search demand beginning to rise, Etsy may finally be exiting its GMS drawdown. For investors, this quarter could be the first signal that the worst-case scenario is off the table.
TickerTrends tracks alternative data trends across hundreds of public tickers to forecast KPIs before earnings. Our models update weekly based on live consumer activity, and our KPI dashboard is available to enterprise partners.
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