By Connor Hart

Etsy logged lower profit in the fourth quarter, despite an uptick in revenue, as the company takes steps to grow its relevance, engagement and market share in an effort to return to sustained growth.

The online marketplace for crafts and vintage on Thursday posted a profit of $110.7 million, compared with $129.9 million a year earlier. Quarterly earnings of 92 cents a share topped analyst expectations for 85 cents a share, according to FactSet.

Revenue climbed 3.5% to $881.6 million, compared with Wall Street models for $884.3 million.

Gross merchandise sales fell 3.8% from last year, to $3.59 billion. The company attributed the decline largely to the divestiture of musical-instrument marketplace Reverb last year.

Excluding Reverb, gross merchandise sales were up 2.4% from last year.

Etsy ended the quarter with about 5.6 million active sellers, marking a 1.5% year-over-year decrease, though the company noted sellers were up modestly on a sequential basis. Active buyers totaled 86.5 million, down 3.4% year over year and roughly flat sequentially.

Looking ahead, Etsy guided for gross merchandise sales of $2.38 billion to $2.43 billion in the current quarter. For the year, the company expects slight growth in gross merchandise sales, with positive year-over-year comparisons in each quarter, it said.

"As we enter 2026, we have a focused set of product and marketing initiatives in flight and several early indicators of progress," Chief Financial Officer Lanny Baker said. "We expect that the full impact of these will take time to translate into long-term sustainable growth."

Etsy's readout came a day after eBay said it would acquire Depop, a secondhand fashion platform, from Etsy for about $1.2 billion. Etsy CEO Kruti Patel Goyal said selling the platform would allow the company to focus on growing its core marketplace.

Etsy shares jumped on news of its Depop sale and were recently trading hands 20% higher, at $53.02, in premarket trading.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

February 19, 2026 07:37 ET (12:37 GMT)

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