Etsy, Inc. shares rose 1.3% in premarket trading as the e-commerce company reported better-than-expected first-quarter revenue, despite a decline in gross merchandise sales (GMS).

The online marketplace operator posted revenue of $651.2 million for the quarter ended March 31, 2025, surpassing analyst estimates of $642.03 million. This represents a 0.8% increase from $645.95 million in the same quarter last year. However, the company reported a net loss of $52.1 million, or $0.49 per share, compared to a net income of $63 million, or $0.47 per share, in the year-ago period. The company’s loss per share also missed the consensus estimate of $0.47 in earnings per share.

Etsy explained that the loss reflected an "impairment charge of $101.7 million to the goodwill of Reverb."

Etsy’s consolidated GMS fell 6.5% YoY to $2.8 billion, with the Etsy marketplace GMS declining 8.9% to $2.3 billion. The company attributed the top-line pressure to macroeconomic volatility but highlighted positive trends in its app metrics.

"Etsy’s first quarter 2025 financial results were aligned with our expectations, with solid adjusted EBITDA performance despite pressure on the top line," said Josh Silverman, Etsy Inc (NASDAQ:ETSY). Chief Executive Officer.

The company’s take rate, which represents consolidated revenue divided by consolidated GMS, increased to 23.3% from 21.6% in the prior-year quarter. Etsy also reported a 1.9% YoY increase in adjusted EBITDA to $171.1 million.

Looking ahead, Etsy expects second-quarter GMS to decline at a rate similar to or slightly better than the first quarter’s performance. The company anticipates a take rate similar to Q1 and an adjusted EBITDA margin of approximately 25%.