By Rob Curran

Etsy swung to a first-quarter profit as investments in technology helped the digital marketplace draw more sellers, leading to a growth forecast for a key sales metric this year.

The online marketplace for crafts and vintage posted earnings of $69.7 million, or 60 cents a share, in contrast to a loss of $52.1 million, or 49 cents a share, a year earlier according to FactSet. Analysts polled by FactSet had anticipated earnings of 61 cents a share.

Revenue rose 3.1% to $631.3 million, surpassing the average analyst target of $621.4 million, as tallied by FactSet.

Gross merchandise sales rose 5.5% from last year, to $2.5 billion. Excluding the impact of foreign exchange, gross merchandise sales rose 3.6%.

The number of active sellers increased 3.3% to reach 5.6 million by quarter end. Etsy ended the quarter with about 86.6 million active buyers, down 2.1% from a year earlier.

For the second quarter, Etsy targeted gross merchandise sales in a range between $2.48 billion and $2.53 billion.

The company said investment in its app is paying off. The app is where "investments in personalization, machine learning, and direct buyer relationships come together most effectively," the company said, in a letter to investors. Gross merchandise sales growth in the app continued to outpace non-app gross-merchandise sales growth, the company said. The app garnered about 47% of gross-merchandise sales.

Etsy has struck partnership deals with OpenAI, Microsoft, and Google on agentic artificial intelligence. The company has also built two of its own AI agents, one for buyers and one for sellers, which customers can chat with.

Etsy now anticipates gross-merchandise sales growth in the low-single-digit range for the year, compared with a prior projection a slight increase in gross merchandise sales for the year.

During the quarter, Etsy agreed to sell its secondhand clothing Depop unit to rival eBay for about $1.2 billion.

Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

April 29, 2026 07:49 ET (11:49 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.