Etsy (NASDAQ: ETSY) shares soared 5.16% in pre-market trading on Wednesday following the release of its first-quarter 2025 financial results, which exceeded analyst expectations. The e-commerce company specializing in handmade and vintage items demonstrated resilience in a challenging economic environment.
Etsy reported Q1 revenue of $651.2 million, surpassing the IBES estimate of $642.7 million. The company's adjusted EBITDA came in at $171.1 million, also beating the IBES estimate of $164.5 million. The adjusted EBITDA margin for the quarter stood at an impressive 26.3%. These strong financial metrics likely fueled investor optimism, despite the company posting a net loss of $52.1 million for the quarter.
Looking ahead, Etsy provided a cautiously optimistic outlook for the second quarter. The company expects Q2 Gross Merchandise Sales (GMS) to decline at a rate comparable to, or slightly better than, the year-over-year decline reported in Q1 2025. Additionally, Etsy projects an adjusted EBITDA margin of around 25% for Q2. While these forecasts suggest some ongoing challenges, the company's ability to maintain healthy margins and potentially improve GMS trends appears to be resonating positively with investors in early trading.