ETSY INC (ETSY) Business

Item 1. Business.

Overview

Our Mission to Keep Commerce Human

“Keep Commerce Human” reflects our belief that creativity and connection set us apart in an increasingly automated world. We see lasting value in businesses that balance people, planet, and profit, and we strive to align our growth strategy with this principle—using our platform to foster entrepreneurship and sustainable economic impact. You can read more about Etsy’s Impact strategy beginning on page 9.

About our Company

Etsy operates two-sided online marketplaces that connect millions of creative entrepreneurs with buyers around the world.

The Etsy marketplace is the global destination for unique, creative goods from independent sellers, connecting artisans with thoughtful consumers seeking items that reflect their tastes and values. We also operate Depop Limited (“Depop”), a leading fashion resale marketplace acquired in 2021. Total consolidated Gross Merchandise Sales (“GMS”) in 2025 was $11,916.9 million. Of this, Etsy marketplace GMS was $10,460.7 million or 87.8% of the total and Depop generated $1,074.9 million (or 9.0% of the total) of GMS.

On February 15, 2026, Etsy and eBay Inc. (“eBay”) entered into a Sale and Purchase Agreement (the “Purchase Agreement”) for eBay to purchase Depop, for $1.2 billion in cash, subject to certain adjustments as set forth in the Purchase Agreement. The sale is currently expected to close in the second quarter of 2026, subject to regulatory approval and certain other closing conditions as set forth in the Purchase Agreement. Etsy will continue to own and operate Depop through such time as the transaction is completed, with Depop’s financial results classified as discontinued operations on Etsy’s consolidated financial statements for both current and prior periods beginning in the first quarter of fiscal year 2026. In keeping with our current capital allocation approach, Etsy plans to utilize the proceeds from this transaction for general corporate purposes, continued share repurchases, and investment in the Etsy marketplace.

On June 2, 2025, we completed the sale of Reverb Holdings, Inc. (“Reverb”), our musical instrument marketplace, and on August 10, 2023, we completed the sale of the parent holding company of Elo7 Serviços de Informática S.A. (“Elo7”), a Brazil-based marketplace for handmade and unique items. The results of Reverb, until its sale on June 2, 2025, and Elo7, through its sale on August 10, 2023, are included in all financial and other metrics discussed in this report, unless otherwise noted.

Core Business Drivers

While our marketplaces operate independently, they share several critical elements related to how they are managed and serve their respective communities:

Innovative Technology - our engineering and product development organizations drive customer experiences: The engineering and product teams of both Etsy and Depop design, build, and maintain the platforms that enable millions of buyers and sellers to transact across geographies, languages, and devices. We invest in technology that enhances search and discovery, strengthens trust and safety, and improves overall platform performance and scalability.

Marketing - utilizing disciplined marketing investments to engage our communities: Our marketing strategies are designed to attract, engage, retain, and reactivate our customers through a full-funnel approach. We invest across performance marketing, including paid digital marketing which drives clicks, leads, and sales, and brand marketing, which is meant to build longer-term brand equity and loyalty. In addition, our owned marketing channels, including personalized emails and push notifications, have become an increasingly important and effective lever for us to deepen connections with our customers.

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Community - customer operations teams support the health, safety, and success of our global ecosystem: We develop policies and invest in tools and support systems that aim to foster trust, resolve issues efficiently, and drive connection to ultimately help sellers grow their businesses and encourage buyers to purchase from our marketplaces.

People - fostering engaged and impactful teams: We strive to attract, develop, and retain talented people who are deeply connected to our overall corporate mission to “Keep Commerce Human.” Through investments in engagement, professional development, well-being, and creating environments where diverse ideas can thrive, we foster collaboration across distributed teams and cultivate a culture that, we believe, empowers employees to drive lasting business impact.

How We Make Money

Etsy and Depop share a business model which we see as a virtuous circle: connecting sellers and buyers, enabling transactions, earning fees for our services, and reinvesting in the core business drivers of our marketplace outlined above. Because we do not hold physical inventory, we have the ability to lean into our flexible, asset-light operating model and adjust our investments in response to evolving consumer interests and market dynamics. We generate revenue primarily from marketplace activities, including transaction fees (inclusive of offsite advertising), payments processing fees, and listing fees, as well as from optional seller services such as on-site advertising and shipping labels. For more information, see Part II, Item 8, “Financial Statements and Supplementary Data—Note 1—Basis of Presentation and Summary of Significant Accounting Policies—Revenue Recognition.”

Our revenue streams and efficient operating model support strong free cash flow generation. In 2025, our business generated $693.4 million of cash from operating activities and $638.8 million in consolidated free cash flow, providing financial strength and flexibility to support our mission and our marketplaces.

Beginning in 2023, we increased investment in share repurchases beyond the amount required to offset the dilution created by the equity we grant to our employees as a form of compensation, and expect to continue to seek opportunities to do so as conditions warrant. To that end, in total, Etsy repurchased 14.4 million shares of our stock during 2025, at a total cost of $777.1 million. In December 2025, Etsy’s Board of Directors approved a new $750 million stock repurchase program. At the end of the year, we had $1.4 billion in cash and cash equivalents on our balance sheet, a strong foundation to support investments designed to drive future growth of our business.

Etsy’s Next Chapter

On October 29, 2025, Etsy announced a leadership transition. Etsy's President and Chief Growth Officer, Kruti Patel Goyal, was appointed Chief Executive Officer and to Etsy's Board of Directors effective January 1, 2026. This appointment came as Josh Silverman decided to step down as Chief Executive Officer, effective December 31, 2025. To provide continuity through this transition, Mr. Silverman is expected to serve as Executive Chair through December 31, 2026. Fred Wilson, who has served as the Chair of Etsy's Board since 2017, stepped down from that position, but continues to serve on Etsy's Board and was appointed Lead Independent Director, effective January 1, 2026. We believe this series of transitions will provide both continuity and evolutionary thinking about how to best serve future customer needs.

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Our Marketplaces

The Etsy Marketplace

Etsy, founded in Brooklyn just over twenty years ago, is the global marketplace for unique and creative goods, having generated nearly $90 billion in GMS since then. It is home to a universe of special, extraordinary items, from unique handcrafted pieces to vintage treasures — made, curated, sourced or designed by real people. Our strategy centers on strengthening our “Right to Win” — four qualities of our marketplace which we believe are core to our efforts to gain sustainable competitive advantages: our sellers’ unique items, best-in-class search and discovery, authentic human connections, and a trusted brand that inspires confidence and loyalty.

As of December 31, 2025, the Etsy marketplace had 86.5 million active buyers and 5.6 million active sellers. Additionally, for the year ended December 31, 2025:

•74% of GMS came from U.S. buyers and 26% came from buyers outside of the United States.

•There were more than 100 million items for sale on Etsy, with our top six GMS-generating categories being home and living, jewelry and personal accessories, apparel, craft supplies, paper and party supplies, and toys and games. These categories represented approximately $8.9 billion, or 85%, of GMS.

•We continued to drive buyer engagement with our mobile app, with 45% of GMS transacted through the Etsy app, up from 42% in 2024.

•Cross-category purchase occasions such as gifting, holidays, and personal milestones (e.g. weddings) remained a key focus area for us and continued to present meaningful opportunities to reach buyers looking for unique and personalized items.

•Custom or made-to-order merchandise comprised about 30% of total GMS, underscoring Etsy’s strong differentiation in one-of-a-kind and personalized goods.

2025 Performance Recap

GMS for the Etsy marketplace declined 4% in 2025 to $10.5 billion, a meaningful improvement from the decline experienced in 2024, though performance continued to trail overall e-commerce growth. This result reflects a persistently dynamic macroeconomic environment, including ongoing pressure on consumer discretionary spending and evolving buyer behavior.

In early 2025, we realigned our product and marketing organizations to operate in closer coordination around customer outcomes, reflecting our conviction that Etsy’s future growth depends on delivering increasing value and a more differentiated experience for buyers and sellers. We reorganized customer facing teams to enable faster learning, sharper execution, and greater accountability for impact. Through this process, we identified four customer-centric strategic initiatives, described in the following section. These initiatives began to positively influence our performance during 2025, with year-over-year Etsy marketplace GMS performance improving by nearly nine percentage points from the first quarter to the fourth quarter of the year.

Despite pressure on GMS, we delivered year-over-year revenue growth, driven primarily by improvements to our Etsy Ads product. These improvements increased ad relevancy and efficiency through machine learning–based ranking optimizations, more efficient seller budget pacing, and more seamless integration of onsite ads within organic search results. We believe these initiatives demonstrate our ability to drive value for our sellers and enhance the buyer experience, while simultaneously generating incremental revenue for Etsy.

Our Four Near-Term Strategic Initiatives

Show up where shoppers discover. We are working to increase Etsy’s presence across the channels where today’s shoppers - particularly younger audiences - find inspiration, including social, streaming, and AI-enabled platforms. In 2025, we prioritized an app-first, browsable and personalized shopping experience designed to spark curiosity and discovery, and refined our marketing mix so shoppers encounter Etsy more often where they seek inspiration and increasingly come to us directly.

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Match people with the right content through machine learning. With many millions of unique items, Etsy’s scale can be an advantage when we make it easy for shoppers to find what they love. In 2025, we began re-architecting our search and recommendation systems to better understand buyer intent and listing attributes, improving relevance and conversion.

Strengthen the loyalty and retention of our most valuable customers. Our top buyers and sellers drive the majority of Etsy’s GMS, and we are building experiences that recognize and reward their loyalty, deepen engagement, and help sellers grow thriving businesses.

In 2025, we deepened direct relationships with our buyers by delivering more relevant and engaging messaging through our owned marketing channel. By year end, the vast majority of push and email content was personalized for each user. To further strengthen loyalty among our most frequent buyers, we introduced an updated beta version of Etsy Insider in the fourth quarter of 2025, a loyalty program offering rewards and shipping discounts designed to encourage repeat purchasing. We plan to continue to test, learn, and evolve the program in 2026.

For sellers, we enhanced the Shop Manager dashboard to help them more efficiently prioritize tasks, introduced a new Community Hub designed to allow sellers to more easily connect with each other and key resources, and launched optional, AI-powered tools to support shop management tasks so sellers can spend more time creating and curating their items.

Amplify human connection. We’re re-centering our brand around the creativity and authenticity of our sellers by making their stories more visible across our marketplace and marketing. In 2025, we began this work with targeted improvements to core features, including listing pages, where seller information and reviews were given greater prominence, and continued to put sellers and their items at the center of our brand marketing campaigns.

Etsy Sellers

Etsy hosts a wide range of sellers, from hobbyists to professional merchants, serving as both an on-ramp to entrepreneurship and a source of economic empowerment. Sellers come to our marketplace to access tools and services that help them run and grow their creative businesses and drive sales.

In 2025, the number of active sellers declined year-over-year, yet stabilized beginning in the second quarter. This reflects the anticipated and intentional impact of the seller set-up fee introduced in 2024, which was designed to encourage a higher standard of seller commitment on the platform. In addition, the retention rate of prior year active sellers improved throughout the year, signaling improving overall seller health and engagement.

According to our latest Seller Census1, about half of sellers sell exclusively on Etsy, and among those who sell elsewhere, roughly one-third generate most of their sales on our marketplace. Additional Seller Census highlights include:

•89% are businesses of one;

•97% run businesses from their homes;

•80% identify as women;

•27% live in rural areas;

•59% sold for the first time on Etsy;

•70% consider their shop a business;

•51% are multi-channel sellers;

•29% say creative business (on and off Etsy) is their sole occupation;

•38% use income from their creative business to cover household expenses like bills, rent, and food;

•90% source supplies domestically; and

•52% of their business time, on average, is spent making/designing and the rest on administrative tasks.

1 The Etsy Seller Census is a biennial survey. Data reflected herein is from the 2024 survey. Going forward, the detailed results will be published in a standalone report on our Investor Relations website. Global Methodology: Etsy sellers with an active shop in one of our core geographies (United States, United Kingdom, Germany, France, Canada and Australia) were randomly selected to take part in a 25 minute online survey between October 1, 2024 and October 16, 2024. The survey and data analysis of the results were conducted by Ipsos, a leading Research and Public Opinion firm, in partnership with Etsy. The total global sample size was 2,402 sellers. Results were weighted to represent Etsy’s global footprint and seller population parameters. The margin of error for the global survey is +/- 3.1%, but may vary per question.

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Etsy Buyers

Buyers come to the Etsy marketplace for meaningful, one-of-a-kind items handcrafted, handpicked, designed, and sourced by our creative entrepreneurs. Our buyer surveys* show that approximately:

•85% say shopping on Etsy means supporting small businesses;

•82% believe Etsy allows them to shop from and support real people;

•81% agree Etsy offers items they can’t find anywhere else; and

•66% view Etsy as a destination for consistently high-quality items.

Survey responses also highlight the varied ways buyers use Etsy. When asked about their most recent visits (selecting all that apply):

•45% shopped for a specific need or item in mind;

•31% looked for something custom or personalized;

•29% searched for a gift; and

•24% browsed or sought inspiration without a particular item in mind.

*Above data reflects averages from monthly Etsy marketplace buyer surveys completed in 2025.

Key Buyer Metrics

Key buyer metrics and how these trended in 2025 versus the prior year are:

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We remain focused on stabilizing these trends and returning to growth by deepening retention and engagement among existing buyers, continuing to reactivate our large and growing base of lapsed buyers, and attracting new buyers. By executing on our four strategic initiatives outlined in the above 2025 Performance Recap section on page 3, we aim to strengthen our ecosystem, reignite buyer activity, and drive sustainable growth in active buyers and GMS per buyer over time.

Growth Opportunity

We believe the e-commerce industry continues to offer meaningful long-term growth opportunities, and that its sustained expansion bodes well for Etsy. Some key factors that we believe contribute to our broader growth opportunity include:

•The e-commerce industry continues to gain share of retail sales, with online retail providing customers with broad selection, price transparency, convenience, and insight into quality of goods and services.

•Global e-commerce revenue in our core geographies is estimated to grow by a compounded annual growth rate of 7% through 20292, and we see significant potential for Etsy to grow and gain share within this context, particularly as we offer highly differentiated items compared with more commoditized marketplaces.

•We estimate that the online market size across all relevant retail categories for the Etsy marketplace within our core geographies represents an approximately $600 billion market opportunity, and an approximately $2 trillion market opportunity when including offline sales3. The “relevant retail categories” included in our estimate of total market size are apparel and footwear, personal accessories, beauty and personal care, home and garden, toys and games, pet care, craft supplies, paper and party, and art and collectibles. Given that Etsy marketplace GMS in 2025 represented approximately 2% of that online opportunity, we believe there is substantial opportunity to capture additional e-commerce market share.

•Additionally, we estimate that across our largest markets, the U.S. and U.K., approximately 17% of adults shopped on Etsy at least once in 2025, with penetration of approximately 30% among adults who identify as women, and approximately 10% among adults who identify as men. Furthermore, when looking at the next 15 largest markets, our penetration rate of consumers shopping on Etsy is approximately one fifth as high as it is within the U.S. and U.K., underscoring the significant opportunity to expand awareness and adoption in international markets.

•In addition, our near-term growth initiatives put particular focus on the fact that roughly half of active buyers still shop on Etsy only once per year, underscoring our opportunity to increase purchase frequency and overall spend per buyer.

•Generative AI tools are becoming an emerging discovery channel for e-commerce, and while adoption remains early, data shows that usage is growing. We have established partnerships with technology platforms to enable Etsy to surface our sellers’ items within AI-enabled shopping experiences. These partnerships leverage our differentiated, long-tail inventory and machine learning capabilities and may allow select items to be purchased within third-party environments, supporting broader discovery of seller offerings as these technologies evolve.

2 According to Euromonitor International Ltd; Passport: Retail 2025 edition, accessed January 13th, 2026; retail selling price (“RSP”) excluding value added tax (“VAT”), USD year-over-year exchange rates, current terms

3 Estimate based on the Company's own calculations and assumptions based on data from Euromonitor and other sources, without any representation or warranty from Euromonitor.

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The Depop Marketplace

Depop, headquartered in London, is on a mission to “Make Fashion Circular.” Since its founding in 2011, Depop has been a people-powered fashion marketplace where anyone can buy, sell, explore, and discover incredible secondhand fashion. Depop’s circular ecosystem extends the life of millions of garments every year, providing a more sustainable way to enjoy fashion.

As of December 31, 2025, the Depop marketplace had approximately 55.6 million registered users, defined as users with active accounts, including 7.0 million active buyers and 3.2 million active sellers. In the United States, Depop’s largest market, active sellers grew 60% year-over-year in 2025. Additionally, for the year ended December 31, 2025:

•Approximately 59% of Depop sellers who made a sale in 2025 also made at least one purchase in 2025, which we believe shows the strong engagement of Depop’s user base.

•93% of Depop’s GMS was in the apparel category.

•74% of Depop’s GMS came from U.S. buyers and 26% came from non-U.S. buyers.

•92% of GMS transacted on the app.

•87% of buyers over the past year were under the age of 34.

2025 Performance Recap

In 2025, Depop generated $1,074.9 million in GMS, up 36.3% year-over-year, providing a tailwind to our consolidated GMS results. We believe that Depop’s distinctive blend of marketplace functionality, social discovery, and brand energy positioned it to capture momentum in the fast-growing resale apparel market, while its listings of affordable, fashionable, pre-loved merchandise resonated with value-conscious consumers.

In 2025, Depop delivered 46% year-over-year growth in global sign-ups of registered users and U.S. prompted awareness among individuals aged 13–35 who own a smartphone and have heard of the Depop brand reached 62%4. These results reflected Depop’s focus on its core differentiators, including inventory, matching, value, and trust.

In the second half of 2025, Etsy initiated an incremental brand investment in Depop to accelerate U.S. audience expansion and build brand awareness, with the goal of establishing Depop as the leading resale platform across broader demographics and driving long-term growth for Etsy’s overall portfolio.

4 Online survey conducted by HarrisX within the United States from January 1st – December 31st, 2025 among 2,567 Americans aged 13-35. The results reflect a representative sample and were weighted for age, gender, region, and neighborhood. The margin of error for the sample is +/- 0.9 percentage points.

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Competition

For all of our marketplaces, sellers may choose to list their goods for sale with online retailers or sell their goods through craft fairs and local markets, local consignment and vintage stores and other venues and marketplaces, including social networks and agentic experiences. They may also sell wholesale directly to traditional retailers, including large national retailers, who discover their goods in our marketplaces or otherwise. We also compete with companies that sell software and services to small businesses, enabling sellers to sell from their own website or otherwise run their business independently of our platforms. We are able to compete for sellers based on our brand awareness, the global scale of our marketplaces and the breadth of our online presence, our investments in product and marketing for the benefit of our sellers, our tools, education and services which support sellers in running their business, the number and engagement of our buyers, our policies and fees, the effectiveness of our mobile apps, the strength of our communities, and our mission.

In addition, we compete with retailers and marketplaces of all shapes and sizes for the attention of our buyers. A buyer has the choice of shopping with any online or offline venue, whether large e-commerce marketplaces, national retail chains, local consignment and vintage stores, social commerce channels, agentic experiences, resale marketplaces, and other venues or marketplaces. We are able to compete for buyers based on the breadth and quality of items that sellers list in our marketplaces, the ease of finding items, the value and awareness of our brands, the person-to-person commerce experience, customer service, our reputation for trustworthiness, the effectiveness of our mobile apps, the availability of timely, fair, and free shipping offered by sellers to buyers, ease of payment, localization, and experiences targeted based on regional preferences, and the availability and reliability of our platforms.

We also compete for media placements, including with retailers competing for the attention of our buyers and through agentic experiences, and increased competition can impact the cost we pay for media placements, including in dynamic auctions.

Intellectual Property

Protection of our technology and intellectual property is an important component of our success. We rely on intellectual property laws, including patent, trade secret, copyright, and trademark laws, in the United States and abroad. We also use confidentiality procedures, defensive licensing and acquisitions, non-disclosure agreements, invention assignment agreements, and other contractual rights to protect us and our intellectual property.

We file patents and register domain names, trademarks, copyrights, and service marks in the United States and abroad. We rely upon unregistered copyrights and common law protection for certain trademarks. We also use internal and external brand protection mechanisms that are intended to protect our brands from misuse by third parties.

Government Regulation

As with any company operating on the internet, we are subject to a growing number of local, national, and international laws and regulations. These laws are often complex, unclear, sometimes contradict other laws, and are frequently changing. Compliance is costly and can require changes to our business practices and significant amounts of management time and focus. In addition, laws may be interpreted and enforced in different ways in various locations around the world, posing a significant challenge to our global business. For more information, see Part I, Item 1A, “Risk Factors—Regulatory, Compliance, and Legal Risks.”

Seasonality

Etsy marketplace sellers experience increased sales and use more Etsy services during the fourth-quarter holiday shopping season. This has resulted in increased GMS and revenue for us during the fourth quarter of each fiscal year. Our cost of revenue and marketing expenses also generally follow this trend, with the highest costs incurred in the fourth quarter of each fiscal year. We expect this seasonality to continue in future years.

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Our Impact Strategy, Goals, & Progress

Our Impact strategy focuses on areas where we believe Etsy can most effectively advance positive environmental and social outcomes while supporting our long-term business objectives. This strategy and the goals that flow from it are assessed annually to ensure they remain grounded in our brand, responsive to stakeholder interests, and directed towards societal issues shaping the future.

We rely on four levers to operationalize our strategy:

Business Integration: Responsibility and accountability for implementing our Impact strategy is shared across our company. Our Impact strategy and goals are overseen by the Nominating and Corporate Governance Committee of our Board of Directors.

Marketplace Integration: We integrate our Impact ambitions into the design and operation of our marketplace. By helping sellers and buyers better understand their individual and collective impact, we aim to support more informed decisions and foster more sustainable practices. We also remain mindful of using marketing data and marketing imagery in responsible and ethical ways.

Public Policy: We engage with policymakers to advance our commitments to economic empowerment for creative entrepreneurs, equitable access to the digital economy, and ecological sustainability.

Values-Aligned Investment: We direct resources toward initiatives that strengthen the communities we are part of. For example, our $30 million Impact Investment Fund makes investments or provides loans to initiatives that are aligned with our Impact strategy, and, in 2025, Etsy made approximately $3.4 million in philanthropic donations to community-based organizations doing work that supports our Impact goals.

Our Impact Reporting Approach

We use our required filings with the Securities and Exchange Commission (“SEC”), as well as our Investor Relations website and Etsy News blog, as our primary communications channels for information relating to our Impact strategy and progress. We continue to report our Impact metrics using the relevant Sustainability Accounting Standards Board (“SASB”) sector standards for our industry, now utilizing embedded SASB codes to accompany relevant metrics.

We expect to continue to evolve our Impact strategy and related reporting as additional government regulations may require and as our Impact work and the broader industry matures. For example, this year we moved our disclosure about Task Force on Climate-Related Financial Disclosures (“TCFD”) and our SASB table outside of our Form 10-K into an ‘Etsy, Inc. Climate Index’ on our Investor Relations website, which you can also refer to for more information regarding how we manage our climate related risks.

Our discussion of Impact strategy, highlights, and data includes the operations of our Etsy and Depop marketplaces except where noted. Reverb data is included in historical data, but excluded from 2025 reporting except in our environmental data where it is included until June 2, 2025, when we divested the business.

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Net Zero

Goal: Achieve Net Zero through targets aligned with the science of climate change.

*Scope 1 emissions include direct emissions such as natural gas and refrigerants used at our offices. Scope 2 emissions include indirect emissions from the generation of electricity that we may purchase for our offices. Scope 3 emissions include all other indirect emissions that occur in our value chain such as business travel, employee commuting, and the processing of waste from our operations.

Our Carbon Strategy: At Etsy, making a positive impact on our communities — including protecting the environment — is core to our mission. That’s why we support climate solutions that reduce our emissions, and we take responsibility for the emissions we continue to produce through projects that improve air quality and cut emissions beyond our business.

Our Net Zero goal guides this work. Below, we outline our Net Zero progress and the levers we are deploying to achieve our goal.

SBTi aligned Net Zero Goal: In 2022, the Science Based Targets Initiative (“SBTi”) approved Etsy's Net Zero goal under its Net-Zero Standard. For additional details about how we quantify emissions, see our GHG inventory and related notes (including assured emissions categories) on page 11.

Business Integration: Our supply chain remains our second-largest emissions source (Scope 3 – Category 1). In 2025, quantified supply chain emissions intensity decreased by 33% from 2024, driven by supplier engagement and improved data quality. Our analysis found that, in 2025, 55% of Etsy’s spend went to suppliers with science-based emissions reduction targets. Additionally, in 2025, we adopted Google’s Carbon Footprint for Google Ads reporting, which reduced our quantified emissions relative to prior spend based estimates.

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Our expanded supplier carbon fee program requires suppliers to have an A– rating or higher on the Carbon Disclosure Project (“CDP”) assessment to avoid being charged a fee. For 2025, we established terms with suppliers representing over $39 million in annual spend while offering support through performance incentives and free sustainability advisory services from a consulting partner.

In 2025, for the first time since establishing our Net Zero goal, our Scope 1 and 2 emissions exceeded our 2030 annual target trajectory. This increase was driven in part by below-average temperatures in Brooklyn, where our headquarters is located. We are exploring longer term building upgrades intended to reduce our Scope 1 and 2 emissions.

Values-Aligned Investments: In 2025, we implemented an internal carbon pricing framework which is applied to quantified metric tons of greenhouse gas (“GHG”) emissions generated across our marketplaces. The resulting “emissions budget” informs our expenditures for emissions reduction initiatives. At least 25% of this budget is expected to support projects that reduce emissions within our value chain, with the remaining funds allocated to carbon offset projects that reduce emissions beyond our value chain. This helps us manage climate risk while strengthening our ability to pursue new reduction opportunities in line with our Net Zero goal.

Driving Emissions Reductions in our Value Chain: As two-sided marketplaces, we have limited control over our emissions: 99.9% fall within Scope 3 and 62% come from shipping.

In 2024, we joined Green Market Activation (“GMA”) Trucking to accelerate adoption of zero-emissions road freight, which we estimate accounts for at least 65% of our shipping emissions. Through GMA, we are participating in a pilot - launched in 2025 - that will enable the largest known deployment of class 8 zero-emission trucks in Texas, where millions of Etsy packages travel each year. Our investment will enable carriers to purchase electric trucks rather than conventional trucks, allowing us to claim the associated emissions reductions once operations begin in 2026.

Another way we take action is through our Impact Investment Fund. In 2025, we provided a $3 million loan to the nonprofit New York Energy Efficiency Corporation, which finances energy-efficiency improvements and clean energy projects with a focus on low- and middle-income communities in the Northeast and mid-Atlantic regions.

Supporting Emissions Reductions Beyond our Value Chain: We also take immediate action to address ongoing emissions by supporting projects that promote cleaner air and reduce emissions beyond our operations. We consider this to be separate from, but complementary to, our Net Zero emissions reduction efforts.

For 2025, we invested a portion of our “emissions budget” in carbon offsets credits or verified emissions reductions (“VERs”). We prioritize projects that address emissions in sectors tied to our footprint– such as shipping, packaging, cloud, and AI – and those that advance human health, circularity, and entrepreneurship, and benefit the regions where our stakeholders operate. For specific projects supported in 2025, see our ‘Etsy, Inc. Climate Index’.

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† Etsy commissioned an external third-party to perform limited assurance procedures with respect to our energy and GHG emissions metrics for the reporting period. Full details and data methodology are available at investors.etsy.com.

Sustainable Operations

Goal: Maintain best-in-class sustainable operations.

Striving for best-in-class sustainable operations allows us to focus on long-term cost reduction, minimizing waste, and creating a healthier office environment for our employees.

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Office Energy Use: In 2025, our total quantified operational energy footprint was 7,797 MWh, of which 54% was from electricity. This includes energy usage from our offices and employees’ working from home. We met our 2025 office energy intensity target of a 25% reduction (kWh/sq ft) from a 2016 baseline and set a new 2030 target to guide our efforts.

Cloud Compute & AI: To mitigate the impact of our use of cloud computing and AI, in 2025 we launched our Sustainable Compute & AI strategy, building on our long-standing work in sustainable computing, including Cloud Jewels, our open-source methodology to estimate cloud energy use.

Our updated strategy centers on three key levers, each focused on a different layer of our value chain:

•Catalyze: Collaborate with peers to support industry progress on AI sustainability.

•Influence: Use our purchasing power to support decarbonization of the cloud and AI supply chain.

•Optimize: Improve the efficiency of our operations and promote sustainable use of AI/ML.

As part of this strategy update, we also refreshed our sustainable compute target, having met our prior 2025 sustainable compute energy target of a 25% reduction (kWh/visit) from a 2016 baseline.

Renewable Energy: We began sourcing renewable energy for our measured or calculated electricity use in 2020. In 2025, we sourced renewable energy for the electricity we measured or calculated to power our offices and employees working from home, as well as Etsy marketplace's computing load in Google Cloud. This was achieved through our 15-year virtual power purchase agreement, the purchase of international renewable energy credits for our non-U.S. electricity consumption, on-site solar arrays at our Brooklyn office, and negotiated supplier terms.

Zero Waste: In 2025, Etsy's Brooklyn office headquarters received “Zero Waste” certification through the Total Resource Use and Efficiency certification program by Green Business Certification Inc. for the seventh year in a row, while Etsy's Dublin office was also certified for diverting over 90% of waste from landfill. We rolled out a third-party tech-enabled system that measures real-time waste streams and contamination in our Brooklyn, Dublin, London, and Mexico City offices.

Marketplace Sustainability

Goal: Foster more resilient, sustainable, and circular marketplaces.

1Circular attributes on the Etsy marketplace are vintage, upcycled, reusable swaps, and “contains recycled content” (metal, glass, polyester, plastic, paper, or cotton), or “contains vintage gemstones.” On Depop, these attributes are deadstock, reworked, preloved, vintage, or made from recycled cotton or polyester.

2Sustainability attributes on the Etsy marketplace are made from environmentally conscious materials or designed to be reusable or to reduce waste.

Circularity: We aim to inspire and enable participation in the circular economy by keeping products and resources in use at their highest value. Across our marketplaces, our communities engage in circular practices through the materials they use, the items they sell, and the packaging they ship with.

Depop's mission is to make fashion circular and to inspire more people to shop secondhand - extending the lives of their clothes and redefining fashion consumption. We estimate approximately 137 million items have been given a second life3 by Depop users since the platform was founded.

3Represents items sold and tagged as "used" condition, not all items sold. Since the condition attribute was added in Q4 2020, we assume the proportion of “used” and “brand new” items has remained consistent over time.

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Depop contributed to a new industry methodology led by The Waste and Resources Action Programme for measuring how secondhand purchases displace new items. Depop subsequently published its displacement rate and continued to communicate the impact of secondhand purchases to users. We also supported the launch of the Recommerce Caucus in the U.S. House of Representatives—a bipartisan initiative aimed at championing policies that foster the growth of the circular economy. We hope that by showcasing the environmental benefits of shopping secondhand, we can continue to bring circular fashion to more people.

Helping Our Sellers Build Climate Resilience: Our sellers face increasing challenges related to natural disasters. Recognizing this, our climate resilience strategy includes efforts to improve both the preparedness and the recovery capacity of our sellers.

In 2025, we deferred fees owed by nearly 77,000 sellers impacted by the Los Angeles fires and continued to partner with the Craft Emergency Relief Fund (“CERF+”) to provide individual grants of $2,000 to Etsy marketplace U.S. sellers impacted by a Federal Emergency Management Agency (“FEMA”) declared disaster. Recognizing that responding to climate disaster often requires a community approach, we issued a pilot grant to support the River Arts District in North Carolina in envisioning a resilient approach to rebuilding for this community of over 550 artists that were severely impacted by a hurricane and catastrophic flooding.

Through our partnership with Nest, Inc., we continue to develop resources that make it easier for sellers and artisans in the U.S. to access climate-related disaster information and funding. In 2025, we launched a free public database of climate-related resources for small businesses and makers.

Workforce Access

Goal: Ensure equal access to employment, engagement, and development.

Ensuring Equal Access to Employment: Etsy offers competitive compensation, uses clear guidelines for salary and bonuses based on performance, and periodically makes market-based adjustments to keep pay equitable among employees and new hires. Since 2020, Etsy has engaged a third-party to conduct a biennial pay equity analysis to confirm compensation is not influenced by gender or race/ethnicity. We expect to conduct the next analysis in 2026. We also offer employees a comprehensive package of benefits, including family building benefits, mental healthcare access, and flexible stipends for personal well-being. We provide budget for skills development across our organization, along with tailored mentorship opportunities. And our Employee Resource Groups (“ERGs”) continue to thrive across Etsy and Depop, contributing to a culture of inclusion across our brands. We have established transparent, level-based expectations for performance evaluation. Twice a year, managers recognize individual contributions and readiness for the next level through our promotion processes, which are reviewed through a rigorous calibration process - reinforcing our commitment to equal access to opportunity.

We know, however, that providing competitive pay and benefits and an inclusive workplace culture is only part of the story. Etsy’s mission to “Keep Commerce Human” requires us to serve a community of buyers and sellers that is extraordinarily diverse. We believe teams with diverse viewpoints and backgrounds are better able to deliver the creativity and innovation necessary to serve our global community, and as a result we broadly seek to increase the range of backgrounds and perspectives in our workforce. These efforts encompass outreach and recruiting practices, which are designed to ensure we attract the broadest and most talent-rich pool of employee applicants possible. In all cases, we make individual employment decisions – whether it’s a decision to hire, to promote, to discipline, or to discharge – on the basis of merit.

Consistent with how we run our business, we track our progress in diversifying our workforce through a variety of metrics at both the consolidated level and at the individual marketplace levels.

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For Etsy Marketplace:

•At December 31, 2025:

◦49.1% of all global employees identified as women or marginalized genders

◦15.2% of U.S. employees identified as Black, Latinx, or Native American

◦40.6% of U.S.-based software engineers identified as women or marginalized genders

◦13.4% of Mexico-based software engineers identified as women or marginalized genders

◦27.9% of Ireland-based software engineers identified as women or marginalized genders

◦13.2% of our U.S. and U.K. employees disclosed that they have or have had a disability

◦0.6% of our U.S. employees disclosed that they are veterans that served in the armed forces

◦11.8% of our U.S. employees disclosed that they identify as LGBTQIA+

◦29.7% of our U.S., Mexico, and Ireland employees disclosed that they are parents of children below the age of 18 through their benefits elections

◦0.2% of our U.S. employees disclosed their spouse served in the armed forces

For Depop:

•At December 31, 2025:

◦31.2% of U.S. and U.K. employees identified as Asian, Black, Mixed or ‘Other,’ including Latinx in the United States

◦27.0% of employees on engineering and data teams identified as women and marginalized genders

◦9.3% of U.S. and U.K. employees disclosed that they have or have had a disability

Etsy and Depop both achieved a score of 100 on DisabilityIn.org's Disability Equality Index in 2025, and remain committed to maintaining a workplace environment where employees with disabilities can achieve their full potential.

Workforce Metrics: As of December 31, 2025 we had 2,375 total employees worldwide including approximately 475 Depop employees. Across our employee workforce, over 70 nationalities are represented.

All metrics below are as of December 31 of the stated year. Leadership is defined as Director level and above. Tech employees are defined as those employees who work on Product, Engineering, Analytics, and HR Information and Financial Systems Administration teams. Engineering employees are defined as those employees who work within the Engineering Job Family Group included within Tech. Other Business Roles are defined as those employees who work in roles outside of the Tech definition, inclusive of non-tech Leadership positions. Gender and age metrics reflect our global employee base, while race and ethnicity metrics reflect U.S. only in the below graphs and table. Our most recent consolidated equal employment opportunity (“EEO-1”) report can be found on our Investor Relations website. Reverb (divested in 2025) is excluded from the 2025 workforce metrics, but included in the 2024 and 2023 workforce metrics below.

Gender Metrics - Global

* Additional Genders for Overall was 1.7% in 2025, 2.0% in 2024, and 2.4% in 2023; for Leadership was 0% in 2025, 0.3% in 2024, and 0.6% in 2023; for Tech was 1.9% in 2025, 2.1% in 2024, and 2.6% in 2023; for Engineering was 2.4% in 2025, 3.0% in 2024, and 3.5% in 2023; for Other Business Roles was 1.5% in 2025, 1.3% in 2024, and 1.5% in 2023.

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Race & Ethnicity Metrics - U.S. only

* American Indian or Alaska Native for Overall was 0.1% in 2025, 0.1% in 2024, and 0.1% in 2023; for Leadership was 0% in 2025, 2024, and 2023; for Tech was 0.1% in 2025, 0.1% in 2024, and 0.1% in 2023; for Engineering was 0.2% in 2025, 0.1% in 2024, and 0.1% in 2023; for Other Business Roles was 0% in 2025, 0% in 2024, and 0.2% in 2023. **North African or Middle Eastern is a new disclosure in 2025 and for Overall was 0.2%, for Leadership was 0.5%, for Tech was 0.2%, for Engineering was 0.3%, and for Other Business Roles was 0.2%.

Age Metrics - Global*

* Age Not Declared was 0.0% in 2025, 0.1% in 2024, and 0.04% in 2023.

† Etsy commissioned an external third party to perform limited assurance procedures with respect to our workforce metrics in the charts above for the reporting period. Full details and data methodology are available at investors.etsy.com.

Supply Chain

Goal: Promote a supply chain that upholds human rights and expands economic opportunity for a broad range of businesses and their employees.

Supplier Diversity: We continue to work to build a more transparent, accessible, and competitive supply chain. We believe our commitment to supplier diversity provides access to a broader range of innovative ideas, talent, and perspectives, which ultimately leads to enhanced market reach, cost efficiency, and a more resilient supply chain. During 2025, we spent $39 million with diverse-owned suppliers, which we define as woman, disability, and LGBTQ-owned globally; as well as Black, Asian-Indian, Asian-Pacific, Hispanic/Latinx, Indigenous, and veteran-owned in the United States.

While we are committed to broadening the diversity of suppliers that we consider, and while we track data to help assess our efforts, in all cases we make individual procurement decisions on the basis of merit.

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Advancing Partner Welfare and Compensation: In 2025, we continued to educate our vendor partners who employ contingent labor or provide outsourced business operations for Etsy on our aspirational guidelines for employment practices. We also continued to evaluate our third-party partners across key practices. Where we identify gaps, we open dialogues with our vendors, using these guidelines as a north star:

•Ensuring contractors receive a living wage, adjusted for market conditions, based on location.

•Using our leverage with vendor partners to achieve a progressive and flexible paid leave policy for all full-time contractors, including vacation time, sick time, and parental leave.

•Ensuring all full-time contractors have access to quality medical care for themselves and their dependents.

Our Commitment to Human Rights: We are committed to upholding and promoting human rights across our marketplaces and throughout our value chain. In 2025, we continued our partnership with Nest to create educational videos for Etsy sellers who engage with production partners. The videos aim to support sellers in choosing ethical and responsible production partners by introducing sellers to key topics in Etsy’s “Ethical Expectations: What We Expect from Sellers Who Work With Production Partners” policy. In our corporate supply chain, we implemented a process for key suppliers to complete third-party assessments, strengthening our understanding of their human rights and broader social and ethical practices. We also updated our Modern Slavery Statement and published AI principles intended to guide us in keeping human connection at the center of innovation.

Creative Community

Goal: Strengthen our global community by supporting the ecosystems that nurture creative entrepreneurship.

In 2025, our Uplift Fund supported organizations providing creative entrepreneurs with capital and wrap-around business support services for nearly 7,690 entrepreneurs. Along with Etsy’s contribution, U.S. buyers elected to give back to the creative community by donating their change at checkout 4.4 million times, resulting in $1.9 million in grants. We also invested $3 million from our Impact Investment Fund in Hope Enterprise Corporation, a commercial loan fund that provides affordable lending services to local communities, organizations, and small business owners across the Southern United States.

Available Information

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), and file or furnish reports, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports, proxy statements, and other information with the SEC. These reports are available free of charge on our website at investors.etsy.com as soon as reasonably practicable after we have filed or furnished them to the SEC.

We also share certain workforce metrics, such as our most recent consolidated EEO-1 report, certain Impact-related disclosures, including our annual Transparency Report, and our external facing policies, including our governance policies and guidelines, and privacy policy, on our Investor Relations website. Information contained on or accessible through our websites or other websites referenced in this Annual Report is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our websites in this Annual Report are intended to be inactive textual references only. You should not rely on such information in deciding whether to invest in our common stock. Copies of our SEC reports and other documents are also available, without charge, by sending a letter to Investor Relations, Etsy, Inc., 117 Adams Street, Brooklyn, NY 11201, or by sending an email to ir@etsy.com.

Our SEC reports are also available on the SEC’s website at www.sec.gov free of charge as soon as reasonably practicable after we have filed or furnished them to the SEC.