Etsy Touts Improved Search and Ads in Fourth Quarter 2023 Earnings

Etsy Touts Improved Search and Ads in Fourth Quarter 2023 Earnings

Etsy marketplace GMS (Gross Merchandise Sales) was $3.6 billion in the fourth quarter, down 1.4% year-over-year and up 142% on a four-year basis. Consolidated GMS (including its subsidiaries) was $4 billion, down 0.7% year-over-year and down 1.6% on a currency neutral basis.

Consolidated revenue reached a record $842.3 million, primarily driven by growth in Etsy Ads and payments revenue.

Of special interest to sellers – Etsy included information about changes to search it had made last year:

“Our Search & Discovery teams launched a new graph neural network retrieval system, which, when combined with existing neural networks, should enhance our search retrieval capabilities by enabling improved interactions between listings, resulting in better search relevance. We also enhanced our neural ranking model in non-U.S. markets to include all features available in the United States.”

And Etsy said ads were more relevant thanks to machine learning technology:

“Etsy Ads was once again a key driver of revenue growth. During the quarter, we utilized novel approaches for machine learning generated graph representations to increase ad relevance, which positively impacted average order value of items sold across the marketplace. We also added localization capabilities to our existing ads ranking system to improve ad relevancy in international markets, driving higher conversion rates.”

Etsy published its 4th-quarter and full year 2023 results on Wednesday, Excerpts of its press release follow:

Etsy, Inc. Reports Fourth Quarter and Full Year 2023 Results
Highest-ever quarterly revenue achieved in Q4 23

Etsy, Inc., which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, today announced financial results for its fourth quarter and full year ended December 31, 2023.

“Etsy delivered over $13 billion in consolidated GMS and our highest-ever annual revenue,” said Josh Silverman, Etsy’s Chief Executive Officer. “We’ve built an ambitious plan to invest in a portfolio of growth initiatives in 2024, starting with efforts to make Etsy an indispensable partner for Gifting. We recently launched Gift ModeTM, an interactive hub for gifting that combines AI and human curation to help shoppers find the perfect present — just the beginning of our bold plans to drive buyer consideration and frequency. We start the year energized – with the right team, a highly relevant and differentiated Right to Win strategy, a disciplined investment approach, and a resilient business model.”

Fourth quarter 2023 performance highlights include:

Consolidated GMS was $4.0 billion, down 0.7% year-over-year and down 1.6% on a currency neutral basis. Headwinds to consolidated GMS included a dynamic macroeconomic environment that impacted consumer discretionary product spending, Etsy marketplace category mix, and a highly promotional and competitive retail environment, as well as a small headwind from the divestiture of Elo7.

Etsy marketplace GMS was $3.6 billion, down 1.4% year-over-year and up 142% on a four-year basis.

The Etsy marketplace’s GMS accelerated during the holiday season, with GMS during Cyber 5 (Thanksgiving through Cyber Monday) up 4% on a year-over-year basis. We delivered record levels of GMS on Cyber Monday and Giving Tuesday.

Active buyers reached a new all-time high of 92 million, increasing 3% year-over-year. United States active buyer trends continued to improve, with modestly positive year-over-year growth again this quarter, and international buyer growth remained strong.

We reactivated a record nearly 10 million lapsed buyers, up 13% from the prior year, and we acquired over 8 million new buyers. On a trailing twelve month basis, our retention of active buyers improved from the prior year and remained above pre-pandemic levels.

While GMS per active buyer on a trailing twelve month basis was down 4% year-over-year to $126 in the fourth quarter, this metric declined only 1% from the prior quarter as trends continued to show signs of stabilization. Our number of habitual buyers remained stable on a sequential basis at just over 7 million.

The full press release is available on

Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She’s a widely cited authority on marketplace selling and is author of “Turn eBay Data Into Dollars” (McGraw-Hill 2006). Her blog was featured in the book, “Blogging Heroes” (Wiley 2008). She is a member of the Online News Association (Sep 2005 – present) and Investigative Reporters and Editors (Mar 2006 – present). Follow her on Twitter at @ecommercebytes and send news tips to See disclosure at