Financial Analysis

Note 11Commitments and Contingencies Purchase Obligations The Companys purchase obligations primarily consist of the minimum, non-cancelable commitments as well as cancellation fees related to technology spending. During the three months ended March 31, 2026, there were no material changes outside the ordinary course of business to the Companys non-cancelable purchase obligations disclosed in the Companys Annual Report. Legal Proceedings In the ordinary course of business, various claims and litigation are regularly asserted or commenced against the Company. Due to uncertainties inherent in litigation and other claims, the Company can give no assurance that it will prevail in any such matters and such claims or litigation could have a material adverse effect on the Companys business, financial condition, results of operations, or cash flows. However, the Company currently believes that the final outcome of these matters will not have a material adverse effect. …

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Note 10Debt The following table presents the outstanding principal amount and carrying value of short- and long-term debt as of the dates indicated (in thousands): As of March 31, 2026 2025 Notes 2021 Notes 2020 Notes 2019 Notes Total Principal $ 700,000 $ 1,000,000 $ 650,000 $ 649,887 $ 2,999,887 Unamortized debt issuance costs 9,543 4,196 1,691 586 16,016 Net carrying value $ 690,457 $ 995,804 $ 648,309 $ 649,301 $ 2,983,871 As of December 31, 2025 2025 Notes 2021 Notes 2020 Notes 2019 Notes Total Principal $ 700,000 $ 1,000,000 $ 650,000 $ 649,887 $ 2,999,887 Unamortized debt issuance costs 10,110 4,671 1,989 879 17,649 Net carrying value $ 689,890 $ 995,329 $ 648,011 $ 649,008 $ 2,982,238 Terms of the Notes The terms of the Notes are summarized below: Convertible Notes Maturity Date Contractual Convertibility Date (1) Initial Conversion Rate per $1,000 Principal (2) Initial Conversion Price Annual Effective Interest Rate 2025 Notes June 15, 2030 February 15, 2030 11.6570 $ 85.79 1.3 % 2021 Notes June 15, 2028 February 15, 2028 4.0518 246.80 0.4 % 2020 Notes September 1, 2027 May 1, 2027 5.0007 199.97 0.3 % 2019 Notes October 1, 2026 June 1, 2026 11.4040 87.69 0.3 % (1) As of March 31, 2026, none of the conditions permitting the holders of the Notes to early convert have been met, based on the daily closing prices of the Companys stock during the quarter ended March 31, 2026. (2) The initial conversion rate will be subject to adjustment upon the occurrence of certain speci …

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Three Months Ended March 31, 2026 2025 Marketplace revenue $ 432,773 $ 428,236 Services revenue 198,504 183,968 Revenue $ 631,277 $ 612,204

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Note 13Stock-Based Compensation 2024 Equity Incentive Plan During the three months ended March 31, 2026, the Company granted restricted stock units (RSUs), including financial performance-based restricted stock units (Financial PBRSUs) and total shareholder return performance-based restricted stock units (TSR PBRSUs), and long-term cash awards (LTC awards) under its 2024 Equity Incentive Plan (2024 Plan). LTC awards are not included in the stock-based compensation awards disclosures below. At March 31, 2026, 19,280,062 shares were authorized under the 2024 Plan and 3,528,977 shares were available for future grant. 2024 Inducement Plan The Etsy, Inc. 2024 Inducement Plan (the 2024 Inducement Plan) was terminated on March 6, 2026 and no further awards will be granted thereunder. Stock-Based Compensation Awards The following table summarizes the activity for the Companys unvested RSUs under the 2024 Plan and the 2024 Inducement Plan, which includes Financial PBRSUs and TSR PBRSUs, and includes awards related to continuing and discontinued operations, during the three months ended March 31, 2026 (in thousands, except per share amounts): Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2025 7,942 $ 63.21 Granted 3,263 54.27 Vested (589) 62.77 Forfeited/Canceled (310) 67.62 Unvested at March 31, 2026 (1) 10,306 60.27 (1) Includes 1.2 million shares underlying unvested awards held by employees of Depop as of March 31, 2026. Any unvested Depop awards as of the d …

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Note 8Fair Value Measurements As of March 31, 2026 and December 31, 2025, the Companys cash equivalents, short-term investments, and long-term investments primarily consisted of available-for-sale debt securities. These debt securities are measured at fair value and classified within Level 1 or Level 2 in the fair value hierarchy as the Company uses unadjusted quoted prices for identical assets in an active market that the Company has the ability to access (Level 1) or quoted market prices in markets that are not active or model derived valuations in which all significant inputs are observable in active markets (Level 2). As of March 31, 2026 and December 31, 2025, the Companys short-term and long-term investments also consisted of investments in loan receivables and in third-party managed funds. The investments in loan receivables are measured on an amortized cost basis and classified in Level 3 of the fair value hierarchy as the fair value is derived from techniques in which one or more significant inputs are unobservable. The investments in third-party managed funds are measured on the net assets value (NAV) basis as a practical expedient. NAV is primarily determined based on the information provided by external fund administrators for which the most recent financial information is typically received on a lag within the quarter following the Companys balance sheet date. These investments are intended to further the Companys impact strategy as part of the Companys Impact In …

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Note 4Income Taxes The Companys provision or benefit from income taxes in interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment. The estimate of the annual effective income tax rate for the full year is applied to the respective interim period, taking into account year-to-date amounts and projected results for the full year. For the three months ended March 31, 2026, the Companys effective income tax rate was 19.0% representing a provision for income taxes from continuing operations recorded on net income from continuing operations before taxes. The effective tax rate for the three months ended March 31, 2026 was favorably impacted by foreign operations taxed at a lower rate. Although management believes its tax positions and related provisions reflected in the condensed consolidated financial statements are fully supportable, it recognizes that these tax positions and related provisions may be challenged by various tax authorities. These tax positions and related provisions are reviewed on an ongoing basis and are adjusted as additional facts and information become available, including progress on tax audits, changes in interpretation of tax laws, developments in case law and closing of statute of lim …

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Recently Adopted Accounting Pronouncements In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which amends the guidance for estimating expected credit losses on accounts receivable and contract assets, requiring entities to apply a current expected credit loss model. The Company adopted this standard effective January 1, 2026 on a prospective basis. The adoption did not have a material impact on the Companys consolidated financial statements or results of operations. In November 2024, the FASB issued ASU 2024-04, DebtDebt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments , which clarifies the assessment of whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt. The Company adopted this standard effective January 1, 2026 on a prospective basis. The adoption did not have a material impact on the Companys consolidated financial statements or results of operations. Recently Issued Accounting Pronouncements In December 2025, the FASB issued ASU 2025-12, Codification Improvements , which includes amendments that clarify guidance, correct errors, and make other minor improvements to the FASB Accounting Standards Codification (ASC). The amendments are effecti …

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Note 3Revenue Three Months Ended March 31, 2026 2025 Marketplace revenue $ 432,773 $ 428,236 Services revenue 198,504 183,968 Revenue $ 631,277 $ 612,204 Contract balances Deferred revenues The amount of revenue recognized in the three months ended March 31, 2026 that was included in the deferred balance at January 1, 2026 was $20.2 million . …

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Note 7Segment and Geographic Information For the three months ended March 31, 2026, the Company had one operating and reportable segment, Etsy. For the three months ended March 31, 2025, the Company had three operating segments, Etsy, Reverb, and Depop which at the time qualified for aggregation as one reportable segment because they met the quantitative and qualitative aggregation criteria prescribed by ASC 280, Segment Reporting . Reverb was sold in the second quarter of 2025, and Depop, beginning in the three months ended March 31, 2026, is classified as discontinued operations for all periods presented, as discussed in Note 2Discontinued Operations. The Companys Chief Operating Decision Maker (CODM), the Chief Executive Officer, reviews operating results to assess performance and allocate resources at the segment level. In connection with Depops classification as discontinued operations, the Company changed its measure of profit or loss. The Company has concluded that net income (loss) from continuing operations is the measure of profit or loss required to be disclosed under ASC 280 for its single operating segment, although Adjusted EBITDA is another measure of operating performance that continues to be used by the CODM. The significant segment expenses that are regularly provided on a quarterly basis to the CODM are cost of revenue, marketing, product development, and general and administrative, which are presented on the face of the Condensed Consolidated Statements of …

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Note 12Stockholders Deficit In June 2023, the Board of Directors approved a stock repurchase program that authorized the Company to repurchase up to $1 billion of its common stock. The program was completed in the first quarter of 2025. In October 2024, the Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $1 billion of its common stock. In December 2025, the Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to $750 million of its common stock. As of March 31, 2026, the remaining amount available to be repurchased under the approved plans was $827.9 million . The stock repurchase programs have no expiration date and may be modified, suspended, or terminated at any time by the Board of Directors. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume, and general market conditions, along with the Companys working capital requirements, general business conditions, and other factors. Under the stock repurchase programs, the Company may purchase shares of its common stock through various means, including open market transactions, privately negotiated transactions, tender offers, or any combination thereof. In addition, open market repurchases of common stock have and could be made pursuant to trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Ac …

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