Online marketplace operator Etsy has reported a drop in gross merchandise sales (GMS) for the third quarter, which management attributed to challenging market conditions.

Consolidated GMS for the quarter ended September 30 was $2.9 billion, down 4.1 per cent year-on-year and down 4.4 per cent on a currency-neutral basis. 

Etsy marketplace GMS fell 6 per cent to $2.5 billion (down 6.3 per cent on a currency-neutral basis). Demand for gifts outpaced sitewide performance and represented a higher share of overall GMS compared to the year-ago period. Active buyers decreased 0.4 per cent to 91.2 million. 

Meanwhile, the company’s consolidated revenue rose 4.1 per cent to $662.4 million, driven by growth in both marketplace and services revenue.

Consolidated net income was $57.4 million, down $30.5 million year-over-year.

“Our third quarter consolidated results came in roughly as anticipated, with some incremental pressure on Etsy marketplace year-over-year GMS, healthy growth in revenue, and continued strength in our adjusted EBITDA profitability,” said Josh Silverman, Etsy CEO.

“While 2024 has been a challenging period for discretionary goods, we are investing with discipline and focus to make Etsy even more Etsy – which we believe will lift our boat when the tide comes back in again.”

Etsy’s primary business is Etsy.com, a global online marketplace for creative goods. The company also owns a fashion resale marketplace, Depop, and an online marketplace for music gear, Reverb.