Online marketplace operator Etsy reported record revenue for the fourth quarter despite a slight decrease in gross merchandise sales (GMS).

The company’s consolidated revenue was up 4.3 per cent year on year to $842.3 million, primarily driven by growth in Etsy Ads and payments revenue.

Consolidated GMS slid 0.7 per cent to $4 billion (down 1.6 per cent on a currency-neutral basis). The firm cited a dynamic macroeconomic environment that impacted consumer discretionary spending and a highly promotional and competitive retail environment.

For the full year, Etsy’s revenue rose 7.1 per cent to $2.7 billion, while GMS were down 1.2 per cent to $13.1 billion.

The company expects the first quarter of FY24 to be the low point of year-over-year growth in GMS and revenue. The firm said its marketplace product and marketing investments will start to show results in the second quarter.

 “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,” said CEO Josh Silverman.

“We recently launched Gift Mode, 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.”

Further reading: Etsy restructures, lays off 225 workers