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Etsy Inc (NASDAQ:ETSY, XETRA:3E2) reported first quarter results that topped Wall Street expectations for both revenue and earnings per share, driven by higher gross merchandise sales and improving marketplace performance.

Shares rose about 10% to about $70 in early trading following the report.

The company posted revenue of $631.3 million, ahead of analyst estimates of roughly $620 million, while adjusted earnings per share came in at $0.89 versus expectations of about $0.62.

Gross merchandise sales (GMS) increased 5.5% year-over-year to $2.5 billion, reflecting stronger consumer demand and higher spending per buyer. Growth also improved sequentially from the prior quarter, supported by gains in mobile app usage, marketing effectiveness, and search improvements.

Mobile app strength remained a key driver, accounting for about 47% of total GMS, up roughly 240 basis points year-over-year. App-based GMS grew 11.2% year-over-year, while non-app GMS returned to growth at 1.0%. Etsy also cited continued improvements in paid search performance, product listing ads, and search engine optimization as contributors to traffic and conversion gains.

The company said GMS per active buyer rose year-over-year for the first time since 2022, reaching $122 on a trailing twelve-month basis, supported by higher average order value. Etsy noted that some of the AOV increase was driven by temporary factors, including foreign exchange movements and pricing adjustments following changes in cross-border trade rules.

International performance also improved, with non-U.S. buyer GMS growth turning positive on a constant currency basis for the first time since 2023. Growth was broad-based across income cohorts, with the strongest contribution continuing to come from higher-income households.

โ€œWe saw encouraging signals during the first quarter that our growth priorities are taking hold,โ€ Etsy CEO Kruti Patel Goyal wrote in a letter to shareholders.

Alongside its results, Etsy provided updated guidance for the Etsy marketplace, following the anticipated sale of Depop, which is now treated as discontinued operations. The outlook also reflects the earlier divestiture of Reverb, meaning results are based solely on continuing operations.

For the second quarter of 2026, Etsy expects GMS of $2.48 billion to $2.53 billion, representing 3% to 5% year-over-year growth for the marketplace. The company expects a take rate of about 25.7% and adjusted EBITDA margin of 27% to 29%.

For full-year 2026, Etsy now expects GMS growth in the low single-digit range, improving from prior commentary in mid-February. The company said it still expects year-over-year GMS growth in each quarter of 2026, citing stronger-than-expected first-quarter performance and progress on growth initiatives. Adjusted EBITDA margin guidance was maintained at 28% to 30%.