ETSY (ETSY) risk factors, FY2025 10-K

ETSY's FY2025 10-K, filed Feb 19, 2026, lists 47 risk factors in 2 groups. Against the prior year's 49: 6 new, 8 dropped, 18 substantially reworded.

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Risk factors listed
472 groups
New this year
6vs 49 last year
Dropped
8since the prior 10-K
Substantially reworded
18of those kept
Section length
22k wordsItem 1A

What the changes say

  • Etsy marketplace active buyers and GMS per active buyer declined year-over-year, creating pressure to restore buyer momentum.
  • New emphasis covers AI errors, marketplace safety, Depop’s proposed sale, cross-border trade, and broad technology regulation.
  • Seller fulfillment problems now include popular sellers receiving more orders than they can timely process.
  • Competition increasingly includes seller software, multichannel tools, social networks, and agentic shopping experiences.

What changed since the prior 10-K

New

  • New

    The trustworthiness and safety of our marketplaces and the connections within our communities are important to our success. If we are unable to maintain and expand that trust and keep our marketplaces safe, our business could be adversely affected

    Marketplace trust and safety could deteriorate through unreliable platforms, data incidents, unsafe or infringing listings, or inconsistent policy enforcement.

  • New

    We use AI-enabled systems, which could expose us to liability or adversely affect our business

    AI-generated inaccuracies, bias, misleading recommendations, or regulatory issues could damage Etsy’s reputation, competitiveness, and business.

  • New

    We also compete with companies that sell software and services to small businesses, enabling a seller to sell from her own website or otherwise run her business independently of our platforms, or enabling her to sell through multiple channels

    Seller-focused software, independent websites, multichannel tools, and numerous online and offline venues could reduce Etsy’s seller and buyer engagement.

  • New

    Growing the Etsy marketplace globally is part of our strategy, and our business could be harmed by the continued imposition of barriers to international trade

    Trade barriers and difficulties executing cross-border transactions could undermine Etsy’s global growth, GMS, revenue, and operating results.

  • New

    The closing of the proposed sale of Depop is subject to various risks and uncertainties, may not be completed in accordance with expected plans or on the currently contemplated timeline, or at all, and the pending sale may be disruptive to Etsy or create loss in value to stockholders

    The proposed sale of Depop to eBay could be delayed, fail, disrupt operations, distract employees, or reduce stockholder value.

  • NewRegulatory, Compliance, and Legal Risks

    Our business is subject to a complex, evolving global landscape of laws, regulations, rules, and standards relating to the technology sector, which may disproportionately burden smaller platforms and businesses like ours

    Evolving global rules covering AI, marketplaces, payments, safety, privacy, cybersecurity, and competition could impose disproportionate burdens on Etsy and sellers.

Dropped

  • Dropped

    The trustworthiness of our marketplaces and the connections within our communities are important to our success. If we are unable to retain our existing buyers and sellers and activate new ones, our financial performance could decline

  • Dropped

    Our payments systems are subject to a complex landscape of evolving laws, regulations, rules, and standards

  • Dropped

    The terms of our debt instruments may restrict our ability to pursue our business strategies

  • Dropped

    Our insurance may not cover or mitigate all the risks facing our business

    Failure to retain existing buyers and sellers or activate new ones could reduce financial performance.

  • Dropped

    Finally, while some sellers on our platforms may be insured for some or all of these risks, many small businesses do not carry any or sufficient insurance, and, even if a seller is insured, the insurance may not cover the relevant loss

  • Dropped

    If we are unable to successfully execute on our business strategy or if our strategy proves to be ineffective, our business, financial performance, and growth could be adversely affected

  • Dropped

    Continuing to expand our operations outside of the United States is part of our strategy, and our business could be harmed if our expansion efforts do not succeed

  • DroppedRegulatory, Compliance, and Legal Risks

    Increased regulation of technology companies, even if focused on large, widely adopted platforms, may nevertheless impact smaller platforms and small businesses, including us and our sellers

Reworded

  • 79% rewritten

    We face intense competition and may not be able to compete effectively

    Competition now expressly includes social networks and agentic experiences, while the prior reference to Etsy’s House of Brands was removed.

  • 75% rewritten

    We have incurred impairment charges and may incur further impairment charges in the future, which would negatively impact our operating results

    The risk now emphasizes quarterly impairment reviews and potentially material financial-statement effects, replacing specific historical Depop and Elo7 charge amounts.

    Was: We have incurred impairment charges for our goodwill and other long-lived tangible and intangible assets, and may incur further impairment charges in the future, which would negatively impact our operating results

  • 58% rewritten

    We track certain operational metrics with internal systems and tools or manual processes and do not independently verify such metrics. Certain of these metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies may adversely affect our business and reputation

    No substantive change; the risk still covers internally measured, judgment-based metrics that are not independently verified.

  • 54% rewritten

    We may need additional capital, which may not be available to us on acceptable terms or at all

    No substantive change; the updated wording says additional equity or convertible debt could also dilute existing stockholders.

  • 41% rewritten

    Our business, financial performance, and growth depends on our ability to attract, retain, and drive momentum with an active and engaged communities of buyers and sellers

    The risk now states that Etsy active buyers and GMS per active buyer declined year-over-year and that buyer momentum must improve.

    Was: Our business, financial performance, and growth depends on our ability to attract and retain active and engaged communities of buyers and sellers

  • 36% rewritten

    We rely on our sellers to provide a fulfilling experience to our buyers

    The risk adds that popular or trending sellers may receive more orders than they can fulfill promptly, harming sellers.

  • 35% rewritten

    Enforcement of our marketplace policies may negatively impact our brands, reputation, and/or our financial performance

    No substantive change; the wording only changes “highly-regulated” to “highly regulated” while retaining the prohibited-item examples.

  • 32% rewrittenRegulatory, Compliance, and Legal Risks

    We may be subject to intellectual property and similar claims, which, even if meritless, could be extremely costly to defend, damage our brands, require us to pay significant damages, and limit our ability to use certain technologies in the future

    The risk now includes publicity and similar rights, plus claims that Etsy is liable for infringement by sellers, vendors, or other third parties.

    Was: We may be subject to intellectual property claims, which, even if meritless, could be extremely costly to defend, damage our brands, require us to pay significant damages, and limit our ability to use certain technologies in the future

  • 30% rewritten

    Our marketing efforts to help grow our business may not be effective

  • 28% rewrittenRegulatory, Compliance, and Legal Risks

    Our business and our sellers and buyers may be subject to evolving sales and other tax regimes in various jurisdictions, which may harm our business

  • 28% rewritten

    We have a significant amount of convertible debt and may incur additional debt in the future. We may not have sufficient cash flow from our business to pay our substantial debt when due

    Was: We have a significant amount of debt and may incur additional debt in the future. We may not have sufficient cash flow from our business to pay our substantial debt when due

  • 27% rewritten

    We are subject to risks related to our environmental, social, and governance activities and disclosures

  • 25% rewritten

    Our business depends on third-party services and technology that we utilize to maintain and scale the technology underlying our platforms and our business operations

  • 25% rewrittenRegulatory, Compliance, and Legal Risks

    Privacy, data protection, information security, and AI regulations are complex and rapidly evolving areas that have and may adversely affect our and our sellers’ business

    Was: Privacy, data protection, and information security regulations are complex and rapidly evolving areas that have and may adversely affect our and our sellers’ business

  • 23% rewrittenRegulatory, Compliance, and Legal Risks

    We are subject to the terms of open source licenses because our platforms incorporate, and we contribute to, certain open source software, potentially impairing our ability to adequately protect some of our intellectual property

    Was: We are subject to the terms of open source licenses because our platforms incorporate, and we contribute to, certain open source software, potentially impairing our ability to adequately protect our intellectual property

  • 21% rewritten

    We also compete for media placements, including with retailers competing for the attention of our buyers, and increased competition can impact the cost we pay for media placements, including in dynamic auctions

  • 21% rewritten

    The global scope of our business subjects us to macroeconomic and geopolitical risks

    Was: The global scope of our business subjects us to risks associated with operations abroad

  • 21% rewritten

    We rely on Google Cloud for a substantial portion of the computing, storage, data processing, networking, and other services for the Etsy Marketplace. A significant disruption of or interference with our use of Google Cloud would negatively impact our operations and seriously harm our business

All 47 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Our quarterly operating results have and may continue to fluctuate, which can cause significant stock price fluctuations
  2. 02These events may also impact our sellers’ ability to run their businesses on our marketplaces, which could negatively impact our business and financial performance
  3. 03We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which could cause our stock price to decline
  4. 04The trustworthiness and safety of our marketplaces and the connections within our communities are important to our success. If we are unable to maintain and expand that trust and keep our marketplaces safe, our business could be adversely affectedNew
  5. 05Our business, financial performance, and growth depends on our ability to attract, retain, and drive momentum with an active and engaged communities of buyers and sellers41% rewritten
  6. 06We rely on our sellers to provide a fulfilling experience to our buyers36% rewritten
  7. 07We track certain operational metrics with internal systems and tools or manual processes and do not independently verify such metrics. Certain of these metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies may adversely affect our business and reputation58% rewritten
  8. 08Our software is highly complex and may contain undetected errors
  9. 09We rely on Google Cloud for a substantial portion of the computing, storage, data processing, networking, and other services for the Etsy Marketplace. A significant disruption of or interference with our use of Google Cloud would negatively impact our operations and seriously harm our business21% rewritten
  10. 10We use AI-enabled systems, which could expose us to liability or adversely affect our businessNew
  11. 11Our business depends on third-party services and technology that we utilize to maintain and scale the technology underlying our platforms and our business operations25% rewritten
  12. 12Our business depends on access to third-party services, platforms, and infrastructure that are critical to the successful operation of our business
  13. 13Our payments systems have both operational and compliance risks, including in-house execution risk and dependence on third-party service providers
  14. 14The global scope of our business subjects us to macroeconomic and geopolitical risks21% rewritten
  15. 15Our ability to recruit and retain a talented and broadly diverse group of employees and deploy that talent effectively is important to our success. Significant attrition or turnover could impact our ability to grow our business
  16. 16We may be unable to adequately protect our intellectual property
  17. 17We may experience fluctuations in our tax obligations and effective tax rate
  18. 18We face intense competition and may not be able to compete effectively79% rewritten
  19. 19We also compete with companies that sell software and services to small businesses, enabling a seller to sell from her own website or otherwise run her business independently of our platforms, or enabling her to sell through multiple channelsNew
  20. 20We also compete for media placements, including with retailers competing for the attention of our buyers, and increased competition can impact the cost we pay for media placements, including in dynamic auctions21% rewritten
  21. 21Our marketing efforts to help grow our business may not be effective30% rewritten
  22. 22Enforcement of our marketplace policies may negatively impact our brands, reputation, and/or our financial performance35% rewritten
  23. 23If we are not able to keep pace with technological changes and enhance our current offerings and develop new offerings to respond to the changing needs of sellers and buyers, our business, financial performance, and growth may be harmed
  24. 24New offerings may not drive GMS or revenue growth, may require substantial investment and planning, and may bring us more directly into competition with companies that are better established or have greater resources than we do
  25. 25Growing the Etsy marketplace globally is part of our strategy, and our business could be harmed by the continued imposition of barriers to international tradeNew
  26. 26We have incurred impairment charges and may incur further impairment charges in the future, which would negatively impact our operating results75% rewritten
  27. 27We may engage in acquisitions, dispositions, or strategic partnerships, which may divert management’s attention and/or prove to be unsuccessful
  28. 28The closing of the proposed sale of Depop is subject to various risks and uncertainties, may not be completed in accordance with expected plans or on the currently contemplated timeline, or at all, and the pending sale may be disruptive to Etsy or create loss in value to stockholdersNew
  29. 29We are subject to risks related to our environmental, social, and governance activities and disclosures27% rewritten
  30. 30We may need additional capital, which may not be available to us on acceptable terms or at all54% rewritten
  31. 31We have a significant amount of convertible debt and may incur additional debt in the future. We may not have sufficient cash flow from our business to pay our substantial debt when due28% rewritten

Regulatory, Compliance, and Legal Risks

  1. 32Failure to deal effectively with fraud or other illegal activity could harm our business
  2. 33Our brands may be harmed if third parties or members of our communities use or attempt to use our marketplaces as part of their illegal or unethical business practices
  3. 34We regularly receive and expect to continue receiving claims alleging that items listed by sellers on our marketplaces are counterfeit, infringing, unlawful, harmful, or otherwise violate our policies
  4. 35We are regularly involved in litigation, arbitration, and regulatory matters that are expensive and time-consuming and that may require changes to our strategy, the features of our platforms, and/or how our business operates
  5. 36Privacy, data protection, information security, and AI regulations are complex and rapidly evolving areas that have and may adversely affect our and our sellers’ business25% rewritten
  6. 37Our business and our sellers and buyers may be subject to evolving sales and other tax regimes in various jurisdictions, which may harm our business28% rewritten
  7. 38Our business is subject to a large number of U.S. and non-U.S. laws, many of which are evolving, and the resulting compliance costs and liability risk could negatively impact our business
  8. 39Our business is subject to a complex, evolving global landscape of laws, regulations, rules, and standards relating to the technology sector, which may disproportionately burden smaller platforms and businesses like oursNew
  9. 40We may be subject to intellectual property and similar claims, which, even if meritless, could be extremely costly to defend, damage our brands, require us to pay significant damages, and limit our ability to use certain technologies in the future32% rewritten
  10. 41We are subject to the terms of open source licenses because our platforms incorporate, and we contribute to, certain open source software, potentially impairing our ability to adequately protect some of our intellectual property23% rewritten
  11. 42If we are unable to maintain effective internal controls over financial reporting, investors may lose confidence in the accuracy of our financial reports

Other Risks

  1. 43The price of our common stock has been and will likely continue to be volatile, and declines in the price of our common stock could subject us to litigation
  2. 44Future sales and issuances of our common stock or rights to purchase common stock, including upon conversion of our convertible senior notes, could result in additional dilution to our stockholders and could cause the price of our common stock to decline
  3. 45Our stock repurchases are discretionary and, even if effected, they may not achieve the desired objectives
  4. 46Our business could be negatively affected as a result of actions of activist stockholders
  5. 47Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, could limit attempts to make changes in our management and could depress the price of our common stock

Other ETSY 10-Ks

  • FY2024 10-K risk factors
    53 risks

    Marketplace trust, buyer and seller engagement, and seller-controlled customer experiences dominate Etsy’s business risks.

    Filed Feb 19, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.