Shares of Etsy (ETSY) tumbled intraday Wednesday after the e-commerce platform reported weaker-than-expected fourth-quarter revenue and indicated that pressure on gross merchandise sales, or GMS, will likely continue into the first quarter.

Revenue rose to $852.2 million for the three months ended Dec. 31 from $842.3 million the year earlier but was shy of the $861.8 million average analyst estimate on FactSet. Shares of Etsy tumbled 10% in midday trade.

GMS, which measures the total dollar amount of items sold on the platform, was down 6.8% year over year to $3.74 billion. Full-year GMS fell 4.4%. Active buyers dropped 2.6% to 89.6 million during the key holiday quarter.

Chief Executive Josh Silverman told analysts on a conference call that "2024 was a challenging year for Etsy, one where we underperformed the far higher standards we hold for ourselves." GMS was impacted by a temporary shift away from near-term conversion and onto improving the customer experience, he said, according to a FactSet transcript.

Etsy marketplace GMS fell 8.6% in the fourth quarter, which the company said reflected pressure on consumer discretionary spending, challenging comparisons, a shortened holiday season, and a highly promotional retail environment.

Earnings per share advanced to $1.03 from $0.62 year over year and topped the $0.93 consensus. The bottom-line benefited from an easier comparison, with Etsy recognizing restructuring and other exit costs of $27 million in the fourth quarter of 2023.

For the first quarter, Etsy expects GMS to decline at a similar rate to the fourth quarter.

Chief Financial Officer Lanny Baker told analysts that Etsy marketplace GMS is positioned to improve "as we move through 2025."

Adjusted earnings before interest, taxes, depreciation and amortization margins will be stronger in the second half of the year than in the first, he said.