After surprising investors in its second quarter with an acceleration in revenue growth and $11.7 million of net income compared to a loss of $7.3 million in the year-ago quarter, investors were looking for online marketplace Etsy (NASDAQ: ETSY) to continue this momentum in its third quarter. Fortunately, Etsy's third-quarter results highlighted continued execution on the company's strategic initiatives, leading to accelerated growth in both revenue and gross merchandise sales (GMS). In addition, Etsy kept up its recent return to profitability, reporting an even stronger profit in its third quarter than in Q2. Image source: Etsy. Etsy earnings: The raw numbers Metric Q3 2017 Q3 2016 Year-Over-Year Change Revenue $106.4 million $87.6 million 21.5% Earnings per share $0.21 ($0.02) $0.23 Gross merchandise sales $766.4 million $677.2 million 13.2% Active sellers 1.89 million 1.71 million 10.8% Active buyers 31.7 million 27.1 million 16.7% Data source: Etsy's third-quarter earnings release. Table by author. For Etsy's third quarter, the company reported revenue of $106.4 million, up 21.4% from its revenue in the year-ago quarter. Management said its strong revenue growth was driven by a meaningful rise in both markets and seller services revenue. Markets revenue was up 11.2% year over year, while seller services revenue increased 30.6% year over year. The company's net income rose from a loss of 2.4 million in the year-ago quarter to a profit of $25.9 million, translating to $0.21 on a per-share basis. GMS was up 13.2% year over year, marking a 140-basis point acceleration in the key metric's growth compared to growth in the second quarter. Active sellers and buyers were up about 11% and 17% year over year, respectively. Key takeaways Etsy's 21.5% revenue growth marked the company's second quarter in a row of accelerating revenue. Etsy said its 11.2% year-over-year increase in markets revenue was "driven by growth in transaction fee revenue and, to a lesser extent, growth in listing fee revenue." A 30.6% year-over-year increase in seller services revenue was "driven primarily by revenue growth in Etsy Payments and Promoted Listings and, to a lesser extent, Shipping Labels and Pattern." An acceleration in GMS growth follows "several successful launches of new features and tools," management said. In addition, GMS was helped by growth in active sellers and buyers. Etsy posted a record EBITDA margin of 21.4%. Etsy CFO Rachel Glaser said this achievement reflects the company's focused execution, rapid product launch cadence, and expense discipline. What now? Looking ahead, Etsy CEO Josh Silverman, who replaced former CEO Chad Dickerson as the company faced headwinds earlier this year, is optimistic about the company's future. "Looking ahead, we believe our sharpened focus will enable us to build on our momentum, support our sellers throughout the holiday season, and advance our new mission to keep commerce human," said Silverman. Specifically, Silverman said Etsy will continue to execute on its new strategy of heavily emphasizing special shopping occasions, such as weddings and holidays. Glaser said Etsy is reiterating the guidance for 2017 that it provided investors in August. She also said she believes the company is "well positioned to build on our momentum as we head into the holiday season." For the full year, Etsy is guiding for 12% to 14% growth in GMS, 18% to 20% growth in revenue, and 16% to 18% growth in adjusted EBITDA margin. 10 stocks we like better than EtsyWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Etsy wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of October 9, 2017Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Etsy. The Motley Fool has a disclosure policy.