All while supporting independent makers. No one has a better opportunity to own gifting than Etsy and what better time than the holiday season. So here are some of our new initiatives. First, we’ve launched a new and improved curated gift finder now available in our app and featured more prominently on mobile web. Second, our new deals tab replaces our updates tab in our app, making it easier to find personalized deals and amazing gifts at an affordable price. And third, we’ll continue to selectively test Etsy-funded offers with an optimizing our return on investment. And last, but certainly not least, we couldn’t be more excited about our holiday plans to market in the U.S. that Etsy gifts will be delivered on time or your money back. Our estimated delivery date performance and Etsy purchase protection program enable us to stand behind purchases and work to disrupt buyer perceptions.
Here is one of our new TV campaigns all of which aim to disrupt by our perceptions of Etsy this holiday season. [Video Presentation] Shifting to our subsidiaries. Depop had a great quarter. GMS and revenue both grew double digits on a year-over-year basis with growth in active buyers sparked by strong new buyer growth in the U.S. Depop’s success can be attributed to compelling product and marketing investments, which have accelerated growth alongside an increasing flywheel impact from higher transaction velocity and improved user experience. We’re continuing to broaden Depop’s appeal to feel more accessible to a wider audience, emphasizing value even more in the buyer experience while further streamlining the seller experience. While Reverb’s GMS was down modestly in Q3, the business outperformed the musical instrument industry, while also improving take rate and growing revenue, compared to Q3 of 2022.
Reverb enhanced the buyer experience by expanding search and category filters, improved negotiation tools and increased the prominence of promotions and price drops to help buyers more easily find the perfect piece of gear for their budget. There’s no doubt that this is an incredibly challenging environment for spending on consumer discretionary items. It’s therefore important to acknowledge that the volatile macro climate is going to make it challenging for us to grow this quarter. While there are many things we can’t control, there’s still a lot we can. So we are obsessively focused on those. All of us at Etsy feel a great responsibility to deliver profitable growth. Growth for our millions of sellers for our shareholders and for all of our stakeholders.
Our team is working passionately and with the highest level of urgency. And I’m more excited about our current road map and the progress we’ve made this year than at any time in my tenure. We’re confident we’re working on areas that will positively impact Etsy in the months and years ahead. We believe our TAM is enormous. Our market share remains small. Our value proposition is highly differentiated, and we’re solving for something no one else is. keeping commerce human. We’re keeping our eye on the prize and look forward to getting back to strong growth again as we move through this cycle. Thanks for your time. I’ll now turn the call over to Rachel.
Rachel Glaser: Thanks, Josh. And thank you, everyone, for joining our third quarter call. My commentary today will cover consolidated results, key drivers of performance and Etsy Marketplace stand-alone results where appropriate. As a reminder, Reverb, Depop and ELo7 were all reflected in our consolidated financial results and KPIs for the third quarter 2022 with Elo7 divested on August 10, 2023. Etsy delivered $3 billion in consolidated GMS, which increased 1.2% year-over-year, our first positive GMS growth quarter since Q1 ‘22. Revenue increased 7% year-over-year to $636 million, and adjusted EBITDA was $182 million, up nearly 9% from the third quarter of last year. Note that Elo7’s mid-quarter divestiture resulted in small headwinds to both GMS and revenue and was modestly accretive to adjusted EBITDA margin.
Given the volatile macroeconomic landscape that continues to impact consumer discretionary product spending, we believe these results demonstrate the underlying strength of our brand and consumer relevance. Our year-over-year consolidated GMS growth was positive each month of the quarter, driven by strong Etsy Marketplace growth in several of our top international markets and continued active buyer expansion, as well as meaningful acceleration at Depop that outpaced consolidated growth. The FX headwinds that impacted our business in the prior seven quarters reversed in the third quarter providing a 130 basis point tailwind. GMS for our subsidiaries increased in the third quarter, driven by the strong growth at Depop I just mentioned and partially offset by softness at Reverb.
Within our consolidated year-over-year revenue growth of 7%, consolidated marketplace revenue grew 4%, due to an increase in the volume of GMS, including growth in payment speeds for Etsy, primarily driven by a mix shift to more international transactions that yield higher fees, growth in subsidiary payment fees, as well as growth in revenue from offsite ads. Services revenue remained a standout contributor to growth, increasing 16% year-over-year. Etsy Ads was the primary driver of this strength as we optimized our XWalk functionality to better value potential listing conversion and pricing into our ad ranking system. Allowing us to show more ads in our search results without negatively impacting our conversion rate. We delivered a consolidated take rate of 20.9% and in line with the prior quarter and modestly above the take rate implied at the midpoint of our quarterly guidance.
Even while continuing to invest in product and marketing, our consolidated EBITDA margin expanded 40 basis points year-over-year to a very strong 28.6% and above the high-end of our guidance and our highest level since the fourth quarter of 2021. This strength was driven in part by leverage in product development spend. Our subsidiaries represented about a 300 basis point to 400 basis point headwind to our consolidated adjusted EBITDA margin in the third quarter. We are very pleased with our ability to continue to balance disciplined ROI-focused investments and strong profitability. We are pleased with the excellent returns on our product development spend this quarter, Etsy Marketplace product initiatives delivered approximately 40% more product launches than in the prior year with very healthy win rates.
Looking at the quarter’s product development spend, we reported a 5% year-over-year increase to $114 million in the third quarter, gaining 30 basis points of leverage year-over-year partially, due to lower employee comp and professional services costs. Our consolidated head count declined year-over-year due to the Elo7 divestiture, although we increased our core Etsy head count a bit as we usually do this time of year to invest in important growth initiatives. Particularly those that highlight Etsy’s offering of high-quality merchandise with great value and convenience for buyers. On a trailing 12-month basis, Etsy Marketplace revenue per average full-time head count for the third quarter was about $1.3 million, well above the approximately $800,000 for the Etsy Marketplace in full-year 2019 and some of the highest amongst our peer group.
