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eBay guides Q4 revenue up 7%-9% as take rate slips; cites 9% workforce cut and Depop surge
Executives said live commerce and Depop are driving growth as they flagged lower take rates, a workforce reduction and a moderating trading cards business heading into 2027.
eBay Inc. forecast fourth-quarter revenue of $3.19 billion to $3.24 billion, up 7% to 9% year over year on an FX-neutral basis, and said take rate pressure will cause gross merchandise volume to outpace revenue, as executives walked analysts through a third quarter in which GMV grew nearly 16% to $23.2 billion.
Fourth-quarter outlook and workforce cut
Chief Financial Officer Peggy Alford said eBay expects fourth-quarter GMV of $23.7 billion to $24.1 billion, or 12% to 14% growth on a total FX-neutral basis and about 8% to 10% organically. Depop is expected to add four percentage points to GMV growth and two points to revenue growth. Non-GAAP operating income is forecast to grow 6% to 10%, implying a margin of 25.7% to 26.2%, and non-GAAP earnings per share are guided to $1.48 to $1.53, up roughly 5% to 9%.
Alford said last week's announced workforce reduction of approximately 9% is meant "to better align our talent and resources, streamline our operations and help create the capacity required to invest in our highest growth initiatives." She said the company still targets roughly $2 billion in stock repurchases for the full year, and its board declared a quarterly dividend of 31 cents per share, payable in December.
Third-quarter results
Third-quarter GMV grew nearly 16% to $23.2 billion on an FX-neutral basis, or 13% organically. Revenue rose 13% to $3.21 billion, or 11% organically. Non-GAAP operating income climbed 11% to $843 million, and non-GAAP earnings per share rose nearly 12% to $1.51. GAAP earnings per share were $1.11. Free cash flow was $749 million, and the company returned nearly $830 million to shareholders through buybacks and dividends.
Overall take rate fell 20 basis points year over year, which Alford attributed to faster growth in eBay Live and consumer-to-consumer sales, category and average selling price mix shifts, and the inclusion of Depop. She named three factors behind faster GMV than revenue growth in the fourth quarter: Depop's lower take rate, the shift of UK managed shipping to a net revenue model, and ongoing mix shifts. U.S. GMV grew 22% organically, while international GMV grew nearly 4% organically.
Live commerce, Depop and collectibles
CEO Jamie Iannone said eBay Live had another record quarter, with a multibillion-dollar annualized GMV run rate and growth "well into the triple digits." He said live sellers generated roughly twice as much GMV on the core marketplace as they sold in live events over the trailing 12 months.
Depop's U.S. GMV more than doubled year over year on a pro forma basis in its first quarter with eBay. Iannone said Depop reached 11 million trailing-12-month active buyers, up from 9 million, and 5 million active sellers. Combined, eBay and Depop generated about $9 billion in U.S. fashion GMV over the trailing 12 months, growing in the mid-20% range.
Collectibles remained the largest growth contributor, though U.S. growth decelerated moderately as eBay lapped strong prior-year comparisons. Alford said the fourth-quarter outlook reflects tough comparisons in trading cards and bullion, and that 2027 planning assumes trading card growth "will naturally moderate."
Buyers, advertising and AI
Trailing-12-month active buyers grew 4% to 147 million on a pro forma basis including Depop and Ties, but just over 1% excluding them. U.S. active buyers grew 6% organically. Advertising revenue rose 16% to $607 million, and first-party ads grew 16% to $575 million.
Asked about AI agents, Iannone said referral traffic from them is "very, very small today" but brings new and reactivated buyers at a higher rate than comparable channels. He said AI listing tools are already contributing to marketplace growth. Alford said 2027 planning assumes healthy growth in GMV, revenue, operating income and earnings per share, with take rate and margins varying by quarter based on business mix.
Bulletins
EBAY Q3 GMV GREW 13% TO MORE THAN $23 BILLION; REVENUE GREW 11% TO $3.2 BILLION
EBAY Q3 NON-GAAP OPERATING INCOME GREW 11%, NON-GAAP EPS GREW NEARLY 12%
EBAY: Q3 FOCUS CATEGORY GMV GREW 24%; TOTAL FX NEUTRAL GMV GROWTH NEARLY 16%
EBAY: Q3 C2C AND RECOMMERCE GMV GREW ~20%, NOW 72% OF TOTAL GMV EXCLUDING DEPOP
EBAY: TCGPLAYER TRAILING 12-MONTH GMV TOPS $1 BILLION FOR FIRST TIME; GOLDIN RECORD GMV QUARTER
EBAY: AUTHENTICITY GUARANTEED SURPASSED 20 MILLION CUMULATIVE ITEMS INSPECTED IN JULY
EBAY: DEPOP US GMV, MAUS, SOLD ITEMS MORE THAN DOUBLED YOY PRO FORMA IN Q3, BEAT EXPECTATIONS
EBAY: Q3 GLOBAL C2C GMV GREW MORE THAN 20%, HEALTHY DOUBLE-DIGIT GROWTH IN US, UK, AUSTRALIA
EBAY: MAGICAL LISTING AI NOW AVAILABLE TO ALL NEW, REACTIVATED LISTERS IN SIX MAJOR MARKETS
EBAY: EBAY LIVE GMV GROWTH STAYED WELL INTO TRIPLE DIGITS YOY, SIMILAR TO RECENT QUARTERS
EBAY: INTL SHIPPING LAUNCHED IN UK, GERMANY; UK EIS UP TO 30% CHEAPER THAN PRIOR PROGRAM
EBAY: COMPLETED US MANAGED SHIPPING ROLLOUT TO NEW LISTERS; DOUBLE-DIGIT % CUT IN LISTING TIME
EBAY: BEGINS LIMITED SELLER DROP-OFF TEST IN SEVERAL LARGE US METRO AREAS IN Q4
EBAY: 47% OF SURVEYED CONSUMERS NOW BUY SECONDHAND AT LEAST MONTHLY, UP FROM 35% LAST YEAR
EBAY: 89% OF SURVEYED CONSUMERS EXPECT TO SPEND SAME OR MORE ON SECONDHAND IN 2027
EBAY Q3 NON-GAAP EPS $1.51, UP NEARLY 12% YOY; NON-GAAP OP INCOME $843M, UP 11%
EBAY Q3 GMV $23.2B, UP NEARLY 16% YOY FXN; 13% ORGANIC FXN; REV $3.21B, UP 13% FXN
EBAY: Q3 CAPITAL RETURNED TO SHAREHOLDERS NEARLY $830M VIA REPURCHASES, DIVIDENDS
EBAY: Q3 FOCUS CATEGORY GMV GREW 24%; C2C, E-COMMERCE EACH GREW GMV MORE THAN 20%
EBAY: US GMV GREW 22% ORGANIC; DEPOP US GMV MORE THAN DOUBLED YOY PRO FORMA
EBAY: INTL GMV GREW NEARLY 4% YOY ORGANIC FXN; FX A 60 BASIS POINT HEADWIND TO SPOT GROWTH
EBAY: TTM ACTIVE BUYERS UP 4% TO 147M PRO FORMA; US ACTIVE BUYERS UP 6% ORGANIC
EBAY: ENTHUSIAST BUYER SPEND ~$3,700 TTM; U.S. ENTHUSIAST BUYERS UP 9%; 16M ENTHUSIASTS
EBAY: Q3 REVENUE UP 11% ORGANIC FXN; DEPOP ADDED NEARLY 2 PTS; FX 70 BPS TAILWIND
EBAY: Q3 TOTAL ADVERTISING REVENUE $607M, UP 16% YOY; 1P ADS UP 16% TO $575M
EBAY: Q3 TAKE RATE DOWN 20 BPS YOY ON EBAY LIVE, C2C GROWTH, MIX SHIFTS, DEPOP
EBAY: Q3 NON-GAAP GROSS MARGIN 73.1%, UP 60 BPS YOY; NON-GAAP OP INCOME $843M, UP 11%
EBAY: 6 MILLION SELLERS ADOPTED A PROMOTED LISTING PRODUCT IN Q3; ~2.7B LISTINGS EX-DEPOP
EBAY: Q3 NON-GAAP EPS $1.51, UP NEARLY 12% YOY; GAAP EPS $1.11
EBAY: Q3 FREE CASH FLOW $749M; BOUGHT BACK ~$690M OF SHARES AT ~$106 AVG; DIVIDEND $0.31/SHR
EBAY: Q4 GMV SEEN $23.7B-$24.1B INCL DEPOP; ORGANIC GROWTH ~8%-10%, TOTAL FXN 12%-14%
EBAY: Q4 REVENUE SEEN $3.19B-$3.24B; TOTAL FXN GROWTH 7%-9%, ORGANIC 5%-7%; DEPOP 2 PTS
EBAY: Q4 NON-GAAP OP INCOME GROWTH SEEN 6%-10%; OP MARGIN 25.7%-26.2%
EBAY: Q4 NON-GAAP EPS SEEN $1.48-$1.53; IMPLIES GROWTH ~5%-9% YOY
EBAY: ANNOUNCED ~9% WORKFORCE REDUCTION LAST WEEK; TARGETS ~$2B FULL-YEAR BUYBACKS
EBAY: 2027 PLANNING FOR HEALTHY YOY GROWTH IN GMV, REVENUE, NON-GAAP OP INCOME AND EPS
EBAY: 2027 PLAN ASSUMES TRADING CARDS GROWTH MODERATES; CAPITAL RETURN TARGET 90%-100% OF FCF
EBAY: 2027 SEES MODEST NET INTEREST INCOME HEADWINDS; NON-GAAP TAX RATE SEEN RELATIVELY STABLE
EBAY: VEHICLES BUSINESS GROWING AT TRIPLE-DIGIT RATE, HIGH-VALUE TRANSACTIONS
EBAY: LIVE SELLERS GENERATE ~2X GMV ON CORE MARKETPLACE VS WHAT THEY SELL IN LIVE EVENTS
EBAY: DEPOP US GMV, MAUS, SOLD ITEMS MORE THAN DOUBLE YOY IN Q3; ACTIVE BUYERS 11M VS 9M
EBAY: DEPOP HAS 5M ACTIVE SELLERS; BUYERS SPEND 70% MORE ON CORE AFTER ENGAGING WITH LIVE
EBAY: MAGICAL LISTING NOW IN SIX MAJOR MARKETS; AUSTRALIA SEES 30% MORE LISTINGS PER ATTEMPTER
EBAY: EBAY, DEPOP GENERATED ~$9B US FASHION GMV OVER TRAILING 12 MONTHS, GROWING MID-20S% YOY
EBAY: Q3 US C2C GMV GREW FASTER THAN OVERALL US EBAY GMV
EBAY: Q3 ADVERTISING REVENUE UP 16% YOY, 15% ON PRO FORMA BASIS
EBAY: PCGS COIN AUTHENTICATION LAUNCHED AUGUST, ROLLED OUT TO ALL SELLERS IN SEPTEMBER
EBAY CEO: AVERAGE HOUSEHOLD HAS $4,000 OF STUFF THAT COULD BE ONLINE, LESS THAN 20% IS ONLINE
EBAY: Q3 PRO FORMA TTM ACTIVE BUYERS UP 4% TO 147M INCL DEPOP, TIES; OVER 1% EXCL THEM
EBAY: Q3 US ACTIVE BUYERS UP 6% ORGANIC; US ENTHUSIAST BUYERS UP 9%, GLOBAL UP OVER 2%
EBAY: ENTHUSIAST BUYER SPEND ~$3,700 PER BUYER, RISING QUARTER OVER QUARTER FOR SEVERAL YEARS
EBAY: ACCESS TO EBAY CARRIER RATES HAS LOWERED DEPOP SHIPPING AND PARCEL RATES
EBAY: BELIEVES AGENTIC AI TRAFFIC WILL BE LARGELY INCREMENTAL TO EBAY; VERY SMALL TODAY
EBAY: 85% OF TRAFFIC ORGANIC; ENTHUSIAST BUYERS OVER 70% OF GMV
Posts (35)
Transcript
good day everyone my name is
and i will be your conference operator today
at this time i would like to welcome you to the ebay third quarter twenty twenty
six earnings call
all lines have been placed on mute to prevent any background noise
after the speakers' remarks there will be a question and answer session
if you would like to ask a question during this time and if you have joined via the webinar
please use the raise hand icon which can be found at the bottom of your webinar application
at this time i would like to turn the call over to john egbert
vice president of investor relations
good afternoon
thank you all for joining us for ebay's third quarter twenty twenty six earnings conference call
joining me today on the call are jamie iannoni our chief executive officer
and peggy alford our chief financial officer
we're providing a slide presentation to accompany our commentary during the call
which is available through the investor relations section of the ebay website
at investors dot ebayinc dot com
before we begin i'll remind you that during this conference
call we will discuss certain non gaap measures related to our performance
you can find the reconciliation of these measures to the nearest comparable gaap measures
in our accompanying slide presentation
all growth rates noted in our prepared remarks will reflect organic
fx neutral year over year comparisons
all earnings per share amounts reflect earnings per diluted share
unless indicated otherwise
additionally all year over year growth rates versus twenty twenty five
are also based on recast financials reflecting our adoption
of the new internally developed software accounting guidance in twenty twenty six
and all depop comparisons will be pro form a fx neutral
year over year comparisons unless noted
otherwise
during this conference call management will make forward looking statements including
without limitation statements regarding our future performance and expected financial results
these forward looking statements involve known and unknown risks and
uncertainties
our actual results may differ materially from our forecast for a variety of reasons
you can find more information about risks uncertainties and other factors that
could affect our operating results in our most recent periodic reports on form ten ks
form ten q and our earnings release from earlier today
you should not rely on any forward looking statements
all information in this presentation is as of october twenty eight twenty twenty six
we do not intend and undertake no duty to update this information
with that i'll turn the call over to jamie
thanks john good afternoon and thank you all for joining us today
we delivered strong results in q3
as our key financial measures exceeded consensus expectations and the high end of our
respective guidance ranges
gross merchandise volume grew by thirteen percent to more than twenty three billion dollars
revenue grew eleven percent to three point two billion dollars
we also delivered eleven percent year over year growth
in non gaap operating income and nearly
twelve percent growth in non gaap earnings per share even as we continue to invest
behind our highest priority growth opportunities
our outperformance was once again broad based across categories
geographies and customer segments our key strategic priorities
including focus categories consumer to consumer or c to c
and recommerce grew gmv by approximately twenty percent in aggregate
and now represents seventy two percent of our total gmv excluding depop
ebay's results also benefited from the continued scaling of emerging growth vectors
like ebay live and vehicles which are contributing more meaningfully each quarter
as well as depop which accelerated materially
and contributed to total fx neutral gmv growth
of nearly sixteen percent year over year in q three
focus category gmv grew twenty
four percent in q three led by collectibles ebay motors
fashion and refurbished goods our continued momentum
reflects years of strategic investment in category specific innovation
trust selection community and tailored
selling and buying experiences for our customers
starting with collectibles trading cards maintain
strong gmv growth even as we lapped increasingly difficult year over year comparisons
pokemon's thirtieth anniversary releases
support continued growth in collectible card games while major summer events
and the fall sports calendar drove healthy demand for sports trading cards
excitement for ebay collectibles was on full display
at the national sports collectors convention in chicago
which drove record usage of our ai powered card scanning tool
the tool has now surpassed one hundred and thirty million scans
and in q3 we expanded card scanning to the uk
and began adding proprietary transaction data from tcgplayer and goldin
to the tool's price guide giving collectors a broader view of market pricing
in q3 we expanded authenticity guaranteed to lower price trading
cards in the u s and uk
the u s the change increased the number of sold items
eligible for authenticity guaranteed by more than twenty percent
and also made those items eligible for grading add on and vault storage services
offered through our partnership with psa
in august we launched authenticity
for collectible coins in the us in partnership with professional coin grading service
this program covers eligible graded coins from around the world
and raw us coins priced at five hundred dollars or more
at no additional cost to buyers or sellers
authenticity guaranteed surpassed twenty million cumulative
items inspected across categories in july
reinforcing our commitment to building trust and confidence across our marketplace
our off platform collectibles marketplaces also continued to thrive
tcg players surpassed one billion dollars
in trailing twelve month gmv for the first time
and open seller registration in the uk and canada
extending the reach of its specialized collectible card game marketplace
our goldin subsidiary had another record gmv quarter
and continues to track some of the world's rarest and most valuable collectibles
in q three goldin hosted an auction commemorating the united states
two hundred and fiftieth anniversary highlighted by a rare copy of the declaration
of independence that sold for over three point six million dollars
bringing together the core ebay marketplace
ebay live tcg player and goldin we're serving enthusiasts
across all major categories
price points and transaction formats
turning to ebay motors
which remained a material contributor to gmv growth across
parts and accessories and vehicles in p and a
we launched easy and free returns in germany in q3
following successful rollouts in the u s and uk
that drove increased conversion and incremental gmv with stable return rates
we also introduced certified recycled badging in the u s
helping buyers identify high quality recycled oem parts
from qualified sellers
in vehicles we continue to simplify the end to end transaction
experience and expand the range of customers and vehicles we can serve
in q3
we launched secure purchase express to provide a streamlined path
to check out for c to c sellers who do not require our full suite of services
we onboarded hundreds of independent dealers
to our new trusted dealer program allowing them
to use secure purchase within their existing workflows
and we increased vehicle purchase protection coverage
to five hundred thousand dollars
to support more high value transactions
these protections and our differentiated buyer reach supported
several vehicle sales above one million dollars in q three
including a two thousand and five porsche carrera gt
that sold for five million dollars from a trusted dealer in arkansas
to a buyer located in texas
ebay's fashion business continues to be a source of growth
led by luxury which delivered another quarter of healthy double digit gmv growth
in q3 we significantly
expanded authenticity guaranteed across europe
enabling buyers in twenty three european union countries
to shop for authenticated luxury fashion inventory
from sellers in germany france and italy
in australia we launched authenticity guaranteed for watches
and continued broadening eligible brands across apparel footwear and accessories
this trust infrastructure has helped make ebay the leading online marketplace
for secondhand luxury fashion sales in the us and uk
depop complements ebay's broader fashion business
and expands our reach with younger consumers through its discovery led experience
optimized for desirable affordable secondhand fashion
q3 was depop's first quarter as part of ebay
and its results reinforce the strength of the business
and gave us even more conviction in the opportunity ahead
depop's gmv growth outperformed our expectations in q3
including us gmv monthly active users and sold items
more than doubling year over year on a pro form a basis
and the quality of that growth is encouraging
new cohorts are buying and selling more than prior cohorts
while repurchase relist and resell rates all improved year over year
customers who both buy and sell remain
several times more valuable than one-sided users
demonstrating the strength of depop c2c flywheel
depop continued to improve its product experience in q three
as it enabled faster personalized discovery on the home page
simplified its ai assisted listing flow
and deployed new ai models to prioritize the visibility
of higher quality listings
we also introduced new depop balance features in q3
allowing customers to keep their sales proceeds in the app
and use them for future purchases
this makes it easier for sellers to become buyers as well
encouraging the two sided engagement we see among depop's most valuable customers
marketing and shipping play complementary roles in depop's growth model
full funnel marketing has proven effective at raising awareness
and bringing more customers into the marketplace
our investments to lower shipping costs have made lower priced items economical
increased purchase frequency and improved seller velocity
access to ebay's preferred carrier rates
has lowered average parcel cost making shipping investments more efficient
we are also increasingly targeting those investments toward customer moments we believe are most
predictive of long term value
beyond shipping we continue to explore
and demand synergies between ebay and depop
in q three we tested a dedicated module of relevant depop listings
adjacent to ebay search results for select fashion queries
we are currently testing the next phase of our inventory integration
by exploring how users respond to individual depop listings directly in ebay
search results for relevant queries over time we believe ebay's
scaled demand and shopping intent signals can connect more fashion consumers
with relevant depop listings and drive incremental gmv and velocity
for depop sellers
overall we are managing ebay and depop as a portfolio
preserving each brand's distinct experience and allocating investment
toward opportunities that generate the strongest long term returns for the combined company
depop's growth builds upon the strong consumer selling momentum on ebay
where global c two c gmv grew by more than twenty percent in q three
including healthy double digit growth across the us uk and australia
artificial intelligence has an outsized impact
on our c to c business as it reduces friction that prevents consumers from
listing and selling successfully
we continue to see strong results from the latest
generation of our ai powered magical listing experience
which is now available to all new and reactivated listers
across six major markets we've also rolled out magical listing to all
nonprofessional sellers in australia france and italy
and we are in the midst of ramping to active seller groups in the us uk and germany
in australia active sellers are creating more than one third more listing
per attemper with magical listing while their average listing time has been reduced by
one third which is similar to the benefits we've observed with new sellers
as we began ramping active seller groups
we upgraded magical listings pricing guidance including an
improved user experience and new ai models with smarter price recommendations
driving measurable improvements in conversion and sell through
in september we launched comprehensive improvements to the
c2c value proposition in france and italy
bringing together free selling buyer protection mass
listing enhanced local discovery ebay balanced and simplified shipping
these launches have driven meaningful uplift in leading indicators such as new
reactivated listers and lay the foundation for a more connected european
overall
we are also giving sellers new ways to connect directly with buyers
grow their businesses which brings me to ebay live
ebay live delivered another record quarter
and is generating gmv at a multibillion dollar annualized run rate
gmv growth remained well into the triple digits year over year
similar to recent quarters as sellers
buyers content hours and viewership continue to expand across
all seven markets
in q3 we expanded self-service onboarding to more markets
and broaden eligibility beyond established ebay sellers
creating a more scalable path for sellers to join live
we also launched multi streaming through live studio
which allows sellers to broadcast simultaneously to youtube facebook
instagram and twitch drawing buyers to ebay from their existing social audience
for buyers we redesigned the live hub with updated search
filters personalized recommendations and a feed based experience
while integrating live more prominently into services across ebay
this should make relevant events inventory and communities easier to
discover as live scales
trust remains foundational to ebay live
during q three we launched ai powered moderation across chat
audio and video added pre event screening
and strengthened host controls for moderation
we also deployed real time multimodal ai agents
to extract structured item details directly from video streams
these agents will initially focus on trust and over time
support automated listing creation tools and more intelligent item discovery
taken as a whole these advances are expanding seller access and reach
strengthening buyer discovery and embedding ai and trust
throughout the experience helping us scale ebay live as a differentiated commerce
platform
in shipping
we are using ebay's scale and carrier relationships to lower cost and simplify
fulfillment helping sellers reach more buyers
and making more inventory economical to transact
in q3 we launched ebay international shipping in both the uk and germany
sellers will now be able to ship domestically to an ebay hub
and seamlessly tap into buyer demand in more than one hundred and ninety markets
while ebay handles transportation customs returns
and post purchase support customer feedback has been extremely positive
and the cost savings from these programs are significant
for instance in the uk we estimate eis
can be up to thirty percent cheaper for customers
than our previous global shipping program
in q3 we also deployed an improved
ai delivery date model across six major export markets
expanding the inventory we can show with a fast delivery promise
while maintaining reliability
during the quarter we completed the nationwide rollout of u s
managed shipping to all new and reactivated listers
within the magical listing flow ebay now estimates the package
size and weight with ai generates a prepaid label
and provides tracking
sellers are automatically protected against loss or damage
and early results show a double digit percentage reduction
in listing time and strong customer satisfaction
in the uk we are making pickup and drop off
or pudo services more visible
and economical across more than fifty thousand carrier options
at lockers and parcel shops with approximately ninety
percent of u k buyers living within one mile of a pouda location
we are simplifying the experience and using targeted promotions to build adoption
giving sellers convenient drop off options
and buyers a lower cost alternative to home delivery
which can increase velocity for lower priced inventory
in q4 we are beginning a limited seller drop off
test in several large u metropolitan areas
our objective is to learn whether greater shipping choice and structurally lower cost delivery options
can improve listing activity conversion and transaction velocity
we are assessing customer adoption service quality and unit economics
throughout the test
before closing
like to share a few highlights from ebay's two thousand and twenty six ecommerce report
which we published earlier this month
report points to a secular shift in ecommerce as forty seven percent of consumers
surveyed now buy secondhand at least monthly
up from thirty five percent last year
and eighty nine percent expect to spend the same or more
on secondhand goods in two thousand and twenty seven
it also highlights seller economics roughly eighty five percent of sellers
source secondhand inventory from their own belongings
and nearly thirty percent say selling secondhand
helps them earn extra income
younger consumers are accelerating this shift
fifty three percent of eighteen to twenty nine year olds
expect to buy more secondhand in two thousand twenty seven
that reinforces the long term opportunity for ebay
as secondhand becomes a larger part of how people shop
in closing we are building on strong marketplace momentum
with strategic investments that improve the customer experience
and strengthen ebay for the long term
collectibles remained our largest growth contributor
ebay motors and fashion also contributed materially
and ebay live delivered another record quarter
depop's first quarter with ebay reinforced its strategic fit
as us gmv more than doubled year over year on a pro form a basis
with healthy new cohorts and growing engagement from customers who both buy and sell
shipping is becoming a more strategic portfolio capability
as we expand our domestic and cross border services
and extend ebay's carrier scale and infrastructure to depop
lowering costs reducing friction and increasing velocity
ai is delivering measurable gains in listing productivity and conversion
while improving discovery trust and reliability across the marketplace
and we delivered all of this progress while growing non gaap operating income
and earnings per share at double digits year over year
demonstrating our ability to invest behind long term growth
and still deliver significant value for shareholders
with that i'll turn the call over to peggy to provide more details
on our financial performance and outlook peggy over to you
thank you jamie
hello everyone
in the third quarter we once again exceeded expectation across
all of our key financial metrics
gmv grew by nearly sixteen percent year over year
to twenty three point two billion dollars on an fx neutral basis
or thirteen percent organically
revenue grew thirteen percent year over year
to three point two one billion dollars on an fx neutral basis
or eleven percent organically
non gaap operating income grew eleven percent year over year
to eight forty three million dollars
non gaap earnings per share grew nearly twelve percent year over year
to one point five one dollars
and we returned nearly eight thirty million dollars of capital
to shareholders through repurchases and cash dividends in q three
now let's take a closer look at the drivers of our
strong performance
gmv grew nearly sixteen percent to twenty three point two billion dollars
on a total fxn basis
and increased thirteen percent on an organic fxn basis
as depop added nearly three points of growth
foreign exchange was a headwind of thirty basis points
to spot gmv growth
we saw broad based momentum across our established strategic priorities
as focus categories c2c and e commerce
each grew gmv by more than twenty percent
while ebay live and vehicles each grew well into the triple digits in the quarter
focus category gmv grew twenty four percent
outpacing the remainder of our marketplace by nineteen percentage points
with collectibles motors fashion and refurbished
all contributing materially to growth
moving on to our major geographies
our u s gmv grew twenty two percent on an organic basis
with positive growth contributions from all of our major categories
collectibles gmv growth remains strong in the u s
but decelerated moderately as we lapped last year's robust growth
growth in our trading cards business remained broad based
across multiple sports and collectible card game genres
beyond trading cards we also saw healthy growth
across collectible coins comics and sports memorabilia
electronics became a larger contributor to u s growth in q3
driven by strong demand for computer hardware
consoles and video games
the growth in these subcategories was also fueled by a combination of
transactions and asp increases which reinforce
reinforces ebay's strength as a leading destination for pre owned and refurbished products
at more assessable price points
ebay's fashion gmv in the u s was healthy with continued
strength in luxury
depop added to our momentum in fashion
as its us gmv more than doubled year over year on a pro form a basis
combined ebay and depop generated
approximately nine billion dollars in fashion gmv
over the trailing twelve months in the us alone
growing in the mid-twenty percent range year over year on a pro form a basis
international gmv grew nearly four percent year over year in
on an organic fxn basis
with foreign exchange representing a sixty basis point headwind to spot growth
our investments and strategic priorities continue to yield a track
attractive returns in these markets despite a challenging macro backdrop
specifically focus category and c2c gmv
each grew double digits in the uk and each
drove high single digit growth in germany
furthermore our organic year over year growth
also improved sequentially in canada australia
france and italy
shifting to our biometrics
trailing twelve month active buyers grew four percent
to one hundred and forty seven million on a pro form a basis
which includes buyers from recently acquired depop and ties
excluding depop and ties global
active buyers grew by over one percent
u s active buyer growth remained strong at
six percent year over year organically
or thirteen percent on a pro form a basis including depop
our sixteen million enthusiast buyers
who are our most loyal customers visit the core ebay marketplace
more than once a day on average
and contribute over seventy percent of the gmv on our marketplace
our investments in key strategic priorities
continue to drive higher engagement and spending
helping grow trailing twelve month enthusiast buyers
by over two percent year over year
in q three
in the u s enthusiast buyer growth was especially strong
up nine percent year over year
global spend per enthusiast buyer continues to show strong growth
increasing to approximately three thousand seven hundred dollars
on a trailing twelve month basis
next let's take a look at our income statement
revenue grew thirteen percent to three point two one billion dollars
on a total fxn basis
and increased eleven percent on an organic fxn basis
as depop contributed nearly two points of growth in the quarter
foreign exchange was a seventy basis point tailwind
to spot revenue growth
our overall take rate declined by
twenty basis points year over year reflecting faster growth
in ebay live and c2c
ongoing category and asp mix shifts
and the inclusion of depop
as a reminder depop's revenue contribution is lower than gmv
primarily because a significant portion of our
velocity driving shipping investments are recognized as contra revenue
these pressures were partially offset
by tailwinds from shipping advertising and financial services
next i'll discuss highlights within our value added services
portfolio which continues to benefit our marketplace by strengthening trust
reducing transactional friction
and driving sales velocity
total advertising revenue was six zero seven million
in the third quarter
growing sixteen percent year over year
excluding depop ads revenue was nearly
two point seven percent of gmv
first party ads grew sixteen percent
to five seventy five million dollars
promoted listings comprised nearly one point three billion
of the nearly two point seven billion total listings on ebay
excluding depop and six million sellers adopted
at least one promoted listing product during the quarter
we delivered several key
product innovations during the quarter
to strengthen our performance ads engine
we introduced an ai powered placement engine
that uses machine learning to dynamically optimize ad density and search
based on shopper context and expected value
we also expanded our video ad formats across
promoted listings and promoted stores
video ads create a much more dynamic engaging
discovery experience for buyers while giving sellers a powerful new tool
to showcase their items
additionally we rolled out new personalized ad prompts
for c to c sellers that are more relevant and efficient
financial services was a modest
contributor to our take rate as we continue to
expand our buyer and seller products to reduce friction on our marketplace
following a successful uk launch
we recently expanded pay by bank to germany and france
which offers more choice for customers and attractive economics for ebay
similar to the uk
pay by bank transactions in germany generate high average order values
and carry lower processing costs than other forms of payment
moving on to our profitability and earnings
non gaap gross margin was seventy three point one percent in the third quarter
up sixty basis points year over year
our non gaap operating income grew eleven percent year over year
to eight hundred and forty three million dollars
sales and marketing expense increased in the third quarter
driven by targeted investments in our strategic priorities including depop
based on the strong results we are seeing
given the upside in our overall performance this quarter
we were able to create more capacity to invest in these areas
in addition
marketing efficiencies in the core ebay marketplace
enabled us to redeploy more resources to capitalize on depop's
extraordinary momentum and expand our reach with a younger customer demographic
transaction losses as a percentage of revenue decreased
for a second straight quarter in q3 as expected
and was roughly in line with the year ago period
as teams delivered on multiple initiatives to optimize our shipping programs
and customer experiences
we delivered non gaap earnings per share
of one point five one dollars up nearly twelve percent year over year
and gaap earnings per share of one point one one dollars
turning to our balance sheet and capital allocation
in the third quarter we generated free cash flow
of seven forty nine million dollars and ended the period with cash and
fixed income investments of three point three billion dollars
and gross debt of six point seven billion dollars on our balance sheet
our equity investments were valued at eight hundred million dollars
we repurchased approximately six ninety million dollars of ebay
shares in q3
at an average price of roughly one hundred and six dollars
and we paid a quarterly cash dividend of one hundred and thirty eight million dollars
in september or zero three one dollars per share
now i will share some thoughts on our outlook starting with the fourth quarter
please reference the earnings presentation accompanying our release
for our outlook in spot growth terms and foreign exchange implications
for q4 we expect consolidated gmv
between twenty three point seven
and twenty four point one billion dollars
including depop which represents total fx and growth
between twelve percent and fourteen percent year over year
or organic growth between approximately eight percent and ten percent
our guidance implies depop would contribute four percentage points
to total fx and gmv growth
this guidance contemplates strong broad based momentum
across the core ebay marketplace
driven by our strategic priorities and ebay live
partially offset by lapping dynamics from a very robust fourth quarter last
year
due in part to trading cards and bullion strength
furthermore we are forecasting another quarter of
extraordinary growth from depop with q4 year over year growth
similar to q3 on a pro form a basis
driven by effective customer acquisition and engagement
we forecast consolidated revenue
to be between three point one nine percent and three point two
four billion dollars in q4 which represents total fxn growth
between seven percent and nine percent year over year
or organic growth between five percent and seven percent
with depop contributing two percentage points to total fxn revenue growth
we expect gmv growth to outpace revenue growth in q4
due to a few factors
some of which are temporary
first
depop is operating at a lower take rate than our core marketplace
and its year over year take rate pressure is elevated
until we lap the acquisition date
second the transition of uk managed shipping from a gross to net
revenue model has impacted our take rate in twenty twenty six
and is more significant in q4 as we lap
the completed rollout in the prior year
and third ongoing business as
asp and category mix shifts continue to apply pressure to our take rate
though we are pleased with the incremental gmv revenue and
operating income contributions from these transactions
we expect consolidated non gaap operating income growth
to be between six percent and ten percent year over year in q4
which implies non gaap operating margin
between twenty five point seven percent and twenty six point two percent
our better than expected top line growth in the first three
quarters of this year has generated the capacity to further invest
behind our strategic priorities even as we anticipate
strong full year operating income growth well ahead of our initial expectations
as we have consistently noted
our goal is to strike the optimal balance
between funding long term growth and delivering healthy flow through to the bottom line
our strategy is clearly working
we see tremendous runway ahead across numerous initiatives
including ebay live c two c as well as depop
which are significantly expanding our addressable market
at the same time we remain disciplined on costs
and continue to drive operational efficiency across the business
with this in mind last week
we announced a difficult decision to reduce our workforce by a
approximately nine percent to better align our talent and resources
streamline our operations and help create the capacity required
to invest in our highest growth initiatives
we recognize the significant impact this decision
has on our colleagues and their families and we are deeply grateful
for their contributions to ebay
for the fourth quarter we expect consolidated non gaap
earnings per share
between one point four eight dollars and one point five three dollars
which implies year over year growth between approximately five percent and nine percent
in addition we continue to target roughly two billion
dollars of stock repurchases for the full year and our board declared a
quarterly cash dividend of zero point three one dollars per share for the fourth quarter
to be paid in december
and finally i'd like to share our
preliminary views on twenty twenty seven
while we are still in the midst of our annual budgeting process
we are planning our business around healthy consolidated year over year growth
across gmv
revenue non gaap operating income and non gaap earnings per share
we anticipate continued broad based gmv growth
across our strategic initiatives including focus categories ebay live
c2c and depop
while we expect the performance of our trading cards business to remain strong
our planning assumes growth will naturally moderate
as we lap the extraordinary levels we experienced in twenty twenty six
with regard to profitability we will
continue to strike a balance between funding prudent investments in long term growth
and ensuring healthy flow through from top line growth to earnings in twenty twenty seven
our take rate and margin trends in any given quarter
will depend on the mix of our portfolio of businesses
lapping considerations as well as the timing of various business initiatives
below the operating income line
we forecast modest headwinds to net interest
interest income on a year over year basis given our lower cash balance
and interest rate assumptions
and we expect our non gaap tax rate
to remain relatively stable
our long term capital return framework remains unchanged
in a normal year
we plan to target repurchases and cash dividends
totaling between ninety percent to one hundred percent of normalized free cash flow
absent organic or inorganic needs for that capital
in closing we delivered another
set of strong results in q3 with double digit
top and bottom line growth
our sustained marketplace momentum and disciplined
operating efficiencies enabled us to drive strong earnings
all while funding compelling long term opportunities
like ebay live and depop
looking ahead our conviction in ebay's long term
trajectory has never been stronger
we see tremendous runway
to expand our total addressable market and drive durable growth
creating compounding multiyear value for our shareholders
with that jamie and i will now take your questions
we will now begin q and a for today's session we'll be utilizing the raise hand feature
if you'd like to ask a question simply click on the raise hand button at the bottom of your screen
once you've been called on please unmute yourself and begin to ask your question
thank you
your first question comes from the line of michael morton with moffett
nathanson
please unmute your line and ask your question
hi good evening thank you for the question
my first one would be following up on what peggy just spoke about
sorry to kinda hammer this point home but there's a lot of moving parts in the business right now
you have live commerce depop and autos are all growing
at significantly faster rates than the core business and
as you've mentioned they come in at lower take rates and
in theory require higher incremental investments than the core business
so i i fully appreciate you're not guiding to twenty twenty seven
but how should investors think about
your ability to reinvest but then also
just the competing forces within the
p and l of these businesses that are doing so well and is the
restructuring does that give you
enough capacity to do it without
a noticeable impact to margins longer term
and i have a follow-up
great thank you so much for your question so oh first of all
you know we're very focused on pursuing
opportunities overall that can add gmv and operating income dollars
even if they carry a lower percentage take rate you mentioned that
you know the vehicles business is a perfect example we've got high value transactions
growing at you know triple digit growth
and it taps into a very large addressable market that complements p and a
when we look at
picking you know which strategic priorities we think are gonna drive the best
balance between top line and bottom line we really
evaluate the opportunities and the earnings overall that
they can generate not
really looking at optimizing for take rate because we really believe that investment
in a variety of businesses both provides durability overall to the business
and also enables us to really drive top line and bottom line growth
that that's really helpful and then maybe
quick one for jamie the live commerce
opening up to more sellers
during the summertime i would love your big picture thoughts on the
addressable categories for live commerce there's a perception
that it's highly targeted towards things like pack breaking
but when you talk to industry participants it seems to be effective
categories we might not have expected
can you
talk about your long term ambitions to see live commerce touch a lot of aspects of ebay's offering
yeah we believe ebay live has a a broad appeal across
a lot of different categories and segments and so when you look at it it's definitely
strong in collectibles but that's a cause trading cards coins etcetera
but we see a lot of strength from a lot of other areas fashion
handbag watches home and garden
i mean i think just going on to the live hub you can see kind of
the breadth of things that are on the on the platform
and as it gets more popular and more mainstream
you see kinda even more different types of sellers coming onto the platform to drive live
because they really feel like it can drive velocity you know over time what works
excited by is that we see
the live business and our core business as highly synergistic
so if i look over the trailing twelve months ebay live sellers
live sellers generate roughly twice as much gmv
on the core marketplace as they sold in live events
and we're also seeing higher engagement and spending among live buyers
and much of that is incremental outside of live events so overall we think it's got
obviously a a large and rapidly growing addressable market
and we don't think it's bound by categories we're seeing it continue to
expand into new categories as more of our core sellers
realize what live can do it helps them you know build a better reputation
it helps them build community it helps introduce buyers into their product
and that's why you're seeing kinda more and more categories of sellers adopt live
your next question comes from the line of nathan
feather with morgan stanley please unmute your line and ask your question
hey everyone thanks for taking the question and congrats on the strong results here
one follow-up on live there exciting to see the incremental traction
how do you think what are the major gating factors that you see today in order to unlock
additional growth in that category and then any way to think about or
quantifying some of the relationship between
core gmv growth and live growth thank you
yeah thanks for the question so
look we're excited live had another record quarter and it's at a multibillion dollar
annualized gmv run rate with growth well into the triple digits
similar to recent quarters you know i think self-service is a big
part of that you know previously it had been gated by how we were bringing on sellers
now we're able to really open the live up to more sellers and bring them onto the marketplace
we've been driving demand in new and compelling ways we launched multistreaming
that allows sellers to leverage their social audiences to bring into their lives on ebay
we've redesigned the live hub to help buyers find more
so we continue to expand in terms of countries and categories that that we're going after
and i would say every you know week or two we're adding new features at the request of sellers
so this quarter we added flash deals which has been well received
we built new ai powered moderation tools
for host and that gives kinda more protection and more trust in the platform
which has been important for us and you know overall what we see is that
know we see this halo effect with core and it makes a lot of sense right which is that
if i find you during live that's gonna help accelerate the core business
and if i'm already core seller and you're doing lives or core buyer i'm doing lives
you see that synergy and that's why i was saying you know when you look over the trailing twelve months
our live sellers did twice as much gmv on core
as they did on live events and i talked last quarter about what we were seeing from
buyers which is you know buyers are spending seventy percent more when they get involved
with live versus comparable buyers
so it really is kind of this you know halo effect of core and live working together
that's exciting for our sellers and exciting for the growth potential of live
great that's really helpful and then on depop help us
think through how you're determining the appropriate level of marketing
spend to allocate to that business and any metrics you're keenly watching as it
goes through that hyper growth phase
yeah look we're feeling great about the strong q three results we saw
us gmv monthly active users and sold items more than double
year over year on a pro form a basis and you know our trailing twelve month
active buyers reach eleven million in q three which is up from nine million
and they also reached five million active sellers so really good kind of traction
across the base i think the other thing that we're seeing is that the
quality of the buyers that are coming onto the marketplace are very strong
the new cohorts that we're seeing are buying and selling more than prior cohorts
and the repurchase the relist and the resell rates
are all improved year over year so across the board we're seeing the metrics
that we wanna see peggy anything you wanna add on that yeah i would just
add that you know the investments that we're making you know and in marketing and shipping and portability
are really supported by the strong customer engagement that we're seeing
and we're managing these investments across ebay and depop
allocating resources towards the opportunities with the strongest returns
while also continuing to drive efficiencies across both businesses
and then we're increasing and you know increasingly leveraging
synergies between ebay and depop particularly in areas like shipping
so the distinction between the investments we're making in each one is
starting to become a little more blurred because we're really seeing the the complementary nature of the two platforms
platforms together
very helpful thank you
your next question comes from the line of deepak mathivanan with cantor fitzgerald
fitzgerald please unmute your line and ask your question
great thanks for taking the question
jamie when chatgpt was growing fast
you made it a priority to improve ai capabilities at ebay
both in terms of user experience seller tools and also in several other places
now with muse how are you thinking about the product
for the agentic era on ebay for buyers and sellers
maybe also talk a little bit you know related to it specifically on ecommerce
right like now it seems like you know with agentic tools like news growing
the friction in inventory cataloging listing transaction
can be eliminated meaningfully
do you see this already in consumer behavior at this time in these
categories and how is ebay planning to tap into this opportunity thanks so much
yeah thanks for the question i would i
start by saying that you know i agree ai is meaningfully contributing even to the growth we're seeing
today on the marketplace you know you talked about listing and cataloging part of the reason why we're
expanding magical listing i talked about you know we're now in six major markets
expanding into seller cohorts in us uk
and in germany is because of the you know the results of what we're
seeing you know i talked about australia seeing thirty percent more listings
per attempter and reduced listing time we're seeing the same type of
thing with our own internal tests as agentic as it relates to search
and discovery and buying behavior and we think you know as a leading destination
of ecommerce we're uniquely positioned to be one of the biggest beneficiaries of ai
because it's really helping us reduce that transactional friction
in a scalable way especially because you know we're primarily
a non new and seasoned inventory marketplace very different than
you know inventory that's generally out there as it pertains to third party
experiences we're continuing to test and learn we're open to approaches that improve
discovery of our unmatched inventory
while preserving the trusted end to end experience that customers have come to expect from ebay
your next question comes from the line of kim
with wells fargo please unmute your line and ask your question
thank you very much two if i may please first
could you talk about
your live distribution strategy you talked about
allowing or enabling your sellers
to to market their offerings elsewhere but
is there any thought about you know if you think about live it's not just a commerce experience
but it's an entertainment experience as well are there opportunities
to syndicate your listings and still capture a lot of the economics
and and really benefit some of your your sellers
across other properties that are more known for short form entertainment
that's that's question one and question two
could you just talk about early learnings
from the consumer to consumer side what you've seen
in out of depop could you talk about the competitive environment in the us
vintage has continued to to be quite aggressive in the market and it's
seemingly it is growing quite nicely but depop is as well
could you just talk about what what you see there what you've learned in in the next quarter and and
how that informs your view over the say next to nine next
maybe twelve to fifteen months thank you very much
yeah sure great so it is one of the things that we're excited by with
live distribution is the ability to put it out there both having our sellers do so
to do it in cooperation with our sellers so you may see
across facebook or instagram our sellers
highlighting upcoming streams to target audiences
that's work we're doing together with them the reason we launched the multi streaming
was it was a a highly requested feature from our sellers
a lot of them have large followings across tiktok or instagram or twitch or
or other platforms and they wanna be able to drive as much demand to it and so
to be able to not only highlight your upcoming shows on ebay live
but to multistream them and that's great for us because that brings new buyers
to ebay from all of those areas so we're gonna continue to look at more services
and more avenues you know what's been great is as we've done self-service
we've opened up a lot more streaming hours and that's really you know as you talk about
the entertainment factor of ebay live has been important and so we're
excited by what that growth has just done to the overall kinda streaming hours and number of
lives on the platform you know as it relates to your question on c two c
you know we've really strengthened our competitive position over the last several years
by sharpening our focus and scale in a really beneficial way you've seen us do that with
you know the multiyear growth that we have in focus categories
and similarly we see us c two c fashion as a large and underpenetrated
market and one that's not a winner take all so you know we're really building from a position of
strength with two well established brands between depop and ebay
and in in q three ebay's usc to see gmv grew
faster than overall us ebay gmv
and as we talked about depop's usg more than doubled
i think what's interesting ken is when you look at them together which is how we look at it
ebay and depop generated approximately nine billion dollars of fashion gmv
in the us alone over the trailing twelve months and that's growing in the mid twenty
percentage range year over year on a pro form a basis
so we're really focused on building on that momentum and investing where we see the strongest
returns you know as peggy talked about we're building on depop's strong foundation
with ebay's demand our carrier relationships our technology
and our marketplace expertise
thank you very much
your next question comes from the line of colin sebastian with baird
please unmute your line and ask your question
great thank you maybe a couple
for me covering other parts of the business
first off on advertising
if you're seeing any change in in seller demand there or how you'd frame
the opportunity to increase adoption or or penetration rate over time if if that's
changed at all
and then secondly on international
was hoping maybe you could separate the macro pressures
on gmv from the progress you're making
through c to c and focus categories in those markets maybe to help us understand
that dynamic a little bit better thank you
sure i can take those
nice to talk to you colin
so on advertising advertising delivered really healthy growth in q three
total revenue increased sixteen percent year over year or
fifteen percent on a pro form a basis despite tougher year over year comps
in q three we began lapping last year's attribution changes across
several international markets marketplace mix is also a factor
with some of the faster growth in areas that have lower advertising penetration
we do continue to see a lot of growth opportunities through broader seller
adoption
increased listings penetration and even the expansion of priority off-site and other
products so our confidence in the long term
remains very strong we're really focused
focused on improving returns for sellers and growing advertising in a way
that supports sustainable revenue and operating income growth across the entire marketplace
i would say as it relates to your question on on the macro
you know it's definitely uneven between you know us and international at this point
in europe though we have seen some improvement in consumer sentiment particularly in the uk
but customers i would say remain selective i think germany continues to face a more challenging
spending environment i think the positive thing is despite these macro pressures
our strategic initiatives continue to perform well our differentiated chain is
selection our value proposition almost become you know a little bit more relevant in this
so when you look at pre loved or refurbished or
other non new and seasoned inventory it's really giving customers more ways to find what they want and attractive
prices it's why you've seen us continue to expand you know more things into
our european businesses we expanded eis that we talked about recently
obviously we're there with live we brought some new c two c capabilities
to italy and france this quarter ones that we had done in australia
and we're seeing really healthy you know double digit growth in our c to c business for example
in the uk so that that makes us confident that as the macro environment improves
the strategy that we have that's working will really continue to drive growth in that market
thank you
your next question comes from the line of bernard mcternan with needham
please unmute your line and ask your question
great thanks for taking the question maybe just to start coins became a
category in the in the us can you talk about this market a little bit
maybe early uptake of authenticity guaranteed and
maybe how it differs from the the trading card market
yeah you know it's another one of these huge enthusiast categories on the platform where
know these coins enthusiasts what's important to them is you know the
same type of thing which is they wanna have kinda authenticity guarantee
so we launched that in august of this year through a partnership with
pcgs we introduced the program at the ana's world fair of money
and then we completed the rollout to all sellers in in september
you know a fun stat is the first coin authenticated with the two thousand and twenty six
cook's island thunder dragon silver coin for nine hundred dollars
and i'd say the best way to learn about this industry is actually just go on ebay live
and watch the coin sellers you'll see in the commentary etcetera
there's just a lot of enthusiasm for this as a as another collectible area
and i would just say coins is the next of you know what are many interesting
areas in collectibles that we can continue to drive the playbook on
and where we're seeing excitement across both the core platform and across live
understood thank you and just to follow-up on all the commentary
or discussion on depop so far i thought the set the
the ecommerce report had a a really interesting stat in terms of the
the jump in monthly purchasing from thirty five
percent last year to to forty seven percent this year
that's that's a really significant jump anything
in terms of why you think this is happening right now in the us i know it's i know it's
you know a couple of years at least behind europe but why it's happening now in the us
yeah look i think i'm seeing this with my own kids and their friends
with that increasing behavior and i think it's a secular shift
i think you know when you look at it the younger generation specifically is much more phonish
on sustainability and driving ecommerce
i think initiatives like what depop is doing is really unlocking stuff that
sitting in the closets you know i like to say that the average household has four thousand dollars of stuff that
could be online and less than twenty percent of it is online
you know if you if you talk to gen zs they'll tell you
everything that you ever want already exists in this world
and what we're doing through magi and depop magical listings in depop is really
unlocking that creating less friction
and driving that kinda secondhand i guess the last thing i would say is that
know i think all the work that we've done in ag has helped build trust in secondhand
specifically in categories like watches and handbags and that type of thing
and the last is value you know we're seeing strength in our electronics business right now
and i find it hard to not buy a refurbished product on ebay
because it's coming at a value
coming with a two year warranty etcetera and i
i'd say the last factor of that increase is just people are realizing
the value that they can get from secondhand
your next question comes from the line of brian pitts with bmo capital markets
please unmute your line and ask your question
thanks so much maybe starting with active buyers up
two hundred and forty seven million ten percent growth
but if you actually exclude depop and ties acquisitions think growth
was closer to one percent can you talk about the plans to accelerate
really accelerate organic buyer acquisition for the core marketplace
beyond these inorganic additions and then maybe a quick one on depop
i know you're gonna operate as a separate business but given the size of the investment
you maybe talk about specific back end synergies you may realize in
search or ai or payments that could be realized without compromising the social forward brand
experience for the gen z audience thanks
great thanks so much for your question i'll start
and answer your question on the buyers so you know we've been encouraged
by both the growth of our buyer base as well as the quality of the engagement across the marketplace
on a on a pro form a basis the trailing twelve month active buyers grew four percent in
to a hundred and forty seven million including depop and ties
if you exclude those businesses to your point active buyers grew by over one percent
and but that's led by six percent organic growth in the us
partially offset by softer trends in international markets so that's you know one factor
i'd i'd point out with regard to the difference between us and outside of the us
on the core ebay marketplace
we had a trailing twelve month enthusiast buyers that grew by over two percent
with us enthusiast buyers up nine percent
we also focus a lot on the spend per buyer and we saw enthusiast
buyers increasing to approximately thirty seven hundred dollars it's been increasing quarter over quarter
for the last several years
so you know we're really focused on our c to c initiatives
better listing tools and discovery
ebay live which jamie talked a lot about and targeted marketing
all helping us attract customers and giving them more reasons to return
to buy more frequently and to deepen their relationship with ebay
i'd also just remind that the active buyers is a trailing twelve month metric
so it takes time for the stronger gmv momentum that we're seeing
to fully translate into buyer growth
yeah and on your question on depop and and leveraging kinda core
parts of ebay i think we're already seeing the benefits of having these businesses together
i'd start with shipping you know access ebay's carrier rates
has already lowered depop's shipping and parcel rates making shipping investments
more efficient and there's a lot more work for us to do there
we've also been you know leveraging ebay's traffic and testing a dedicated module
of relevant depop listings and ebay search for select fashion queries
which is really connecting our existing shopping demand with depop's inventory
i think all the ones that you mentioned brian are areas that over time
we are be able to leverage ebay's capability with depop
things like our regulatory compliance all the work we've done in authenticity
our payment solutions and frankly all the work that we've done with ai to make products
list make listings easier to bring onto the marketplace
we think all of those over time are opportunities and we have a really robust road map
and we're excited to continue to unlock more of the potential
through those synergies in q four in two thousand twenty seven and beyond
operator could we do one last question please
yes your final question comes from the line of mark mahaney with evercore isi please
unmute your line and ask your question
hey thanks i'll just ask one question on agentic
we've had a couple of interesting public data points on
how big commerce activities are underlying some of these consumer agents
the instinct and and muse how do you view the rise of these i
assume there's gonna be more in kind of in the freemium model space
think google hinted at that in its earnings call tonight how do you think that's
how do you think about those as kind of additional platforms more opportunities to acquire
customers anything that suggests to you that it makes it more challenging
or less challenging to acquire retain customers thanks lot
yeah we we believe that this traffic will be largely incremental
to ebay while it's i would say it's very very small today
it does bring over new and reactivated buyers at a higher rate
than other similar channels on the platform you know i think what's
what's great about ebay is you know we have a a very strong and loyal base
of of buyers on the platform you know eighty five percent of our traffic is organic
enthusiast buyers represent over seventy percent of our gmv
they visit us more than once day and as peggy talked about they spend thirty seven hundred dollars
but we've got a track record of you know using other channels to
bring new buyers to ebay and then turn them into enthusiast buyers
on the platform you know importantly even though the traffic is small today we're seeing that
roughly half of the new buyers from those referrals come directly to ebay
for their subsequent purchases so you know we we we're open to ways to find
you know opportunities to bring new traffic in convert them to enthusiast buyers
and as i've said upfront you know what's really i think important is that
the ai what we've already seen is the ai that our sellers are using
and then the ai tools that we're giving to buyers are really having a big impact
on the business today through magical listing through other tests that we're doing etcetera
so we're excited to keep kinda leveraging those we think it's gonna be a big
structural tailwind for ebay
thank you jamie
thank you for joining this concludes today's call you may now disconnect
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