eBay Inc. (EBAY) Q4 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary indicates positive financial performance and optimistic guidance, with strong non-GAAP operating income and EPS growth. Product development initiatives, such as eBay Live and agentic commerce, show expansion and potential. Market strategy includes new partnerships and acquisitions, enhancing growth prospects. Shareholder return plans with significant buybacks further support a positive outlook. Despite some uncertainties in international markets and management's lack of specific data on certain initiatives, the overall sentiment is positive, suggesting a likely stock price increase.

Key Financial Performance

Gross Merchandise Volume (GMV) Grew by nearly 6% to approximately $80 billion globally in 2025, with U.S. GMV growing by nearly 10%. The growth was broad-based across strategic priorities like focus categories, consumer-to-consumer (C2C), and recommerce. Investments in reducing transactional friction and marketing for pre-owned goods contributed to this growth.

Revenue Increased by nearly 7% to $11.1 billion in 2025. This outpaced GMV growth by over 1 point, primarily driven by advertising revenue, which reached approximately $2 billion.

Non-GAAP Operating Income Grew by roughly 7% to nearly $3.1 billion in 2025. This was achieved through a balance of strategic investments and operational discipline.

Non-GAAP Earnings Per Share (EPS) Grew by 13% to $5.52 in 2025. This growth was supported by strong operational performance and returning approximately $3 billion of capital to shareholders through repurchases and dividends.

Q4 GMV Grew over 8% to $21.2 billion. U.S. GMV grew nearly 19%, while international GMV declined nearly 1% due to macroeconomic conditions and trade policy changes. Focus category GMV grew over 16%, driven by collectibles, luxury, and refurbished apparel.

Q4 Revenue Grew over 13% to $2.96 billion. This was supported by a 14% take rate, advertising revenue growth, and remonetization efforts in the U.K. C2C segment.

Q4 Non-GAAP Operating Income Grew over 11% year-over-year to $775 million. This was driven by marketing efficiencies and strategic investments.

Q4 Non-GAAP EPS Grew nearly 13% year-over-year to $1.41. This reflects strong operational performance and disciplined reinvestments.

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Operating Highlights

Magical Listings: Introduced AI-powered listing experience that reduces listing time by over 25% and increases new listing creation rate by over 50%.

eBay Live: Expanded globally to 7 countries, achieving a single-day record of $2 million in sales during Black Friday.

AI-Powered Card Scanning: Launched a new AI-powered card scanning experience for trading cards, with over 15 million cards scanned since November.

Depop Acquisition: Acquired Depop for $1.2 billion to strengthen C2C and fashion segments, adding $1 billion in annual gross merchandise sales.

Tise Acquisition: Acquired Tise to expand C2C marketplace in the Nordics.

Cross-Border Solutions: Expanded shipping solutions like SpeedPAK and eBay International Shipping to new regions, including Canada and Germany.

Revenue Growth: Revenue increased by nearly 7% to $11.1 billion in 2025, driven by advertising and financial services.

Operational Efficiencies: Improved risk modeling and flexible payment options like Klarna, and scaled managed shipping in the U.K.

Environmental Impact: Achieved $25 billion in positive economic impact and prevented 8.2 million metric tons of carbon emissions through recommerce.

Focus Categories: Focus categories like collectibles, fashion, and P&A drove 2/3 of GMV, growing by 10% in 2025.

Recommerce: Recommerce accounted for over 40% of GMV, fueled by investments in preowned goods and collaborations with iconic brands.

AI and Innovation: Transitioned to scalable AI-native experiences, enhancing both buyer and seller interactions.

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Risk or Challenges

Regulatory Changes: The company faces challenges from new tariffs and trade policy changes, particularly impacting cross-border trade and U.S. imports. This has led to pressure on international GMV and required investments in solutions like SpeedPAK and eBay International Shipping to mitigate compliance complexities.

Macroeconomic Conditions: Challenging macroeconomic conditions in key international markets like the U.K. and Germany have negatively impacted GMV growth. Persistent headwinds in these regions have also pressured international buyer metrics.

Trade Policy Adjustments: The removal of the de minimis exemption for U.S. imports has created additional pressure on cross-border volume growth, impacting international GMV performance.

Operational Costs: Programs like managed shipping and Authenticity Guarantee, while strategically beneficial, have increased operational costs and pressured gross margins. Losses from these programs are expected to decline over time but currently represent a financial challenge.

Competitive Pressures: The acquisition of Depop and investments in emerging growth vectors like eBay Live and vehicles require significant capital and operational focus, which could strain resources and impact profitability if not managed effectively.

Buyer Metrics: While U.S. buyer metrics have shown growth, international buyer metrics have been pressured by macroeconomic headwinds, with some buyers falling below volume or frequency thresholds.

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Guidance & Outlook

GMV Growth: For Q1 2026, GMV is expected to be between $21.5 billion and $21.9 billion, representing FX-neutral growth of 10% to 12% year-over-year. For the full year 2026, GMV growth is expected to be similar to 2025, driven by strategic priorities and emerging growth vectors.

Revenue Growth: Revenue for Q1 2026 is forecasted to be between $3 billion and $3.05 billion, implying FX-neutral growth of 13% to 15% year-over-year. Full-year revenue growth is expected to be in line with or slightly ahead of GMV growth.

Non-GAAP Operating Income: For Q1 2026, non-GAAP operating income growth is expected to be between 11% and 16% year-over-year, with operating margins between 28.3% and 29.2%. For the full year, operating income growth is projected to be between 8% and 10%.

Non-GAAP Earnings Per Share: For Q1 2026, non-GAAP EPS is expected to be between $1.53 and $1.59, representing growth of 12% to 16% year-over-year. Full-year EPS growth is expected to align with operating income growth.

Capital Expenditures: Capital expenditures for 2026 are forecasted to be between 4% and 5% of revenue.

Depop Acquisition: The acquisition of Depop is expected to close in Q2 2026, contributing 1 to 2 percentage points to GMV growth for the year. The acquisition is expected to dilute operating income and EPS growth by low single digits in 2026 but become accretive to operating income by 2028.

Advertising Revenue: Continued healthy growth in advertising revenue is expected to contribute to revenue growth in 2026.

Emerging Growth Vectors: Growth in areas like eBay Live and vehicles is expected to contribute to long-term top and bottom-line growth.

Cross-Border Shipping Solutions: Expansion of cross-border shipping solutions, including SpeedPAK and eBay International Shipping, is planned for additional corridors in 2026.

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Shareholder Return Plan

Capital Returned to Shareholders: eBay returned approximately $3 billion of capital to shareholders through repurchases and dividends in 2025.

Quarterly Cash Dividend: eBay paid a quarterly cash dividend of $131 million in December 2025, or $0.29 per share. For Q1 2026, the quarterly cash dividend is increased to $0.31 per share.

Share Repurchase Program: eBay repurchased $625 million of shares in Q4 2025 at an average price of nearly $86. For 2026, eBay is targeting roughly $2 billion of share repurchases.

Board Authorization for Stock Repurchase: In February 2026, eBay's Board authorized an incremental $2 billion under its stock repurchase plan, in addition to the remaining authorization of roughly $800 million at the end of 2025.

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Key Q&A

Q:What has driven the improvement in consolidated growth in the U.S. market?

A:Jamie Iannone attributed the improvement to the broad brand strength, the strongest underlying health of the business in six years, and the payoff from years of investment. Focus categories, C2C, and recommerce grew in high single to low double digits in 2025, driving a significant majority of GMV. While some unique tailwinds were noted, the broad-based growth momentum is expected to carry into 2026.

Q:How much contribution is expected from newer emerging vectors like Caramel and eBay Live in the GMV guide for this year?

A:Jamie Iannone stated that while new growth vectors like eBay Live and Vehicles are exciting, the majority of growth is driven by the strength of the core business, particularly focus categories, C2C, and recommerce. eBay Live has shown a 7x year-over-year run rate.

Q:What changes are being observed in the competitive environment in international markets, and are focus categories and AI tools benefiting these markets?

A:Jamie Iannone noted a divergence between the U.S. and international markets, with Europe facing challenges due to low consumer confidence and subdued retail sales. However, focus categories and C2C initiatives are performing well internationally. eBay Live has been expanded to Germany, France, Italy, and Canada, showing positive results.

Q:What user behavior changes are expected with the rollout of agentic commerce, and how does it impact advertising and partnerships with platforms like OpenAI?

A:Jamie Iannone highlighted the differentiated experience eBay is building with agentic commerce, such as AI-native solutions like magical listing and agentic search. eBay's unique inventory (90% non-new in season) and trust features position it well in the agentic AI world. eBay is also testing partnerships like the OpenAI Ads Pilot Program to explore opportunities.

Q:What is the growth cadence for 2026, and how are durable versus non-durable factors expected to impact growth?

A:Peggy Alford explained that while durable growth is expected from focus categories, C2C, and recommerce, some deceleration is anticipated in areas like Pokemon and bullion due to tough comps. Marketing efficiency gains and partnerships like Klarna will also be lapped in 2026. Overall, the majority of growth is considered durable.

Q:How will the acquisition of Depop advance eBay's strategy in fashion and international markets?

A:Jamie Iannone stated that Depop will remain a stand-alone brand but will benefit from eBay's assets like Authenticity Guarantee, shipping, and payments. Depop's younger consumer base and focus on sustainability align with eBay's growth in fashion and C2C. Depop has seen 60% growth in the U.S., and the acquisition is expected to enhance eBay's position in fashion and recommerce.

Q:What revenue synergies are expected from the Depop deal, and how will cross-listing between Depop and eBay work?

A:Jamie Iannone emphasized that Depop will remain a stand-alone brand but will leverage eBay's back-end resources like Authenticity Guarantee and global shipping. The integration is expected to drive synergies similar to what eBay achieved with TCGplayer and Goldin Auctions in collectibles.

Q:Is GMV still accelerating excluding the impact of coins and bullion?

A:Peggy Alford clarified that while coins and bullion account for a significant portion of the sequential acceleration, there is still broad-based strength in GMV growth beyond these categories.

Q:What are the drivers of EPS growth and the role of buybacks in 2026?

A:Peggy Alford stated that strong non-GAAP operating income growth is the primary driver of EPS growth. eBay plans to repurchase $2 billion in shares in 2026, reflecting a balance between investing in growth and returning cash to shareholders.

Q:What is the update on eBay Live, and what are its long-term benefits?

A:Jamie Iannone reported that eBay Live has expanded to new markets like Australia, Germany, France, Italy, and Canada. It contributes to double-digit growth in focus categories, attracts new buyers, and drives engagement. A single live event generated over $2 million in sales, showcasing its potential as a meaningful growth vector.

Q:What is the update on the Facebook Marketplace partnership?

A:Jamie Iannone stated that eBay has expanded its inventory into Facebook Search and increased the volume and categories of inventory shared on Facebook Marketplace. The partnership benefits eBay sellers by exposing their listings to Facebook's audience and benefits Facebook users by providing access to eBay's unique inventory.

Q:What is the sustainability of the trading card business, and how has the user base grown?

A:Jamie Iannone explained that trading card growth is driven by innovation, new buyers, and a mix shift towards higher-priced items. Sports trading cards and collectible card games like Pokemon and One Piece are performing well. eBay's investments in AI card scanning and live events have renewed excitement among hobbyists.

Q:Are there any changes in user behavior from AI search platforms, and how does it impact eBay?

A:Jamie Iannone noted that traffic from AI search platforms is currently small but high-intent, leading to higher conversion rates. eBay's own agentic commerce features, like agentic search and magical listing, are resonating well with users, driving engagement and unlocking new inventory.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the contribution of newer growth vectors like Caramel and eBay Live to the GMV guide, instead emphasizing the strength of the core business. Additionally, while discussing agentic commerce, management did not provide concrete data on user behavior changes or the impact of partnerships like OpenAI on advertising.

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Earnings Word Cloud

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The earnings call reveals solid financial performance with strong U.S. GMV growth and promising AI integration plans. Despite some margin concerns due to strategic investments, the optimistic outlook on durable growth and key opportunities in focus categories, vehicles, and AI partnerships is encouraging. The Q&A session highlights management's confidence in future growth, although some uncertainties remain. Overall, the positive financial guidance, strategic initiatives, and shareholder return plans suggest a positive stock price movement in the near term.

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The earnings call presented a mixed picture. While there were positive aspects such as AI-powered initiatives, focus on operational efficiency, and strong ad revenue growth, the guidance for Q2 was weak, with GMV and revenue growth expected to be flat. The Q&A revealed management's reluctance to provide long-term growth projections, which may concern investors. The lack of a new partnership announcement or strong financial metrics further tempers expectations. Given these factors, the stock price is likely to remain stable, resulting in a neutral sentiment.

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