Sign in
EI

EBAY INC (EBAY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 slightly beat Wall Street on revenue and non-GAAP EPS, with revenue $2.585B vs S&P Global consensus $2.547B* and non-GAAP EPS $1.38 vs consensus $1.337*; GMV rose 1% YoY to $18.8B, marking a fourth consecutive quarter of positive GMV growth .
  • Advertising remained a key growth vector: total ad revenue reached $442M (2.4% of GMV) and first‑party ads grew 13% as‑reported (14% FX‑neutral) to $418M .
  • Non‑GAAP operating margin dipped to 29.8% (from 30.3% YoY), pressured by ~70 bps depreciation and UK C2C shipping initiatives; management guided Q2 non‑GAAP operating margin to 27.0–27.8% amid tariff uncertainty .
  • Q2 2025 guidance: revenue $2.59–$2.66B, GMV $18.6–$19.1B, GAAP EPS $0.87–$0.94, non‑GAAP EPS $1.24–$1.31; board declared a $0.29 dividend for Q2 .
  • Leadership transition: CFO Steve Priest to depart (advisory through July 31), incoming CFO Peggy Alford effective May 12; product/engineering reorganized for speed and AI execution—potential sentiment catalyst .

What Went Well and What Went Wrong

What Went Well

  • “Fourth consecutive quarter of positive GMV growth”; GMV up 1% YoY to $18.8B; revenue $2.585B up 1% YoY; non‑GAAP EPS $1.38 up 10% YoY .
  • Focus Categories drove growth: management highlighted >6% Focus Category GMV growth; trading cards accelerated for the ninth straight quarter, supported by PSA integrations and magical bulk listing .
  • Advertising strength: total ads $442M (2.4% of GMV), first‑party ads $418M up 13% as‑reported (14% FX‑neutral); adoption broadened across products .

What Went Wrong

  • Margin pressure: non‑GAAP operating margin fell to 29.8% from 30.3% YoY; ~70 bps depreciation headwind from server life change, plus UK C2C monetization ramp impacted margins .
  • Take‑rate headwinds: UK C2C initiative reduced overall take‑rate by ~30 bps in Q1, partly offset by ads/financial services and FX .
  • Macro/tariffs: uneven demand (softer in February, better in March) and tariff/de minimis uncertainty; weaker macro in Germany/UK relative to U.S. .

Financial Results

Core P&L and Margins (Quarterly; oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$2.576 $2.579 $2.585
GAAP EPS ($)$1.29 $1.40 $1.06
Non-GAAP EPS ($)$1.19 $1.25 $1.38
GAAP Operating Margin (%)23.1% 21.1% 23.8%
Non-GAAP Operating Margin (%)27.2% 27.0% 29.8%

GMV and Geography (Quarterly; oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
GMV Total ($USD Billions)$18.306 $19.320 $18.753
GMV U.S. ($USD Billions)$8.740 $9.043 $9.066
GMV International ($USD Billions)$9.566 $10.277 $9.687

KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
Active Buyers (Millions)133 134 134
Total Advertising Revenue ($USD Millions)$408 $445 $442
First‑Party Ad Revenue ($USD Millions)$396 $434 $418
Advertising Penetration (% GMV)2.2% 2.3% 2.4%
Take Rate (%)—13.3% (context) ~13.8%
Operating Cash Flow ($USD Millions)$755 $677 $787
Free Cash Flow ($USD Millions)$646 $560 $644

Q1 2025 Actual vs S&P Global Consensus

MetricConsensusActual
Revenue ($USD Billions)$2.547*$2.585
Non-GAAP EPS ($)$1.337*$1.38
# of Revenue Estimates24*—
# of EPS Estimates27*—

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)Q1 2025$2.52–$2.56 ——
GMV ($B)Q1 2025$18.3–$18.6 ——
GAAP EPS ($)Q1 2025$0.98–$1.02 ——
Non‑GAAP EPS ($)Q1 2025$1.32–$1.36 ——
Revenue ($B)Q2 2025—$2.59–$2.66 New
GMV ($B)Q2 2025—$18.6–$19.1 New
GAAP EPS ($)Q2 2025—$0.87–$0.94 New
Non‑GAAP EPS ($)Q2 2025—$1.24–$1.31 New
Non‑GAAP Op Margin (%)Q2 2025—27.0–27.8 New
Dividend ($/share)Q1 2025$0.29 ——
Dividend ($/share)Q2 2025—$0.29 Maintained
Non‑GAAP Tax Rate AssumptionFY 202516.5% 16.5% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI/Technology initiativesRolled out proprietary LiLiuM LLMs; magical bulk listing; AI experiences for buyers (Explore, Shop the Look) Simplified AI‑powered listing flow to all C2C in US/UK/DE; strong seller CSAT; efficiency gains; testing agent commerce with OpenAI Operator ↑
Tariffs/MacroFraming 2025 outlook with tariff uncertainty; uneven demand; U.S. more resilient than Europe Tariff/de minimis uncertainty; China→U.S. corridor ~5% GMV, 3/4 forward‑deployed; SpeedPak to manage duties; wider Q2 ranges ↔/Cautious
Focus Categories (Collectibles, P&A, Fashion)Trading cards strongest contributor; P&A mid‑single digit growth; fashion AI discovery Trading cards accelerated for ninth straight quarter; fashion discovery feeds; UK preloved apparel focus ↑
AdvertisingFirst‑party ads +15–16% in 2H24; 2.3% GMV penetration $442M total; 2.4% GMV; first‑party +14% QoQ; broad‑based adoption ↑
Payments/Financial ServicesKlarna expansion; eBay Balance drives 0 cost of payments; seller capital Klarna in U.S.; U.K. Balance adoption; Checkout.com added; authorization resilience ↑
C2C UK program & Managed ShippingOverhaul in Q4’24; buyer protection fee rollout in Feb; mandating managed shipping in Q2 Narrowed monetization gap; higher C2C KPIs than pre‑launch; managed shipping mandate commencing ↑
Regional Trends (U.S. vs International)U.S. GMV +1%; International +3% FXN; Germany/UK weaker U.S. GMV ~+0.5pt; International ~+3% FXN with FX headwinds; macro weaker in DE/UK ↔

Management Commentary

  • “Our strategy is working and has put us on a path towards sustainable long‑term growth.” – CEO Jamie Iannone .
  • “Focus category GMV grew by over 6% in Q1 and now makes up more than 1/3 of our total volume globally.” – CEO Jamie Iannone .
  • “We rolled out a simplified AI‑powered listing flow to all C2C sellers in the U.S., U.K. and Germany… with customer satisfaction rates 90% or higher” – CEO Jamie Iannone .
  • “We exceeded expectations across our key financial metrics... Non‑GAAP EPS grew 10% to $1.38.” – CFO Steve Priest .
  • “To account for a variety of scenarios in the remainder of the quarter, we are providing wider‑than‑usual guidance ranges for Q2.” – CFO Steve Priest .

Q&A Highlights

  • Tariff/de minimis exposure quantified: China→U.S. corridor ~5% of total GMV; ~75% forward‑deployed inventory already subject to tariffs; SpeedPak covers ~50% of remaining shipments and includes duties at checkout .
  • Advertising durability: no material impact from tariffs; broad seller adoption across CPA/CPC/offsite; path to ~3% of GMV reiterated .
  • Agent commerce/AI: expanding internal “agentic” tools; testing OpenAI Operator; pervasive AI across listing, marketing, and support .
  • UK C2C managed shipping: mandate beginning with new/occasional sellers; expected to close remaining monetization gap; create new revenue and OI .
  • Consumer health: U.S. more resilient; UK/Germany depressed consumer confidence; uneven demand earlier in quarter but improved into March/April .

Estimates Context

  • Q1 2025 results beat S&P Global consensus modestly: revenue $2.585B vs $2.547B*, non‑GAAP EPS $1.38 vs $1.337*; beats driven by Focus Categories, advertising expansion, and AI‑enabled listing efficiencies .
  • Coverage breadth: 24 revenue estimates and 27 EPS estimates for Q1*; current consensus target price ~$94.10* (text recommendation unavailable).
    Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Modest beat with constructive Q2 guide despite tariff uncertainty; wider‑than‑usual ranges suggest management caution but underlying demand held into April .
  • Advertising remains a structural tailwind (2.4% of GMV; first‑party +13%/+14%), supporting take‑rate and profitability even as UK C2C ramps .
  • AI execution is tangible (listing CSAT ≥90%, higher completion rates, faster listing) and likely to drive GMV and seller adoption across categories .
  • UK C2C initiatives (buyer protection fee, managed shipping) are closing monetization gaps; management expects take‑rate improvement as programs fully ramp .
  • Margins face near‑term headwinds (depreciation ~70 bps, managed shipping/M&A) but non‑GAAP OI growth remains aligned with FX‑neutral revenue; Q2 non‑GAAP OM guide 27.0–27.8% .
  • Capital returns continue: $625M buybacks and $0.29 dividend declared for Q2; authorization remaining ~$2.7B as of 3/31/25 .
  • Leadership changes (incoming CFO Alford, product/engineering consolidation) aim to accelerate innovation and operational scale—watch for execution updates next quarter .