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EBAY INC (EBAY)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 printed broad-based beats: revenue $2.73B (+6% YoY) versus consensus $2.64B, and non-GAAP EPS $1.37 versus consensus $1.30; GAAP EPS was $0.79 . Revenue and EPS also exceeded the upper end of Q2 guidance from April . Revenue consensus value marked with an asterisk is from S&P Global.
  • GMV accelerated to $19.5B (+6% YoY; +4% FX-neutral), with focus categories up >10% and U.S. GMV +7% YoY; advertising revenue reached $482M (2.5% of GMV) .
  • Q3 2025 guidance points to continued momentum: revenue $2.69–$2.74B, GMV $19.2–$19.6B, GAAP EPS $0.97–$1.02, non-GAAP EPS $1.29–$1.34; non-GAAP operating margin guided to 26.6–27.1% .
  • Key drivers: strength in collectibles and P&A, U.K. C2C initiative scaling managed shipping, Klarna expansion in the U.S., and AI-enabled marketing and ad optimizations; FX tailwind aided spot growth while tariff/de minimis changes had a modest net impact .

What Went Well and What Went Wrong

What Went Well

  • Focus categories accelerated: “focus category GMV grew by over 10%,” with trading cards in “healthy double digits” and Pokémon growth in triple-digits for the second quarter in a row .
  • Advertising scaled efficiently: first-party ads +17% to $455M; total ads $482M at ~2.5% GMV penetration, with LLM-driven relevance gains and broader adoption across products .
  • Strategic initiatives: Klarna U.S. launch exceeded expectations (AOV ~3× marketplace average) and the U.K. managed shipping mandate advanced monetization; quote: “Klarna’s U.S. launch has surpassed our initial expectations... average order value... approximately three times the U.S. marketplace average” .

What Went Wrong

  • GAAP operating margin compressed YoY to 17.7% (from 21.3%), reflecting depreciation and U.K. C2C initiative headwinds; free cash flow was negative ($441M) given ~$935M unique tax outflows .
  • Direct shipments from Greater China to the U.S. saw disruption post de minimis changes, partially offset by SpeedPak adoption and forward-deployed inventory ASP uplift; management still contemplates tariff scenarios in H2 .
  • International macro remains tough (U.K., Germany) relative to resilient U.S. demand; quote: “Europe remains tougher... we’ve not seen a meaningful improvement in the European macro environment” .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$2.579 $2.585 $2.730
GMV ($USD Billions)$19.320 $18.753 $19.514
GAAP Diluted EPS ($USD)$1.40 $1.06 $0.79
Non-GAAP Diluted EPS ($USD)$1.25 $1.38 $1.37
GAAP Operating Margin %21.1% 23.8% 17.7%
Non-GAAP Operating Margin %27.0% 29.8% 28.4%
Operating Cash Flow ($USD Billions)$0.677 $0.787 $(0.307)
Free Cash Flow ($USD Billions)$0.560 $0.644 $(0.441)
Actual vs S&P Global ConsensusQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)Actual: $2.579 vs Consensus: $2.582*Actual: $2.585 vs Consensus: $2.547*Actual: $2.730 vs Consensus: $2.641*
Primary EPS (Non-GAAP, $USD)Actual: $1.25 vs Consensus: $1.199*Actual: $1.38 vs Consensus: $1.337*Actual: $1.37 vs Consensus: $1.297*
EBITDA ($USD Millions)Actual: 558* vs Consensus: 778*Actual: 695* vs Consensus: 821*Actual: 591* vs Consensus: 801*

Values retrieved from S&P Global.*

Segment breakdown (GMV by geography):

GMV ($USD Billions)Q4 2024Q1 2025Q2 2025
U.S.$9.043 $9.066 $9.428
International$10.277 $9.687 $10.086
Total$19.320 $18.753 $19.514

Key KPIs:

KPIQ4 2024Q1 2025Q2 2025
Active Buyers (Millions)134 134 134
Advertising Revenue ($USD Millions)$445 $442 $482
Ads as % of GMV2.3% 2.4% 2.5%
Non-GAAP Operating Income ($USD Millions)$698 $771 $775

Estimate comparison highlights:

  • Revenue: beat in Q2 (+$0.09B), beat in Q1 (+$0.04B), slight miss in Q4 (−$0.003B)* .
  • EPS: beat in Q2 (+$0.07), beat in Q1 (+$0.04), beat in Q4 (+$0.05)* .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)Q3 2025—$2.69–$2.74 New
GMV ($B)Q3 2025—$19.2–$19.6 New
Diluted GAAP EPS ($)Q3 2025—$0.97–$1.02 New
Diluted Non-GAAP EPS ($)Q3 2025—$1.29–$1.34 New
Non-GAAP Operating Margin (%)Q3 2025—26.6–27.1 New
Dividend ($/share)Q3 2025$0.29 (Q2 declared) $0.29 (Q3 declared) Maintained

Q2 2025 outcomes versus April guidance:

MetricPeriodPrevious Guidance (Apr)Reported (Jul)Result
Revenue ($B)Q2 2025$2.59–$2.66 $2.73 Above
GMV ($B)Q2 2025$18.6–$19.1 $19.51 Above
Diluted GAAP EPS ($)Q2 2025$0.87–$0.94 $0.79 Below
Diluted Non-GAAP EPS ($)Q2 2025$1.24–$1.31 $1.37 Above

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesRolled out magical bulk listing across categories; Explore/Shop The Look in fashion; AI-enhanced CRM; build/partner/buy framework AI shopping assistant announced; LLMs improving ad relevance; AI-generated PLA titles/images; millions of tailored CRM emails weekly Expanding scope and impact
Tariffs/macroU.S. demand resilient vs softer EU; detailed CBT/tariff exposure and SpeedPak; China→U.S. corridor ~5% of GMV Modest net impact; disruption to direct shipments offset by SpeedPak/forward-deployed ASP uplift; guidance contemplates scenarios Managed; monitored
AdvertisingQ4 ads $445M (2.3% GMV); Q1 first-party ads +14%; off-platform ads adoption Ads $482M (2.5% GMV); first-party +17%; LLM optimization; priority ads extended to vehicles Scaling, more products
Product performance: collectiblesTrading cards accelerated 9th straight quarter in Q1; PSA integrations; eBay Live features Pokémon triple-digit GMV; sports/MTG strong; PSA grading add-ons; TCGplayer record GMV Robust; may lap tougher comps in Q4
Regional trendsU.S. stronger; U.K./Germany macro weaker; U.K. C2C initiative improved metrics U.S. GMV +7% YoY; U.K. managed shipping mandate; international GMV grew nearly 2% FX-neutral U.S. strength; EU cautious
Vehicles/CaramelAcquired Caramel (end-to-end vehicle checkout) Secure Purchase vehicle checkout launched; collectible car focus; synergies with P&A Early build-out

Management Commentary

  • “We delivered another strong quarter… all key financial metrics exceeding both consensus expectations and the high end of our respective guidance ranges.” — Jamie Iannone .
  • “Klarna’s U.S. launch has surpassed our initial expectations… average order value… approximately three times the U.S. marketplace average.” — Jamie Iannone .
  • “We expect non-GAAP operating margin for Q3 to be between 26.6% and 27.1%… we intend to reinvest a portion of further top line upside in strategic initiatives.” — Peggy Alford .
  • “Our authenticity guarantee program… inspecting over 1 million items in a single quarter for the first time.” — Jamie Iannone .

Q&A Highlights

  • Marketing ROI and competition: Management saw efficiencies in lower-funnel spend amid competitive dynamics; large share of organic traffic reduces reliance on paid channels .
  • Tariff/de minimis impacts: Breakage in direct China→U.S. shipments but offsets through SpeedPak and forward-deployed inventory ASP lift; Q3 guidance contemplates varied scenarios .
  • GMV sustainability: Focus categories and horizontals underpin durable growth; core categories targeted to flat longer-term; U.S. healthier than Europe .
  • Fashion and vehicles: Pre-loved fashion poised for growth with AI discovery, influencers, authentication; vehicles business (Caramel, “Secure Purchase”) gaining traction, synergy with P&A .

Estimates Context

  • Q2 beat on both revenue and non-GAAP EPS versus consensus; Q1 also beat; Q4 had a marginal revenue miss but EPS beat. EBITDA tracked below consensus across quarters, reflecting differences in reported metrics versus SPGI normalization and D&A timing* .
  • With advertising penetration rising, Klarna-driven high-ticket conversion, and U.K. monetization scaling, Street may raise revenue and EPS estimates for H2; however, management flagged tougher Q4 comps and potential trading card moderation .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Broad beats and Q3 guidance support continued momentum: Q2 revenue $2.73B (+6% YoY) and non-GAAP EPS $1.37 outpaced consensus and Q2 guidance; Q3 revenue guided to $2.69–$2.74B, non-GAAP EPS $1.29–$1.34 .
  • Growth drivers are durable: focus categories (>10% GMV growth), U.S. demand (+7% U.S. GMV), and ads scaling to 2.5% of GMV; Klarna U.S. expansion lifts high-ASP conversion .
  • Margin mix: Non-GAAP operating margin held at 28.4%; GAAP margin compressed on depreciation and U.K. C2C costs; Q3 margin guided to 26.6–27.1% as reinvestment balances growth and profitability .
  • Cash flow optics: Q2 free cash flow negative due to unique ~$935M tax outflows; FY25 reported FCF targeted at ~$1.5B, normalized FCF “comfortably north of $2B” .
  • Tariffs manageable so far: SpeedPak and forward deployment mitigated direct shipment headwinds; FX neutral GMV up 3–5% in Q3 guidance range .
  • Vehicles and fashion optionality: Secure Purchase (Caramel) and AI-powered fashion discovery expand TAM and deepen enthusiast engagement; early but promising .
  • Near-term trading lens: Stock narrative hinges on ads penetration, AI-enabled conversion, and U.K. monetization; watch Q4 trading-card moderation and European macro drag as potential crosscurrents .

Appendix: Other Q2 2025 Press Releases

  • “Secure Purchase” vehicle checkout announced July 29, 2025 (end-to-end identity, title, financing, transport) .
  • Earnings press release with full financial tables and Q3 2025 guidance (July 30, 2025) .