Q3 2024 Earnings Summary
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +3% (to $2,576 million) | Focus on promoted listings, higher take rate, and international shipping improvements drove revenue gains, continuing momentum from prior quarters. However, foreign exchange headwinds and cautious consumer spending moderated growth, echoing trends seen in earlier periods. |
Marketplace Revenue | +3% (to $2,576 million) | Growth in key categories (e.g., motors, parts & accessories) and strong advertising revenue helped sustain marketplace revenue increases. This is a continuation of eBay’s category-focused strategy from previous quarters, supported by expansions in core verticals and new product offerings. |
China Revenue | +11% (to $293 million) | Cross-border trade demand and ongoing efforts to optimize Chinese seller programs boosted revenue in China, picking up from already expanding export categories in prior quarters. Improved logistics also contributed to stronger performance for China-based sellers. |
Operating Income | +31% (to $595 million) | Operating income growth reflects revenue gains and cost efficiencies, building on cost-optimization programs introduced in prior periods. Advertising expansion and lower depreciation expenses also lifted margins, aligning with the company’s ongoing shift toward higher-margin services. |
Net Income | -51% (to $634 million) | Despite operational improvements, one-time gains or favorable tax items in the prior year created a challenging comparison. Reduced investment-related gains and certain tax adjustments suppressed net income growth relative to the previous period’s elevated baseline. |
Diluted EPS | -48% (to $1.27) | The decline in EPS is tied to lower net income versus the prior year’s period, which benefited from non-recurring items. Share repurchases provided a partial offset, but the comparison remains unfavorable due to one-time factors in the prior year. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
GMV | Q3 2024 | $17.8B–$18.2B | No guidance | no current guidance |
Revenue | Q3 2024 | $2.50B–$2.56B | No guidance | no current guidance |
Non-GAAP Operating Margin | Q3 2024 | 26.8%–27.5% | No guidance | no current guidance |
Non-GAAP EPS | Q3 2024 | $1.15–$1.20 | No guidance | no current guidance |
Revenue | Q4 2024 | No prior guidance | $2.53B–$2.59B | no prior guidance |
GMV | Q4 2024 | No prior guidance | $18.9B–$19.3B | no prior guidance |
Non-GAAP Operating Margin | Q4 2024 | No prior guidance | 26.5%–27.0% | no prior guidance |
Non-GAAP EPS | Q4 2024 | No prior guidance | $1.17–$1.20 | no prior guidance |
Share Repurchase | Q4 2024 | No prior guidance | $750 million in Q4 | no prior guidance |
Dividend | Q4 2024 | No prior guidance | $0.27 per share | no prior guidance |
Non-GAAP Operating Margin | FY 2024 | 60–100 bps expansion | 60–70 bps expansion | lowered |
Non-GAAP EPS Growth | FY 2024 | 12%–14% | 13%–14% | raised |
Free Cash Flow | FY 2024 | Just under $2B | Just under $2B | no change |
Capital Expenditure | FY 2024 | 4%–5% of revenue | ~4.5% of revenue | no change |
Non-GAAP Tax Rate | FY 2024 | 16.5% | 16.5% | no change |
Share Repurchase Target | FY 2024 | ≥$2.5B | $3B total for 2024 | raised |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q3 2024 | $2.50B – $2.56B | $2.576B | Beat |
Non-GAAP EPS | Q3 2024 | $1.15 – $1.20 | $1.28 | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Focus Categories | Consistently highlighted as key GMV drivers in prior quarters (Q2, Q1, Q4) with steady year-over-year growth and category-specific innovations. | Double-digit growth in collectibles, continued strength in luxury, parts & accessories, and refurbished. | Continues to be a core growth driver across all periods. |
Advertising and Financial Services | Advertising grew consistently (e.g., +8% in Q2 and +20% in Q1); financial services saw less discussion, though expansions were noted in payments partnerships. | Advertising revenue up 11% year-over-year; financial services expanded with $40M in seller capital. | Key revenue contributors, with first-party ads and new seller capital offerings driving growth. |
Shifting Monetization Strategies | Fee eliminations in Q1 (pre-owned apparel in the UK); minimal changes in Q2; Q4’s take rate (~13.8%) remained stable. | Eliminated seller fees in UK C2C; take rate at ~14.1%, planning to re-monetize via shipping, ads, and buyer fees. | Expanding free-to-list approach and re-monetizing through alternative revenue streams. |
Macro Headwinds (UK, Germany) | Repeatedly noted in Q2, Q1, and Q4 as headwinds, impacting discretionary categories and C2C trading sentiment. | Challenging consumer confidence persisted; P&A remained strong; localized strategies offset some GMV pressure. | Persistent but partially mitigated by focus category growth and localized initiatives. |
Competition from Large Players (Temu, Shein) | Q4 2023 call mentioned no significant impact from new low-priced entrants like Temu and Shein. | No direct mention in Q3. | No ongoing references; not cited as a major concern in recent calls. |
Supply Chain & Geopolitical Risk (China) | Sparse direct references in earlier quarters; mostly discussed in the context of ensuring stable inventory for cross-border trade. | Reiterated cross-border trade with forward-deployed inventory to minimize geopolitical disruptions. | Stable approach; no major escalations in supply chain or geopolitical risks noted. |
Cross-Border Trade | Constantly cited as a core aspect of GMV expansion in prior quarters (Q2, Q1, Q4), bolstered by authentication centers and broad category coverage. | A significant growth driver, with ~$400M in incremental international listings and strong exports from China/Japan. | Sustained importance, with continual investment and notable GMV contributions. |
Emerging Use of AI-Driven Features | Regularly expanding AI tools for listings, image enhancements, and ad optimization in Q2, Q1, and Q4. | Launched second-gen LLMs (Lilium), Magic Listing, and Magical Bulk Listings; 10M+ sellers leveraging generative AI tools. | Growing deployment of generative AI, improving seller efficiency and GMV potential. |
Balance Between Margin Expansion & Investment | Prior quarters (Q2, Q1, Q4) also balanced 60–100 bps margin expansion targets with strategic spending on categories, AI, and marketing. | Expects 60–70 bps of non-GAAP margin expansion for 2024 while funding Q4 initiatives; 2025 plans focus on GMV growth plus margin gains. | Ongoing discipline, investing in growth while steadily enhancing margins. |
C2C Initiatives in Europe | Seen in Q2, Q1, and Q4 with pilot programs in Germany leading to higher customer satisfaction and incremental GMV; partial rollout in the UK. | Expanded in the UK (fee elimination, local pickup improvements), building on Germany’s prior success; unlocking more seller/buyer engagement. | Scaling across markets, aiming to unlock new TAM by reducing friction for consumer sellers. |
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Future Growth Outlook
Q: What gives you confidence in sustainable growth?
A: We are seeing momentum in our focused categories with 5% growth, and have had two quarters of nearly flat growth in core categories. Active buyers grew 1% to 133 million. Investments in new initiatives like C2C in the UK and Germany expand our TAM significantly, giving us confidence in continued growth in 2025. -
Impact of C2C Initiatives
Q: How are C2C efforts affecting your business?
A: Our C2C initiatives in Germany increased seller CSAT by 20 percentage points, leading to healthier trends and improved profitability. These efforts bring unique inventory, driving demand from enthusiast buyers, and create a flywheel effect benefiting both C2C and B2C sellers. We're excited about expanding this model to the UK. -
Competitive Positioning in Collectibles
Q: How are you addressing competition in collectibles?
A: We feel great about our innovation in collectibles, seeing double-digit growth in trading cards. Our acquisitions like TCGplayer and Goldin have strengthened our position, offering everything from ungraded cards to high-value items. We've introduced features like collections, price guides, and seamless grading partnerships, which collectors have long requested. -
AI Initiatives Boosting Growth
Q: Is AI impacting volume growth?
A: Yes, we are outperforming public benchmarks in descriptions, titles, and pricing, with precision pricing increasing by double digits. Over 10 million sellers have used our AI tools, enhancing over 100 million listings, generating several billion dollars in cumulative GMV from AI-enhanced listings. We're excited by the performance we're seeing in AI. -
Growth in Parts & Accessories
Q: What's driving strength in parts and accessories?
A: Our continuous innovation over the past years, including improvements in Fitment, product finders, MyGarage (now with over 100 million cars), and guaranteed fit, have increased customer satisfaction. Breadth of inventory, with over 600 million unique listings, and services like tire and parts installation have contributed to P&A being our largest growth contributor. -
Take Rate and Revenue Implications
Q: What are the factors affecting take rate next year?
A: While we eliminated final value fees for sellers in the UK C2C initiative, we'll monetize through managed shipping and buyer fees. We expect advertising to continue growing faster than GMV, driven by promoted listings and off-site ads. Financial services will also contribute incremental revenue in 2025. -
Healthier Trends in Germany
Q: Are German profitability and top-line improving?
A: Yes, we're seeing improvements in both. Healthier C2C business with 20% greater CSAT is driving more new and reactivated sellers who end up buying more, leading to improved trends and profitability in Germany. -
One-off Factors Impacting Q4 Guidance
Q: What one-offs are affecting Q4 growth guidance?
A: Factors include upcoming U.S. elections, a shorter holiday season, and impacts from Hurricane Milton, particularly in P&A, shipping, and deliveries. We believe our guidance balances strong execution with these macro factors. -
Cross-border Trade and China
Q: How is your business in China performing?
A: Our cross-border trade from China remains strong, overindexing in focus categories like parts and accessories. We've made it easier for buyers and sellers with improved shipping and payments. Deprecation of Amex had no material impact, as customers migrated to other payment options. -
Improved Satisfaction Boosting Conversion
Q: How have CSAT improvements affected conversion rates?
A: Increases in CSAT by 20 percentage points in focus categories and markets like Germany have led to healthier trends and growth. Higher CSAT drives higher conversion, and our active buyer growth is an output of these strategic initiatives, bringing more compelling inventory and benefiting long-term business health.