EBAY INC (EBAY)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 results: Revenue $2.58B (+1% YoY), GMV $19.32B (+4% YoY), GAAP EPS $1.40, non-GAAP EPS $1.25; non-GAAP operating margin 27.0% .
• Focus categories and AI initiatives drove acceleration; trading cards returned to healthy double-digit growth and P&A sustained mid-single-digit GMV growth, while ad revenue reached $445M (2.3% of GMV), first-party ads +16% YoY .
• Quarter set up 2025: Q1 guidance Revenue $2.52–$2.56B, GMV $18.3–$18.6B, GAAP EPS $0.98–$1.02, non-GAAP EPS $1.32–$1.36; dividend raised to $0.29/share .
• Management highlighted tailwinds (AI, ads, UK C2C overhaul) and headwinds (FX, potential tariff changes, calendar factors); at least $2B buybacks planned for 2025 and dividend increase a capital return catalyst .

What Went Well and What Went Wrong

• What Went Well

  • Ads and monetization: Total ad revenue $445M (2.3% of GMV), first-party ads $434M (+16% FX-neutral YoY); broadened adoption and product optimization in Promoted Listings .
    “First-party advertising accelerated to 16%... ad revenue grew nearly 12% to $445 million” .
  • Category momentum: Trading cards were the largest GMV contributor in Q4 with healthy double-digit growth; P&A grew mid-single digits for the second consecutive year; >700M live P&A listings .
    “Trading cards volume accelerated to healthy double-digit growth… P&A inventory grew by double digits during Q4” .
  • AI-enabled execution: Proprietary LLMs and “magical listing” scaled (10M sellers, 100M+ listings, several $B GMV); improved accuracy and lower latency/costs .
    “We achieved 30% improved accuracy… 8x smaller model, 10x lower latency” .

• What Went Wrong

  • Take-rate pressure from UK C2C changes: Eliminated final value fees created ~50bps headwind; take rate 13.3% (down ~40bps YoY) in Q4, partly offset by ads/financial services/shipping .
  • Macro and calendar headwinds: Europe (UK, Germany) remain challenged; Q1 outlook tempered by tariff uncertainty and leap-year/Easter timing effects .
  • GAAP tax volatility: GAAP effective tax rate swung to (10.3)% in Q4 (vs 29.4% prior year), driving GAAP EPS above non-GAAP; highlights non-repeatable items impact .

Financial Results

Notes: Management said Q4 results “met or exceeded expectations” but Street consensus from S&P Global was unavailable at time of analysis .

Segment and Monetization Metrics

KPIs and Other

Guidance Changes

Management also reiterated full-year 2025 architecture (low-single-digit FX-neutral GMV growth; non-GAAP EPS high-single-digit growth; non-GAAP OI growth roughly in line with revenue) and at least $2B buybacks in 2025 .

Earnings Call Themes & Trends

Management Commentary

• “We saw continued topline growth in Q4 as GMV grew by more than 2% to $19.3 billion… Focused categories remained a key driver of overall growth” .
• “First-party advertising accelerated to 16%… ad revenue grew nearly 12% to $445 million, eclipsing 2.3% of GMV” .
• “Over 10 million unique sellers have used our GenAI features… 100 million listings… several billion dollars of GMV” .
• “We introduced buyer protection fees in the U.K. C2C in February… early results slightly better than expectations” .
• “We forecast non-GAAP EPS between $1.32 and $1.36 in Q1… and target share repurchases of at least $2 billion in 2025; dividend raised to $0.29 per share” .

Q&A Highlights

• Tariffs/de minimis exposure: China→US ~5% of GMV; ~¾ forward-deployed inventory already tariffed; SpeedPAK manages remaining cross-border complexity .
• Agentic commerce: Early collaboration with OpenAI Operator; testing integration with Facebook Marketplace to broaden demand while leveraging eBay checkout/protections .
• UK C2C economics: Near-term take-rate headwind; with buyer fees and managed shipping ramp, UK C2C take-rate expected to run slightly higher than pre-initiative levels .
• Margin outlook: 2025 non-GAAP op margins relatively flat, reflecting ~70bps net headwinds (depreciation, managed shipping gross accounting, M&A), partly offset by FX .
• Vehicles/Caramel: Modest volume contribution in 2025 (immaterial Q1); strategic to tap collectible car TAM and drive P&A synergies .

Estimates Context

• S&P Global consensus estimates for Q4 2024 and Q1 2025 were unavailable at the time of this analysis due to data access limits.
• Company indicated Q4 results “met or exceeded expectations across our key financial metrics,” but without Street consensus, formal beat/miss assessment cannot be made .

Key Takeaways for Investors

• AI-driven merchandising and listing automation are materially improving conversion and supply quality; expect continued benefits to GMV and ad monetization as models scale in 2025 .
• Ads attach rising (2.3% of GMV) with first-party growth and product optimization; supports take-rate resilience despite UK C2C fee changes .
• UK C2C overhaul is unlocking recommerce TAM with double-digit uplifts; buyer fees and managed shipping should remonetize and modestly lift UK C2C take rates once fully ramped .
• Near-term headwinds (FX, tariffs uncertainty, calendar) temper Q1 outlook, but 2025 architecture (low-single-digit GMV, high-single-digit non-GAAP EPS growth, $2B+ buybacks) supports capital return thesis .
• Vehicles via Caramel add trust and potential cross-sell to P&A; a strategic wedge into collectible cars with synergy to broader marketplace .
• Watch tax/GAAP volatility: GAAP ETR swings (Q4: -10.3%) can create non-repeatable GAAP EPS surprises; focus on non-GAAP and cash flow for underlying performance .
• Short-term trading: Dividend increase and buyback cadence are supportive; catalysts include continued ads penetration gains, AI feature rollouts, and clarity on tariffs .

Additional Data References

• Q4 2024 8-K and press release details (financial statements, guidance, cash flows) .
• Prior quarters for trend analysis: Q3 2024 PR/8-K and transcript ; Q2 2024 PR/8-K and transcript .
• Caramel acquisition announcements (strategic context) .