Earnings Call Insights: eBay Inc. (EBAY) Q2 2025
Management View
- CEO Jamie J. Iannone stated that eBay “delivered another strong quarter in Q2 with all of our key financial metrics, exceeding both consensus expectations and the high end of our respective guidance ranges.” He highlighted that gross merchandise volume (GMV) grew by 4% to $19.5 billion, with revenue rising over 4% to $2.73 billion. Iannone emphasized, “focus category GMV grew by over 10%, outpacing our core categories by 9 percentage points,” and noted momentum in collectibles, particularly trading cards, and the surge in demand for Pokemon cards.
- Iannone also discussed strategic initiatives, including integrating inventory from Goldin Auctions, expanding luxury authentication to the U.K., and leveraging generative AI for listing optimization and CRM personalization. “In late 2024, we introduced AI-generated subject lines and pre-headers for personalized CRM e-mails in the U.S., which drove a greater than 40% increase in quality visits versus our prior approach,” he said.
- The CEO pointed to eBay Live as a major investment area, noting its expansion into new categories and geographies, and ongoing enhancements to seller and buyer experiences.
- CFO Peggy M. Alford said, “GMV grew 4% to $19.5 billion. Revenue grew over 4% to $2.73 billion. Non-GAAP operating income grew 8% to $775 million, and non-GAAP earnings per share grew 16% to $1.37. In addition, we returned approximately $760 million to shareholders through repurchases and cash dividends.”
Outlook
- Alford provided Q3 guidance: “we expect GMV between $19.2 million and $19.6 billion, representing FX-neutral growth between 3% and 5% year-over-year.” She forecasted revenue between $2.69 billion and $2.74 billion, also implying FX-neutral growth of 3% to 5%. Non-GAAP earnings per share are forecast between $1.29 and $1.34, representing year-over-year growth between 8% and 12%. For the full year, she stated, “we now expect non-GAAP earnings per share growth between 10% and 12% year-over-year in 2025.”
- The company highlighted factors possibly affecting the outlook, including “potential disruptions from impending tariffs and the potential elimination of de minimis exemptions on other trade corridors.”
Financial Results
- GMV increased to $19.5 billion, with revenue at $2.73 billion. Non-GAAP operating income rose to $775 million, and non-GAAP EPS reached $1.37. GAAP earnings per share were $0.79. Free cash flow was negative $441 million, attributed to $935 million in cash outflows related to taxes on equity investment sales and repatriation tax.
- Advertising revenue was $482 million, with first-party ads growing 17% to $455 million. Non-GAAP operating margin was 28.4%. The company repurchased $625 million in shares and paid a $134 million dividend.
Q&A
- Eric Sheridan, Goldman Sachs: Asked about marketing efficiency and AI-driven traffic. Iannone responded, “we did see some ability to lean in due to the competitive dynamics and saw some efficiencies there in the marketplace,” and detailed a multipronged AI strategy for personalization and traffic generation.
- Michael Morton, MoffettNathanson: Asked about category growth drivers and buyer behavior from AI search. Iannone indicated growth was “really across the board strength in all focus categories” and noted AI-driven buyers have “a high shopping intent.”
- Nathan Feather, Morgan Stanley: Sought clarity on U.S. vs. international strength and investment priorities. Iannone cited “broad-based strength across different categories as both our sold items and our average selling prices grew year-over-year in Q2,” with investments focused on fashion, C2C initiatives, eBay Live, and AI.
- Ross Sandler, Barclays: Queried ASP drivers and fashion opportunity. Iannone pointed to “growth across sold items and ASP,” driven by China inventory and Klarna partnership, and said, “we do over $10 billion in fashion on the platform.”
- Nikhil Devnani, Bernstein: Asked about trading cards growth durability and margin leverage. Iannone said, “growth has never been linear,” but sees long-term potential, while Alford emphasized, “when GMV grows, we actually get to very healthy margins.”
- Colin Sebastian, Baird: Probed on buyer base and medium-term outlook. Iannone stressed the importance of enthusiast buyers, saying, “active grew 1% year-over-year to 134 million in Q2,” and focused on growing across the funnel.
- Tom Champion, Piper Sandler: Questioned listing growth and Caramel acquisition. Iannone noted “2.4 billion listings…consistently growing double digit year-on-year” and highlighted Caramel’s potential in collectible cars.
- Ygal Arounian, Citi: Raised margin priorities and tariff exposure. Alford said, “our first priority is investing in our business organically to drive sustainable long-term GMV growth,” while Iannone noted, “we did observe some breakage in elasticity relative to tariffs and de minimis in Q2…the net impact to eBay [was] relatively modest.”
- Shweta Khajuria, Wolfe Research: Inquired about ad revenue and GMV growth durability. Iannone projected “a long runway for ads growth,” and expects advertising revenue to “outpace GMV for the foreseeable future.”
- Lee Horowitz, Deutsche Bank: Asked about the international GMV gap and eBay Live’s opportunity. Iannone attributed the gap to macro factors in Europe and said, “Live is a major focus for us for 2025…I’m optimistic that given the level of engagement, the metrics that we’re seeing…we plan to continue to invest and improve this experience.”
Sentiment Analysis
- Analysts expressed a positive to slightly positive tone, focusing on growth drivers, marketing efficiency, AI initiatives, and category expansion. Their questions frequently sought clarity on the sustainability of positive trends and the durability of category momentum.
- Management maintained a confident and optimistic tone in both prepared remarks and Q&A, frequently using phrases such as “we remain confident” and “excited by the work that we’re doing.” In Q&A, management continued to highlight strategic investments and growth initiatives, with no notable defensiveness.
- Compared to the previous quarter, the tone was more upbeat, reflecting stronger results and sequential acceleration in key metrics.
Quarter-over-Quarter Comparison
- Guidance for Q3 2025 is higher, with a 3%–5% growth target for both GMV and revenue, up from the previous quarter’s guidance range. Non-GAAP EPS growth guidance for the full year is now 10%–12%, raised from “high single digits” previously.
- Strategic focus remains on AI-driven personalization, expansion of focus categories, and C2C initiatives, with additional momentum from eBay Live and geographic expansion.
- Analysts shifted from focusing on macro risks and tariff impacts in Q1 to more questions about category growth durability, AI adoption, and new business models in Q2.
- Management’s confidence in sustainable growth and investment in long-term initiatives increased, with more detailed examples of AI and marketing impact than in Q1.
Risks and Concerns
- Management cited potential risks from “impending tariffs and the potential elimination of de minimis exemptions on other trade corridors.”
- Some disruption to direct shipments from Greater China to the U.S. was observed, but “the volume that persisted saw an uplift to ASP.”
- Caution about trading cards growth moderation in Q4 and tougher year-over-year comparisons for the holiday season was noted.
- International macroeconomic challenges, particularly in the U.K. and Germany, were flagged as ongoing risks.
Final Takeaway
eBay’s second quarter results for 2025 reflect broad-based growth, with particular strength in focus categories such as collectibles and fashion, further supported by AI-driven initiatives and expanding advertising revenues. The company raised its full-year earnings guidance and provided higher targets for Q3, while acknowledging that tariff changes and macroeconomic headwinds remain potential challenges. Management emphasized ongoing investment in strategic growth areas and expressed continued confidence in the durability of its marketplace model and the momentum behind its transformation initiatives.