EBay (EBAY) beat both the top- and bottom-line estimates in the third quarter and even issued Q4 revenue guidance that surpassed expectations, all of which underscores the outperformance of its Focus category, as well as gains in its motor parts & accessories segment.
“We achieved these strong top and bottom line results amid continued macroeconomic challenges across our international markets and increased headwinds for cross-border trade into the U.S.,” CEO Jamie Iannone said on the company’s earnings call.
Unfortunately, the outlook for compressed margins in the fourth quarter coupled with the challenges facing the company in 2026 has unnerved investors, driving shares sharply lower and below support at its 100-day moving average for the first time since April.
“EBay continues to make investments across its marketplace including its Focus Categories, horizontal initiatives (including AI), eBay Live, vehicles, and geo-specific initiatives,” Citi Research said, adding that the disappointing profit guidance is likely attributed to management “meaningfully accelerating its multiyear roadmap for shipping solutions,” an initiative that will help sellers navigate the changes in trade policies.
For the current quarter, eBay (EBAY) expects to earn an adjusted profit between $1.31 and $1.36 per share with a midpoint of $1.33 that is 2 cents below estimates. Revenue is expected to improve by 8% to 10% (FX neutral) in Q4 to a range of $2.83B to $2.89B, above the consensus estimate. At the same time, gross merchandise volume (GMV) is expected to increase 6% to 8% (FX neutral) which is well above the 4.4% growth rate the street forecasts.
And for FY25, guidance was also upbeat, though tempered by U.S. trade policies’ impact on cross-border sellers.
By FY26, revenue and GMV are still expected to improve, although factors weighing on growth are amplified by a lower cash balance, pressure on net interest income, and potentially higher 2026 non-GAAP tax rate.
Added CFO Peggy Alford, “We expect to face incremental headwinds from annualizing breakage associated with the global de minimis changes. If the current level of impact remains stable throughout 2026, it would result in a headwind to FX-neutral GMV growth of approximately 1 point.”