Earnings Call Insights: eBay Inc. (EBAY) Q3 2025
Management View
- CEO Jamie Iannone reported “better-than-expected results across our key financial metrics in Q3,” highlighting gross merchandise volume (GMV) growth of 8% to $20.1 billion, revenue up 8% to $2.82 billion, and non-GAAP EPS up 14% year-over-year to $1.36. Iannone stated, “Focus category GMV growth accelerated to over 15% in Q3, outpacing the remainder of our marketplace by roughly 11 percentage points.” He emphasized collectibles as the largest contributor, with Pokémon GMV growing in the triple digits for the third straight quarter. Iannone also pointed to strong momentum in motor parts and accessories, fashion, and the expansion of eBay Live, noting, “eBay Live’s annual GMV run rate was up approximately 5x year-over-year.”
- Iannone discussed AI integration, stating, “We are well positioned to continue improving the on-eBay experience with agentic tools, touching more of the end-to-end shopping journey, but also connect to compelling third-party agentic experiences.” He highlighted the rollout of an AI assistant for member-to-member messaging in the U.S., U.K., and Australia, increased use of generative AI in listings, and new partnerships such as the acquisition of Tise in the Nordics.
- CFO Peggy Alford stated, “Our non-GAAP operating income grew 9% year-over-year to $764 million. Non-GAAP earnings per share grew over 14% year-over-year to $1.36, and we returned approximately $760 million to shareholders through repurchases and cash dividends.” Alford detailed that U.S. GMV growth accelerated to nearly 13%, while international GMV grew nearly 4%. She noted a “modest year-over-year headwind” from U.K. C2C and highlighted first-party advertising revenue growth of nearly 23%, with total advertising revenue at $525 million.
Outlook
- For Q4, eBay expects GMV between $20.5 billion and $20.9 billion, representing FX-neutral growth between 4% and 6% year-over-year. Revenue is forecasted between $2.83 billion and $2.89 billion, with FX-neutral growth of 8% to 10%. Alford said, “Our guidance reflects a continuation of the durable growth trends we’ve observed in recent quarters, driven by our momentum in focused categories and other strategic initiatives.”
- Non-GAAP EPS guidance for Q4 is between $1.31 and $1.36, representing year-over-year growth of 5% to 9%. Alford added, “We expect reported free cash flow of approximately $1.5 billion for this year…On a normalized basis, free cash flow is expected to be roughly $2.5 billion for 2025.”
- For 2026, eBay is planning for “a third consecutive year of positive FX-neutral GMV and revenue growth” but highlighted lapping dynamics in trading cards, bullion, coins, and marketing efficiency as factors that could temper growth.
Financial Results
- Q3 GMV grew 8% to $20.1 billion, revenue rose over 8% to $2.82 billion, non-GAAP operating income reached $764 million, and non-GAAP EPS was $1.36. Free cash flow totaled $803 million, with $625 million in share repurchases and a dividend of $0.29 per share paid in September.
- Non-GAAP gross margin was 71.6%, down over 80 basis points year-over-year due to managed shipping, marketing expenses, and FX. Non-GAAP operating margin was 27.1%, down 10 basis points year-over-year. Total advertising revenue hit $525 million, with first-party ads at $496 million.
- Trailing 12-month active buyers were over 134 million, up 1% year-over-year, and spend per enthusiast buyer surpassed $3,200.
Q&A
- Scott Devitt, Wedbush: Asked about AI’s impact on eBay’s future connections and advertising. Iannone responded, “One of the biggest opportunities for us…is to really be that unlocker of supply for consumers across the world.” He emphasized listing ease, AI-driven discovery, and rapid innovation, stating, “Every quarter, AI is becoming more embedded throughout our experience.”
- Nikhil Devnani, Bernstein: Inquired about margins and investments. Alford noted, “We’re really trying to balance driving long-term growth and then returning and flowing through upside to the bottom line…We were investing in product development against some of our very strategic initiatives, including eBay Live, our shipping solutions…vehicles business as well.”
- Nathaniel Feather, Morgan Stanley: Sought clarity on durable vs. transitory growth. Iannone said, “We did see some GMV upside from what we would characterize as transitory factors…but we do believe the majority of our growth was durable in nature.”
- Deepak Mathivanan, Cantor Fitzgerald: Asked about AI agent partnerships and deployment. Iannone discussed the unified agentic commerce platform, AI shopping assistant, and leveraging 30 years of data for discovery and recommendations.
- Andrew Northcutt, Wolfe Research: Focused on trading cards sustainability. Iannone replied, “We see a long runway of growth for trading cards…most of the recent growth has been driven by the trust and the innovation that we’ve driven for hobbyists over the last several years.”
- Michael Morton, MoffettNathanson: Asked about vehicles business and ads attribution. Iannone explained, “We’re focused…in the collectible car market, which is about a $75 billion addressable market…we think there’s really nice synergies from both the buyer and the seller base there.” Alford added, “Caramel’s effective take rate will fall to the low to mid-single-digit range…the revenue contribution also so far this year has been immaterial.”
- Thomas Champion, Piper Sandler: Asked about buyer growth and Facebook Marketplace. Iannone said, “Top of the funnel is important for us, but we are very focused on driving active buyers to become enthusiast buyers.”
- Andrew Boone, Citizens: Queried about narrowing GMV/revenue gap and magical listings. Iannone noted, “What we see with magical listings is really kind of an unlock of more inventory when sellers are starting to use it.”
- Ygal Arounian, Citi: Sought more detail on 2026 guidance and de minimis impact. Alford stated, “We do expect the gap between GMV and revenue growth to be relatively narrow in 2026…fewer imports into the U.S. by CBT sellers, which slightly pressures our advertising and financial services monetization.”
Sentiment Analysis
- Analysts displayed a positive but probing tone, with repeated focus on margin durability, AI-driven growth, and the sustainability of trading card and vehicle segment gains. Questions reflected interest in long-term growth vectors and the balancing of reinvestment and profitability.
- Management maintained a confident, constructive tone throughout the call, consistently emphasizing strategic momentum and innovation. Iannone expressed confidence, “We are well positioned for continued long-term sustainable growth as we reinvent the future of e-commerce for enthusiasts.” In Q&A, management was detailed and forthcoming but acknowledged transitory boosts and macro uncertainties, showing a slightly more cautious tone on headwinds than in the previous quarter.
- Compared to Q2, both management and analysts maintained a positive outlook, but there was more emphasis on macro risks and headwinds from trade policy in Q3.
Quarter-over-Quarter Comparison
- Guidance for Q4 GMV and revenue is higher than Q3 actuals, reflecting continued confidence but includes caution about a “modest deceleration in GMV growth” due to lapping tough comps in trading cards and the full quarter impact of de minimis changes.
- Management’s tone remains confident but is more measured, with explicit acknowledgment of headwinds and “lapping dynamics” in 2026.
- Strategic focus has shifted further toward AI and agentic commerce, live commerce expansion, and vehicles, while analysts continue to probe margin leverage and the durability of focus category gains.
- Key metrics—GMV, revenue, advertising, and active buyers—all showed sequential acceleration from Q2 to Q3.
Risks and Concerns
- Management cited macroeconomic challenges internationally and incremental cost and friction for cross-border trade into the U.S. following the elimination of the de minimis exemption for imports under $800.
- Alford highlighted “an uptick in returned and canceled orders,” a “modest year-over-year headwind” from U.K. C2C, and foreign exchange pressures.
- The full quarter impact of de minimis changes is expected to pressure take rates, advertising, and financial services in Q4 and into 2026.
- Analysts raised concerns about margin flow-through, the temporary nature of some growth drivers, and the sustainability of trading cards and vehicles GMV.
Final Takeaway
eBay management emphasized that Q3 results reflect strong execution in focus categories, innovation in AI and live commerce, and effective responses to shifting trade policy and macro challenges. The company expects to continue investing in strategic initiatives while navigating headwinds from regulatory changes and market dynamics, signaling sustained long-term growth as it expands its platform and product capabilities.