eBay (NASDAQ:EBAY) reported second-quarter results that exceeded its guidance ranges and consensus expectations, driven by growth in focused categories, consumer-to-consumer sales, recommerce and newer initiatives including eBay Live, vehicles and shipping.
Gross merchandise volume, or GMV, increased 14% year over year on an organic, foreign-exchange-neutral basis to $22.4 billion, while revenue rose 14% to $3.13 billion. Non-GAAP operating income increased 16% to $893 million, and non-GAAP earnings per share grew 17% to $1.60.
Focused Categories Drive Marketplace Growth
Focused-category GMV rose 26% in the second quarter and surpassed 40% of eBay’s total GMV for the first time. Collectibles, motors, fashion and refurbished goods all contributed to the increase.
Collectibles benefited from continued demand for trading cards, particularly basketball cards during the NBA Finals and soccer cards around the FIFA World Cup, Iannone said. The company expanded its Authenticity Guarantee for trading cards to the United Kingdom, its first expansion of that service in the category outside North America. Its AI-powered card-scanning tool has now exceeded 80 million cumulative scans.
eBay Motors contributed nearly two percentage points of GMV growth, according to the company. The business includes both parts and accessories as well as vehicles, with parts and accessories representing the larger, more established portion. In the U.K., eBay launched free and easier returns for auto parts, while Canada received eBay Guaranteed Fit and automated fitment capabilities for sellers.
Vehicle GMV also continued to scale, particularly among C2C sellers and smaller dealers. The company launched native vehicle listings in its mobile app and said automation around title, VIN and odometer verification helped reduce the average time to vehicle pickup to roughly four days from more than two weeks.
Fashion GMV grew, led by luxury and pre-loved inventory. eBay expanded Authenticity Guarantee coverage to more than 100 apparel, footwear and accessory brands in the U.S. and U.K. and extended jewelry eligibility to items sourced from greater China.
Depop Acquisition Expands C2C Fashion Strategy
On July 30, eBay completed its acquisition of fashion marketplace Depop for $1.4 billion in cash, including a $1.2 billion purchase price and approximately $200 million of net purchase-price adjustments. The adjustments mainly reflected investments made by Etsy and Depop before the transaction closed.
Iannone said Depop broadens eBay’s fashion portfolio and gives it greater reach among younger consumers. Depop had approximately 7 million buyers when the acquisition was announced and nearly 9 million active buyers in the second quarter, according to Chief Financial Officer Peggy Alford.
Management said it intends to preserve Depop’s brand, community and product experience while using eBay’s larger customer base, shipping capabilities, trust tools and marketplace infrastructure to support growth. Planned investments are centered on full-funnel marketing and shipping affordability, particularly for lower-priced fashion purchases where shipping can represent a significant share of the total cost.
eBay expects Depop to become accretive to consolidated non-GAAP operating income in 2028. For the third quarter, however, Depop is expected to reduce consolidated non-GAAP operating-income growth by three to four percentage points and create a mid-single-digit headwind to non-GAAP EPS growth.
Live Commerce, AI and Advertising Expand
eBay Live posted another record quarter, with GMV increasing roughly eightfold year over year. The company recently began self-service onboarding for eligible U.S. sellers across more than 300 categories, moving beyond its prior invite-only model.
Iannone said that among established sellers who stream regularly, more than 90% increase their GMV on eBay, while median GMV growth is roughly three times that of similar sellers who do not use Live. First-time Live buyers in collectibles spend about 70% more than comparable non-Live buyers, with roughly half of the incremental spending occurring outside Live events, he said.
The company also continued deploying AI tools. Its latest “magical listing” system has been fully rolled out to new and reactivated listers in the U.K., Germany and Australia. The tool uses AI and eBay’s product knowledge graph to simplify listing creation. Australia is the first market where eBay has expanded the latest version to all C2C sellers.
Advertising revenue reached $596 million in the quarter, representing nearly 2.7% of GMV. First-party advertising revenue grew 24% to $570 million, while off-platform advertising increased 21%, primarily due to growth at Qoo10 in Japan. Promoted Listings now cover nearly 1.3 billion of eBay’s 2.6 billion listings, and 5.7 million sellers used at least one promoted-listing product during the quarter.
Outlook Raised for Full Year
For the third quarter, eBay forecast consolidated GMV of $22 billion to $22.4 billion, representing foreign-exchange-neutral growth of 10% to 12%. The outlook includes a projected 2.5-percentage-point contribution from Depop in a partial quarter. Organic GMV growth is expected to be 7% to 9%.
Third-quarter revenue is expected to range from $3.07 billion to $3.12 billion, or 8% to 10% foreign-exchange-neutral growth. The company projected non-GAAP operating-income growth of 1% to 5% and non-GAAP EPS of $1.36 to $1.42.
For the full year, eBay raised its outlook to consolidated FX-neutral GMV growth of 11.5% to 12.5% and revenue growth of 11% to 12%. It expects non-GAAP operating income and non-GAAP EPS each to grow 10% to 12%.
The company generated $326 million in free cash flow during the second quarter and returned nearly $450 million to shareholders through $310 million of stock repurchases and $138 million in dividends. Its board declared a third-quarter cash dividend of $0.31 per share, payable in September.
About eBay (NASDAQ:EBAY)
eBay Inc is a global e-commerce company that operates an online marketplace connecting individual consumers and businesses for the sale and purchase of new, used and collectible goods. Founded in 1995 by Pierre Omidyar and headquartered in San Jose, California, eBay grew from its early auction-style site into a diversified platform offering both auction-format listings and fixed-price “Buy It Now” transactions. The company completed an initial public offering in the late 1990s and has since evolved its platform and services to support a broad range of product categories and buyer preferences.
The company’s core business centers on its marketplace platform, which provides listing, search and transaction capabilities for millions of items across consumer goods, electronics, fashion, collectibles and more.
