Core Viewpoint - eBay's stock is experiencing a significant decline of approximately 9% following a mixed earnings report, raising concerns among investors about future profitability and margin pressures ahead of the holiday shopping season [1] Financial Performance - eBay reported earnings and revenue that exceeded estimates, indicating strong performance in those areas [1] - Despite beating earnings and revenue expectations, the company's profit forecast for the current quarter fell short of investor expectations [1] Market Reaction - Prior to the decline, eBay's stock had increased by about 61% year-to-date, but the current drop has adjusted this figure to approximately 44% year-to-date [1]

Core Viewpoint - eBay's stock dropped approximately 10.6% in pre-market trading despite reporting better-than-expected third-quarter sales and earnings [1] Financial Performance - eBay's third-quarter sales increased by 9% year-over-year to $2.82 billion, surpassing market expectations of $2.73 billion [1] - Adjusted earnings per share were $1.36, slightly above the market expectation of $1.33 [1] - The total gross merchandise volume for the period was $201 billion, reflecting a 10% year-over-year growth [1] Future Guidance - For the fourth quarter, eBay's sales guidance midpoint is $2.86 billion, slightly above the market expectation of $2.8 billion [1] - Earnings per share guidance is projected between $1.31 and $1.36, which is below the expected $1.38 [1]

Core Insights - The Q3 earnings season is expected to be volatile, with stocks needing to justify their all-time record valuations amidst a challenging macroeconomic environment [1] Group 1 - The current earnings season is early, indicating potential volatility for stocks [1] - Companies are under pressure to defend high valuations in light of economic challenges [1] - The experience of analysts covering technology companies and startups is influencing the understanding of industry trends [1]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

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Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) grew 8% to $20.1 billion, with revenue increasing over 8% to $2.82 billion, and non-GAAP earnings per share rising over 14% year-over-year to $1.36 [5][27] - Non-GAAP operating income grew 9% year-over-year to $764 million, with a non-GAAP operating margin of 27.1% [27][32] - Free cash flow generated was $803 million, with cash and non-equity investments totaling $5.3 billion and gross debt at $6.8 billion [32] Business Line Data and Key Metrics Changes - Focus categories GMV growth accelerated to over 15%, with collectibles being the largest contributor, particularly in collectible card games and sports trading cards [5][7] - Motors Parts and Accessories (P&A) contributed significantly to GMV growth, with over 750 million live listings [9] - Fashion categories, including luxury and pre-loved apparel, also drove GMV growth, supported by partnerships like the one with Marks & Spencer [10] Market Data and Key Metrics Changes - U.S. market GMV growth accelerated to nearly 13%, while international GMV grew nearly 4% on an FX-neutral basis [28][29] - The UK C2C initiative saw notable improvements, contributing to overall acceleration in UK volume growth [29][14] - The removal of the de minimis exemption for imports under $800 created challenges for cross-border trade into the U.S., impacting growth [22][28] Company Strategy and Development Direction - The company is focused on enhancing its marketplace through innovations like eBay Live and AI-driven tools to improve user experience [12][25] - The acquisition of TIES aims to strengthen the company's position in the circular economy and expand its presence in the Nordics [15] - Continued investment in AI technologies is expected to transform the shopping experience and improve seller interactions [16][25] Management Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges but expressed confidence in the company's growth strategy and the resilience of its marketplace [5][24] - The company anticipates a modest deceleration in GMV growth in Q4 due to various headwinds, including the full impact of the de minimis change [33][34] - For 2026, the company plans for continued positive FX-neutral GMV and revenue growth, while being mindful of potential lapping dynamics [37][38] Other Important Information - The company returned approximately $760 million to shareholders through repurchases and cash dividends [27] - Non-GAAP gross margin was 71.6%, with total advertising revenue reaching $525 million, representing GMV penetration of 2.6% [30][31] - The company is committed to maintaining a strong culture and has received recognition for its workplace environment [24] Q&A Session Summary Question: Insights on AI's impact on eBay's business - Management highlighted AI's potential to unlock supply for consumers and enhance user experience through improved recommendations and search capabilities [44][46] Question: Margins and investment strategies - Management discussed balancing long-term growth with margin flow-through, noting increased product development expenses aimed at strategic initiatives [50][52] Question: Sustainability of growth in trading cards - Management expressed confidence in the long-term growth of trading cards, attributing recent success to trust and innovation in the category [71]

Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) grew 8% to $20.1 billion, with revenue increasing over 8% to $2.82 billion, and non-GAAP earnings per share rising over 14% year-over-year to $1.36 [5][27] - Non-GAAP operating income grew 9% year-over-year to $764 million, with a non-GAAP operating margin of 27.1% [27][32] - Free cash flow generated was $803 million, with cash and non-equity investments totaling $5.3 billion and gross debt at $6.8 billion [32] Business Line Data and Key Metrics Changes - Focus categories GMV growth accelerated to over 15%, with collectibles being the largest contributor, particularly in trading cards [5][7] - Motors parts and accessories (P&A) contributed significantly to GMV growth, with over 750 million live listings [9] - Fashion categories, including luxury and pre-loved apparel, also drove GMV growth, supported by partnerships like the one with Marks & Spencer [10] Market Data and Key Metrics Changes - U.S. GMV growth accelerated to nearly 13%, while international GMV grew nearly 4% on an FX-neutral basis [28] - The U.K. C2C initiative saw notable improvements, contributing to overall volume growth [29] - Cross-border trade faced challenges due to the removal of the de minimis exemption, impacting year-over-year volume growth [28][29] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance the selling experience and improve buyer engagement through features like Magical Listing and AI shopping agents [16][25] - Expansion into live commerce through eBay Live is seen as a strategic growth vector, with significant momentum in the U.S. and plans for further expansion in Europe [12][25] - The acquisition of Tise aims to strengthen the company's position in the circular economy and enhance its presence in the Nordics [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges but expressed confidence in the company's growth strategy and the resilience of its marketplace [5][24] - The outlook for Q4 includes expected GMV between $20.5 billion and $20.9 billion, reflecting durable growth trends [33] - Management highlighted the importance of balancing top-line growth with margin flow-through, indicating ongoing investments in strategic initiatives [52][41] Other Important Information - The company returned approximately $760 million to shareholders through repurchases and cash dividends [27] - Non-GAAP gross margin was 71.6%, with a slight decline attributed to managed shipping and traffic acquisition costs [31] - The company plans to repurchase approximately $2.5 billion of shares for the full year [36] Q&A Session Summary Question: Insights on AI's impact on eBay's business - Management discussed the potential of AI to unlock supply for consumers and enhance the shopping experience through improved recommendations and discovery [44][46] Question: Margins and investment strategies - Management elaborated on balancing long-term growth with margin flow-through, noting increased product development expenses and strategic investments [50][52] Question: Sustainability of growth in trading cards - Management expressed confidence in the long-term growth of trading cards, driven by trust and innovation, while acknowledging that growth may not be linear [71]

Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) grew 8% to $20.1 billion, with revenue increasing over 8% to $2.82 billion, and non-GAAP earnings per share rising over 14% year-over-year to $1.36 [4][27] - Non-GAAP operating income grew 9% year-over-year to $764 million, with a non-GAAP gross margin of 71.6% and a non-GAAP operating margin of 27.1% [27][31] - Free cash flow reached $803 million, with cash and non-equity investments totaling $5.3 billion and gross debt at $6.8 billion [32] Business Line Data and Key Metrics Changes - Focus categories GMV growth accelerated to over 15%, with collectibles being the largest contributor, particularly in collectible card games and sports trading cards [4][5] - Motors Parts and Accessories (P&A) contributed significantly to GMV growth, with over 750 million live listings [7][8] - Fashion categories, including luxury and pre-loved apparel, also drove GMV growth, supported by partnerships like the one with Marks & Spencer [8][9] Market Data and Key Metrics Changes - U.S. market GMV growth accelerated to nearly 13%, while international GMV grew nearly 4% on an FX-neutral basis [28][29] - The UK C2C initiative saw notable improvements in customer satisfaction and GMV growth, with the introduction of managed shipping [12][29] - The removal of the de minimis exemption for imports under $800 created challenges for cross-border trade into the U.S. [22][23] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance the selling experience and improve buyer engagement through features like Magical Listing and AI Shopping Agent [15][16] - Expansion of eBay Live into new markets is seen as a strategic growth vector, with significant momentum in the U.S. and UK [10][11] - The acquisition of TIES aims to strengthen the company's position in the circular economy and enhance its presence in the Nordics [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of growth trends, despite facing macroeconomic challenges and changes in trade policy [4][28] - The company anticipates continued growth in focus categories and is investing in strategic initiatives to drive long-term growth [25][41] - For Q4, GMV is expected to be between $20.5 and $20.9 billion, with revenue guidance between $2.83 and $2.89 billion [33][34] Other Important Information - The company returned approximately $760 million to shareholders through repurchases and cash dividends [27] - The advertising revenue grew nearly 23%, with first-party ads contributing significantly to this growth [20][30] - The company plans to repurchase approximately $2.5 billion of shares for the full year [39] Q&A Session Summary Question: Insights on AI's impact on eBay's business - Management highlighted AI's potential to unlock supply for consumers and enhance user experience through improved recommendations and search capabilities [44][45] Question: Margins and investment strategies - Management discussed balancing long-term growth with margin flow-through, noting increased product development expenses aimed at strategic initiatives [48][49] Question: Sustainability of growth in trading cards - Management expressed confidence in the long-term growth of trading cards, driven by trust and innovation, while acknowledging that growth may not be linear [64][66]

Core Insights - eBay reported quarterly earnings of $1.36 per share, exceeding the Zacks Consensus Estimate of $1.33 per share, and up from $1.19 per share a year ago, representing an earnings surprise of +2.26% [1] - The company achieved revenues of $2.82 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.90% and increasing from $2.58 billion year-over-year [2] - eBay shares have increased approximately 60.7% year-to-date, significantly outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of eBay's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $1.37 on revenues of $2.81 billion, and for the current fiscal year, it is $5.46 on revenues of $10.87 billion [7] Industry Context - The Internet - Commerce industry, to which eBay belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact eBay's stock performance [5]

Q3 2025 Performance Highlights - eBay's Gross Merchandise Volume (GMV) reached $20.1 billion [7], exceeding guidance of $19.2 - $19.6 billion [43]. - Revenue for Q3 2025 was $2.8 billion [7], surpassing the guided range of $2.69 - $2.74 billion [43]. - Non-GAAP operating margin stood at 27.1% [7], hitting the high end of the guidance [43]. - Diluted Non-GAAP EPS was $1.36 [7], above the guidance of $1.29 - $1.34 [43]. - eBay has 16 million Enthusiast Buyers [7], defined as buyers with at least 6 purchase days and $800+ annual spend [9]. Category Growth & Strategic Initiatives - Focus Categories (Collectibles, Motors Parts & Accessories, Fashion) grew +15% year-over-year on an FX-Neutral basis [12], outpacing the rest of the marketplace by approximately 11 percentage points [12]. - eBay Live's annual GMV run-rate increased by approximately 5x year-over-year [14]. - Over $1 billion has been disbursed to sellers globally through financing partners since 2021 via Seller Capital [37]. Q4 2025 Guidance - GMV is projected to be between $20.5 - $20.9 billion [72], representing a 6%-8% spot growth [72]. - Revenue is expected to be in the range of $2.83 - $2.89 billion [72], indicating a 10%-12% spot growth [72]. - Non-GAAP operating margin is guided to be 25.8% - 26.3% [72]. - Diluted Non-GAAP EPS is projected to be $1.31 - $1.36 [72], reflecting a 5%-9% growth [72]. FY 2025 Guidance - GMV is expected to be $78.9 - $79.3 billion [73], with a 6% - 6% spot growth [73]. - Revenue is projected to be $10.97 - $11.03 billion [73], showing a 7% - 7% spot growth [73]. - Non-GAAP operating margin is guided to be 27.7% - 27.8% [73]. - Diluted Non-GAAP EPS is expected to be $5.42 - $5.47 [73], representing an 11% - 12% growth [73]. - The company anticipates approximately $1.5 billion in Free Cash Flow (FCF) in FY'25 [73].