eBay (EBAY) reported $2.57 billion in revenue for the quarter ended June 2024, representing a year-over-year increase of 1.3%. EPS of $1.18 for the same period compares to $1.03 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $2.53 billion, representing a surprise of +1.79%. The company delivered an EPS surprise of +4.42%, with the consensus EPS estimate being $1.13.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they co ...

PART I: FINANCIAL INFORMATION This section presents eBay Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2024 [Item 1: Financial Statements (unaudited)](index=4&type=section&id=Item%201%20Financial%20Statements%20(unaudited)) This section presents eBay Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2024, and December 31, 2023 (for balance sheet) or June 30, 2023 (for income, comprehensive income, stockholders' equity, and cash flows), along with detailed notes explaining significant accounting policies, net income per share, goodwill, intangible assets, segments, investments, derivative instruments, fair value measurements, debt, supplemental financial information, commitments and contingencies, stockholders' equity, employee benefit plans, income taxes, accumulated other comprehensive income, and restructuring activities - The financial statements are unaudited and include normal recurring adjustments necessary for fair statement[33](index=33&type=chunk) - Effective January 1, 2024, the estimated useful lives for servers and networking equipment changed from three to four years, reducing depreciation expense by **$17 million** (Q2 2024) and **$43 million** (YTD Q2 2024), increasing net income by **$12 million** and **$34 million**, respectively[28](index=28&type=chunk) [Condensed Consolidated Balance Sheet](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) This table provides a snapshot of eBay's financial position, detailing assets, liabilities, and equity at specific reporting dates **Condensed Consolidated Balance Sheet Highlights (June 30, 2024 vs. December 31, 2023):** | Metric | June 30, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------------------------- | :----------------------- | :------------------------- | | Total Assets | $20,378 | $21,620 | | Total Liabilities | $14,853 | $15,224 | | Total Stockholders' Equity | $5,525 | $6,396 | | Cash and cash equivalents | $1,963 | $1,985 | | Short-term investments | $3,203 | $2,533 | | Equity investment in Adevinta | $— | $4,474 | | Equity investment in Aurelia | $1,910 | $— | | Short-term debt | $1,551 | $750 | | Long-term debt | $6,174 | $6,973 | [Condensed Consolidated Statement of Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Income) This table presents eBay's financial performance, including revenues, expenses, and net income over specific periods **Condensed Consolidated Statement of Income Highlights (Three Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net revenues | $2,572 | $2,540 | 1% | | Gross profit | $1,837 | $1,822 | 1% | | Income from operations | $549 | $518 | 6% | | Loss on equity investments and warrant, net | $(222) | $(214) | (4%) | | Income from continuing operations before income taxes | $328 | $285 | 15% | | Net income | $224 | $171 | 31% | | Net income per share - diluted | $0.45 | $0.32 | 41% | **Condensed Consolidated Statement of Income Highlights (Six Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net revenues | $5,128 | $5,050 | 2% | | Gross profit | $3,693 | $3,632 | 2% | | Income from operations | $1,180 | $1,076 | 10% | | Loss on equity investments and warrant, net | $(319) | $(16) | (1894%) | | Income from continuing operations before income taxes | $864 | $1,015 | (15%) | | Net income | $662 | $738 | (10%) | | Net income per share - diluted | $1.29 | $1.36 | (5%) | [Condensed Consolidated Statement of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This table outlines eBay's comprehensive income, including net income and other comprehensive income components **Condensed Consolidated Statement of Comprehensive Income Highlights (Three Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Net income | $224 | $171 | | Other comprehensive loss, net of tax | $(6) | $(64) | | Comprehensive income | $218 | $107 | **Condensed Consolidated Statement of Comprehensive Income Highlights (Six Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Net income | $662 | $738 | | Other comprehensive loss, net of tax | $(20) | $(92) | | Comprehensive income | $642 | $646 | [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) This table details changes in eBay's stockholders' equity, reflecting net income, share repurchases, and dividends **Condensed Consolidated Statement of Stockholders' Equity Highlights (Six Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | | :----------------------------------- | :-------------- | :-------------- | | Balance, beginning of period (Total Stockholders' Equity) | $6,396 | $5,268 | | Net income | $662 | $738 | | Common stock repurchased | $(1,512) | $(503) | | Dividends and dividend equivalents declared | $(283) | $(278) | | Balance, end of period (Total Stockholders' Equity) | $5,525 | $5,268 | - Dividends declared per share increased to **$0.54** for the six months ended June 30, 2024, from **$0.50** in the prior year[20](index=20&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This table summarizes eBay's cash inflows and outflows from operating, investing, and financing activities **Condensed Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | | :----------------------------------- | :-------------- | :-------------- | | Net cash provided by operating activities | $982 | $1,442 | | Net cash provided by investing activities | $902 | $424 | | Net cash used in financing activities | $(1,805) | $(1,458) | | Net increase in cash, cash equivalents and restricted cash | $62 | $402 | | Cash, cash equivalents and restricted cash at end of period | $2,555 | $2,674 | - Investing activities in 2024 included **$2.4 billion** in proceeds from the sale of Adevinta shares, offsetting significant purchases of investments[22](index=22&type=chunk) - Financing activities included **$1.483 billion** in common stock repurchases in 2024, compared to **$492 million** in 2023[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 — The Company and Summary of Significant Accounting Policies](index=11&type=section&id=Note%201%20%E2%80%94%20The%20Company%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes eBay's business and outlines the significant accounting policies applied in its financial statements - eBay Inc. is a global commerce leader connecting buyers and sellers in over 190 markets through its Marketplace platforms and mobile apps[25](index=25&type=chunk) - Effective January 1, 2024, the estimated useful lives for servers and networking equipment were changed from three years to four years, resulting in a reduction of depreciation expense by **$17 million** (Q2 2024) and **$43 million** (YTD Q2 2024)[28](index=28&type=chunk) - Immaterial restricted cash balances were reclassified from short-term and long-term investments to other current assets and other assets, respectively, in the balance sheet[34](index=34&type=chunk) - New accounting pronouncements (ASU 2023-07, 2023-08, 2023-09) related to segment reporting, crypto assets, and income tax disclosures are not expected to have a material impact[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 2 — Net Income Per Share](index=15&type=section&id=Note%202%20%E2%80%94%20Net%20Income%20Per%20Share) This note details the calculation of basic and diluted net income per share for eBay **Net Income Per Share (Three Months Ended June 30):** | Metric | 2024 | 2023 | | :----------------------------- | :--- | :--- | | Net income per share - basic | $0.45 | $0.32 | | Net income per share - diluted | $0.45 | $0.32 | **Net Income Per Share (Six Months Ended June 30):** | Metric | 2024 | 2023 | | :----------------------------- | :--- | :--- | | Net income per share - basic | $1.30 | $1.37 | | Net income per share - diluted | $1.29 | $1.36 | [Note 3 — Goodwill and Intangible Assets](index=16&type=section&id=Note%203%20%E2%80%94%20Goodwill%20and%20Intangible%20Assets) This note provides information on eBay's goodwill and identifiable intangible assets, including changes and amortization **Goodwill Activity (Millions):** | Metric | December 31, 2023 | Acquired | Adjustments | June 30, 2024 | | :------- | :---------------- | :------- | :---------- | :------------ | | Goodwill | $4,267 | $69 | $(51) | $4,285 | - Goodwill acquired during the six months ended June 30, 2024, relates to the acquisition of Goldin, a U.S.-based auction house for high-value trading cards and collectibles[50](index=50&type=chunk) **Identifiable Intangible Assets, Net (Millions):** | Metric | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :-------------- | :---------------- | | Customer lists and user base | $54 | $42 | | Marketing related | $42 | $21 | | Developed technologies | $42 | $49 | | All other | $1 | $2 | | Total | $139 | $114 | - Amortization expense for intangible assets was **$9 million** for Q2 2024 and **$17 million** for YTD Q2 2024[51](index=51&type=chunk) [Note 4 — Segments](index=17&type=section&id=Note%204%20%E2%80%94%20Segments) This note describes eBay's operating segments and presents net revenues broken down by geographical regions - The Company has one operating and reportable segment: Marketplace, encompassing its online platform, off-platform businesses in Japan and the U.S., and mobile apps[54](index=54&type=chunk) **Net Revenues by Geography (Three Months Ended June 30):** | Geography | 2024 (Millions) | 2023 (Millions) | | :-------------- | :-------------- | :-------------- | | U.S. | $1,293 | $1,265 | | United Kingdom | $392 | $413 | | China | $291 | $263 | | Germany | $247 | $244 | | Rest of world | $349 | $355 | | Total net revenues | $2,572 | $2,540 | **Net Revenues by Geography (Six Months Ended June 30):** | Geography | 2024 (Millions) | 2023 (Millions) | | :-------------- | :-------------- | :-------------- | | U.S. | $2,595 | $2,526 | | United Kingdom | $782 | $794 | | China | $566 | $500 | | Germany | $489 | $496 | | Rest of world | $696 | $734 | | Total net revenues | $5,128 | $5,050 | [Note 5 — Investments](index=18&type=section&id=Note%205%20%E2%80%94%20Investments) This note details eBay's investment portfolio, including short-term, long-term, and equity investments, and related transactions **Total Investments (Millions):** | Category | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :-------------- | :---------------- | | Short-term investments | $3,203 | $2,533 | | Long-term investments | $1,722 | $1,129 | | Equity investment in Adevinta | $— | $4,474 | | Equity investment in Aurelia | $1,910 | $— | | Other equity investments under the fair value option | $354 | $382 | | Other equity investments without readily determinable fair values | $134 | $93 | | Equity investments under the equity method of accounting | $55 | $55 | | Total equity investments | $2,453 | $5,004 | - On May 29, 2024, eBay completed the sale of Adevinta shares, receiving approximately **$2.4 billion** in cash and an equity investment in Aurelia valued at **$1.9 billion** (18.3% ownership)[68](index=68&type=chunk)[182](index=182&type=chunk) - A realized gain of **$84 million** (Q2 2024) and **$78 million** (YTD Q2 2024) was recorded from the sale of Adevinta[69](index=69&type=chunk) - Unrealized losses on the equity investment in Gmarket were **$22 million** (Q2 2024) and **$28 million** (YTD Q2 2024)[76](index=76&type=chunk) - An Aurelia Option, granted in connection with the Adevinta transactions, was valued at **$109 million** as of June 30, 2024, and is reported as a current liability[80](index=80&type=chunk) **Unrealized Gains (Losses) on Equity Investments Held (Millions):** | Period | Net gains (losses) recognized during the period on equity investments | Less: Net gains recognized during the period on equity investments sold during the period | Total unrealized losses on equity investments held, end of period | | :----------------------------------- | :----------------------------------------------------------------- | :--------------------------------------------------------------------------------- | :----------------------------------------------------------------- | | Three Months Ended June 30, 2024 | $61 | $84 | $(23) | | Six Months Ended June 30, 2024 | $(185) | $78 | $(263) | [Note 6 — Derivative Instruments](index=23&type=section&id=Note%206%20%E2%80%94%20Derivative%20Instruments) This note explains eBay's use of derivative instruments for hedging and their fair value measurements - Derivatives are used to reduce volatility from foreign currency exchange rates and interest rates, not for trading purposes[87](index=87&type=chunk) - Foreign currency exchange contracts are used for cash flow hedges (initially reported in AOCI) and non-designated hedges (gains/losses in interest income and other, net)[88](index=88&type=chunk)[90](index=90&type=chunk) - A warrant agreement with Adyen, accounted for as a derivative, entitles eBay to acquire up to 5% of Adyen's shares, vesting based on processing volume milestones[91](index=91&type=chunk) **Fair Value of Outstanding Derivative Instruments (Millions):** | Metric | June 30, 2024 | December 31, 2023 | | :------------------------------------------------ | :-------------- | :---------------- | | Total derivative assets | $380 | $396 | | Warrant (included in derivative assets) | $339 | $364 | | Total derivative liabilities | $10 | $33 | | Total fair value of derivative instruments (net) | $370 | $363 | - Notional amounts of outstanding derivatives totaled **$3,329 million** as of June 30, 2024, down from **$3,924 million** at December 31, 2023[98](index=98&type=chunk) [Note 7 — Fair Value Measurement of Assets and Liabilities](index=28&type=section&id=Note%207%20%E2%80%94%20Fair%20Value%20Measurement%20of%20Assets%20and%20Liabilities) This note provides details on the fair value measurement of eBay's financial assets and liabilities across different levels **Total Financial Assets Measured at Fair Value (Millions):** | Level | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :-------------- | :---------------- | | Level 1 (Active Markets) | $2,555 | $6,967 | | Level 2 (Observable Inputs) | $4,423 | $3,164 | | Level 3 (Unobservable Inputs) | $646 | $699 | | Total Financial Assets | $7,624 | $10,830 | - The warrant is valued using a Black-Scholes model, with a fair value of **$339 million** as of June 30, 2024[109](index=109&type=chunk)[110](index=110&type=chunk) - The equity investment in Gmarket, a Level 3 asset, had a fair value of **$307 million** as of June 30, 2024, down from **$335 million** at December 31, 2023[112](index=112&type=chunk) - The Aurelia Option, a Level 3 liability, was valued at **$109 million** as of June 30, 2024[117](index=117&type=chunk) [Note 8 — Debt](index=32&type=section&id=Note%208%20%E2%80%94%20Debt) This note outlines eBay's outstanding debt, including senior notes, credit facilities, and commercial paper programs **Carrying Value of Outstanding Debt (Millions):** | Metric | June 30, 2024 | December 31, 2023 | | :---------------- | :-------------- | :---------------- | | Total senior notes | $7,750 | $7,750 | | Total long-term debt | $6,174 | $6,973 | | Total short-term debt | $1,551 | $750 | | Total Debt | $7,725 | $7,723 | - On August 1, 2024, **$750 million** of 3.450% senior notes were repaid upon maturity[120](index=120&type=chunk)[184](index=184&type=chunk) - The company has a **$2.0 billion** unsecured five-year revolving credit facility, with no outstanding borrowings as of June 30, 2024[128](index=128&type=chunk)[129](index=129&type=chunk) - eBay has a commercial paper program for up to **$1.5 billion**, with no outstanding notes as of June 30, 2024[126](index=126&type=chunk) [Note 9 — Supplemental Consolidated Financial Information](index=34&type=section&id=Note%209%20%E2%80%94%20Supplemental%20Consolidated%20Financial%20Information) This note provides additional detailed financial information, including various asset and liability accounts and income components - Allowance for doubtful accounts and authorized credits decreased to **$45 million** as of June 30, 2024, from **$49 million** at December 31, 2023[132](index=132&type=chunk) **Other Current Assets (Millions):** | Metric | June 30, 2024 | December 31, 2023 | | :-------------------------- | :-------------- | :---------------- | | Warrant | $339 | $364 | | Prepaid expenses | $136 | $116 | | Restricted cash | $112 | $23 | | Income and other tax receivable | $89 | $99 | | Accounts receivable, net | $96 | $94 | | Short-term derivative assets | $28 | $23 | | Other | $232 | $292 | | Other current assets | $1,032 | $1,011 | **Accrued Expenses and Other Current Liabilities (Millions):** | Metric | June 30, 2024 | December 31, 2023 | | :----------------------------------- | :-------------- | :---------------- | | Accrued sales and use tax and VAT | $478 | $424 | | Compensation and related benefits | $351 | $581 | | Accrued marketing expenses | $209 | $181 | | Operating lease liabilities | $120 | $118 | | Transaction loss reserve | $119 | $125 | | Aurelia option | $109 | $— | | Accrued general and administrative expenses | $74 | $79 | | Accrued legal matters | $67 | $132 | | Accrued interest expense | $56 | $56 | | Deferred revenue | $33 | $34 | | Accrued restructuring | $27 | $102 | | Other | $361 | $364 | | Total accrued expenses and other current liabilities | $2,004 | $2,196 | **Loss on Equity Investments and Warrant, Net (Millions):** | Metric | Q2 2024 | Q2 2023 | YTD Q2 2024 | YTD Q2 2023 | | :------------------------------------------------ | :------ | :------ | :---------- | :---------- | | Unrealized change in fair value of Adevinta | $— | $(210) | $(234) | $(36) | | Realized change in fair value of shares sold in Adevinta | $84 | $— | $78 | $— | | Unrealized change in fair value of Gmarket | $(22) | $(29) | $(28) | $(40) | | Change in fair value of warrant | $(174) | $31 | $(25) | $69 | | Fair value of Aurelia option | $(109) | $— | $(109) | $— | | Loss on other investments | $(1) | $(2) | $(1) | $(2) | | Total loss on equity investments and warrant, net | $(222) | $(214) | $(319) | $(16) | **Interest Income and Other, Net (Millions):** | Metric | Q2 2024 | Q2 2023 | YTD Q2 2024 | YTD Q2 2023 | | :-------------------------- | :------ | :------ | :---------- | :---------- | | Interest income | $63 | $48 | $124 | $90 | | Foreign exchange and other | $3 | $(2) | $10 | $(2) | | Total interest income and other, net | $66 | $46 | $134 | $88 | [Note 10 — Commitments and Contingencies](index=36&type=section&id=Note%2010%20%E2%80%94%20Commitments%20and%20Contingencies) This note discloses eBay's commitments, contingencies, and legal proceedings, including potential liabilities - No material off-balance sheet arrangements as of June 30, 2024[143](index=143&type=chunk) - The U.S. Department of Justice filed a civil complaint alleging liability for the sale of regulated or illicit products on Marketplace platforms, which could result in material monetary damages or changes in business practices[145](index=145&type=chunk) - Accrued estimated losses for litigation and other legal matters totaled **$67 million** as of June 30, 2024[146](index=146&type=chunk) - The company has indemnification provisions with PayPal and in commercial agreements, but historical losses have not been significant[147](index=147&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk) [Note 11 — Stockholders' Equity](index=38&type=section&id=Note%2011%20%E2%80%94%20Stockholders'%20Equity) This note details changes in eBay's stockholders' equity, including stock repurchase programs and dividend declarations - An incremental **$2.0 billion** was authorized for the stock repurchase program in February 2024, with no expiration date[155](index=155&type=chunk) **Stock Repurchase Activity (Six Months Ended June 30, 2024):** | Metric | Shares Repurchased (Millions) | Value of Shares Repurchased (Millions) | Remaining Amount Authorized (Millions) | | :-------------------------------- | :---------------------------- | :----------------------------------- | :------------------------------------- | | Repurchase of common stock | 29 | $1,499 | $1,948 | - Cash dividends paid totaled **$135 million** for Q2 2024 and **$274 million** for YTD Q2 2024. A quarterly cash dividend of **$0.27 per share** was declared in July 2024[157](index=157&type=chunk) [Note 12 — Employee Benefit Plans](index=39&type=section&id=Note%2012%20%E2%80%94%20Employee%20Benefit%20Plans) This note provides information on eBay's employee benefit plans, including restricted stock unit activity and stock-based compensation **Restricted Stock Unit (RSU) Activity (Millions of Units):** | Metric | Units | | :-------------------------- | :---- | | Outstanding as of Jan 1, 2024 | 24 | | Awarded | 11 | | Vested | (5) | | Forfeited | (3) | | Outstanding as of Jun 30, 2024 | 27 | **Stock-Based Compensation Expense (Millions):** | Metric | Q2 2024 | Q2 2023 | YTD Q2 2024 | YTD Q2 2023 | | :-------------------------------- | :------ | :------ | :---------- | :---------- | | Cost of net revenues | $14 | $14 | $27 | $27 | | Sales and marketing | $25 | $25 | $48 | $45 | | Product development | $77 | $74 | $141 | $133 | | General and administrative | $38 | $41 | $84 | $77 | | Total stock-based compensation expense | $154 | $154 | $300 | $282 | [Note 13 — Income Taxes](index=40&type=section&id=Note%2013%20%E2%80%94%20Income%20Taxes) This note discusses eBay's income tax provision, effective tax rates, and ongoing tax examinations - The company is under examination by tax authorities for tax years 2010 to 2022 in various jurisdictions, including the U.S., Germany, India, Israel, Switzerland, and the UK[163](index=163&type=chunk) - A liability of **$292 million** for deemed repatriation of foreign earnings is included in income taxes payable as of June 30, 2024[165](index=165&type=chunk) - The balance of gross unrecognized tax benefits could significantly change in the next 12 months due to ongoing tax examinations, but the full range of possible adjustments is not estimable[164](index=164&type=chunk) [Note 14 — Accumulated Other Comprehensive Income](index=41&type=section&id=Note%2014%20%E2%80%94%20Accumulated%20Other%20Comprehensive%20Income) This note details the components and changes in eBay's accumulated other comprehensive income **Changes in AOCI (Millions):** | Component | Balance as of Dec 31, 2023 | Net current period other comprehensive income (loss) (YTD Q2 2024) | Balance as of Jun 30, 2024 | | :----------------------------------- | :------------------------- | :---------------------------------------------------------------- | :------------------------- | | Unrealized Gains (Losses) on Derivative Instruments | $(13) | $29 | $16 | | Unrealized Gains (Losses) on Investments | $(45) | $14 | $(31) | | Foreign Currency Translation | $206 | $(53) | $153 | | Estimated Tax (Expense) Benefit | $37 | $(10) | $27 | | Total | $185 | $(20) | $165 | - Reclassifications out of AOCI to net income for the six months ended June 30, 2024, resulted in a net loss of **$12 million**, primarily from foreign exchange contracts affecting net revenues[169](index=169&type=chunk) [Note 15 — Restructuring](index=43&type=section&id=Note%2015%20%E2%80%94%20Restructuring) This note outlines eBay's restructuring activities, including workforce reductions and associated liabilities **Restructuring Reserve Activity (Millions):** | Metric | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | | Accrued liability, beginning of period | $102 | | Payments | $(69) | | Adjustments | $(6) | | Accrued liability, end of period | $27 | - Workforce reductions approved in 2023 resulted in pre-tax charges of **$42 million** (Q1 2023) and **$99 million** (Q4 2023), substantially completed by Q2 2024[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on eBay's financial performance, condition, and results of operations for the three and six months ended June 30, 2024, compared to 2023. It discusses revenue trends, operating expenses, investment losses, and liquidity, highlighting the impact of macroeconomic factors and strategic initiatives [OVERVIEW](index=44&type=section&id=OVERVIEW) This section provides a high-level summary of eBay's business, market conditions, and key financial highlights for the period - eBay Inc. operates as a global commerce leader, connecting buyers and sellers across over 190 markets[176](index=176&type=chunk) - Discretionary spending trends are dynamic due to geopolitical events, inflation, FX volatility, high interest rates, and low consumer confidence, which are expected to continue[177](index=177&type=chunk) **Quarter Highlights (Three Months Ended June 30, 2024):** | Metric | Value | YoY Change | | :-------------------- | :------ | :--------- | | Net revenues | $2,572M | 1% | | FX-Neutral net revenues | N/A | 2% | | Operating margin | 21.3% | +0.9 pp | | Loss on equity investments and warrant, net | $(222)M | (4%) | | Cash flow from continuing operating activities | $367M | (39%) | - Completed the sale of Adevinta shares for **$2.4 billion** cash and a **$1.9 billion** equity investment in Aurelia on May 29, 2024[182](index=182&type=chunk) - Repaid **$750 million** senior notes on August 1, 2024, and plans to refinance a portion with commercial paper[184](index=184&type=chunk) [RESULTS OF OPERATIONS](index=46&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes eBay's financial performance, detailing trends in revenues, costs, and operating expenses [Net Revenues](index=46&type=section&id=Net%20Revenues) This section examines eBay's net revenue performance, including reported and FX-neutral changes and key operating metrics **Net Revenues (Millions):** | Period | 2024 | 2023 | % Change | | :-------------------- | :----- | :----- | :------- | | Three Months Ended June 30 | $2,572 | $2,540 | 1% | | Six Months Ended June 30 | $5,128 | $5,050 | 2% | **Key Operating Metrics (Three Months Ended June 30):** | Metric | 2024 As Reported | 2023 As Reported | % Change As Reported | 2024 FX-Neutral | % Change FX-Neutral | | :-------------------- | :--------------- | :--------------- | :------------------- | :-------------- | :------------------ | | Net Revenues | $2,572 | $2,540 | 1% | $2,583 | 2% | | GMV | $18,418 | $18,214 | 1% | $18,448 | 1% | | Take rate | 13.96% | 13.95% | 0.01% | N/A | N/A | **Key Operating Metrics (Six Months Ended June 30):** | Metric | 2024 As Reported | 2023 As Reported | % Change As Reported | 2024 FX-Neutral | % Change FX-Neutral | | :-------------------- | :--------------- | :--------------- | :------------------- | :-------------- | :------------------ | | Net Revenues | $5,128 | $5,050 | 2% | $5,125 | 2% | | GMV | $37,041 | $36,624 | 1% | $36,899 | 1% | | Take rate | 13.84% | 13.79% | 0.05% | N/A | N/A | - Net revenues and GMV were impacted by dynamic discretionary spending trends, geopolitical events, inflationary pressure, foreign exchange rate volatility, elevated interest rates, and lower consumer confidence[197](index=197&type=chunk) [Cost of Net Revenues](index=48&type=section&id=Cost%20of%20Net%20Revenues) This section analyzes the factors influencing eBay's cost of net revenues, including specific expense drivers **Cost of Net Revenues (Millions):** | Period | 2024 | 2023 | % Change | | :-------------------- | :----- | :----- | :------- | | Three Months Ended June 30 | $735 | $718 | 2% | | Six Months Ended June 30 | $1,435 | $1,418 | 1% | - Q2 2024 increase driven by **$25 million** in indirect tax matters, **$15 million** in promoted listings, and **$11 million** in data center equipment disposition, partially offset by **$17 million** depreciation decrease and **$9 million** payment processing decrease[199](index=199&type=chunk)[200](index=200&type=chunk) - YTD Q2 2024 increase driven by **$30 million** in eBay International Shipping, **$26 million** in promoted listings, **$29 million** in indirect tax matters, and **$11 million** in data center equipment disposition, partially offset by **$43 million** depreciation decrease and **$20 million** payment processing decrease[201](index=201&type=chunk) [Operating Expenses](index=49&type=section&id=Operating%20Expenses) This section details eBay's operating expenses, including sales and marketing, product development, and general and administrative costs **Operating Expenses (Millions):** | Expense Category | Q2 2024 | Q2 2023 | % Change (QoQ) | YTD Q2 2024 | YTD Q2 2023 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :---------- | :---------- | :------------- | | Sales and marketing | $577 | $566 | 2% | $1,118 | $1,077 | 4% | | Product development | $379 | $392 | (3%) | $730 | $744 | (2%) | | General and administrative | $241 | $251 | (4%) | $479 | $548 | (13%) | | Provision for transaction losses | $86 | $90 | (5%) | $177 | $174 | 2% | | Amortization of acquired intangible assets | $5 | $5 | 0% | $9 | $13 | (30%) | | Total operating expenses | $1,288 | $1,304 | (1%) | $2,513 | $2,556 | (2%) | - Sales and marketing increased due to a **$44 million** (Q2) and **$89 million** (YTD Q2) increase in advertising and marketing program costs[205](index=205&type=chunk)[206](index=206&type=chunk) - Product development decreased due to lower employee-related costs, despite continued investment in strategic areas like browsing experience and search optimization[208](index=208&type=chunk) - General and administrative expenses decreased primarily due to lower employee-related costs (Q2) and a **$48 million** decrease in one-time restructuring costs (YTD Q2)[211](index=211&type=chunk)[212](index=212&type=chunk) - Provision for transaction losses decreased in Q2 due to a slight decrease in buyer/seller fraud rates but increased YTD due to a slight increase in fraud rates[214](index=214&type=chunk) [Loss on equity investments and warrant, net](index=51&type=section&id=Loss%20on%20equity%20investments%20and%20warrant,%20net) This section explains the net loss or gain from eBay's equity investments and warrant, detailing contributing factors **Loss on Equity Investments and Warrant, Net (Millions):** | Metric | Q2 2024 | Q2 2023 | % Change (QoQ) | YTD Q2 2024 | YTD Q2 2023 | % Change (YoY) | | :------------------------------------------------ | :------ | :------ | :------------- | :---------- | :---------- | :------------- | | Unrealized change in fair value of Adevinta | $— | $(210) | 100% | $(234) | $(36) | (550%) | | Realized change in fair value of shares sold in Adevinta | $84 | $— | 100% | $78 | $— | 100% | | Unrealized change in fair value of Gmarket | $(22) | $(29) | 24% | $(28) | $(40) | 30% | | Change in fair value of warrant | $(174) | $31 | (661%) | $(25) | $69 | (136%) | | Fair value of Aurelia option | $(109) | $— | (100%) | $(109) | $— | (100%) | | Loss on other investments | $(1) | $(2) | N/A | $(1) | $(2) | N/A | | Total loss on equity investments and warrant, net | $(222) | $(214) | (4%) | $(319) | $(16) | (1894%) | - The significant increase in YTD Q2 2024 loss was due to the unrealized loss on Adevinta (**$234 million**) and the fair value of the Aurelia option (**$109 million**), partially offset by a realized gain on Adevinta sale (**$78 million**)[216](index=216&type=chunk) [Interest Expense, Interest Income and Other, Net](index=51&type=section&id=Interest%20Expense,%20Interest%20Income%20and%20Other,%20Net) This section outlines eBay's interest expense, interest income, and other net financial items **Interest Expense, Interest Income and Other, Net (Millions):** | Metric | Q2 2024 | Q2 2023 | % Change (QoQ) | YTD Q2 2024 | YTD Q2 2023 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :---------- | :---------- | :------------- | | Interest expense | $(65) | $(65) | 0% | $(131) | $(133) | (2%) | | Interest income | $63 | $48 | 31% | $124 | $90 | 38% | | Foreign exchange and other | $3 | $(2) | N/A | $10 | $(2) | N/A | | Total interest income and other, net | $66 | $46 | 43% | $134 | $88 | 52% | - Interest income increased due to higher yields on interest-bearing instruments, a trend expected to continue to a lesser extent in 2024[218](index=218&type=chunk) [Income Tax Provision](index=52&type=section&id=Income%20Tax%20Provision) This section details eBay's income tax provision and effective tax rates for the reporting periods **Income Tax Provision (Millions):** | Metric | Q2 2024 | Q2 2023 | YTD Q2 2024 | YTD Q2 2023 | | :-------------------- | :------ | :------ | :---------- | :---------- | | Income tax provision | $102 | $113 | $199 | $274 | | Effective tax rate | 31.1% | 39.7% | 23.0% | 27.0% | - The decrease in effective tax rate was primarily due to the lapping of increased reserves for uncertain tax positions in 2023 and the reversal of a dividend apportionment benefit in Q2 2024[219](index=219&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses eBay's ability to generate and manage cash, including cash flows and capital requirements [Cash Flows](index=53&type=section&id=Cash%20Flows) This section summarizes eBay's cash flows from operating, investing, and financing activities **Net Cash Provided by (Used in) Activities (Six Months Ended June 30):** | Metric | 2024 (Millions) | 2023 (Millions) | | :----------------------------------- | :-------------- | :-------------- | | Continuing operating activities | $982 | $1,446 | | Continuing investing activities | $902 | $424 | | Continuing financing activities | $(1,805) | $(1,458) | | Net increase in cash, cash equivalents and restricted cash | $62 | $402 | - The decrease in operating cash flow was primarily due to working capital movements and changes in non-cash items[224](index=224&type=chunk) - Investing cash flow was significantly boosted by **$2.4 billion** from the sale of Adevinta equity investment[225](index=225&type=chunk) - Financing cash flow was primarily used for **$1.5 billion** in common stock repurchases and **$274 million** in dividends[227](index=227&type=chunk) [Liquidity and Capital Resource Requirements](index=54&type=section&id=Liquidity%20and%20Capital%20Resource%20Requirements) This section discusses eBay's current liquidity position and future capital resource needs and plans - As of June 30, 2024, total cash, cash equivalents, and non-equity investments aggregated **$6.3 billion**[229](index=229&type=chunk) - The company believes its liquidity sources are sufficient for the next 12 months and foreseeable future, but acknowledges risks from geopolitical events, inflation, FX volatility, and elevated interest rates[229](index=229&type=chunk)[230](index=230&type=chunk) - **$750 million** of senior notes were repaid on August 1, 2024[234](index=234&type=chunk) - **$1.9 billion** remained available for future common stock repurchases as of June 30, 2024, following **$1.5 billion** in repurchases during the six months ended June 30, 2024[243](index=243&type=chunk) - A quarterly cash dividend of **$0.27 per share** was declared in July 2024[244](index=244&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses eBay's exposure to market risks, including interest rate risk, equity price risk, and foreign currency risk. The company uses various strategies, including derivative instruments, to mitigate these risks, though not entirely eliminating them [Interest Rate Risk](index=57&type=section&id=Interest%20Rate%20Risk) This section describes eBay's exposure to interest rate fluctuations on its investments and debt - The company is exposed to interest rate risk on its investments and outstanding debt[247](index=247&type=chunk) - A hypothetical **1% increase** in interest rates would decrease the fair value of investments by **$32 million** as of June 30, 2024[249](index=249&type=chunk) - Approximately **26%** of total cash and investments were held in cash and cash equivalents and customer accounts as of June 30, 2024, making interest income sensitive to rate changes[248](index=248&type=chunk) [Equity Price Risk](index=57&type=section&id=Equity%20Price%20Risk) This section details eBay's exposure to changes in equity prices, particularly for its investments and warrant - Equity investments, primarily in privately-held companies, totaled **$2.5 billion** as of June 30, 2024[252](index=252&type=chunk) - The warrant agreement with Adyen is sensitive to changes in Adyen's common stock price and equity volatility; a hypothetical **$1 change** in Adyen's stock price would impact the warrant's fair value by approximately **$0.4 million**[253](index=253&type=chunk) [Foreign Currency Risk](index=58&type=section&id=Foreign%20Currency%20Risk) This section explains eBay's exposure to foreign currency exchange rate fluctuations and its hedging strategies - Significant international revenues and costs, primarily in British pounds and euros, expose the company to foreign currency risk[254](index=254&type=chunk) - A foreign exchange exposure management program uses foreign currency exchange contracts to reduce volatility, though not entirely eliminating it[255](index=255&type=chunk)[256](index=256&type=chunk) - A hypothetical **20% adverse change** in foreign exchange rates would have an immaterial adverse impact on income before income taxes as of June 30, 2024, due to offsetting hedging effects[261](index=261&type=chunk) [Item 4: Controls and Procedures](index=60&type=section&id=Item%204%20Controls%20and%20Procedures) As of June 30, 2024, eBay's principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective. There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter - Disclosure controls and procedures were effective as of June 30, 2024[263](index=263&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[264](index=264&type=chunk) PART II: OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal, risk, and equity matters [Item 1: Legal Proceedings](index=61&type=section&id=Item%201%20Legal%20Proceedings) This section incorporates by reference the information on legal proceedings detailed in Note 10 to the condensed consolidated financial statements, which includes a civil complaint from the U.S. Department of Justice regarding the sale of regulated products on eBay's platforms - Information on legal proceedings is incorporated from Note 10, detailing ongoing litigation and regulatory matters[267](index=267&type=chunk) [Item 1A: Risk Factors](index=61&type=section&id=Item%201A%20Risk%20Factors) The company reiterates that it is subject to various risks and uncertainties, as described in its 2023 Form 10-K, with no material changes to these risk factors. Current global economic and geopolitical events may amplify these existing risks - No material changes to the company's risk factors from those disclosed in the 2023 Form 10-K[268](index=268&type=chunk) - Current global economic and geopolitical events may amplify existing risks[268](index=268&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity, showing that during the three months ended June 30, 2024, eBay repurchased approximately $1.0 billion of common stock. As of June 30, 2024, approximately $1.9 billion remained available under the stock repurchase program **Issuer Purchases of Equity Securities (Three Months Ended June 30, 2024):** | Period Ended | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs | | :------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | April 30, 2024 | 4,148,511 | $51.47 | 4,148,511 | $2,734,959,172 | | May 31, 2024 | 7,036,407 | $51.54 | 7,036,407 | $2,372,306,488 | | June 30, 2024 | 7,927,381 | $53.46 | 7,927,381 | $1,948,472,536 | | Total | 19,112,299 | N/A | 19,112,299 | N/A | - Approximately **$1.0 billion** of common stock was repurchased during the three months ended June 30, 2024[270](index=270&type=chunk) - As of June 30, 2024, **$1.9 billion** remained available for future repurchases under the stock repurchase program[270](index=270&type=chunk) [Item 3: Defaults Upon Senior Securities](index=61&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) This item is marked as "Not applicable," indicating no defaults upon senior securities - No defaults upon senior securities[273](index=273&type=chunk) [Item 4: Mine Safety Disclosures](index=61&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is marked as "Not applicable," indicating no mine safety disclosures - No mine safety disclosures[274](index=274&type=chunk) [Item 5: Other Information](index=61&type=section&id=Item%205%20Other%20Information) This section discloses Rule 10b5-1 trading plans adopted by the President and CEO, Jamie Iannone, and the CFO, Steve Priest, in May and June 2024, respectively, for potential sales of company shares - Jamie Iannone, President and CEO, adopted a 10b5-1 Plan on May 30, 2024, for potential sales of up to **90,000 shares**[276](index=276&type=chunk) - Steve Priest, CFO, adopted a 10b5-1 Plan on June 12, 2024, for potential sales of shares, including those from future vesting equity awards, up to a maximum of **64,129 shares** (before tax withholdings)[277](index=277&type=chunk) [Item 6: Exhibits](index=63&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various agreements related to the Adevinta transactions, corporate organizational documents, and certifications required by the Sarbanes-Oxley Act - The report includes certifications from the CEO and CFO as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[281](index=281&type=chunk) - Exhibits include Bid Conduct Agreement and Transaction Completion Agreement related to Adevinta, as well as amendments[281](index=281&type=chunk) [Signatures](index=64&type=section&id=Signatures) The report is signed by Jamie Iannone (Chief Executive Officer), Steve Priest (Chief Financial Officer), and Rebecca Spencer (Vice President, Chief Accounting Officer) on August 1, 2024, certifying its submission - The report was signed by the Chief Executive Officer, Chief Financial Officer, and Vice President, Chief Accounting Officer on August 1, 2024[284](index=284&type=chunk)

As eBay looks to reach Generation Z and millennials, the online marketplace is turning to pay-by-bank to meet younger customers’ eCommerce expectations.On a call with analysts Wednesday (July 31) discussing the company’s second-quarter earnings results, CEO Jamie Iannone said the company’s integration of Venmo payments has yielded positive results.“Venmo’s mobile-first checkout experiences and strong adoption among Gen Z and millennial audiences are particularly appealing as we continue to broaden our reach ...

Core Viewpoint - eBay Inc. reported strong second-quarter 2024 results with non-GAAP earnings of $1.18 per share, exceeding estimates and showing a 15% year-over-year increase [1] Financial Performance - Net revenues reached $2.57 billion, surpassing estimates by 1.7% and increasing 1% year-over-year on a reported basis and 2% on an FX-neutral basis [1] - Gross merchandise volume (GMV) totaled $18.42 billion, reflecting a 1% year-over-year growth on both reported and FX-neutral bases, exceeding the consensus estimate of $18.1 billion [3] - eBay's gross margin was 71.4%, down 30 basis points year-over-year, while operating expenses decreased by 1.2% to $1.29 billion [4] Advertising Performance - First-party advertising products generated $384 million in revenues, up 12% on an FX-neutral basis year-over-year [1] - Total advertising offerings yielded $398 million, growing 8% year-over-year on an FX-neutral basis [1] - However, third-party advertising products saw a significant decline, generating only $14 million, down 49% year-over-year on an FX-neutral basis [1] Buyer Metrics - eBay's active buyer base remained flat at 132 million year-over-year, slightly below consensus expectations [2] - Excluding acquisitions, the active buyer count was 131 million [2] Balance Sheet & Cash Flow - As of June 30, 2024, cash equivalents and short-term investments increased to $5.2 billion from $3.9 billion at the end of the previous quarter [5] - Long-term debt remained stable at $6.17 billion [5] - Cash generated from operating activities was $367 million, down from $615 million in the previous quarter [6] Shareholder Returns - eBay repurchased $1 billion worth of shares and paid out dividends totaling $135 million during the reported quarter [6] Guidance - For Q3 2024, eBay expects revenues between $2.50 billion and $2.56 billion, with an anticipated FX-neutral growth of 1-3% [7] - GMV for Q3 is projected to be between $17.8 billion and $18.2 billion [7] - Non-GAAP earnings per share are expected to be between $1.15 and $1.20, with the consensus estimate at $1.13 [7] Market Position - eBay has gained 28.8% year-to-date, outperforming the industry growth of 14.1% [1] - The company currently holds a Zacks Rank 1 (Strong Buy) [8]

bennymarty/iStock Editorial via Getty Images Among legacy technology companies, one of the most recognizable former tech giants that has continued to drag its feet on seeking relevance in the modern world is eBay (NASDAQ:EBAY). The one-time auction powerhouse has attempted a number of initiatives to bolster its recovery, including focusing on several "focus categories" like collectibles and auto parts while also building up an advertising business to squeeze more revenue from its sellers who wished to m ...

Financial Data and Key Metrics - Gross merchandise volume (GMV) grew 1% to $18.4 billion in Q2 [6] - Revenue increased 2% to $2.57 billion [6] - Non-GAAP operating margin rose by 1.0% to 27.9% [6] - Non-GAAP earnings per share rose by approximately 15% to $1.18 [7] - The company returned $1.1 billion to shareholders through repurchases and dividends during the quarter [7] Business Line Performance - Focus category GMV grew by over 4% in Q2, outpacing the remainder of the marketplace by approximately 5 points [7] - Motors Parts & Accessories (P&A) and collectibles were the largest contributors to GMV growth among focus categories [7] - eBay refurbished was the fastest-growing focus category year-over-year [9] - Luxury focus categories delivered positive year-over-year GMV growth for the sixth straight quarter [10] Market Performance - U.S. GMV grew by nearly 1 point in Q2, with collectibles being a key contributor [31] - International GMV grew by over 1% on an FX-neutral basis, with cross-border trade being a key driver [32] - Germany sustained positive year-over-year growth in C2C volume, supporting B2C business [13] - Japan saw accelerated volume growth after the opening of the authentication center [33] Strategic Direction and Industry Competition - The company is focusing on integrating Goldin and expanding its relationship with PSA to enhance the collectibles experience [8] - eBay is investing in generative AI and machine learning to simplify selling and buying experiences [15] - The company launched a complete redesign of its advertising platform to make it simpler for sellers to manage campaigns [20] - eBay is expanding its payments platform, including the launch of Venmo as a payment option in the U.S. [23] Management Commentary on Operating Environment and Future Outlook - Management highlighted continued macroeconomic headwinds, geopolitical uncertainty, and an evolving regulatory landscape [7] - The company expects FX-neutral GMV growth between flat and up 2% year-over-year in Q4 [42] - Non-GAAP operating margin expansion is expected to be between 60 to 100 basis points for the full year [43] - The company is raising its share repurchase target for the year to at least $2.5 billion [44] Other Important Information - eBay authenticated its 10th million item since the inception of the Authenticity Guarantee Program in 2024 [10] - The company launched a sustainability collaboration with Seagate to reduce e-waste [9] - eBay for charity raised more than $47 million last quarter, up 22% year-over-year [26] Q&A Session Summary Question: Advertising Growth and Campaign Adoption [47] - The company is seeing positive momentum in advertising, with new features like trend-based suggestions driven by AI [48] - First-party advertising grew over 12% in Q2, and the company expects modest take rate expansion in the second half [50] Question: AI Features and Friction Points [51] - The company is leveraging AI to simplify listing processes and improve product imagery, with high customer satisfaction (CSAT) scores [52][53] - New AI-powered features like Shop the Look and Explore are being tested and show promising engagement metrics [53] Question: Advertising Growth Long-Term [55] - The company sees a long runway for advertising growth, with a line of sight to 3% penetration and potential for further expansion [56] Question: International Performance and AI Impact [60] - International GMV grew over 1% on an FX-neutral basis, with cross-border trade being a key driver [62] - AI features are driving high CSAT scores and improving GMV growth, particularly in C2C markets like Germany [63][64] Question: Investment Cycle and Future Growth [66] - The company is focused on long-term sustainable growth and will continue to invest in focus categories, geospecific initiatives, and horizontal innovations [67][68] Question: Active Buyers and Enthusiast Buyers [74] - Active buyer count was fractionally positive year-over-year for the first time since early 2021, with enthusiast buyers remaining stable at 16 million [75][76] - Enthusiast buyers, who drive 70% of GMV, are showing strong cross-category shopping behavior, benefiting both focus and core categories [77][79] Question: Consumer Health and Q3 GMV Guidance [81] - The company noted a shift in consumer spend towards value-driven purchases, with used and refurbished goods outperforming new goods [82] - Q3 GMV guidance reflects an uneven macro environment, with some one-off impacts like summer travel demand and global sports events [84] Question: Collectibles and Trading Card Market [88] - The company is driving innovation in the collectibles market, with the integration of Goldin and partnerships with PSA simplifying the grading and selling process [89][90] - eBay Live events grew 50% quarter-over-quarter, with new features like Buy Spot enhancing the collectibles experience [91]

Q2 2024 Financial Performance - Gross Merchandise Volume (GMV) reached $18.4 billion[7] - Revenue totaled $2.6 billion[7] - Non-GAAP Operating Margin was 27.9%[7] - Non-GAAP Diluted EPS was $1.18[7] Advertising Performance - Total ads FXN revenue growth increased by 8% year-over-year[15] - IP ads FXN revenue growth increased by 12% year-over-year[15] - Approximately 3.1 million sellers adopted an ad product[15] Q2 2024 GMV and Revenue Results vs Guidance - GMV actuals were $18.4 billion, exceeding guidance of $17.8 - $18.2 billion[24] - Revenue actuals were $2.57 billion, exceeding guidance of $2.49 - $2.54 billion[24] Q3 2024 Guidance - GMV is projected to be $17.8 - $18.2 billion[79] - Revenue is projected to be $2.50 - $2.56 billion[79] - Non-GAAP EPS is projected to be $1.15 - $1.20[79] FY24 Outlook - The company anticipates full-year Non-GAAP operating margin expansion of 60 to 100 bps[81] - The company is targeting FY'24 share repurchases of at least $2.5 billion[81]

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section provides an overview of eBay's strong Q2 2024 financial performance, strategic advancements, and key innovations driving future growth [Second Quarter 2024 Performance Overview](index=1&type=section&id=1.1%20Second%20Quarter%202024%20Performance%20Overview) eBay Inc. reported strong Q2 2024 financial results, exceeding expectations with positive year-over-year Gross Merchandise Volume (GMV) growth and increased revenue, driven by Focus Categories and new AI capabilities - eBay's Q2 2024 results were **strong**, marking progress toward sustainable, long-term growth[3](index=3&type=chunk) - Continued momentum in Focus Categories contributed to increased GMV[3](index=3&type=chunk) - New AI capabilities are driving innovation and transforming customer experience[3](index=3&type=chunk) - The company exceeded expectations across key financial metrics, achieving positive year-over-year GMV growth despite an uneven discretionary demand environment[3](index=3&type=chunk) [Strategic Initiatives and Innovation](index=1&type=section&id=1.2%20Strategic%20Initiatives%20and%20Innovation) eBay advanced strategic focus categories, integrated new payment methods, expanded its refurbished program, launched AI-powered features, and completed the sale of Adevinta shares while acquiring Goldin - Completed the sale of Adevinta shares for **$2.4 billion** in cash and **$1.9 billion** in Aurelia shares[7](index=7&type=chunk) - Acquired Goldin from Collectors, sold the eBay vault, and established a commercial agreement for streamlined grading, storage, and selling experiences[7](index=7&type=chunk) - Enabled Venmo as an additional payment method, targeting Gen Z and Millennials for increased payment flexibility[7](index=7&type=chunk) - Expanded the eBay Refurbished program to include golf clubs, offering warranties and hassle-free returns[7](index=7&type=chunk) - Launched innovative product features, including generative-AI powered 'Shop the look' for fashion buyers (U.S. and U.K.) and an AI-powered background enhancement tool for sellers (U.S., U.K., Germany)[7](index=7&type=chunk) - Introduced improved selling and buying experiences for pre-owned apparel in the U.K., featuring a new selling flow and Generative AI-powered 'Shop the look' and 'Explore' features for buyers[7](index=7&type=chunk) - Partnered with Certilogo to launch a 'click-to-resell' feature for pre-owned clothing, including authenticity verification via Certilogo's AI-based system, piloted by Save The Duck[7](index=7&type=chunk) [Financial Highlights (Q2 2024)](index=1&type=section&id=Financial%20Highlights%20%28Q2%202024%29) This section details eBay's Q2 2024 financial performance, including key metrics, operating margins, tax rates, cash flow, and capital returns [Key Financial Metrics](index=1&type=section&id=2.1%20Key%20Financial%20Metrics) eBay achieved a 1% increase in revenue and GMV on an as-reported and FX-Neutral basis for Q2 2024, with GAAP diluted EPS growing 39% to $0.45 and Non-GAAP diluted EPS increasing 15% to $1.18 Key Financial Metrics (Millions) | Metric | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | :--------- | | Net revenues | $2,572M | $2,540M | $32M | 1% | | GAAP Net income (Continuing Ops) | $226M | $172M | $54M | 31% | | GAAP EPS (Diluted, Continuing Ops) | $0.45 | $0.32 | $0.13 | 39% | | Non-GAAP Net income (Continuing Ops) | $602M | $555M | $47M | 8% | | Non-GAAP EPS (Diluted, Continuing Ops) | $1.18 | $1.03 | $0.15 | 15% | Gross Merchandise Volume (Billions) | Metric | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Gross Merchandise Volume | $18.4B | $18.2B | $0.2B | 1% | | GMV (FX-Neutral) | $18.4B | N/A | N/A | 1% | [Operating Margins and Tax Rates](index=1&type=section&id=2.2%20Operating%20Margins%20and%20Tax%20Rates) Both GAAP and Non-GAAP operating margins improved year-over-year in Q2 2024, reaching 21.3% and 27.9% respectively, while the GAAP effective tax rate decreased significantly to 31.1% Operating Margins and Tax Rates | Metric | Q2 2024 | Q2 2023 | Change (pp) | | :-------------------------- | :------ | :------ | :---------- | | GAAP Operating Margin | 21.3% | 20.4% | +0.9 | | Non-GAAP Operating Margin | 27.9% | 26.9% | +1.0 | | GAAP Effective Tax Rate | 31.1% | 39.7% | -8.6 | | Non-GAAP Effective Tax Rate | 16.5% | 16.5% | 0.0 | [Cash Flow and Capital Returns](index=1&type=section&id=2.3%20Cash%20Flow%20and%20Capital%20Returns) In Q2 2024, eBay generated $367 million in operating cash flow and $278 million in free cash flow, returning **$1.1 billion** to stockholders through share repurchases and dividends Cash Flow and Capital Returns (Millions/Billions) | Metric | Q2 2024 | Q2 2023 | | :-------------------------- | :------ | :------ | | Operating Cash Flow | $367M | $605M | | Free Cash Flow | $278M | $492M | | Share Repurchases | $1.0B | $250M | | Cash Dividends Paid | $135M | $133M | | Total Capital Returned | $1.1B | $385M | - Total repurchase authorization remaining as of June 30, 2024, was approximately **$1.9 billion**[15](index=15&type=chunk) - Cash and cash equivalents and non-equity investments portfolio totaled **$6.3 billion** as of June 30, 2024[15](index=15&type=chunk) [Business Operations and Strategic Developments](index=1&type=section&id=Business%20Operations%20and%20Strategic%20Developments) This section outlines eBay's platform enhancements, strategic partnerships, and significant social and environmental impact initiatives during the quarter [Platform Enhancements and Partnerships](index=1&type=section&id=3.1%20Platform%20Enhancements%20and%20Partnerships) eBay expanded its consignment service to luxury items, formed strategic partnerships with Condé Nast and McLaren Formula 1, collaborated with Seagate on sustainability, and launched new AI-powered product features - Expanded consignment service in the U.S. to include luxury watches, footwear, and fine jewelry, partnering with Linda's Stuff[9](index=9&type=chunk) - Partnered with Condé Nast to spotlight pre-loved apparel at major fashion events[9](index=9&type=chunk) - Became an Official Partner of the McLaren Formula 1 Team for a multi-year collaboration, featuring eBay branding on race cars for four races in 2024[9](index=9&type=chunk) - Announced a sustainability collaboration with Seagate, offering direct sales of factory recertified hard drives on eBay to reduce e-waste[7](index=7&type=chunk) [Social and Environmental Impact](index=2&type=section&id=3.2%20Social%20and%20Environmental%20Impact) eBay released its 2023 Impact and Recommerce Reports, partnered with Elton John for 'Rocket Man Resale', granted nearly **$7 million** through the eBay Foundation, and saw eBay for Charity contributions exceed **$47 million** globally - Released its 2023 Impact Report, showcasing efforts in economic opportunities, sustainable commerce, and a diverse workforce[9](index=9&type=chunk) - Published its latest Recommerce Report, emphasizing the benefits of shopping pre-loved items[9](index=9&type=chunk) - Launched 'Rocket Man Resale' in partnership with Elton John, selling his personal collection of pre-loved fashion items exclusively on eBay, with all proceeds benefiting the Elton John AIDS Foundation[9](index=9&type=chunk) - eBay Foundation granted nearly **$7 million** to strategic nonprofit partners in the U.S. to address barriers to entrepreneurship for historically excluded groups[9](index=9&type=chunk) - eBay for Charity contributed over **$47 million** globally in Q2, representing a **22% year-over-year increase**[9](index=9&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents eBay's condensed consolidated financial statements, including the balance sheet, statement of income, and statement of cash flows [Condensed Consolidated Balance Sheet](index=6&type=section&id=4.1%20Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2024, eBay's total assets decreased to **$20.38 billion** from **$21.62 billion** at year-end 2023, primarily due to the sale of Adevinta shares, with total liabilities at **$14.85 billion** and stockholders' equity at **$5.53 billion** Condensed Consolidated Balance Sheet (Millions) | Metric | June 30, 2024 (Millions) | December 31, 2023 (Millions) | | :-------------------------------- | :----------------------- | :-------------------------- | | Total current assets | $7,269 | $11,016 | | Equity investment in Adevinta | $— | $4,474 | | Equity investment in Aurelia | $1,910 | $— | | Total assets | $20,378 | $21,620 | | Total current liabilities | $5,799 | $4,520 | | Total liabilities | $14,853 | $15,224 | | Total stockholders' equity | $5,525 | $6,396 | [Condensed Consolidated Statement of Income](index=7&type=section&id=4.2%20Condensed%20Consolidated%20Statement%20of%20Income) For the three months ended June 30, 2024, eBay reported net revenues of **$2.57 billion** and a gross profit of **$1.84 billion**, with income from operations at **$549 million** and GAAP net income from continuing operations at **$226 million** Condensed Consolidated Statement of Income (Millions) | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | | :----------------------------------- | :----------------- | :----------------- | | Net revenues | $2,572 | $2,540 | | Cost of net revenues | $735 | $718 | | Gross profit | $1,837 | $1,822 | | Total operating expenses | $1,288 | $1,304 | | Income from operations | $549 | $518 | | Income from continuing operations | $226 | $172 | | Net income | $224 | $171 | | Diluted EPS (Continuing operations) | $0.45 | $0.32 | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=4.3%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash provided by operating activities for Q2 2024 was **$367 million**, with investing activities providing **$652 million** (boosted by **$2.42 billion** from Adevinta share sale), and financing activities using **$1.12 billion** Condensed Consolidated Statement of Cash Flows (Millions/Billions) | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | | :----------------------------------- | :----------------- | :----------------- | | Net cash provided by operating activities | $367 | $601 | | Net cash provided (used in) by investing activities | $652 | $(277) | | Proceeds from sale of shares in Adevinta | $2,417 | $— | | Net cash used in financing activities | $(1,119) | $(70) | | Repurchases of common stock | $(1,030) | $(250) | | Payments for dividends | $(135) | $(133) | | Cash, cash equivalents and restricted cash at end of period | $2,555 | $2,674 | [Supplemental Operating Data](index=9&type=section&id=Supplemental%20Operating%20Data) This section provides additional operating metrics, including a summary of net revenues and trends in active buyers and Gross Merchandise Volume (GMV) [Net Revenues Summary](index=9&type=section&id=5.1%20Net%20Revenues%20Summary) Total net revenues for Q2 2024 were **$2.57 billion**, a 1% year-over-year increase, with international revenue consistently accounting for approximately 50% of total net revenues Net Revenues Summary (Millions) | Metric | Q2 2024 (Millions) | Q1 2024 (Millions) | Q4 2023 (Millions) | Q3 2023 (Millions) | Q2 2023 (Millions) | | :-------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Total net revenues | $2,572 | $2,556 | $2,562 | $2,500 | $2,540 | | Current quarter vs prior year quarter | 1% | 2% | 2% | 5% | 5% | | Percent from international | 50% | 49% | 50% | 50% | 50% | [Active Buyers and Gross Merchandise Volume (GMV)](index=9&type=section&id=5.2%20Active%20Buyers%20and%20Gross%20Merchandise%20Volume%20%28GMV%29) Active buyers remained stable at **132 million** in Q2 2024, with total Gross Merchandise Volume (GMV) growing 1% year-over-year to **$18.42 billion**, driven by both U.S. and International segments Active Buyers (Millions) | Metric | Q2 2024 (Millions) | Q1 2024 (Millions) | Q4 2023 (Millions) | Q3 2023 (Millions) | Q2 2023 (Millions) | | :-------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Active Buyers | 132 | 132 | 132 | 132 | 132 | | Current quarter vs prior year quarter | 0% | (1)% | (2)% | (3)% | (4)% | | Active Buyers (excl. GittiGidiyor, TCGplayer, Goldin) | 131 | 131 | 131 | 131 | 131 | | Current quarter vs prior year quarter | 0% | 0% | (1)% | (1)% | (3)% | Gross Merchandise Volume (Millions) | Metric | Q2 2024 (Millions) | Q1 2024 (Millions) | Q4 2023 (Millions) | Q3 2023 (Millions) | Q2 2023 (Millions) | | :-------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | | U.S. Gross Merchandise Volume | $8,798 | $8,974 | $8,891 | $8,638 | $8,702 | | Current quarter vs prior year quarter | 1% | 0% | 0% | (1)% | (3)% | | International Gross Merchandise Volume | $9,620 | $9,649 | $9,700 | $9,353 | $9,512 | | Current quarter vs prior year quarter | 1% | 3% | 4% | 4% | (1)% | | Total Gross Merchandise Volume | $18,418 | $18,623 | $18,591 | $17,991 | $18,214 | | Current quarter vs prior year quarter | 1% | 1% | 2% | 2% | (2)% | [Business Outlook](index=3&type=section&id=Business%20Outlook) This section provides eBay's financial guidance for the third quarter of 2024 and details regarding its latest dividend declaration [Third Quarter 2024 Guidance](index=3&type=section&id=6.1%20Third%20Quarter%202024%20Guidance) For Q3 2024, eBay projects net revenues between **$2.50 billion** and **$2.56 billion**, anticipating 1% to 3% FX-Neutral year-over-year growth, with diluted GAAP EPS of **$0.82** to **$0.87** and Non-GAAP EPS of **$1.15** to **$1.20** Q3 2024 Guidance | Metric | Q3 2024 Guidance | | :-------------------- | :--------------- | | Revenue | $2.50B - $2.56B | | FX-Neutral Y/Y Growth | 1% - 3% | | Diluted GAAP EPS | $0.82 - $0.87 | | Diluted Non-GAAP EPS | $1.15 - $1.20 | [Dividend Declaration](index=3&type=section&id=6.2%20Dividend%20Declaration) eBay's Board of Directors declared a cash dividend of **$0.27** per share of common stock, payable on September 13, 2024, to stockholders of record as of August 30, 2024 - Cash dividend of **$0.27 per share** of common stock declared[14](index=14&type=chunk) - Dividend payable on September 13, 2024, to stockholders of record as of August 30, 2024[14](index=14&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains eBay's use of non-GAAP financial measures and provides detailed reconciliations to their most directly comparable GAAP measures [Explanation of Non-GAAP Measures](index=4&type=section&id=7.1%20Explanation%20of%20Non-GAAP%20Measures) eBay uses non-GAAP financial measures to provide investors with a clearer understanding of its core operating results, excluding items not indicative of ongoing operational performance - Non-GAAP measures are used to supplement GAAP financial statements and provide enhanced understanding of current financial performance and future prospects[45](index=45&type=chunk)[48](index=48&type=chunk) - Excluded items from non-GAAP measures include stock-based compensation expense and related employer payroll taxes, amortization or impairment of acquired intangible assets, impairment of goodwill, certain amortization of deferred tax assets, significant gains or losses from business acquisitions/disposals, certain gains or losses on investments, restructuring charges, and changes in fair market value of warrants[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - Free cash flow is defined as operating cash flows less purchases of property and equipment, used as a liquidity measure[56](index=56&type=chunk) [GAAP to Non-GAAP Operating Income Reconciliation](index=12&type=section&id=7.2%20GAAP%20to%20Non-GAAP%20Operating%20Income%20Reconciliation) For Q2 2024, eBay's non-GAAP operating income was **$720 million**, resulting in a non-GAAP operating margin of 27.9%, achieved by adjusting GAAP operating income for specific non-cash and non-recurring items GAAP to Non-GAAP Operating Income Reconciliation (Millions) | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | | :------------------------------------------------ | :----------------- | :----------------- | | GAAP operating income | $549 | $518 | | Stock-based compensation expense and related employer payroll taxes | $158 | $158 | | Amortization of acquired intangible assets | $9 | $8 | | Restructuring | $3 | $— | | Total non-GAAP operating income adjustments | $171 | $166 | | Non-GAAP operating income | $720 | $684 | | GAAP operating margin | 21.3% | 20.4% | | Non-GAAP operating margin | 27.9% | 26.9% | [GAAP to Non-GAAP Net Income and Effective Tax Rate Reconciliation](index=13&type=section&id=7.3%20GAAP%20to%20Non-GAAP%20Net%20Income%20and%20Effective%20Tax%20Rate%20Reconciliation) eBay's non-GAAP net income from continuing operations for Q2 2024 was **$602 million**, leading to a non-GAAP diluted EPS of **$1.18** and a non-GAAP effective tax rate of 16.5% after various adjustments GAAP to Non-GAAP Net Income and Effective Tax Rate Reconciliation (Millions) | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | | :------------------------------------------------ | :----------------- | :----------------- | | GAAP net income from continuing operations | $226 | $172 | | Non-GAAP operating income adjustments | $171 | $166 | | Realized change in fair value of shares sold in Adevinta | $(84) | $— | | Change in fair market value of warrant | $174 | $(31) | | Change in fair market value of other equity investments | $23 | $35 | | Fair value of Aurelia option | $109 | $— | | Income tax effects and adjustments | $(17) | $3 | | Non-GAAP net income from continuing operations | $602 | $555 | | GAAP diluted net income per share | $0.45 | $0.32 | | Non-GAAP diluted net income per share | $1.18 | $1.03 | | GAAP effective tax rate – Continuing operations | 31.1% | 39.7% | | Non-GAAP effective tax rate – Continuing operations | 16.5% | 16.5% | [Operating Cash Flow to Free Cash Flow Reconciliation](index=14&type=section&id=7.4%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow%20Reconciliation) For Q2 2024, eBay's free cash flow was **$278 million**, derived by subtracting **$89 million** in property and equipment purchases from **$367 million** in net cash provided by operating activities Operating Cash Flow to Free Cash Flow Reconciliation (Millions) | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | | :-------------------------------- | :----------------- | :----------------- | | Net cash provided by operating activities | $367 | $605 | | Less: Purchases of property and equipment | $(89) | $(113) | | Free cash flow | $278 | $492 | [Corporate Information and Disclosures](index=4&type=section&id=Corporate%20Information%20and%20Disclosures) This section provides essential corporate information about eBay, including its mission, forward-looking statements, risk factors, and investor/media contacts [About eBay](index=4&type=section&id=8.1%20About%20eBay) eBay Inc. is a global commerce leader founded in 1995, connecting millions of buyers and sellers across more than 190 markets worldwide, facilitating over **$73 billion** in gross merchandise volume in 2023 - eBay Inc. is a global commerce leader connecting millions of buyers and sellers in over 190 markets[18](index=18&type=chunk) - Founded in 1995 in San Jose, California, eBay is one of the world's largest and most vibrant marketplaces[18](index=18&type=chunk) - In 2023, eBay enabled more than **$73 billion** of gross merchandise volume[18](index=18&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=8.2%20Forward-Looking%20Statements%20and%20Risk%20Factors) This press release contains forward-looking statements regarding eBay's future performance and strategic initiatives, which are subject to various risks and uncertainties that could cause actual results to differ materially - The press release contains forward-looking statements about eBay's future performance, financial results, strategic initiatives, and the effects of new product features or programs[21](index=21&type=chunk) - Actual results could differ materially due to risks and uncertainties, including fluctuations in results, ability to attract/retain users, market competition, foreign operations, inflationary pressure, foreign currency exchange rates, geopolitical events, technological developments, and regulatory changes[21](index=21&type=chunk)[22](index=22&type=chunk) - More information on risk factors is available in the company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q[24](index=24&type=chunk) [Investor and Media Contacts](index=5&type=section&id=8.3%20Investor%20and%20Media%20Contacts) Contact information for investor relations (John Egbert) and media relations (Karly Tokioka) is provided, along with links to eBay's company news and investor relations websites for further information - Investor Relations Contact: John Egbert (ir@ebay.com)[25](index=25&type=chunk) - Media Relations Contact: Karly Tokioka (press@ebay.com)[25](index=25&type=chunk) - Company News: https://www.ebayinc.com/stories/news/[25](index=25&type=chunk) - Investor Relations website: https://investors.ebayinc.com[25](index=25&type=chunk)

Revenue of $2.6 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis Gross Merchandise Volume of $18.4 billion, up 1% on an as-reported and FX-Neutral basisGAAP and Non-GAAP earnings per diluted share of $0.45 and $1.18, respectivelyGAAP and Non-GAAP operating margin of 21.3% and 27.9%, respectivelyReturned $1.1 billion to stockholders in Q2, including $1.0 billion of share repurchases and $135 million paid in cash dividendsSAN JOSE, Calif., July 31, 2024 /PRNewswire/ -- eBay Inc. (Nasdaq ...

Financial Results - eBay Inc. is set to release its second quarter financial results on July 31, with analysts expecting earnings of $1.13 per share, an increase from $1.03 per share in the same period last year [1] - Revenue expectations for eBay are projected at $2.53 billion, slightly up from $2.51 billion a year ago [1] - eBay's shares increased by 1.5%, closing at $55.40 on the day prior to the announcement [1] Analyst Ratings - Wolfe Research analyst Deepak Mathivanan initiated coverage with a Peer Perform rating on July 16, achieving an accuracy rate of 80% [2] - JP Morgan analyst Doug Anmuth reinstated a Neutral rating with a price target of $60 on June 25, with an accuracy rate of 84% [2] - Benchmark analyst Daniel Kurnos reiterated a Buy rating with a price target of $58 on June 17, holding an accuracy rate of 73% [2] - Baird analyst Colin Sebastian maintained an Outperform rating and raised the price target from $57 to $58 on June 17, with an accuracy rate of 77% [2] - Truist Securities analyst Youssef Squali maintained a Hold rating and increased the price target from $48 to $50 on May 6, achieving an accuracy rate of 80% [2]