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eBay(EBAY) - 2025 Q1 - Earnings Call Transcript
EBAYeBay(EBAY)2025-04-30 21:30
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Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) grew nearly 2% to approximately 18.8billion,markingthefourthconsecutivequarterofpositiveGMVgrowth[7][34]−Revenueincreasedover118.8 billion, marking the fourth consecutive quarter of positive GMV growth [7][34] - Revenue increased over 1% to 2.58 billion, with non-GAAP earnings per share growing by 10% to 1.38[8][34]−Non−GAAPoperatingincomewasreportedat1.38 [8][34] - Non-GAAP operating income was reported at 771 million, with a non-GAAP operating margin of 29.8% [34][40] - Free cash flow generated in Q1 was 644million,withcashandnon−equityinvestmentstotaling644 million, with cash and non-equity investments totaling 6.2 billion at the end of the quarter [42] Business Line Data and Key Metrics Changes - Focus category GMV grew over 6% in Q1, with collectibles being the largest contributor to growth, particularly in trading cards [11][35] - The fashion category generated over 10billionofGMVannually,withsignificantimprovementsincustomerexperienceandAI−poweredshoppingfeatures[13][15]−First−partyadvertisingrevenuegrew1410 billion of GMV annually, with significant improvements in customer experience and AI-powered shopping features [13][15] - First-party advertising revenue grew 14%, with total advertising revenue reaching 442 million, representing GMV penetration of nearly 2.4% [23][39] Market Data and Key Metrics Changes - U.S. GMV grew nearly 0.5% in Q1, driven by focus categories, particularly trading cards [36] - International GMV grew nearly 3% on an FX neutral basis, although the macro environment in international markets, especially Germany and the UK, was weaker than in the U.S. [37][38] - Trailing twelve-month active buyers grew over 1% to 134 million, with spending per enthusiast buyer remaining over 3,100[38]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonleveragingitsextensiveselectionofpre−lovedandrefurbishedgoodstomitigateconsumerpressureduringrisingcosts[10][11]−Strategicpartnerships,suchaswithCollectorsandPSA,areenhancingthemarketplace′svalueproposition,particularlyintradingcards[12]−Thecompanyisevolvingitsleadershipstructuretoenhanceinnovationandcross−functionalcollaboration,withafocusonAIintegration[30][31]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementacknowledgedtheuncertaintycreatedbytariffsandtradepolicychangesbutexpressedconfidenceinthecompany′sabilitytonavigatethesechallenges[9][43]−TheoutlookforQ2includesGMVexpectationsbetween3,100 [38] Company Strategy and Development Direction - The company is focused on leveraging its extensive selection of pre-loved and refurbished goods to mitigate consumer pressure during rising costs [10][11] - Strategic partnerships, such as with Collectors and PSA, are enhancing the marketplace's value proposition, particularly in trading cards [12] - The company is evolving its leadership structure to enhance innovation and cross-functional collaboration, with a focus on AI integration [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty created by tariffs and trade policy changes but expressed confidence in the company's ability to navigate these challenges [9][43] - The outlook for Q2 includes GMV expectations between 18.6 billion and 19.1billion,withrevenueforecastsbetween19.1 billion, with revenue forecasts between 2.59 billion and 2.66billion[44][45]−For2025,thecompanyanticipateslowsingle−digitGMVgrowthonanFXneutralbasis,drivenbyfocuscategoriesandgeo−specificinvestments[48]OtherImportantInformation−Thecompanyreturnedapproximately2.66 billion [44][45] - For 2025, the company anticipates low single-digit GMV growth on an FX neutral basis, driven by focus categories and geo-specific investments [48] Other Important Information - The company returned approximately 760 million to shareholders through repurchases and cash dividends in Q1 [8][34] - Changes in leadership were announced, with Steve Priest stepping down as CFO and Peggy Alford set to take over [28][29] Q&A Session Summary Question: Demand elasticity in the current commerce landscape - Management noted that eBay is in a strong position to leverage its global seller base and adapt to changes in trade policies, with a focus on used goods during consumer pressure [55] Question: Impact of China tariffs on eBay's business - Management indicated that the Greater China to U.S. corridor accounts for about 5% of total GMV, with tools like Speedpack helping to manage tariff complexities [61][62] Question: Advertising revenue durability amid macro changes - Management reported strong demand for advertising, with no material impact from tariffs observed to date [68] Question: Resilience of eBay during potential consumer pullback - Management expressed confidence in eBay's resilience due to its inventory mix, which includes a significant portion of used and refurbished goods [85][86] Question: Competitive landscape changes due to macro shifts - Management is leveraging its competitive advantage in pre-owned goods and is actively marketing to attract new sellers, which is expected to enhance overall marketplace activity [92][95]