eBay(US:EBAY)2024-05-02 00:31Financial Data and Key Metrics Changes - Gross merchandise volume (GMV) was roughly flat at $18.6 billion, while revenue grew more than 2% to $2.56 billion [7][30] - Non-GAAP operating margin was 30.3%, and non-GAAP earnings per share rose 13% to $1.25 [7][30] - The company returned $638 million to shareholders through repurchases and dividends [7][30] Business Line Data and Key Metrics Changes - Focus categories GMV grew nearly 5%, outpacing the remainder of the marketplace by roughly 6 points [8][31] - Motors Parts & Accessories (P&A) was the largest contributor to growth among focus categories, despite facing headwinds in January [8][31] - Total advertising revenue grew 20% to $384 million, with first-party ads growing 28% to $370 million [24][35] Market Data and Key Metrics Changes - U.S. GMV was nearly flat, while international GMV grew nearly 1% on an FX-neutral basis [31][32] - The U.K. saw some softness in C2C volumes, while the B2C business trends remained consistent [33] - Trailing 12-month active buyers were stable at approximately 132 million, with enthusiast buyers at 16 million [33] Company Strategy and Development Direction - The company aims to strengthen its consumer value proposition in pre-owned fashion and enhance the buying and selling experience [17][18] - A multi-year partnership with McLaren Racing was announced to increase brand visibility among motorsports enthusiasts [10] - The company is focused on leveraging generative AI to improve customer experience and operational efficiency [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges in the global economy, particularly in Europe, but expressed confidence in achieving positive GMV growth by Q3 or Q4 [7][46] - The company is committed to innovation across focus categories and horizontal initiatives to drive sustainable long-term growth [28][46] - Management expects to generate revenue between $2.49 billion and $2.54 billion in Q2, with FX-neutral growth between negative 1% and positive 1% year-over-year [40][41] Other Important Information - The company reached a milestone where pre-owned and refurbished goods accounted for 40% of total GMV [16] - The company has entered into agreements with Collectors and PSA to streamline the buying, selling, grading, and storing of trading cards [14][15] - Free cash flow was $472 million in Q1, with cash and non-equity investments totaling $4.9 billion [38] Q&A Session Summary Question: Insights on Q2 non-GAAP operating margin - Management indicated that Q2 guidance implies margin expansion driven by advertising growth and efficiency gains, despite some FX headwinds [49] Question: Innovations driving growth acceleration - Management highlighted focus category work, geographic initiatives, and horizontal innovations like AI capabilities as key drivers of growth [52][54] Question: Current state of cross-border commerce - Management stated that cross-border transactions account for about 20% of GMV, with positive growth driven by initiatives like eBay International shipping [56][58] Question: Health of the consumer - Management noted a dynamic environment with inflationary pressures, but emphasized the strength of the value proposition in the pre-owned market [60][61] Question: Investments in generative AI - Management expressed excitement about advancements in AI and its potential to enhance customer experience and operational efficiency [63][65] Question: Trading card business volume trends - Management reported an uptick in trading card volumes due to sustained interest from customers acquired during the pandemic and new features introduced [69][71]