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Introduction & Market Context
eBay Inc. (NASDAQ:EBAY) released its first quarter 2025 financial results on April 30, exceeding guidance across all key metrics while continuing to execute on strategic initiatives in focus categories. The e-commerce marketplace reported revenue of $2.58 billion and non-GAAP earnings per share of $1.38, both surpassing the company’s previous guidance.
The company’s stock closed at $67.20 on the day of the announcement, up 1.43% in regular trading, with minimal movement in after-hours trading. This represents a significant improvement from the sharp decline seen after the previous quarter’s results, suggesting investors are responding positively to the company’s execution.
Quarterly Performance Highlights
eBay’s Q1 2025 results exceeded guidance across all key metrics, demonstrating continued momentum in the business. Gross Merchandise Volume (GMV) reached $18.8 billion, growing 2% on an FX-neutral basis year-over-year, while revenue increased to $2.58 billion, up 2% on an FX-neutral basis.
As shown in the following summary of Q1 2025 performance versus guidance:
Non-GAAP operating margin came in at 29.8%, exceeding the guided range of 29.0% to 29.4%. Diluted non-GAAP EPS of $1.38 represented 10% year-over-year growth and surpassed the guidance range of $1.32 to $1.36.
The company highlighted its 16 million "enthusiast buyers" – defined as those with at least 6 purchase days and $800+ annual spend – as a key driver of platform value.
Strategic Initiatives
eBay continued to execute on strategic initiatives across several focus categories. In trading cards, the company enhanced its offerings with PSA Data Integration and PSA Grading Add-On features, allowing collectors to quickly determine card rarity, view grade distribution, and ship cards directly to PSA for grading with a single click.
As shown in the following mobile app screenshots of the trading card features:
In fashion, eBay strengthened its market position through influencer partnerships and collaboration with Condé Nast, aiming to solidify its reputation as a trusted destination for pre-loved, branded fashion products.
The following image highlights eBay’s fashion initiatives:
The company also introduced a new AI-powered discovery experience, personalizing shopping based on users’ preferred brands and sizes. This enhancement is part of eBay’s broader AI strategy to improve user experience and drive engagement.
As illustrated in these screenshots of the new AI-powered discovery experience:
For sellers, eBay launched a simplified listing flow powered by "Magical Listing Technology," which has already been rolled out to 100% of consumer-to-consumer sellers in the US, UK, and Germany. The company reported higher completion rates, faster listing times, increased sold items, and over 90% customer satisfaction with the new flow.
The following images demonstrate the new simplified listing experience:
eBay also expanded its financial services offerings through an enhanced partnership with Klarna in April, providing buyers with more flexible payment options including Buy Now, Pay Later services.
Detailed Financial Analysis
eBay’s GMV has shown consistent growth over the past several quarters, with international markets outpacing US growth. In Q1 2025, US GMV grew 1% year-over-year on an FX-neutral basis to $9.1 billion, while international GMV increased 3% to $9.7 billion, resulting in total GMV growth of 2%.
The following chart illustrates the GMV trend over the past six quarters:
Revenue has similarly shown steady growth, reaching $2.58 billion in Q1 2025, up 2% year-over-year on an FX-neutral basis. The company’s take rate (revenue as a percentage of GMV) was 13.8% for the quarter.
As shown in the revenue trend chart:
Advertising continues to be a bright spot for eBay, with total advertising revenue growing 13% year-over-year to $442 million in Q1 2025. This represents 2.4% of GMV, up from 2.1% in the same quarter last year.
The following chart details advertising revenue growth:
Non-GAAP operating income was $771 million in Q1 2025, representing a margin of 29.8%. While this was slightly down 1% year-over-year, it exceeded guidance and demonstrates eBay’s continued focus on operational efficiency.
Free cash flow showed significant improvement, increasing 36% year-over-year to $644 million, representing 25% of revenue. This strong cash generation supports the company’s capital return program.
eBay returned $893 million to shareholders during Q1 2025, consisting of $134 million in cash dividends and $759 million in stock repurchases. The company reported approximately $2.7 billion remaining in its repurchase authorization as of March 31, 2025.
The company’s balance sheet remains solid with $6.2 billion in cash and investments, offset by $6.7 billion in debt, resulting in a net debt position of $0.5 billion. eBay is targeting a mid-term leverage of approximately 1.5x net debt and gross debt below 3.0x EBITDA.
Forward-Looking Statements
For Q2 2025, eBay provided guidance for GMV between $18.6 billion and $19.1 billion, revenue between $2.59 billion and $2.66 billion, non-GAAP operating margin between 27.0% and 27.8%, and diluted non-GAAP EPS between $1.24 and $1.31.
The company noted that the guidance reflects continued execution of strategic initiatives, tempered by macroeconomic uncertainty and trade policy changes. It also mentioned a headwind of approximately 50 basis points year-over-year due to the timing of Easter, while expecting its Goldin acquisition to contribute approximately 20 basis points of year-over-year growth.
For the full year 2025, eBay expects to continue executing on strategic initiatives while navigating macroeconomic uncertainty. The company anticipates modest FX tailwinds to GMV and revenue growth rates, with non-GAAP operating income expected to grow in line with or slightly above revenue. Capital allocation priorities include organic investment, strategic M&A, and returning excess cash to shareholders through dividends and share repurchases.
eBay’s Q1 2025 results demonstrate the company’s ability to execute on its strategic initiatives while delivering financial performance that exceeds expectations. With continued focus on enthusiast buyers, key categories like trading cards and fashion, and technological enhancements through AI, eBay appears well-positioned to navigate the competitive e-commerce landscape in the quarters ahead.
Full presentation:
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