eBay (EBAY) Q3 Earnings call transcript Oct 30, 2024
2min read In the latest earnings call, eBay reported a strong third quarter, marking the second consecutive quarter of positive GMV growth, with a total volume of $18.3 billion and revenue of $2.58 billion. The company's non-GAAP operating income grew by 6% and earnings per share increased by 16% to $1.19.
Key Drivers of Q3 Results
eBay's focused categories, particularly motors, parts and accessories, collectibles, refurbished, and luxury fashion, have been driving growth for the overall marketplace. Focus category GMV grew by nearly 5%, outpacing the remainder of the marketplace by approximately 5 points. Collectibles had a particularly strong quarter, with trading GMV accelerating to double-digit growth. The acquisition of Golden in the collectibles world is opening up exciting opportunities in this space.
Fashion is also a critical entry point for eBay, as nearly 1 in 5 new sellers and buyers come through this category. eBay's recent creative campaign, Things People Love, has been instrumental in raising awareness of eBay's value proposition in pre-loved fashion. The full funnel marketing strategy has been driving continued momentum in focused categories, resulting in healthier trends in active buyers.
Geo-Specific Investments
eBay's geo-specific investments, such as the expansion of C2C initiatives in the U.K., have been a key building block in the return to positive GMV growth. The success of the German initiative over the last 1.5 years has given confidence to move forward with a significant expansion of the U.K. initiative. This initiative includes a suite of new capabilities to upgrade the overall C2C experience, including a simplified native listing flow, managed shipping, and eBay balance.
Financial Performance
eBay's financial performance in Q3 was strong, with revenue growing by over 3% to $2.58 billion. The non-GAAP operating income grew by 6%, and non-GAAP earnings per share grew by 16% to $1.19. The company's free cash flow for the third quarter was $646 million, and eBay repurchased $750 million of shares during Q3.
Outlook for 2024 and 2025
Looking ahead, eBay expects to generate GMV between $18.9 billion and $19.3 billion in the fourth quarter, representing FX-neutral growth between flat and 2%. The company anticipates continued momentum in GMV to be driven by strategic initiatives across focused categories, the U.K., and Germany, as well as horizontal areas. However, the operating environment is expected to be challenging due to persistent economic headwinds and several one-off dynamics in Q4.
For 2025, eBay plans to balance the need to reinvest for long-term growth against near-term top and bottom line performance. The company aims to achieve positive FX-neutral GMV and revenue growth, with non-GAAP operating income dollar growth modestly ahead of GMV and high single-digit growth in non-GAAP earnings per share year-over-year.
Conclusion
eBay's strong third-quarter performance and strategic initiatives across focused categories, geo-specific investments, and financial services position the company well for continued growth in the future. The company's focus on innovation, customer satisfaction, and operational discipline is expected to drive sustainable growth and shareholder value in the long term.
