eBays Earnings Drop Despite Record Revenue, AI Bets and Depop Deal

eBay reported fiscal 2025 Q4 earnings on Feb 18, 2026, with revenue rising 15% year-over-year to $2.96 billion, exceeding expectations. However, net income fell 22.2% to $528 million, and adjusted EPS declined 18.2% to $1.41, below prior GAAP results. Guidance for Q1 2026 revenue ($3B–$3.05B) and non-GAAP EPS ($1.53–$1.59) outpaced Wall Street forecasts, signaling cautious optimism amid strategic reinvestments.

Revenue

eBay’s total revenue surged 15.0% to $2.96 billion in 2025 Q4, marking a notable rebound from $2.58 billion in the prior-year period. The growth was driven by robust performance across core categories, C2C transactions, and recommerce, which accounted for 40% of GMV.

Earnings/Net Income

Despite revenue gains, eBay’s earnings/Net Income contracted sharply. EPS declined 18.2% to $1.17 in 2025 Q4, down from $1.43 in 2024 Q4. Net income also dropped 22.2% to $528 million, reflecting the impact of strategic reinvestments and operational adjustments. The earnings performance underscores a challenging balance between growth initiatives and profitability.

Price Action

The stock price of eBay has edged up 2.89% during the latest trading day, has dropped 6.06% during the most recent full trading week, and has tumbled 14.46% month-to-date.

Post-Earnings Price Action Review

The strategy of buying eBay (EBAY) shares on the day after earnings release and selling after 30 days delivered moderate returns but underperformed the market. The strategy’s CAGR was 6.86%, trailing the benchmark by 34.29%. With a maximum drawdown of 42.91% and a Sharpe ratio of 0.32, the strategy indicated a challenging risk-return profile, highlighting the importance of risk management in such a volatile scenario.

CEO Commentary

Jamie Iannone, CEO, highlighted Q4 2025 outperformance with GMV growth of ~6% ($80B globally) and 13% revenue growth ($11.1B), driven by focus categories (12%+ GMV acceleration), C2C, and recommerce (40% of GMV). Strategic investments in AI-powered tools like magical listings reduced friction, boosting listing efficiency and GMV. The CEO emphasized AI advancements, including agentic search and next-gen listing experiences, as key growth vectors. Recommerce’s $25B+ economic impact and 8.2M+ carbon emissions prevented underscored circular economy progress. The acquisition of Depop ($1.2B) was framed as a strategic fit to expand C2C and fashion reach, leveraging synergies with Goldin and TCGplayer. Leadership expressed optimism, citing momentum in eBay Live (7x GMV growth YoY) and confidence in AI’s long-term benefits, while balancing reinvestments with operational discipline and shareholder returns.

Guidance

Peggy Alford, CFO, outlined Q1 2026 guidance: GMV $21.5B–$21.9B (10%–12% FX-neutral growth), revenue $3B–$3.05B (13%–15% FX-neutral growth), and non-GAAP EPS $1.53–$1.59 (12%–16% growth). Full-year 2026 targets include GMV growth similar to 2025, revenue growth in line with GMV, and non-GAAP operating income growth of 8%–10%. Capital returns remain a priority, with $2B in planned share repurchases and a 7% dividend.

Additional News

eBay announced a $1.2 billion cash acquisition of Depop, a C2C fashion resale platform, from Etsy to expand its Gen Z and Millennial reach. The deal, expected to close in Q2 2026, aligns with eBay’s recommerce strategy and complements its Goldin and TCGplayer acquisitions. The company also plans $2 billion in share repurchases in 2026, reinforcing its commitment to shareholder returns.