Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gross merchandise volume grew 1% to $18.4 billion in Q2.
- Revenue increased 2% to $2.57 billion.
- Non-GAAP earnings per share rose by approximately 15% to $1.18.
- Returned over $1.1 billion to shareholders through repurchases and dividends.
- Focus category GMV grew by over 4% in Q2, outpacing the remainder of the marketplace.
Negative Points
- Continued macroeconomic headwinds and geopolitical uncertainty.
- Ongoing regulatory challenges impacting operations.
- Softness in C2C volumes in the UK due to new digital sales reporting requirements.
- Foreign exchange was a headwind of roughly 20 basis points year-over-year GMV growth.
- Non-GAAP gross margin declined roughly 30 basis points year-over-year in Q2.
Q & A Highlights
Q: Are you seeing any green shoots in campaign adoption within the unified ad platform and smart targeting? How should we think about advertising growth in the back half?
A: We feel great about the momentum in advertising and the new features. The redesigned interface provides a performance snapshot and daily recommendations for advertisers. We expect modest take rate expansion in the second half driven by our PRT business and ramping up promoted offsite products. (Jamie Iannone, CEO; Steve Priest, CFO)
Q: What are the key friction points you think are immediately addressable with the help of generative AI over the next 12-24 months?
A: We aim to make listing items seamless by leveraging sophisticated models to predict item attributes and enhance product imagery. New features like "Shop the Look" and "Explore" are being tested to improve buyer experiences. (Jamie Iannone, CEO)
Q: Can you update your thoughts around the growth of advertising longer term? Are you still targeting a couple hundred basis points increase in attach rate or take rate?
A: We see a long runway for ads growth from adoption, listings penetration, and ad rate optimization. We have a line of sight to 3% penetration but believe there's more potential beyond that. (Jamie Iannone, CEO)
Q: How do you feel about your ability to improve active buyer metrics in the quarters to come?
A: Active buyer count was fractionally positive year-over-year for the first time since early 2021. We are focused on enthusiast buyers who drive 70% of our GMV. Our strategies are improving buyer acquisition and retention. (Jamie Iannone, CEO)
Q: What are you seeing broadly internationally, and what is the opportunity there?
A: We continue to see an uneven and dynamic environment, particularly in Europe. Investments in C2C in Germany and pre-loved fashion in the UK are helping offset headwinds. Cross-border trade, especially from Greater China and Japan, is also driving growth. (Steve Priest, CFO)
Q: Can you provide more color on the impact of AI features so far?
A: We are seeing high engagement and positive customer satisfaction with AI features, which correlates with GMV growth. AI developments are improving search, advertising, and recommendations, leading to healthier GMV growth. (Jamie Iannone, CEO)
Q: How do you view the consumer health in the U.S. and Western Europe?
A: We see cost-conscious consumers increasingly searching for value. Categories like luxury are still performing well. Our focus on non-new in season and providing great values in used and refurbished items is helping us compete effectively. (Jamie Iannone, CEO)
Q: Can you explain the 3Q GMV guide and the growth outlook at flat at the midpoint?
A: Despite positive growth in Q2, the environment remains uneven. We saw some benefits from Easter timing in Q2. Elevated demand for summer travel and global sports events are making month-to-month trends uneven, which is reflected in our Q3 guide. (Steve Priest, CFO)
Q: Can you discuss the situation with a trading card power seller moving to Fanatics and the broader opportunity in collectibles?
A: We can't comment on any one seller, but we feel great about our innovation in collectibles. Partnerships with Golden and PSA are simplifying processes and driving engagement. Our eBay Live events and new features are also contributing to growth. (Jamie Iannone, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
