Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- eBay Inc (EBAY, Financial) reported a second consecutive quarter of positive GMV growth, with a 1% increase to $18.3 billion.
- Revenue increased by more than 3% to $2.58 billion, and non-GAAP earnings per share grew by 16% to $1.19.
- Focus categories, including motors, parts and accessories, collectibles, and luxury fashion, grew by nearly 5%, outpacing the rest of the marketplace.
- The company successfully launched new initiatives in the UK, including a simplified native listing flow and managed shipping, which are expected to enhance the C2C experience.
- eBay Inc (EBAY) continues to leverage AI to improve the platform, with over 10 million unique sellers using AI-enhanced listing features, generating several billion dollars in GMV.
Negative Points
- Despite positive growth, eBay Inc (EBAY) faces a dynamic macroeconomic environment, which could impact future performance.
- The company anticipates a challenging operating environment in Q4 due to factors like the U.S. elections and a shorter holiday shopping period.
- The elimination of final value fees for UK C2C sellers may pressure revenue in the short term until new monetization strategies are fully implemented.
- Foreign exchange rates posed a 30 basis point headwind to revenue growth in the third quarter.
- Third-party display ad revenue declined by 43% year-over-year as eBay Inc (EBAY) continues to deprecate legacy ad units.
Q & A Highlights
Q: Can you elaborate on the monetization efforts for the e-commerce initiatives and the potential for expansion to the U.S.?
A: (Jamie Iannone, CEO) We launched this from a position of strength, having seen strong results in Germany and early success in the UK. We phased in the changes to give sellers and buyers time to adjust. We believe these changes will unlock a significant portion of TAM in our second largest market. We have no plans to launch free selling in the U.S. as the market dynamics differ.
Q: How is the second generation of your AI models impacting volume growth?
A: (Jamie Iannone, CEO) Our new AI models are outperforming public benchmarks and have significantly impacted our platform. Over 10 million sellers have used these tools, creating over 100 million listings and generating $7.71 billion in GMV. We continue to optimize and expand these tools.
Q: What are the key drivers for growth in focus categories, and what initiatives are you most excited about?
A: (Jamie Iannone, CEO) We see strong momentum in parts and accessories, collectibles, refurbished items, and luxury fashion. Collectibles, in particular, saw double-digit growth due to innovations like TCG Player and partnerships with PSA. Our focus categories continue to grow at market rates.
Q: Can you discuss the impact of the UK managed shipping initiative on your financials?
A: (Steve Priest, CFO) Managed shipping will be recognized on a gross basis, similar to eBay International Shipping. It will pressure our operating margin but contribute positively to operating income dollars. This initiative simplifies the shipping experience and creates a new revenue stream.
Q: How are you addressing competition in the collectibles and fashion categories?
A: (Jamie Iannone, CEO) We continue to innovate in collectibles with partnerships and new features like eBay Live and case breaks. Our relationships with top sellers and focus on an open marketplace help us maintain a strong position. In fashion, we emphasize unique inventory and trust-building initiatives.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
