eBay Aktie

All right. Good afternoon, everyone. Thanks for joining us today. My name is Benjamin Black. I'm the U.S. Internet research analyst here at DB, and I'm very pleased to be joined by Peggy Alford, the CFO of eBay. So thank you so much for joining.

All right. So maybe to kick things off, Peggy. You've been in the seat for about a year now. Some would say that you're a real boomerang, right? So back to eBay, where you started in early 2000s, you're at PayPal and on the Meta Board in between. So what threw you back in? And I guess what surprised you to the upside? And where does it work a little bit harder than you anticipated from the outside looking in?

Yes. It's so exciting to be back. As you mentioned, I was at eBay in the early 2000s, that's when everything was sort of ramping. We were ramping a lot of our outside of U.S. business at the time. And I always realized what was so special about this sort of 2-sided marketplace where we help sellers create a business and reach buyers across the globe. And so there's just -- there was this inherent sort of doing great things that still remained when I joined -- when I rejoined.

But I feel like along the way, eBay sort of lost its way a little bit in terms of trying to focus on new in season. And so when Jamie came back about 5 years ago, our CEO, he really went back to what we have the right to win. We wanted to create these customized experiences for non-nuances season for e-commerce and really think about these categories where we can create these customized experiences that really help buyers and sellers find each other and increase the trust on the marketplace.

And so, it was really just this renewed focus on going back to the basics and doing what made eBay so special that really was attractive to me. And then you take tools like AI, we'll talk about magical listings and Agentic search and those capabilities on top of what is this differentiated value prop for buyers and sellers was just something that I really wanted to be a part of. And so I think what people from the outside, it seems like a pretty simple place, platform, buying and selling.

But on the back end, there's just a lot of trust that we've built through the shipping solutions and financial services and fitment and authenticity guarantee. These are all things that really create complexity but also make it a lot easier for buyers and sellers to trust the platform and be able to really be able to create value between the buyer and seller.

Yes. I mean it looks like that's working because 2026 looks to be a relatively good start. You raised your GMV guide, you raised your operating income guide for the year as well. So from a high level, if you had to point to sort of 1 to 2 factors that are driving this trend, what are those? And what gives you the confidence that those will sustain?

Yes. What gives me confidence is how the breadth of the strength. There's a lot of folks that will talk about the strength in Pokemon, Pokemon is one part of collectibles. We're seeing in collectibles outside of Pokemon, which has been tremendously strong triple-digit growth. We are seeing all of the sporting categories, cards really being popular. The other collectible card games are extremely popular. And then you step outside of collectibles fashion has been tremendously strong parts and accessories is a category that was strong even when I was back here in the 2000s, and it's still creating a lot of strength.

When you look at focused categories, e-commerce and our C2C, our consumer-to-consumer business, it makes up about 70% of our GMV now. Those are areas where we can create these very customized experiences, and we're just seeing that strength quarter after quarter, it grew in that 70% grew in the high teens, focused categories, specifically double-digit growth in Q1. And so we're just seeing so much strength that's very broad, but our playbook of really thinking about focusing on these areas with large TAM, and creating experiences where buyers and sellers can really trust the platform are really starting to yield the benefits that we're seeing in our GMV growth.

Right. I want to dig into all of those, but perhaps just more near term, just given the rising fuel costs, inflationary concerns, it'd be great to sort of hear an update on the health of the U.S. consumer at least from your vantage point. And how are you seeing a difference in trends domestically from a consumer health perspective versus internationally?

Yes. So in the U.S. it's something that we're watching closely. The consumer has been very resilient, surprisingly resilient in some ways. And you see that in our U.S. GMV strength that's both a healthier consumer overall, but also these areas that we talked about that we're really focusing on strategically. And we -- internationally, it's definitely been the macro environment has been much softer and we see that show up in the strength of the international consumer. However, when you look at our areas of strategic focus, even internationally, you see a lot more strength than the macro environment would suggest.

And so that tells us that our focus that we have is the right one. We're seeing improvement in the last quarter. In Q1, we saw improvement even outside of the U.S. And so we feel like our areas of strategic focus are the things that are going to cause the consumer even with fewer dollars to want to transact with our platform. And we also see that because we have this sort of mix of discretionary and nondiscretionary goods, if you think about e-commerce, a lot of consumers when they're looking to get a deal may want to buy on eBay because they can get what they want for less. And then in times when you have more dollars that we have a lot of inventory like that nice to have type inventory as well. And so I think that mix really creates some resilience on our platform as well, both in the U.S. as well as outside.

Some counter cyclicality almost.

Absolutely.

Okay, let's key off the focus categories. So collectibles, eBay Motors, fashion, those are all running hot. I think it's up 24% or so in Q1 that certainly outpaced the rest of the marketplace. So you also have a lot of momentum, as you mentioned, in e-commerce. So what's the secret sauce? Do you think you find a structural edge relative to the more verticalized players out there? And how durable of an edge do you think that is?

Yes. I think one of the things that we focused a lot on is making it a lot easier for sellers to list a lot of friction is created just if you think about all the things you may have in your house and your garage and your attic, that you could -- that you're not using that you could sell. What prevents people from doing that is just the friction of getting it online. And so we have really focused on making sure that it is extremely easy and AI really has enabled us to do that in a much more scalable way.

We have this magical listings technology that we introduced where essentially you can just take a picture and all of the 30 years of data can help with creating all of the -- tell you, like take a picture of the label, take a picture of the bottom, take a picture. It kind of guide you through the process. and that enables you to get all -- use all of our proprietary data to create the listing along with pricing guidance and that sort of thing. And so I think the -- on the selling side, that technology has unlocked a lot of inventory. We see a 50% increase in listings, new listings. New listers and also increases in GMV as well as items listed just because of how easy it is. On the demand side for buyers, we're really focused on using AI to help with the Agentic search process.

So how do you actually use your voice to essentially get to what you're looking for in a much more seamless way. And so I think that we're really just focused on taking the friction out of the process on both the buying side and the selling side, which has really been an unlock for us.

Yes. And maybe sticking with focus categories, and I think you touched on this earlier in terms of the breadth that you really have, right, and how broad-based the strength is, it's not just Pokemon, it's not just Bullion. So what's driving that breadth across sort of the collectible subcategories across vehicles, parts and accessories across fashion? And how are you going to drive -- how can you prove to the market that that's a durable breadth and strength in that?

Yes. I mean part of our strategic focus has really been for each of these categories figuring out where is the friction and how do we remove that? So he takes parts and accessories. We focused a lot both on what we built as well as some acquisitions that we did around fitment and guaranteed fit and allowing if it doesn't fit, which it will, given the technology, you can return it easily. And so if you think about that area, we are leading both in the U.S. and internationally just because of how easy it is to find parts for your car.

In Europe, in some parts of Europe, a lot of the salvage parts are used even by the insurance companies require that the salvage parts be used will be offered at least in addition to new parts. And so -- and then you combine it with the vehicles business that we've been scaling. And if you're an enthusiast car collector, you probably also may be interested in parts for your car. And so those two categories are complementary. And so I think it's a combination of shipping solutions and specific customized functionality for each of these areas that really reduce the friction for both buyers and sellers in these areas with large TAM. And so that's been sort of our focus in all of these categories, which has enabled us to really get traction.

Right. And I think right now, focus categories account for about 35% of GMV today. when you think about extending that playbook to sort of the next set of verticals, what's the bottleneck? What's sort of the gating factor? Is it engineering capacity? Is it the right sort of authentication, infrastructure? Is it marketing? And how should we think about sort of the expansion to new subcategories?

Yes, we have a long sort of road map of additional focus categories that are sort of complementary to the ones we have today. we sort of balance the growth of our existing focus categories where despite our growth, we are actually -- there's a lot of TAM ahead. And so we want to make sure we're continuing to grow the focus categories that we have because these are areas where we really feel like we have a right to win, and there's a large TAM.

In addition to that, there's geographic expansion as well. We think about the focus categories and what's relevant in different parts of the world and where we can grow those categories as well. But we also will continue to increase additional focus categories. Fashion was one of our newest focused categories, and we're seeing a lot of traction both in the U.S. as well as outside of the U.S.

Right? So a lot of runway within the existing...

That's a runway, which that's what gives us confidence in sort of the continued growth ahead.

Right. Okay. eBay Live, you spoke about the annual run rate being up 8x on a year-on-year basis, that's a big number that I checked. You've launched it across a number of countries over the last few quarters. Maybe talk to us about the next leg here. Is it more category expansion beyond sort of collectibles and watches -- is it sellers? Is it monetization? Just give us something.

Yes. We're -- it's a newer category for us and a newer medium for us, and we have seen very encouraging growth, which you talked about 8x growth in Q1 year-over-year. That figure in Q4 was 7x. And so we're seeing accelerating growth in eBay Live we're focused currently on really making sure that we've got the right content on the site. So that's about finding these creators that really will drive the momentum and make it interesting for buyers to view this type of medium.

We're also focused on the demand side and really making sure that we're creating an experience that's entertaining and is yielding sort of transactions and GMV. We're always working on sort of just improving the functionality of the capability. And what's exciting about it is for a platform like eBay, it's very complementary to our core business and specifically, right now, focused categories, fashion, collectibles, these are areas that are large for eBay live right now.

But what we're seeing is that a lot of sellers in our core categories are recognizing that this is a very attractive medium for showcasing their content and enticing buyers and then it creates this flywheel that works really well on our platform.

yes, certainly. Acceleration is always good to hear as well.

Absolutely.

Shifting to buyers, and it's great to hear the U.S. growth there on a year-on-year basis and across entities. I think you're up 8% exactly. So that's higher than the global trends. So can you talk about what's driving that relative strength in the U.S.? And then relatedly, do you think you're seeing efficient returns on your marketing spend? And if so, sort of what cross learnings can you take domestically to the international business?

Yes. Our U.S. buyer growth has been very encouraging. And it's really about the areas of focus of strategic focus that are really attracting new buyers and also increasing the activity of the buyers to make them enthusiast buyers. It's something that we've really focused on. We focus on customer satisfaction because we know that GMV follows that. And that's what really drives active buyer growth and enthusiasm by our growth. Marketing is a part of it. We've seen a lot of efficiency and effectiveness with our marketing. And especially for some of our newer areas of focus, we have really invested in marketing, but it's not just marketing. As a reminder, most of our traffic is organic. 85% of our traffic is organic.

And so while we are reliant on marketing, and we're always focused on making sure that our marketing dollars are always efficient in driving usage. It's really the focus that we have on creating these really enticing experiences that's really driving a lot of the buyer growth. Outside of the U.S., I think the macro conditions have been what's really impacted our buyer numbers. However, we do see that in our strategic focus areas, the buyer growth is higher which makes us encouraged that we're on the right track with the strategic focus areas.

So once the macro clear is presumably...

Yes, we feel like we're focused on the right things. when the market starts to turn around, then it will be -- we'll see that shows up in the buyer numbers.

Right. So in regards to sellers, you had the U.K. C2C overhaul. You had the work in Germany before that. Now you've launched Australia. I think the this -- or last month, really. What's the right way to think about the playbook here? Is it sort of a repeatable formula that you keep on sort of porting from one market to the next? And how should we think about sort of seller growth over the next in 12 to 18 months?

Yes. We definitely have a repeatable playbook. We see it working. We -- we did the C2C initiative in Germany initially. We then rolled it out to the U.K. As you mentioned, we launched a C2C model in Australia last month. And so the playbook is something that we continue to apply to many markets. However, we look at each market individually and look at what buyers and sellers actually want, and we create our solutions around that.

In the U.S., we have a very strong C2C business already. And with the acquisition of Depop, we're extremely excited to amplify the C2C business in the U.S. with that business as well once it closes. And so definitely a repeatable playbook, but something that we customize based on each market and what it needs.

Right. Shifting to AI, which is obviously the topic of every conversation right now. You guys have talked about this as being sort of a structural tailwind just given your unique inventory. So from the CFO seat, where are you actually seeing the ROI show up today? And what are some of the investments that you're making that may have a longer payback period?

Yes. We've been using AI capabilities for a long time. And recently, we've really accelerated those efforts we talked about magical listings and just the ability to allow sellers to very quickly upload many things and just sort of unlock the friction on the site. We talked about on the demand side, really making search much more customized and personalized and easy for fires to sort of build on their needs as they see results and just continue to add on the way you see in some of the ChatGPT or other models, we have that internally built. And so we've really focused on building a platform that enables us to have those capabilities that capitalize on 30 years of data.

We hit our 30-year anniversary last year. So we have 30 years of buyer and seller data that really enables us to fuel these AI capabilities in a way that it's very personalized, but also cost-efficient such that we're not having to rely on third-party models fully. But I think most importantly, what we -- what is a tailwind for us is this sort of like trust and enablement layer. We talked about our shipping solutions, our financial services capabilities are things like fitment, authenticity guarantee.

These are all things that when you apply it to extremely unique inventory that we have builds sort of like trust and enablement that causes buyers and sellers to want to do that on our platform. You're not buying toilet paper where you can sort of just put it in a search engine or in one of these AI engines and that's all that matters. And so that's where I think for us, we're really building this platform that enables us to use these capabilities using our technology, but also flexible enough to be able to plug into third-party models so that we're doing it in a very efficient manner. And then there's all of the capabilities internally.

You mentioned engineering capability AI has really enabled us to get a lot more productivity out of our engineers. But even we created a lot of capabilities to our customer service agents to be able to answer customer calls in a much more personalized way. And we even gave these capabilities to our sellers so that they could help with questions that may come in around their inventory or their listing so they could spend more time selling. And so those are just a few areas that in a cost-efficient manner. We're able to really amplify the capabilities that we have on the platform, which makes us very confident that this is a tailwind for eBay.

Yes, yes. And maybe drilling into Magical Listings, specifically, you mentioned air listings up to 500 million over a 50% increase in new listing creation rate. So how do we think about the through line from it's easier to list to actual GMV, right? Is the bottleneck? Is it supply? Is it discovery? Is it demand? Is it both?

Well, I think on the what we were addressing with magical listings is that the friction is really about getting inventory on site. So we talked about earlier, there's just so much inventory out there. that I think the stat is everyone has at least $4,000 of things that they could sell and only a fraction of that is online. And a lot of that has to do with just if you think about how busy we are going into your addict or your closet or the basement and kind of saying, okay, let me get rid of a bunch of stuff and rather than throwing it away or taking it to donate, I could easily get it online.

That's the technology that magical Listings has enabled because just with a camera, you're able to take pictures and then it generates the listings. And so if you think about how easy it is to get a listing up and then how easy it is to get 10 or 20 or 30 listings up. That's really the unlock. As it relates to magical listings just to get inventory on site, which then we have so much inventory on the site, which creates an environment where for buyers, you can pretty much find anything that you may want to find. And then with our Agentic search capabilities, which makes it much easier to find what you're looking for and be able to talk and continue to hone your search, that capability really enables kind of the demand side of the equation. And so I think it's both, that the unlock that we can use AI that really unlocks both demand and supply.

SP1 Yes, I can imagine in the first time you have a successful listing as a seller using magic listing that may be -- that may unlock sort of the flood gates and you're going through the...

Sell everything, sell your partners goods as well.

All right. On Agentic commerce, right? So you have the on-platform Agentic search beta that's showing, I think, 50% increase in search engagement. You're also an early participant on OpenAI's ad pilot as well. So how are you thinking about that on platform versus off-platform balance? And maybe zooming out a little bit, how do you address concerns that Agentic discovery could over time sort of commoditize marketplaces? That's a concern.

Yes. So we have our own cloud-based proprietary platform that we built. And the reason we did that is because we wanted to make sure that we could create kind of the very customized, unique experience on our site using 30 years of data along with all of the sort of trust and enablement capabilities that we have so that you could actually amplify that experience on our site. And we built it in a way that we're able to also continue to experiment with third-party plug-ins and that sort of thing because we know that, that traffic is additive.

We see that although traffic from third-party models is extremely small today. It is traffic that's coming with intent. And so it's additive to our overall traffic, our organic traffic as well as our paid traffic. And we see that, that traffic that comes from third-party sources, it actually -- for someone who would buy something coming through a third-party model, we see that when they come back, 50% of the time, they come back organically.

And so that is just an indication of the value that we're driving because of those capabilities as well as the unique inventory on eBay. And so we felt that it was important that we started by building a platform that we run ourselves, but then make it flexible enough so that as some of these models are producing more and more traffic that we can plug them in as well and continue to experiment in that area.

Right. That makes sense. Okay. Shifting gears completely. Cross-border trade tariffs. So obviously, a lot has happened in the last 12 months or so, and that clearly brings -- and you mentioned a few then sort of shipping into focus to move friction. So maybe spend a few minutes talking about your latest shipping initiatives? And how much room is there left to run to lower friction to drive up for the throughput?

Yes. The geopolitical environment and tariffs has been -- has definitely introduced friction into the process for buyers and sellers. And we noticed in 2025 when we were seeing this happen that shipping, as you mentioned, was an area where we could really help both buyers and sellers kind of navigate the trade environment and remove some of the friction. And so through eBay international shipping through our SpeedPak partnerships, these were all areas that we really double down on and we continue to increase this capability in more and more markets.

Because of the fact that we saw this is the way that we can enable buyers and sellers to navigate. And so what we saw is even though we saw impact from tariffs, we saw that over time, we're starting to -- first of all, buyers and sellers are starting to get used to the environment a little bit more, but our shipping solutions has really taken a lot of the friction out of the process and enabled us to sort of reduce some of that impact of tariffs.

Right, right. All right. Let's quickly move over to margins. So you're guiding to get these numbers right, 27.6% to 28.1% operating margin for Q2. You raised your full year OI growth to 9% to 11% from 8% to 10%. So as advertising scales and you cycle through the U.K. managed shipping impact, what's the right framing for the medium-term margin algorithm for eBay?

Yes. We're really focused on driving growth in operating dollars. So that's where we focus. And that's what we sort of solve for because you mentioned advertising. Advertising has been the primary contributor to our margin and take rate dynamics. Shipping is becoming an increasing contributor also. But we have a number of sort of both take rate and margin profiles with a different sort of portfolio of businesses that we have. Some of our newer businesses like vehicles and live because it's sort of earlier in life cycle and we're really focused on generating growth in both on the demand side as well as the supply side.

And so less focused initially on the monetization focus. With vehicles and some of our other higher ASP categories, which are growing because of the trust we've built on the platform. Those may result in lower take rate but both contribute very positively to both GMV as well as to margins. And so that's why, overall, we really focus on operating profit growth. And as you mentioned, we grew it from -- we guided 8% to 10% and now we're 9 to 11. And so we've increased our growth profile for the year. And so we feel really good about that.

And that balance between really driving -- continuing to drive GMV growth. and investing in continued growth ahead is something that we really focus on overall.

Great. And then you mentioned the first-party ads grew 30% year-on-year in Q1. Now add as a percent of GMVs in the 2.6% range. So how much runway do you have left there? And I guess, relatedly, how should we think about the take rate going forward with that and shipping as well?

Yes. We talked about in the past sort of 3% target for ads penetration. That's by no means a ceiling. You mentioned 2.6, and so we're well on our way but there is so much growth ahead and that growth can come from anything from increased penetration in our listings with advertising, more sellers advertising, or just some of the AI-enabled tools that just increase the relevance of the ads and just drive more use of advertising. And so there's lots of sort of drivers that are ahead for continued growth in advertising.

We -- as I talked about before, that has been a primary driver of take rate and margin profile, but there continue to be a lot of other levers. You mentioned shipping, and so we're just focused on making sure that we're continuing to grow our strategic focus areas and then these enabling functionality like shipping and ads along with it.

And then shifting to an acquisition Depop expected to close at the end of the third quarter. Just help us understand what a good outcome will look like in a year or 2 after the close. Is it primarily about demographic expansion into sort of Gen Z, is it C2C fashion supply? Is it cross-listing, can just help us understand?

Yes. Really, all of that. So Depop has been such an exciting brand on its own. It grew 60% year-over-year in the U.S. and just really strong sort of fashion and other categories as well, where we're really approaching it from a position of strength we have a really strong U.S. C2C business as well, and Depop gives us sort of additive strong C2C fashion business, but also a young access, as you mentioned, to a younger demographic that we think is complementary to the strength that we have in our business as well.

So we're very excited to allow Depop to continue to operate as a brand, a strong brand that it is. but then be able to bring some of the scaled capabilities that we have on the eBay platform, some of our shipping solutions and some of our authenticity guarantee, cross-listing, these are all areas that we'll explore for bringing synergy between the 2 brands and really driving a strong continued fashion C2C business.

Yes. And then on capital allocation. So you've reiterated 90% to 100% of free cash flow target. 2 billion buyback, the dividend as well. Now you have the Depop acquisition is $1.2 million, all cash. And with rates where they are today, just walk us through how you think about the right balance between the buyback M&A and then also balance sheet flexibility as well.

Yes. So that's the financial architecture of eBay is something that was attractive to me, especially as the CFO coming in. And we've been able to really drive with strong GMV growth, also strong profitability and free cash flow. That free cash flow gives us a lot of opportunity to both return to shareholders while continuing to invest in future growth. And so our primary objective first is to drive continued growth.

And so when we were continuously investing in areas where we know there's a lot of TAM and a lot of growth ahead. But we also want to drive strong flow-through to profit dollars and also return to shareholders. And so even with the Depop acquisition, the $2 billion of stock buyback and the dividend, we're square within the 90% to 100% of normalized free cash flow that we guided to.

Okay. And then I'd be remiss not to touch on the GameStop situation. So obviously, the Board rejected the proposal last month. But one of the underlying rationale was that physical retail could give marketplace, a national network of authentication of intake, drop-off even live commerce. So how do you think about whether or not physical touch points be partner-led or otherwise, could actually play a role in eBay's sort of model going forward?

Yes. I think the -- one of the things that's been so attractive about eBay is how asset light we are -- and the idea of being able to introduce all the capabilities that you mentioned, we have authenticity centers that enable us to do that in a scalable but efficient manner. We have fitment. We have shipping capabilities that we do ourselves as well as through partners but all being able to do it in an asset-light way. And so I'm not sure that physical locations really fits into that model because we already have those capabilities. We're continuing to scale those capabilities, but we're doing it in an asset-light manner that is much more financially attractive.

Right, right. Okay. So you have -- you're using technology based. We're using technology.

We're using partnership. We're using scaled centers that are centralized that enable us to have a lot of sort of scale in an asset-light way.

Right. So last question, I promise. When you and Jamie are sitting down and you're looking at the next 3 to 5 years as you look at the picture for eBay, what's the one thing that you want investors to be focused on that you don't think they're focused on right now. And conversely, what something that folks are focused on that you think is maybe less relevant for the overall picture.

Yes. I mean, I guess I would say one and the same on both. I mentioned earlier how exciting the breadth of our strength is, right? And I think that because of how strong certain parts of the business have been like people will say, "Oh my gosh, Pokemon, it's been so strong for so long and how durable is it and then they'll tie it into our GMV growth. And yet Pokemon is just one part of collectibles.

Collectibles is just one of our focused categories. And if you look at sort of all of our focus categories, you look at e-commerce, you look at C2C, these are all growing individually and together and represent such a large part of our GMV. And so even removing collectibles from the equation, we still have double-digit growth for the rest of the business. And so I think it's really just how resilient our business is because of the focus that we've had on creating these very customized user experience between buyers and sellers, doing them in areas where there is a very large TAM and doing it in a way that creates sort of diversity of GMV contribution, which gives us a lot of confidence in the durability of that growth ahead and how much more runway. We're really just getting started, and I'm just so excited to be a part of the journey.

Great. Well, I think we're up on time, Peggy. Thank you for the time for the insight. It seems like a lot of tailwinds going your way with a lot of focus and there's a lot of self-help as well. And so -- thank you again for your time, and I hope to welcome you back next year.

Yes. Thank you for having me.

Good day, everyone. My name is Megan, and I'll be your conference operator today. At this time, I would like to welcome you to the eBay First Quarter 2026 Earnings Call. [Operator Instructions].

At this time, I would like to turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's First Quarter 2026 Earnings Conference Call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer; and Peggy Alford, our Chief Financial Officer. We're providing a slide presentation to accompany our commentary during the call, which is available through the Investor Relations section of the eBay website at investors.ebayinc.com.

Before we begin, I'll remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. Additionally, all growth rates noted in our prepared remarks will reflect organic FX-neutral year-over-year comparisons, and all earnings per share amounts reflect earnings per diluted share, unless indicated otherwise. All year-over-year growth rates versus 2025 and are also based on recast financials reflecting our adoption of the new internally developed software accounting guidance in 2026.

During this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons. You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K, Form 10-Q and our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of April 29, 2026. We do not intend and undertake no duty to update that information.

With that, I'll turn the call over to Jamie.

Thanks, John. Good afternoon, and thank you all for joining us today. I am pleased to report we're off to a very strong start in 2026. Our first quarter results exceeded our guidance and consensus estimates across the board despite ongoing macroeconomic and geopolitical uncertainty across many of our major markets.

During Q1, gross merchandise volume rose by 14% over $22 billion while revenue grew 17% to more than $3 billion. Strong flow-through of this top line momentum led to 18% year-over-year growth in non-GAAP operating income, which reached over $900 million. Our non-GAAP earnings per share increased by 21% year-over-year to $1.66. These strong top and bottom line results were driven by a broad-based GMV acceleration across all of our major categories, alongside improved year-over-year trends across most of our key geographies. Our most established strategic priorities now make up approximately 70% of our total GMV.

This includes focused categories, our consumer-to-consumer or C2C business, and e-commerce, which is made up of pre-owned and refurbished items. These priority areas each individually grew faster than overall GMV in Q1. And collectively, they grew in the high teens year-over-year. reflecting the impact of our strategic investments over the last several years. Our focus categories continue to build momentum in Q1, with GMV growth accelerating to 24% and reflecting the benefits of our continued investments in trust, product experience improvements and full funnel marketing.

The collectibles category was the largest contributor to GMV growth in Q1, and reflecting broad-based momentum across the category, the 30th anniversary of Pokemon in late February, fueled significant enthusiasm that translated into strong demand on our platform, which we supported through coordinated activations across our core marketplace, eBay Live, TCG Player and Golden. Sports trading card GMV growth accelerated notably in Q1 and was a larger contributor to GMV growth in Pokemon, as we benefited from strong late-season demand for the NFL and NBA as well as 2026 releases for Major League Baseball.

Outside of trading cards, we observed strong GMV growth across much of our broader collectibles offering, including in right to in areas like collectible coins, toys, action figures and comic books. We also saw a transitory benefit to GMV growth from gold and silver bullion in response to precious metal prices. But this demand began to normalize in late Q1 as expected and should revert to historical levels in Q2. Within our off-platform marketplaces, TCG player growth remained strong, and golden growth accelerated as it reached a new quarterly GMV record in Q1.

Golden facilitated several landmark sales during the quarter including a Pokemon Pikachu Illustrator card that's sold for over $16 million, officially becoming the most valuable trading card ever sold at auction.

To further support our trading card enthusiast, we continue to enhance our AI-powered card scanning feature, which recently surpassed 30 million cumulative scans. This tool allows users to scan a single photo to instantly identify card. Surfacing historical prices and population data to help enthusiasts trade with confidence.

In Q1, we expanded the card scanning feature beyond sports to cover our top 5 collectible card game genres including Pokemon, Magic: The Gathering and One Piece. Overall, our continued investments in both on and off platform experiences are deepening engagement with collectibles enthusiasts. Through our innovation across multiple sports, genres, buying formats and price points, we are further solidifying eBay as a premier global shopping destination for the hobbyist immunity.

Importantly, the momentum we observed in Q1 extended well beyond collectibles as the remainder of our U.S. business also delivered double-digit GMV growth and outpaced broader e-commerce benchmarks. Our motors, parts and accessories business, or PNA, delivered its strongest quarter of year-over-year GMV growth since 2021, contributing approximately 2 points of growth to our overall marketplace in Q1. Our guaranteed FIT program has meaningfully increased conversion on fitment enabled listings in the U.S., U.K. and German markets, helping fuel the strongest quarter of P&A GMV growth we have seen in several years.

Given the success we've seen in our initial markets, we recently expanded guaranteed fit to Australia, helping further solidify our online P&A leadership in this market by giving motors enthusiasts, the confidence to tackle their most complex projects knowing they'll have the right part for the job every time or their money back. We also recently strengthened our P&A value proposition with the acquisition of Aladin Systems, a U.K.-based software provider for salvage yards. We expect this acquisition to bring more recycled P&A inventory onto the eBay platform, which provides value for cost-conscious consumers and supports the circular economy.

Our acquisition of Caramel, a little over a year ago is helping us bring in more comprehensive eBay Motors offering by combining the strength of our scaled P&A business with our nascent but fast-growing vehicles business. We see meaningful opportunities for synergies between these businesses as they are highly complementary. Each vehicle sold on eBay creates a natural opportunity for future engagement in P&A. As buyers return to the marketplace to maintain, repair and personalize their vehicles.

In vehicles, our secure fully digital transaction capabilities are driving improvements across the purchase funnel. And we are seeing encouraging traction as we expand from our initial focus on C2C transactions to begin serving small dealerships as well. While it's far earlier in its journey than P&A, vehicles continues to scale month-over-month and exited Q1 at an annualized GMV run rate in the hundreds of millions of dollars.

In fashion, we are building on the momentum we initially created by enhancing trust across high ASP categories like watches, handbags, jewelry, sneakers and streetwear through authenticity guarantee. More recently, we've expanded authenticity guarantee eligibility to a wider selection of pre-loved and luxury apparel, shoes and accessories for a more complete head-to-toe value proposition for fashion enthusiasts. After diversifying our brand and inventory coverage in the U.K. and Germany last year, we followed suit in the U.S. during Q1 by expanding authenticity guarantee to more than 70 shoe and fashion accessory brands. We've also improved our value proposition for fashion e-commerce by streamlining and calibrating garment sizing across global standards.

These changes have simplified the listing process for sellers removed a major point of friction for buyers and contributed to a measurable increases in quality views, bought items and conversion velocity in fashion. Our breadth and depth of selection in branded pre-loved fashion inventory is also key to our relevance in the category.

Our AI tools like the latest generation of magic listing experience are making it dramatically simpler for sellers to list pre-loved fashion items on eBay, helping drive a mid-teens year-over-year increase in casual fashion listers in Q1.

At the same time, we are strengthening our position in fashion by using community to build greater awareness and consideration with enthusiasts. -- eBay Live is becoming a meaningful driver of GMV in certain fashion categories. And in March, we held our first direct from brand live shopping event with Marks & Spencer in the U.K.

Our second annual Vogue Vintage market events in the U.S. and U.K. were another strong example of how curated events elevate eBay's relevance in prelude fashion. We are consistently showing up at the cultural moments that matter most to fashion enthusiasts, including the Grammys, the Oscars and Berlin Fashion Week during Q1.

We've also driven engagement through our sponsorships of the new Saturday Night Live and Love Island: All Stars programming in the U.K. Taken together, these efforts are making eBay a more compelling destination for enthusiasts and helped accelerate overall fashion GMV growth in Q1, including healthy double-digit growth across our fashion focused categories in aggregate.

Our consumer-to-consumer or C2C business remains one of the most important strategic priorities. C2C sellers bring the unique hard-to-find inventory that differentiates eBay and strengthens our position in e-commerce. Multiple years of investment have reduced friction and helped reinvigorate growth in a segment that makes up more than [ 1/4 ] of our total GMV. We saw the momentum continue in Q1 as C2C delivered double-digit GMV growth across the U.S., U.K. and Germany, meaningfully outpacing B2C growth in those markets. We believe this momentum reflects the enhanced value proposition for consumer sellers in the markets with reduced transactional friction, driving a healthier sell-to-buy flywheel.

In May, we plan to revamp our consumer selling experience in Australia, our fourth largest market by demand. We will remove selling fees for consumer sellers in Australia and introduce a buyer-facing fee on C2C transactions. While also tailoring our seller segmentation and manage shipping service to cater to local market dynamics.

Similar to our C2C initiatives in the U.K. and Germany, our goal is to reduce friction for casual sellers, increase our supply of differentiated inventory and ultimately unlock a larger addressable market opportunity.

Another area where we are seeing strong momentum is eBay Live. In categories where trust storytelling and community are central to the purchase experience. eBay Live gives sellers a powerful way to showcase unique inventory and engage buyers in real time. while helping us bring more customers into high-value enthusiast experiences.

Now operating in 7 markets globally, eBay Live continues to scale rapidly, with an annual GMV run rate more than 8x higher year-over-year in recent weeks. We supported that momentum in Q1 through strong growth in programming across a diverse mix of categories, and improved event discovery throughout the eBay mobile app, including the recent addition of an eBay live button on the bottom navigation for U.S. users on iOS.

In Q1, we hosted our first live stream shopping event outside of the holidays as our 48 hours of drops event in the U.S. set a new daily record for eBay Live GMV, with each day outpacing our previous record on Black Friday by 60%. We also saw impressive results internationally where local 24-hour events in the U.K. and Germany each reached 7-figure daily GMV milestones, proving that our live stream playbook is effectively capturing enthusiast demand across geographies.

We continue to leverage our AI capabilities to reimagine core experiences across the marketplace. For sellers, the latest generation of our magical listing experience uses our proprietary models, product knowledge graph and 30 years of marketplace data to do much of the hard work of creating a listing from guiding sellers on which photos to take to generating key details like titles, categories, item specifics and pricing. The U.S. rollout of this experience has been one of the most impactful launches we've had in years as it has driven a greater than 50% increase in new listing creation rate double-digit percentage increases in sold items and GMV per lister, stronger retention and a material increase in estimated customer lifetime value for these sellers. Based on these compelling results, in the U.S. market, we began expanding this experience to new and reactivated listers in Germany in April, where early AB tests are showing directionally similar uplift on key seller KPIs as the U.S. launch which gives us confidence to extend this experience to more countries and seller segments in the coming months.

For buyers, our genetic search beta is creating a more intuitive and conversational way to shop by allowing customers to refine results through natural language and a multi-turn dialogue much like working with a personal shopper that understands their sizes, styles and brand preferences. While still early, we have observed some encouraging learnings from this beta as we're seeing approximately 50% more search engagement in sessions utilizing AI-powered refinements, which is ultimately translating into double-digit percentage increases in purchase behavior.

These innovations are just 2 examples of our transition to an AI-native marketplace. By embedding these capabilities into the core of our platform, we are fundamentally changing the pace at which we can remove friction, unlock supply and drive long-term value for our enthusiasts. We are also extending the reach of our marketplace through partnerships, following a successful pilot of eBay inventory and Facebook Marketplace search results last quarter, this integration has transitioned to general availability. eBay inventory is now enabled in the search box for the majority of Facebook Marketplace users in the U.S., Germany and France. This integration further enhances the visibility of our differentiated inventory to Facebook's scaled audience, which can drive qualified incremental traffic to our sellers' eBay listings. Our search integration complements our existing presence in the marketplace feed for a subset of users where we continue to iterate on the experience and gather valuable learnings.

Now turning to shipping. Shipping solutions are a major focus for us this year as we leverage our scale and expertise to help sellers tap and demand across borders amid an increasingly complex trade policy landscape. In Q1, we continued to scale eBay International shipping in Canada following its Q4 launch, and we expanded access to SpeedPAK for sellers in Germany and 6 other markets. Our SpeedPAK partnership continues to perform well in Greater China and Japan as these capabilities are becoming increasingly important as cross-border trade grows more complex.

Before concluding my prepared remarks, I'm proud to share that eBay was once again recognized as one of Fortune's most innovative companies. In January, we also released eBay's inaugural climate transition plan, a company-wide road map to reach net zero greenhouse gas emissions by 2045. This plan reflects how we are well positioned to drive sustainable commerce at scale and as a result, creating during value for our customers, communities and the planet.

In closing, we delivered a very strong start to 2026 with results that exceeded our expectations and reflected broad-based momentum across the marketplace. A few key themes stand out from the quarter. First, our strategic priorities are driving the majority of our GMV growth. Focused categories, C2C and e-commerce now represent approximately 70% of our total GMV and continue to gain share through our disciplined execution which enhances our long-term resilience and strengthens the structural growth profile of our marketplace.

Second, our GMV growth is broad-based and extends well beyond any single category. While collectibles continues to outperform we saw improved trends across all of our major categories, including accelerating GMV growth across eBay Motors, electronics and fashion, eBay Live continues to scale rapidly across a diverse group of categories and we're in the early stages of realizing valuable synergies between P&A and vehicles. Third, we are progressing from AI-powered optimizations to building fully AI native experiences on eBay.

We're increasingly embedding AI in the foundational elements of our marketplace to remove friction, unlock supply at scale and deliver more personalized and relevant products to our customers. While the macro environment remains dynamic, as I look toward the balance of 2026, I'm confident in the sustainability of our underlying business trends and the durable foundation we've established to support long-term growth.

With that, I'll turn the call over to Peggy to provide more details on our financial performance. Peggy, over to you.

Thank you, Jamie. I'll begin with our financial highlights for the first quarter. GMV grew by 14% to $22.2 billion. Revenue grew 17% to $3.09 billion. Our non-GAAP operating income grew 18% year-over-year to $907 million. Non-GAAP earnings per share grew 21% year-over-year to $1.66. And we returned $639 million to shareholders through repurchases and cash dividends.

Let's take a closer look at the key drivers of our strong Q1 performance. GMV grew over 14% to $22.2 billion on an organic FX-neutral basis. Foreign exchange provided a tailwind of approximately 400 basis points to spot GMV growth. We saw a broad-based strength this quarter with year-over-year growth improving sequentially across all our major categories with most contributing positively to GMV growth, led by collectibles, eBay Motors, electronics and fashion. Focus category GMV grew 24% in the quarter and outpaced the remainder of our marketplace by 15 percentage points.

Shifting to our major geographies. U.S. GMV growth was particularly strong in Q1, up nearly 27% driven by a broad-based acceleration across categories. Strength extended beyond collectibles while the remainder of our U.S. business also delivered double-digit GMV growth and outpaced broader e-commerce benchmarks.

Several of our strategic initiatives contributed more meaningfully to growth than prior quarters. eBay Live and C2C were each larger contributors and exports from the U.S. to our international markets also accelerated, supported by improvements to our eBay International shipping program and a weaker U.S. dollar. In addition, our year-over-year growth continued to benefit from lower funnel marketing efficiencies and our Conner partnership.

International GMV growth also accelerated in Q1 and grew over 2% on an organic FX-neutral basis, with foreign exchange providing a tailwind of 70 basis points to spot GMV growth. While macroeconomic conditions remain challenging in our largest international markets, we are investing effectively in areas where we have a right to win.

Focus categories, C2C and eBay Live each contributed to improved growth in the U.K. and Germany. We also saw cross-border growth recover across key regions like Greater China and Japan reinforcing the benefits of our investments in shipping solutions, which are making it easier for buyers and sellers to transact globally amid a more complex trade environment.

Next, let's look at our buyer metrics. Our trailing 12-month active buyers grew 1% to nearly $136 million in Q1, including buyers from recently acquired ties. On an organic basis, active buyers were over $135 million, also up 1% year-over-year. Higher growth was especially strong in the U.S., accelerating to nearly 6% in the quarter. Enthusiast buyers remained at roughly $16 million, but grew by nearly 2% year-over-year and spend exceeded $3,400 on a trailing 12-month basis. In the U.S. market, enthusiast buyers grew even faster at 8% year-over-year.

Now turning to our income statement. We generated revenue of $3.09 billion up 17% on an organic FX-neutral basis, with foreign exchange providing a tailwind of 260 basis points to spot growth. Our take rate was 13.9% in Q1 and up modestly year-over-year. Tailwinds from advertising, shipping initiatives and lapping of our U.K. C2C buyer fee rollout in the prior year were partially offset by rapid growth in eBay Live in ongoing category and ASP mix changes.

Additionally, foreign exchange was a headwind of approximately 20 basis points to our reported take rate year-over-year. Total advertising revenue was $581 million, representing GMV penetration of over 2.6%. First-party adds grew 28% to $555 million. Promoted Listings comprised over $1.2 billion of the over $2.5 billion total listings on eBay and 5.2 million sellers adopted at least 1 promoted listing product during the quarter. In addition, off-platform adds grew 29%, while third-party display ads declined as expected due to our continued deprecation of these legacy ad units.

Revenue from our shipping programs grew in the double digits during Q1 and is becoming a more significant contributor to our take rate. Our shipping solutions are also strategically important as they leverage eBay's scale and expertise to reduce costs and complexity, improve trust and increase conversion and overall sales velocity. We intend to further scale our shipping initiatives, including managed shipping solutions for domestic C2C sales and cross-border solutions through EIS and our partnership with SpeedPAK.

Moving to our profitability and earnings. Non-GAAP gross margin was 74.6% in the first quarter, up 1 point year-over-year driven primarily by lower cost of payments and operational efficiencies. In addition, gross margin benefited from our U.K. managed shipping program, switching from gross to net revenue recognition on January 1, which I discussed last quarter.

Our non-GAAP operating income grew 18% to $907 million in Q1, reflecting our ability to balance continued investment in our strategic priorities with strong flow-through to earnings. Sales and marketing expense increased in the quarter, primarily reflecting higher marketing investment behind strategic priorities like C2C and eBay Live as well as incremental spending to capitalize on favorable returns in lower funnel marketing.

Transaction losses increased as expected in Q1, and reflecting newer shipping programs and customer experience enhancements. We were encouraged to see loss trends improve toward the end of the quarter, and we continue to expect these shipping programs to follow a typical curve with higher losses initially that moderate over time as we learn and optimize.

Non-GAAP earnings per share was $1.66, up 21% and GAAP earnings per share was $1.12. Shifting to our balance sheet and capital allocation. We generated free cash flow of $898 million in the first quarter and ended the period with cash and fixed income investments of $5.1 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments and warrants were valued at roughly $770 million.

In March, we received approximately $190 million from Aurelia's shareholder distribution. This return of capital reduced the carrying value of our [ Orolia ] investment to approximately $470 million at the end of Q1. We repurchased $500 million of eBay shares in Q1 at an average price of approximately $90 and paid a quarterly cash dividend of $139 million in March or $0.31 per share.

Our pending acquisition of Depop is now expected to close by the end of the third quarter of 2026. We have received regulatory clearances for the transaction in the U.S. and Germany, and reviews are in progress and on track in other markets, including the U.K. and Australia.

Now turning to our outlook, starting with the second quarter. We expect GMV between $21.3 billion and $21.7 billion, representing total FX-neutral growth between 8% and 10% year-over-year. Based on current exchange rates, we estimate FX would represent a roughly 100 basis point tailwind to spot GMV growth. Our Q2 guidance reflects continued broad-based GMV growth within our strategic priorities and incremental contributions from live and vehicles.

Our guidance also contemplates lapping dynamics from lower funnel marketing efficiencies and our U.S. Carna partnership which became noticeable growth drivers during Q2 of last year. These factors, combined with gold and silver bullion volume reverting to historical levels in Q2 and account for the majority of the implied year-over-year growth deceleration from Q1 to Q2.

We forecast revenue to be between $2.97 billion and $3.03 billion in Q2, implying total FX-neutral growth of 8% to 10% year-over-year. Based on current exchange rates, we estimate FX would represent a roughly 120 basis point tailwind to spot revenue growth. We expect non-GAAP operating income growth between 6% and 10% year-over-year in Q2, implying non-GAAP operating margin between $27.6 and 28.1%. Our guidance contemplates a healthy balance between investment and strategic priorities with strong flow-through of operating leverage to the bottom line.

We forecast non-GAAP earnings per share between $1.46 and $1.51, representing year-over-year growth between 7% and 11%. The Next, I'll share some updated thoughts on the full year, excluding the impact of the pending Depop acquisition, which I will discuss separately. For 2026, we are now planning our business around year-over-year GMV growth between 7% and 7.5% on an FX-neutral basis. This updated view reflects the strong momentum we are seeing across our business, balanced against more challenging comparisons as we move through the year, including lapping considerations from the prior year and moderation of some of the category-specific tailwinds we have discussed on this call.

We continue to expect revenue growth to be in line to slightly ahead of GMV for the full year on an FX-neutral basis as healthy growth in advertising and shipping revenue is expected to be partially offset by mix shifts in our business, including higher growth contributions from live and vehicles. We are now anticipating non-GAAP operating income growth of between 9% and 11% for the full year, reflecting our stronger GMV and revenue expectations.

As we have noted previously, when our business outperforms, we will continue to evaluate opportunities to reinvest a portion of that upside into our strategic priorities to further strengthen our marketplace and drive future growth. We continue to expect non-GAAP earnings growth to be relatively in line with non-GAAP operating income in 2026. We anticipate our lower cash balance and higher interest expense would pressure the net interest and other line items year-over-year, partially offsetting the tailwind from our share repurchases.

We continue to expect a non-GAAP tax rate of 17.5% for the full year which is 1 percentage point higher than our tax rate in 2025. Our capital allocation outlook remains unchanged. We forecast capital expenditures to be between 4% and 5% of revenue for 2026. We are targeting roughly $2 billion of share repurchases for the full year. In addition, our board declared a quarterly cash dividend of $0.31 per share for the second quarter to be paid in June.

As I noted earlier, we expect our pending acquisition of Depop to close by the end of Q3. Given the updated time line, we expect Depop to contribute approximately 1 percentage point to total FX-neutral GMV growth year-over-year in 2026. From a profitability perspective, we expect the acquisition would represent a low single-digit headwind to the 9% to 11% operating income growth we anticipate for the core eBay marketplace, which includes planned investments in Depop and integration costs. We would also expect the Depop acquisition to dilute our non-GAAP earnings per share growth by low single digits with the EPS impact modestly higher than operating income due to foregone interest income from the cash used for this transaction.

In closing, we're encouraged by our strong start to the year and the broad-based momentum across the business. Our results reflect continued execution within our established strategic priorities and strong returns on our investments in emerging growth vectors like eBay Live and vehicles. As we look ahead, we remain committed to balancing disciplined investments in areas that can strengthen our business over time with continued earnings growth and thoughtful capital allocation.

Overall, we feel very good about the path ahead and our ability to create long-term value for our shareholders. With that, Jamie and I will now take your questions.

[Operator Instructions]. Our first question will come from Nikhil Devnani with Bernstein.

Jamie, I was hoping you could help bridge the gap between that 6% U.S. buyer growth number and the GMV number, which was much higher than that. What have you seen on order frequency trends relative to ASP growth? And I guess bigger picture is the funnel for new buyers that are coming to eBay expanding again?

Yes, it is. And we're encouraged by what we're seeing with our buyers. And we see even more positive signals when you look at the underlying trend. So while global active buyers increased by 1% year-over-year and enthusiast buyers grew by 2% year-over-year, that really doesn't tell the whole story. Our U.S. buyer growth has been much stronger at 6% year-over-year. and U.S. enthusiast buyers grew even faster at 8%. We've also talked about our mid-value buyers, Nikhil. And what we've seen is they've also grown year-over-year every quarter since the beginning of 2024 consistently outpacing our total active buyer growth, which really suggests strong trends beneath the service. That's somewhat counterbalanced by some of the trends that we're seeing in international mitigated by the macro pressure.

So overall, what I would say is I'm actually very pleased with the strength we're seeing across the board, the improvements in buyer count the cohort mix, the engagement and the spend, and it's really balanced. Like when you look at the U.S. GMV, Nikhil, it's balanced between active buyers, sold items, an ASP, which is, I think, a healthy place to be.

And maybe if I could follow up with a question around gross margin and COGS for Peggy. As we think about initiatives like live and all the AI product investments you're making now. How do we think about the puts and takes on COGS over the long term for the business? And any offsets that you might have elsewhere productivity gains or otherwise to counter that as well?

Thanks for the question. When we look at our Q1 gross margin, what we saw was that it was driven primarily by cost of payment and operational efficiencies. We said it was up 1 point year-over-year. It benefited from the U.K. managed shipping program, switching from gross to net accounting at the beginning of the year. And as we look further in the year, we do see that there's going to be some similar puts and takes to the gross margin driver. But what we're really excited about is that we're continuing to see a lot of strength on the top line. And because of the sort of like diverse nature of our growth areas, if you look at live and some of the AI efficiencies that we're seeing, you're going to see some different sort of drivers to gross margin. But all we're seeing is going to benefit both the top line as well as our operating profit dollars as we scale.

Our next question will come from Nathan Feather with Morgan Stanley.

Broadly, consumer sentiment has weakened a bit over the past 2 months, although spending seems like it's held strong. How do you think about balancing those inputs as you put together your guidance for the remainder of the year? And just more generally, what have you been seeing in the consumer health over the past few months as gas prices have risen?

Yes. Look, we continue to see a dynamic global macro environment with the divergence between the U.S. and international. In the U.S. for our business, consumer demand continues to be resilient so far despite the volatility in trade policy and geopolitics. And strength was really broad-based across the board in Q1 in clean collectibles, motors and fashion. I would say it's a different story in Europe, where it's more challenging as reflected in the consumer confidence and some of the macro data, though the investments we've been making in the region have really helped offset that. our international year-over-year growth improved from Q4 over to Q1, as did CBT and our other solutions. So we've kind of maintained the status quo or kind of thought about things in the status quo. Our ability to incrementally guide Q2 and raise the year is really based on the confidence of the resilience we're seeing in our marketplace.

Remember, Nathan, that we're a bit more resilient because even in more challenging times, people turn to eBay to find value and used or refurbished or that perspective. So we feel more well positioned because of that.

Great. That's helpful. And then just given the really strong GMV performance over the past 12 months, on a go-forward basis, if we look at maybe like a 2 year-over-year to exclude the impact of tougher comps, the any key limitations that would prevent the GMV momentum you're seeing in 2Q from persisting into the back half?

We feel really good about the momentum that we're seeing overall. And so Peggy talked about the real kind of divergence that you see between Q2 and Q1 is just due to the number of factors that whether she called out whether that be a billion or some of lapping dynamics. But what we continue to see is a strong consumer and more importantly than that, what we see is a great return on the investments that we're making in the business.

So when you look this quarter at the focused category growth of 24% and the areas that we've invested in, and we're seeing it really resonate with consumers. And so we feel good about the back half and the strong 2-year stack, and we feel great about what we're seeing given the consumer right now and just the underlying growth in the business.

Your next question will come from Ken Goralski with Wells Fargo.

This is Zach Morrissey on for Ken. I just wanted to double click on this C2C strengths, specifically in the U.S., obviously it's been a source of strength. I think you said a double-digit GMV growth there. Just curious what you're seeing from a competitive dynamic. I know we're seeing a lot of investments in the space. Vintage appears to be scaling and investing more aggressively in the U.S. Curious if you're seeing that reflected in any parts of your businesses? Or is this kind of contributing to the broader industry kind of secular growth? And then I think you noted on kind of the marketing investments, specifically in C2C, is that something we should kind of expect to continue to be an area focused throughout he course of the year?

Yes. Look, we continue to have a very strong C2C business around the globe, and U.S. is amongst our strongest businesses in C2C, and we saw really healthy growth there. we've been operating in a very competitive global landscape for fashion e-commerce for years and it has really raised the bar for the customer experience and help unlock the total addressable market that's locked up in closets, attics, basements and garages.

What we're seeing as we roll out things like magical listing, and we're using AI for listings, which is now up to 500 million listings is we're seeing more listings per lister, great seller metrics because of our ability to kind of unlock all that inventory. And so that's had a meaningful impact on our performance.

If you look at just total GMV growth in fashion, it accelerated sequentially in Q1, our fashion-focused categories contributed roughly 1 point of growth to our overall marketplace with luxury growing at healthy double digits. And our improved C2C value proposition has been impactful in fashion and frankly, across the board. And what we've seen is double-digit growth in each of our top 3 markets by demand in the U.S., U.K. and Germany.

So overall, we feel really great about the momentum that we're seeing in fashion. And our pending acquisition of Depop indicates that we're really leveraging our built by and partner playbook, just like we did in collectibles to enhance the fashion experience for enthusiasts. Peggy, do you want to talk about the full funnel marketing that we're doing?

Sure. So in Q1, we leaned into full funnel investments in support of our strategic priorities, notably in focused categories, C2C and live. Full funnel marketing does remain a really important way for us to support our strategic priorities. It drives awareness and consideration of eBay. We did a number of events and activations during the quarter. And when we think about how we think about it going forward, we continue to see it as a strong lever also do take the opportunity when we have strong GMV performance and strong profitability in the quarter, to make sure that we're investing, including in sales and marketing in order to continue that growth ahead. So that's that important balance that will continue to look at, which is sort of that balance between strong flow-through to the bottom line and investing in continued growth from quarter-to-quarter. Sales and marketing being one of those levers.

Our next question will come from Eric Sheridan with Goldman Sachs.

Maybe building on the last answer and sort of asking a 2-parter. When you look out over the next 6 to 12 months, what do you guys see as the critical investments to make to maintain and build momentum around the enthusiast buyer part of your business, just so that continues to move in sort of a very positive direction, that would be one. And then against the dynamic of what you laid out with respect to marketing, how are you thinking about marketing changes that you're seeing out there across the social media and the search landscape referencing back to kind of ROI you might be able to get as marketing ramps for you guys relative to innovations that are happening across performance marketing more broadly.

Yes. Eric, we're going to continue to invest in the areas that are really driving kind of healthy growth across the business. We're going to continue to invest in the focus categories. You're obviously seeing the nice return from the investments that we've made there. We're leveraging AI throughout the entire product experience really taking the friction out of the experience, and you're seeing more and more of that with the Agentic search beta that we have going on with the incremental improvements in the new Magic listing. We've been investing in live and seeing really nice returns from that. We grew -- we're growing in the last few weeks, 8x year-on-year in that format, and it's really engaging buyers and sellers in a new and different way. And while a little bit earlier, vehicles as well is going to be kind of another area for us to continue to invest in over the course of this year. But we're really pleased with the ROI that we're seeing off of those investments that we're making.

When you think about our marketing plan, we've been using a full funnel marketing approach that's been really working well. And you've seen more kind of mid- and lower supported by the upper funnel that we're doing. We've been driving really interesting activations across social media. We did -- we had all the popular -- the Grammys the Oscars we're sponsoring Saturday Night Live to Berlin's Fashion Week driving all the way down to putting products that are most relevant inside of people's social feed.

Facebook is a good example of that. We've got some new tests with them going on. in addition to putting the items inside of Facebook Marketplace in the search experience. So we're going to continue to push forward. What's great is that AI is giving us a ton of new capabilities there, Eric. The ability to create creative at incredibly low cost and build a lot more of a test-and-learn infrastructure is really compelling to see the ROI on things like that, that we're getting.

It's also helping us in our own marketing and our CRM. Yesterday, I was looking at a personalized glass with a dog -- I was going to put my dog name on it. I forgot about it, and I got an e-mail this morning that said, celebrate with new beer glasses. So AI had kind of written this really compelling subject line and things like that, we're seeing numbers like 40% more engagement. So what I feel really good to is how our marketing team is embracing those new AI technologies, to really kind of speak to the long tail of inventory and opportunities that we have on eBay.

Your next question will come from Bern McTernan with Needham.

Great. Wanted to ask on strategic priorities. The GMV grew from strategic priorities 10%, 25% and then accelerate in 1Q. Is this mostly C2C? Or is there -- or is the strength more broad-based? And then within C2C, is this primarily being driven by magical listings or any other product you would call out?

Yes. It's really broad-based across the board is what we're seeing in our year-over-year growth across all of our major categories sequentially with the strongest growth in focus categories within collectibles, motors and fashion. And while U.S. GMV was particularly strong at 27%, we also saw improvements in our international trends. When you look at our specific strategic areas you asked about but focused category C2C and e-commerce now make up about 70% of total GMV. And individually, they each saw double-digit growth. So that kind of gives you a sense of how broad-based the growth is.

The strength that we're seeing in C2C is coming a lot from a, we're doing some really significant and helpful marketing about magical listing and the value proposition that we have there. And we're finding that the KPIs are really fantastic, right? I mean it's got a customer satisfaction of 95%. We're seeing 50% more listings per lister and more engagement. And it's driving a higher customer lifetime value for the sellers that are using it. This is why we're expanding it to new geographies and we'll expand it to additional seller segments over time. But that's really helping us drive that part of the business. But when you look at it, it's really across all of those priorities that we're seeing really nice double-digit growth.

Your next question will come from Andrew Boone with Citizens.

I wanted to ask about advertising strength in the quarter. It surprised us in terms of the strength that you guys saw. And then can you connect that into just expectations for 2026? And then you guys called out the benefits of AI search. Can you guys just speak to that, where are we in the process of making search just more performant? What are the benefits today? And what should we expect going forward?

Yes. So first on advertising, strong quarter, right? Ads grew 27%, and that was a combination of strong volume growth and the continued monetization of our ads product. So that was mainly driven by our 1P business, which grew 28%. And across the board, our CPA and our CBC products on eBay and our offsite ads all contributed to Q1. Looking forward, we continue to expect ads revenue growth for '26 to be healthy. It's really driven by multiple levers, including seller adoption, listings penetration, ad rate optimization and scaling new products, we're now leveraging AI in our advertising products to increase the yield on the same type of placements while giving sellers a really good kind of ROAs continuing to give sellers are really good ROAs on that. So we continue to see advertising revenue outpacing GMV for the foreseeable future, and I'm really pleased by the innovations that are happening there.

Your next question will come from Shweta Khajuria with Wolfe.

This is Andrew Rolf for Shweta, really want to ask about agentic commerce. And I guess start off more broadly. I guess, what are your updated thoughts on agentic commerce and eBay's role in that, particularly as relates to third-party partnerships. And then if we think about maybe the terminal state of agentic commerce, and I think it's more agent to agent base, would that be impacting the ad revenue potential? And I guess, is eBay basically okay with making the trade-off for ad revenue for volume growth? Just your thoughts on that would be great.

Yes. Look, we see agenetic AI as a real structural tailwind for eBay, and it plays right into our core strengths. First, our innovations leveraging AI are already having a meaningful benefit for our business today. Take magical listing. We've talked about the compelling stats I just mentioned that we're seeing and sellers have created 0.5 billion listings using our AI tools. And our agentic search beta, which I realize I didn't fully answer that question, so I'll come back to that. But what we've seen there is higher engagement and increased purchase behavior off of that early test. So we're going to continue to bring the latest agentic technologies to eBay to make it easier for sellers to list and for buyers to find the things they love.

Second, eBay offers really unmatched breadth and depth of unique and differentiated inventory. Our $2.5 billion listings are non-new in season where items are more likely to be one of a kind. And in our strategic priority areas, we've optimized the end-to-end experience to make it more seamless and enjoyable for buyers and sellers.

Third and most importantly, what really differentiates eBay is the trust and enablement layer we've built over decades. The capabilities we've built, like our global network of authentication centers, our suite of proprietary global shipping solutions regulatory compliance guaranteed fit, just to name a few, always provide a trusted experience for everything from a trading card to a designer dress through a vintage car sold across state lines.

And importantly, all 3 of these areas are enhanced by our 30 years of proprietary data, which gives us powerful insights that no one else has. So overall, we see AI as a powerful force multiplier for our business and it's already supporting the accelerated GMV we're seeing today. When I look specifically at agentic search that you asked about, it's early innings, but there's some encouraging early proof points about the quality of that traffic that's coming over. And even though it's very, very small, what we find is traffic that finds us new buyers that find us via AI. The majority of the time they actually come back directly organically to eBay. So we're going to continue to test and learn. You see us doing the Open A high ads pilot. We've expanded our more inventory to Facebook Marketplace as the space evolves.

Your next question will come from Tom Champion with Piper Sandler.

Good afternoon. Jamie, you've made a tremendous amount of progress over the last several years around authenticity and shipping cost for sellers. I'm just -- I'm curious what you think of as the remaining frictions for sellers today. What are you looking to improve from here on out for the seller experience. And then, Peggy, maybe for you, just could you talk a little bit about head count growth and how you're thinking about that through the year as you incorporate efficiencies from AI?

Yes. Look, it's more than just AG. It's really trust across the board that we're looking at. So that's AG, it's guaranteed fit in motors. It's eBay money back guarantee. It's warranties against refurbished. It's secure checkout that we're building in vehicles and on and on. Having that kind of real trust layer at eBay is incredibly important to us and incredibly important to our consumers and we're going to continue to invest in that. You just saw us roll out more authentication to 70 clothes and shoes and accessory brands in the U.S. driving that program further and further to really kind of build trust in. And it's more than just shipping. It's all of the selling services that we provide, whether that's eBay international shipping, which we just expanded into Canada last quarter, it's SpeedPAK which we've been expanding from China and Japan to now Germany and more markets. It's our forward deployment centers. It's really kind of handling all of those kind of end-to-end pieces. That's making it really easy for sellers.

We're going to continue to invest in our payments technology to make it easier. We continue to invest in areas like seller financing and other elements that help buyers grow their business with their working capital. and helping them with compliance and protections and really being able to make sure that we run an incredibly trusted marketplace there. we're seeing really nice AI efficiency, giving our teams leverage so that we can innovate more on behalf of our seller community. I think it's why we're seeing great response to a lot of the tools that we're building and our seller CSAT is pretty strong is because of what we're able to provide. So we're going to continue to invest in that and make eBay that great destination you can only get started, but build a strong business on the platform.

Your next question...

Sorry, did you was there a second part to that? [indiscernible] Peggy, you want to take that one?

Yes. We're really focused, as Jamie mentioned earlier, about really investing in our strategic priorities in order to do that well and still do what we are very focused on, which is balance our top line growth and our op income dollar growth, we're looking to create efficiencies in the business so that we can invest in our strategic priorities. We are seeing that even as we invest significantly in our AI talent capabilities, tech staff, we're able to sort of like maintain that balance and generate more capacity to be able to invest in these areas without pressuring our bottom line. And so that's the balance that we'll continue to take and really try to drive efficiency, to create capacity to grow these very strategic initiatives that we're focused on.

Your next question will come from Michael Morton with MoffettNathanson.

Thank you for the question. I wanted to talk about the live shopping. It's something I think e-commerce platforms have tried for almost my whole career. And listening to what you're saying, sounding like it's hitting a real inflection point. I was curious to hear why you think it's gaining so much momentum now. We were at an industry conference and people were talking about eBay's live commerce momentum, and then this is a long shot, but I would love if you could maybe quantify the impact or your expectations for the enacted GMV growth going forward?

Yes. You've seen this be strong in kind of Asian markets, and we're seeing kind of real excitement and momentum with live shopping in our Western markets. After our recent expansion now, eBay Live is available across 7 countries. And it's becoming a more meaningful contributor to growth, particularly in our collectibles and fashion categories, that's a big part of -- or that's part of why we see -- saw such strong growth in focused categories. We've been doing pretty meaningful activation around eBay Live.

This quarter, we did a 48 hours of drops in the U.S. And we did the same thing in U.K. and Germany, where we did 24 hours of drop. And so that really helped kind of drive engagement and boost sales. with each market reaching a single day milestone as a result. And kind of that gives you a sense of the size and scale of even our newest markets, U.K. and Germany saw a 7 figure a day on that day.

We continue to scale it by adding new sellers, growing content density, expanding entry points this quarter. We actually put it in the bottom of navigation for all mobile iOS users in the U.S., helping to increase discoverability. And what we're hearing is that buying inventory on eBay is different, right? There's an engagement, there's a community, there is an excitement that comes with it. And many of our sellers are finding that streaming on live, they're able to kind of bring that community together, drive that excitement. And it not only drives new business for them in terms of live, but it's actually driving more visits and buyers to their core business as a result of them seeing them on live.

So we feel like great our scale, our global buyer base and the high bar for trust that we have really differentiates us in live commerce. And while it's still early, we believe live can be a meaningful growth factor over time, an increasingly important part of how enthusiasts shop on our platform.

Thank you for joining. This concludes today's call. You may now disconnect.

Good afternoon, everyone. Thank you so much for joining us. My name is Nathan Feather. I'm regional small and mid-cap Internet analyst. I'm pleased to be joined by Jamie Iannone, eBay's CEO; and Peg Alford, eBay, CFO. Thanks so much for being here.

Thanks for having us.

All right. Before we get a quick housekeeping item for important disclosures, please see the Morgan in research cost website at www.morganstanley.com/disclosures. If you have any questions, please tour team Morgan Sanley sales representative. And with that, let's begin.

Now although everyone knows eBay, we've seen a lot of investors come back to the story in the past year or so. Jamie, can you give a high-level compare and contrast of where eBay was when you joined the business versus where it's at today.

Yes. Thanks for the question, Jason. So I came back to eBay about 6 years ago. And when I came back, I really refocused on us back on our roots of non-new and seasoned. -- which is now 90% of what we sell on the platform and really got us aligned around 3 strategic focus areas. First is focus categories. We've invested in these categories now about 35% of our experience -- they're growing faster than the rest of the business. In 2025, they grew 12%. And we really have this playbook of driving leading customer satisfaction, game-changing levels of trust, vertical-specific marketing that's worked really well. The second big bucket has been focused on our C2C business, our consumer to consumer, which is about 25% of our business. And there, we've been doing a lot of marketing around the benefits of C2C, converting more buyers into sellers building new technologies to make it easier to list. And that's been very successful as we've made some innovations, especially in our European markets that have really helped drive that business. And then third is just our focus on e-commerce as a business.

If you look at our focus in terms of leaning into used and prelude, it's now grown over 40% of what's on the platform. is used to refurbish and continues to grow well and faster than new products on the platform. And those kind of focus areas for us that we've been working on now represent about 2/3 of the business on the site. And -- last year, they grew 10%. And so it's really helped us kind of define eBay, the role that we play, the unique positioning in the market and 1 that's really kind of leaning in, especially to where the consumer is going.

A lot I want to get into there. But let's talk about Depop. You recently signed an agreement to acquire that asset, hopefully closing in 2Q. Can you walk us through why you chose to acquire Depop why now was the right time? And how are you thinking about the potential revenue and/or cost synergies?

Yes. So we have 5 categories on eBay that are north of $10 billion. And one of the key ones that we've been investing in has been fashion. So fashion is an over $10 billion category on the platform. It's been growing fast. It grew 10% in the U.S. last year. And if you just think about that, that's $0.5 billion just in that 1 category of growth. And we saw an opportunity to lean in and acquire Depop, which is really synergistic and we think can supercharge what we're seeing with fashion and with the C2C that I talked about, specifically, a great marketplace of Gen Z and millennials. It's been the fastest-growing demographic on eBay has been Gen Z and millennials, but we see a massive TAM in terms of what's happening in pre-lube fashion and that demographic. For Depop, 90% of their users are below the age of 34. And when you look at the sell to buy flywheel that they've got going on in the marketplace, they've got about 7 million buyers and over 1/3 of them also sell in the marketplace, and it drives real kind of great velocity into a younger demographic, which frankly is much more focused on sustainability than I was at that age. I don't know how many of you have daughters that drag you to thrift shops, but they're also on depop reselling clothing and listing clothing.

And so we saw an opportunity to take great things that we have invested in over the years, things like authenticity guarantee and shipping capabilities and advanced marketing tools and payments and financial services and bring them to Depop to be able to kind of continue the great growth that we're seeing over the marketplace. I mean they're growing 60% in the U.S. And so we're going to kind of continue that growth while leveraging the great assets that eBay has built.

Well, speaking of great growth, your GMV growth has accelerated throughout 2025, particular success in the back half given 8% FX-neutral GMV growth in 3Q and 4Q. And the market's really been surprised at the par magnitude of this improvement. So help us understand what drove that acceleration?

You want to take that, Peggy?

Sure. What's been so exciting is that it's been broad-based and for the most part, durable, we called out a few areas that were specific that we thought potentially either we're lapping or things that would not consider things like Bolon, where we saw a lot of acceleration due to precious metal prices that we said may not be durable. We talked about some of the lapping items around Klarna and the positive marketing environment. But overall, we just saw broad-based strength, which gives us a lot of comfort that this will continue. The areas of our strategic focus. Jamie talked about focused categories, he talked about e-commerce. C2C. These are all areas that -- it's 2/3 of our GMV, growing at 10%. When you look at focus categories, 12% growth and we feel like a lot of this is extremely durable, and it gives us a lot of confidence when we go in -- when we look into '26, we talked about GMV being similar growth as prior year.

And so it's just been really exciting to see the playbook work and see the areas of focus have such strength and then when you look at some of the areas that we invested in last year like shipping, we brought forward the shipping road map, in a large part, an answer to some of the trade policy and tariff dynamics. But what we saw it added a lot of health to our marketplace overall. Obviously, shipping is a big part of our CBT business. And so continuing to improve those tools around shipping just bolsters the the sort of resiliency of the marketplace. And so it just makes us really confident that there's a lot of strength ahead.

One of the success areas you mentioned there is in collectibles, real strong point with outsized traction, both trading cards and coins and Bullion. How are you thinking about the portion of that, that's macro growth versus syncratic improvements. Said another way, do you think the performance in these subcategories is more cyclical or structural?

What's interesting is we feel like most of it is structural. And a lot of it has to do with the specific innovation that we've brought to the category when you think about our magical listing product, if you think about some of the Agentic search capabilities or if you think about some of the acquisitions that we've done in the past, the partnership with PSA, the acquisition of Golden and TCG player. All of these things combined with the innovation that we've done internally has really created a lot of strength in the category. And a lot of folks think about Pokemon when they think about collectibles or think about trading cards. But within trading cards, there's the 3 sports that have been very strong. There are other sort of games like MAGIC GATHERING that's been strong. And then even outside of trading cards, there's other collectibles that have been -- we talked about toys and all of these have contributed to what we view as very durable strength.

On Pokemon, we did talk about the fact that we think that the growth may moderate after Q1, but that's really because it's been triple-digit growth, and we expect to lap some of that and the comps become more pronounced as we go through the year.

But despite that, we expect Pokemon to continue to grow. And so it's just been very encouraging sort of the diversity of strength within the business that gives us a lot of confidence that while growth in any one area may not be linear, overall, the growth is durable.

Another area you've seen element is 1 of the newer verticals, eBay Live, now tracking an annualized run rate of about 7x year-on-year. Is this a business that didn't get must interest from investors until maybe 3 or 6 months ago? What are the steps you're taking here to gain share within that market? And how should we think about the investment needed to achieve your aspirations?

Yes. Look, it's really exciting to see what's happening with eBay Live. It's a great new medium for sellers and buyers to transact. Our sellers have really gravitated to it. And that's what's driving the growth numbers that you talked about. And we've been kind of leaning into that opportunity. So we've been expanding into geographies. In Q4, we launched in Australia and Germany and since then, we've actually launched in France and Italy and Canada. We've been leaning in to continue to drive development on the platform and adding new features, AutoCharge, combined shipping, a new flash sale capability, buy it now, a new seller host console and continue to drive the innovation because of what we're seeing in the category and the excitement between sellers and buyers.

What's really nice is that we see a real kind of synergy back to their core business for our sellers. So they're finding buyers saying, "Oh, I found you because of eBay Live and now shopping in your core or built a new trust with the seller because I've been watching them do lives, and that's been really great to see. It's helped people discover new enthusiast areas because they can now watch a seller live. It reminds me of the community elements of the early 2000s of eBay, where I see sellers and buyers interacting, buyers interacting with each other and the real excitement around kind of entertainment and commerce coming together.

In terms of investment, we've been investing into it in the new geographies and the capabilities. All of that is contemplated in the outlook that Peggy talked about in our last earnings, which had strong top and bottom line growth and we see it as a great long-term opportunity -- long-term opportunity. We got some of these newest markets that we just launched, live commerce is still relatively nascent. And there's a really big kind of market opportunity across categories and sellers and buyers.

Okay. Great. Well, 1 area I do really want to touch on is a agentic commerce. I know it's early days here, but can you help us envision how you're thinking about the on-site agenetic opportunity for eBay? And what are some of the features or tools you're thinking of that could really level up the consumer experience?

Yes. I'm really excited to bring these technologies to the platform. Some examples of things that we've talked about recently are our newest generation of magic listing is a true game changer for listing products on the platform. When you think about the vision that I gave to the team was, assume AI or existed, how would you list a product on eBay and that's what we built in this next generation. And so if I held up a pair of sneakers to my camera, I would say, great sneakers show me the label. You take a picture of the label. It absorbs all that information. And it all works seamlessly in the background. The Agentic technology just builds the listing. eBay has real-time proprietary data on what stuff sells for. So it's like, do you want to sell them quickly? Or do you want to maximize the value, we help you drive kind of all of that. And it would be very different if I sold anything. If I sold a piece of electronics, it's like, "Great. I know what that is, you show me the barcode. It's almost like selling with a friend, but the friend is this like super powerful with all the kind of background of eBay's product knowledge graph, our real-time pricing data, et cetera.

And so that's 1 example. We're building out agentic search capabilities so that you can use natural language search on the platform and be able to work through our $2.5 billion listings in a compelling new way, which is great. We're helping our sellers do things like write the initial responses to buyers' questions using AI technologies. We're using it in our own communications with customers. We're having AI right, the subject lines out to our customers. We're seeing a 40% increase in our click-through rates. So really kind of across the board. And what's exciting is that when I come to conferences like this, people are like, wow, you guys are building so much in AI, but you've kept your expenses at the same level, 4% to 5% of our CapEx and that's because we've done a lot of things with kind of proprietary models and our hybrid cloud, and we've built 1 of the world's largest supercomputers. And so how we're doing it, leveraging our unique data set has also been really compelling.

Great. Now similarly, can you share or you're viewing the off-site agenetic opportunity? We've seen various e-commerce players partner with different model providers -- how do you see the space evolving? And what are you looking for in partnerships to create really a win-win scenario?

Yes. Look, we've always been open to taking our sellers' inventory and exposing it on other surfaces. You've seen us do that with Google Shopping. We're doing that with Facebook Marketplace and the tests we're running there. We just expanded to a new service we're testing inside of Facebook Marketplace on their search platform. Over the course of the last -- end of last year, we built what we call the unified agentic commerce platform, which actually allows us to work with partners and do it in the right way where we're leveraging our hybrid cloud, our unique data set that we own, our MCP, et cetera. And that's what we're using in the tests that we're doing. So for example, we're testing with the OpenAI ads test pilot right now in doing that.

But my first priority has always been to build those technologies onto eBay our enthusiast buyers could leverage in it. It's why we built the newest version of magical listing. It's why we're building Agentic search. Because we come at this from a point of view that we think we're a very strong beneficial -- beneficiary of AI in the short and the long term. because eBay has a really unique set of inventory, right? 90% of what we sell is non-new in season. It's not stuff that's generally kind of out there more broadly. We've wrapped that over the years with things like authenticity guarantee and guaranteed fit and money back guarantee and the ability to ship it throughout the world where we handle everything. And so the value-added services and the game-changing level of trust, also makes that inventory incredibly unique on the platform. And when you think about our enthusiast buyers and what they're buying, they're mainly more considered purchases, right? These are not purchases that you just don't think about. In fact, there's an experiential component to shopping these things.

It's why live is growing so fast because people love the experience of shopping in these categories. So for all of those reasons, we feel really good about our positioning with it, how we're leveraging it internally and what we're learning from the test externally.

Okay. Great. Now Peggy, can you give a sense of the ways in which eBay leveraging Ginni kind of internally on the back end to reduce cost to help increase your debt productivity?

Sure. Some of the early things that we did with AI was really focused in product and technology and really wanting to both increase -- decrease the product development life cycle using AI. What we've been able to do in that area for customer-facing items is really developed really quick prototypes, like working prototypes to be able to test and be able to do that in a much shorter time frame, which really sort of increases the amount of throughput that we have for product and development. We -- one of the other early things that we did that was to enable our customer support agents to have to use AI to have sort of almost like a partner be able to resolve customer needs much more quickly. And it was so successful in terms of creating both a richer experience between the agent and the customer as well as sort of reduce the cost, create some cost efficiency within the function that we said we should actually use this for our sellers because a lot of what they are answering from customers, especially in the C2C model, are things that are in the listing.

And so just sort of like bringing up their time to be able to sell more, and that was using some of the technology that we developed internally. And then -- but really across every function, we are really looking to look at each process, each opportunity for automation to really create the capacity to invest in these strategic priorities that we talked about and be able to enable our employees to really focus on value-added functions and do it without increasing the resources within a business that continues to grow.

Now one of the features I want to really highlight here has been a lot of things you're doing in the selling experience. And I know, Jamie, you've talked about this a little bit. So just help me think through what have been the major successes to date as we're kind of rolling out this next generation of magical listings? And then to the extent you are able to remove that friction from sellers. How does that impact GMV growth and your ability to both attract an increasing engagement with C2C sellers?

Yes, great question. So if you think about it, the average American household has about $4,000 of stuff that could be sold online and less than 20% of it is online. And if you go home today and walk around your house, you'll probably realize, "Oh, yes, I'm not using this. This could be sold, et cetera." And so the whole opportunity is to unlock all of that TAM and all that inventory to drive that. And the reason we built this new version of Magical Listing is I always wanted to have this vision of, if it's that easy to list, of course, I'm going to sell it. I had 1 investor tell me he's walking out the door, he's like it's so easy now my son. I have hem selling all this stuff, and he gets to keep the proceeds. He's like, you've made it too easy. I can't distract them enough selling on the platform.

But -- so when you look at the metrics, right, the listings per lister now are up over 50% with this new tool. We've decreased the time by more than a quarter. We've got customer satisfaction rates at like 95%. That's because when you use it, it's so compelling to unlock all that inventory. We're also doing it because the younger generation is very much more focused on sustainability. And so how do we kind of unlock all of that inventory and drive e-commerce. It's now actually seek to buy a pre-loved handbag versus a new handbag on the platform. And so that's been our focus for us. It's been working out really well.

I'm excited to see it. It's led to very strong C2C growth in all of our geographies, and I think we're going to continue to see that momentum for quite some time.

Okay. Well, talked a lot on gen AI and its possibilities. I guess wrapping up in this section, I guess, can you talk through what's the most underappreciated opportunity in your view? And then also the most underappreciated challenge or a limiting factor to push faster?

Yes. So I think for us, I actually feel lucky to be CEO of eBay right now because what it can as what a rich set of years of data, amazing experiences to really just take all that friction out of the experience. And I can't think of a part of the experience where we're not using or attempting to use AI to really kind of change that experience. You think about like 20% of our business is across borders and how do we help people communicate and translate you think about our advertising business and how do we use AI to make it more compelling as an advertiser and also to do all the work on your behalf, kind of leveraging these technologies. The work that we're doing in selling, the work that we're doing in buying and search the work that we're doing in recommendations and putting stuff in front of customers a CRM. It's really, I think, broad-based in terms of the opportunity to really change the experience across eBay and to continue the work that we've done in focused categories in C2C and e-commerce, but now kind of accentuated with AI.

On the challenge side, I think if companies aren't taking advantage of it, that's a massive challenge. I mean we are leaning in so aggressively. I've got a huge AI week, I do every year. It's a huge part of our customer experience and what Peggy talked about, how we're working internally. One of the fun challenges of eBay is it's an unstructured inventory. It's $2.5 billion listings. So the problems are somewhat complex. So that's one of our challenges. But on the upside, AI makes that easier. We've been able to build a product knowledge graph, get kind of amazing real-time pricing data and leverage these technologies to take advantage of some of the challenges that we've worked on over the years.

So we are 200% all in, both for our customers and for how we work internally and our speed of innovation.

No, talked a lot about growth and the 6% FX-neutral GMV growth for '26, it's far higher than people expected. But -- how do you think about balancing that growth with profitability and the flow-through from GMV to operating income? And given that, what are the key investment areas you're leaning into? And how do you think about the payback for you on this?

Sure. We've always been very focused on driving top line growth, and you're starting to see that in the numbers. but we are equally want to make sure that the flow-through to operating income and EPS and driving operating income growth is also something that we're really focused on. And we're doing that through ensuring that we are being really smart and disciplined with the areas we're investing in. You heard us talk about our strategic focus areas, and that's really where we're more focus focused categories, C2C, e-commerce. But at the same time, some of our newer growth vectors in live in vehicles where we know that there's a lot of TAM and a lot of growth to come.

We are -- we created a financial architecture that enables us to really focus on freeing up capacity through some of the things we talked about, the focus on AI, automation, efficiency to drive capacity to continue to be able to invest in these areas. And you saw in 2025, when we had acceleration that was not necessarily anticipated, we used some of that to continue to drive investment in some of these strategic growth areas. But also we're able to drive really healthy operating income growth. And so it's a very balanced approach. We know that the areas where we've invested in are paying off. And so we want to invest more in that. When you think about when acquiring Depop once that closes, we'll be investing in growth there that's been anticipated in the outlook that we provided. And so we're focused on doing both.

We know that driving top line growth enables a profitable business model, but we also want to create efficiency so that we're creating more capacity to invest in that growth.

And putting a finer point on that, adjusted operating income margins have stayed within the range of 27% to 28% over the past few years. How are you thinking about the longer-term margin opportunity from here given all that opportunity for investment. And does the Depop acquisition alter maybe that trajectory?

We are really focused on operating income growth. There's a lot of the dynamics in the portfolio of our business that can sort of change the margin, the actual margins. But by focusing on sort of top line GMV growth and focusing on operating income growth in EPS, we feel like that drives a very healthy business. As it relates to Depop, our initial focus after close, of course, is going to be on just continuing to support the very healthy growth that we've seen from Depop. We talked about getting to profitability in 2028. But our initial focus is going -- is really just to support the very healthy growth that we're seeing.

And then we'll be looking at areas where we can drive synergy. When we think about some of the things that eBay has focused on things like authenticity, shipping, payments, listing. These are all areas that we know can be very synergistic with a really attractive business that Depop has built organically. And so we'll be looking for areas where we can sort of drive those synergies while also recognizing that the Depop business is a great brand and a great stand-alone business.

Okay. Great. Now moving to take rate, you've guided that to be in line or slightly ahead of last year on an FX-neutral basis. the puts and takes for take rate as we think through 2026? And longer term, do you see room to just durably expand that? And how should we think about that trajectory?

Yes. So Advertising continues to be a huge positive driver to take rate. Some of the offsetting sort of pressure to take rate in '26. We continue to have -- because of the trust we've built on the platform, we see ASP increasing. And so that obviously pressures take rate but drives very profitable bottom line growth. When you think about sort of the trade environment and tariffs, that has had impact on our CBT business, and they tend to adopt our advertising and other products at a higher rate, and so that puts some pressure on take rate. Also, some of our more nascent areas like vehicles, which is a higher ASP puts pressure on take rate and live where we're really focused on growing that business and optimizing the experience and a little less focused in the very near term around monetization.

So those are kind of the puts and takes on take rates. But overall, we feel very comfortable that we're thinking about sort of equally balancing top line and operating income growth.

Now, with all of that very profitable business and help us think through the capital ratio or capital allocation framework you've had have been somewhat acquisitive over the past few years? And so help us understand what's your M&A philosophy, what areas you believe could be complementary to the business, especially the Depop acquisition and then fit that into the broader capital allocation framework.

Sure. Yes. So we've always utilized build by partner framework. And we've really been focused on -- if we think about the acquisitions that we've done, take in the collectibles area, we have really focused on building and innovating in the space through. You talked about the bulk the bulk listing capability, magical listing those are areas that we've built ourselves. Then you saw us buy TCG player and Golden and this added a really synergistic set of businesses to an already strong category. And then our partnership with PSA, that really bolstered the overall business in with what we built organically as well as what we bought. And so it's just a great example of how we think about M&A and partnership within our build and innovation strategy.

And so that's -- we'll continue to think about it like that. When you think about Depop, it was buying it from a position of strength and to a fashion category that's growing really nicely, but also enabling us to reach a demographic that is younger and really bolster the fashion category that's growing very nicely in the U.S.

In terms of our broader capital allocation strategy, what we've talked about is that we are targeting between 90% and 100% of free -- organic free cash flow, our normalized free cash flow in '26. We have talked about doing a -- targeting a buyback of $2 billion. And if you take that with our dividends, that fits within that framework of 90% to 100% of normalized free cash flow.

Now if we drop all the way down the income statement to EPS, how should we think about the bridge from operating income to EPS, especially given some hat-off this year?

Sure. There's a couple of things in 26 that we've called out. We did change our tax rate by 1 point, and that was just due to both some changes in the tax law as well as sort of the geographic dynamic of our business. We talked about what we're planning around our share buyback framework. In terms of the -- in Q1, we expect interest income and interest expense to offset. We expect interest expense to be a bit of a headwind in the remaining 3 quarters of the year because of the interest rate environment as well as the fact that we used the cash. We did an all-cash deal for the Depop acquisition.

Okay. Now 1 other area we've got a lot of questions from investors on is just the split between U.S. and international growth. U.S. has really been the source of a lot of the outsized performance over the past few quarters. And so help us think through the delta between those 2 lines, what's driven a lot of the success in the U.S. And maybe conversely, was held back international growth a little bit.

Yes. I would say -- I'll start and then you feel free to add. I think there's a couple of differences. One is the macro conditions are very different, right? So if you look at international right now, specifically our largest markets in U.K. and Germany, you're seeing very low consumer confidence, retail sales being down sequentially between Q3 and Q4. And I think that, that obviously plays a role. Secondarily is just the tariffs for us, they're based on with the country of origin of where the seller is. And so we're seeing some of that domestic substitution in the U.S. from those components there. But the positive side of things on those 2 headwinds is that the stuff that we're investing in, the areas that we're focused on, we're seeing similar traction internationally than we are in the U.S. which makes us feel good as we kind of move out of the macro that we'll see the same type of thing in our international businesses.

Our focused category growth numbers that we talked about, the 12% and 16% last quarter are global numbers, that's working really well. The investments in C2C are working well for us internationally. We recently expanded into eBay live because we think there's big opportunity and a huge TAM in what are relatively nascent markets. So we feel good about the ultimate growth as we get through some of the kind of the headwinds that we've talked about from a macro perspective.

Okay. Great. Well, 1 last 1 for you both. Can you leave us with maybe 1 or 2 aspects of the business you feel are most misunderstood or underappreciated by investors?

Yes. I would say first, I feel like AI is going to be such an amazing opportunity for eBay. When I think about what we can do on the customer experience side, we're just getting started. And when I look at the metrics that we're seeing from our newest version of Magical listing, where we're seeing 50% more listings per list and you think about applying that to so many different parts of the experience is phenomenal. And eBay has had mid-80% organic traffic. Because we sell differentiated inventory that nobody else has. And our enthusiast buyers, which make up 70% of GMV, love that shopping experience and the experiential side of that. And when I talk to them and we show them some of these new technologies, it's like, "Wow, I love that. I'm going to do my safe searches that way." And it really is going to be incredibly powerful for the platform.

I think the second thing is just how broad-based the growth that we're seeing on the platform is right now. it's across categories, across ASP, across different types of buyers in the platform. We called out strength that we're seeing in fashion and collectibles, parts and accessories adding a point of growth, electronics. And so it's really -- what we're seeing is a really healthy, broad-based growth on the backs of the areas that we've been investing in for years. So on the backs of strong growth and focused categories, on the back of really accelerating mid-teens growth in our C2C business, on the backs of kind of the growth that we're seeing in e-commerce. And I've been at eBay. I've been back 6 years. I was involved with the company for 8 years before. And I've never seen the business this healthy in terms of what we're seeing in our ability to drive growth. And I think more importantly, coming back to the first point is I'm really excited by the road map of what we have for 2026.

We haven't talked a lot about it externally, but our pace of innovation is changing at the company with these new technologies. Our ability to put like working prototypes in front of customers in a matter of days. And eBay is an open book test, right? You just go talk to your community, they'll tell you how to work the next kind of product area that you're working on. We're getting tons of feedback on live, which is accelerating what we're doing there. So our ability to kind of continue to do that on the road map for 26 for me is really exciting, and I'm looking forward to a great year.

Okay. Awesome. Jamie, Peggy, thank you so much for being here.

Thanks for having us.

Thanks for having us.

Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to the eBay Fourth Quarter 2025 Earnings Call. [Operator Instructions]. At this time, I would like to turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's Fourth Quarter 2025 Earnings Conference Call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer; and Peggy Alford, our Chief Financial Officer. We're providing a slide presentation to accompany our commentary during the call which is available through the Investor Relations section of the eBay website at investors.ebayinc.com.

Before we begin, I'll remind you that during this conference call, we may discuss certain non-GAAP measures related to our performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. Additionally, all growth rates noted in our prepared remarks will reflect organic FX-neutral year-over-year comparisons, and all earnings per share amounts reflect earnings per diluted share unless indicated otherwise.

During this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons.

You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K, Form 10-Q and our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of February 18, 2026. We do not intend and undertake no duty to update this information.

With that, I'll turn the call over to Jamie.

Thanks, John. Good afternoon, and thank you for joining us today. We finished 2025 with incredible momentum as we delivered Q4 results that meaningfully exceeded our expectations. Before I get into the details of the quarter, I'll start with some highlights for the full year.

Gross merchandise volume grew by nearly 6% to approximately $80 billion globally in 2025, and while U.S. GMV grew by nearly 10%. Importantly, our growth was broad-based across all of our most established strategic priorities. First, focus category GMV growth accelerated over 12%. In addition, multiple years of investment in our consumer-to-consumer or C2C experience have reduced transactional friction and reinvigorated growth in this segment which makes up roughly 1/4 of our total GMV.

Alongside these efforts, we've made significant investments in accelerating re-commerce on eBay, which we define as the sale of preowned and refurbished goods. We've invested in full funnel marketing to drive awareness and consideration of eBay for consumers shopping pre-loved.

Innovations like magical listings have unlocked consumers closets, basements and garages to increase the supply of preowned goods on eBay. We have also introduced direct recommerce collaborations with iconic brands and strategically expanded inventory in key areas like certified recycled auto parts. This work has fueled the circular economy. And as a result, recommerce made up over 40% of GMV on the eBay platform in 2025.

In aggregate, these strategic priorities, focus categories, C2C and recommerce comprised approximately 2/3 of our business in 2025 or more than $50 billion of unique GMV. This GMV grew by approximately 10% and accelerated throughout the course of the year, reinforcing the broad-based impact of our strategy on overall GMV growth.

We saw equally compelling results on monetization front as we continue to scale our suite of eBay services. Revenue increased by nearly 7% to $11.1 billion, outpacing GMV by over 1 point, primarily driven by growth in advertising, which reached approximately $2 billion in annual revenue.

We expanded our financial services footprint, driving incremental GMV through improved risk modeling and flexible payment options like Klarna, while working with partners to deploy working capital to trusted sellers.

We also scaled managed shipping in the U.K. and accelerated our product road map for cross-border solutions to help our sellers navigate new tariffs and trade policy changes.

Our top line outperformance throughout 2025 enabled us to accelerate investments in areas like eBay Live, vehicles and full funnel marketing to support key categories and geographies. We balance these investments in strategic growth vectors with operational discipline, which enabled us to grow non-GAAP operating income by roughly 7% to nearly $3.1 billion.

Lastly, we created significant shareholder value by growing non-GAAP earnings per share by 13% to $5.52 while returning approximately $3 billion of capital to shareholders through repurchases and dividends. These results meaningfully outperformed our expectations entering the year, highlighting our ability to navigate a dynamic macro environment and an increasingly complex global trade landscape. We also shared some exciting news today alongside our fourth quarter results.

EBay has entered into a definitive agreement to acquire Depop for approximately $1.2 billion in cash. This acquisition further strengthens our C2C value proposition, augmenting our organic momentum with a leading circular fashion marketplace that brings complementary strengths and demographic reach. I'll share more on this transaction shortly, and Peggy will discuss some of the financial details and forward-looking implications. But first, I'll discuss the key drivers of our strong Q4 performance.

The collectibles category had another standout quarter and was the largest contributor to GMV growth in Q4, driven by continued strength in trading cards, growing contributions from our off-platform marketplaces, TCGplayer and Goldin and a notable acceleration in other subcategories like bullion and collectible coins amid unique demand for precious metals in recent months.

Within trading cards, we continue to leverage AI to extend our industry-leading value proposition. In Q4, we launched early access to a new AI-powered card scanning experience powered by a set of proprietary models trained on over 40 million card samples. Now users can scan a single photo to instantly detect their exact card in parallel, while also servicing historical prices, PSA population data and other valuable insights. This eliminates time-consuming manual research and helps collectors decide when to buy, sell or grade valuable trading cards. Since we launched this beta feature in November, feedback has been overwhelmingly positive, and trading card enthusiasts have already scanned over 15 million cards to instantly identify and value their assets.

We also continue to drive synergies with our off-platform collectibles marketplaces to better serve enthusiasts across every price point. In Q4, we launched a new search experience that services unique inventory from Goldin directly within eBay search results. This integration addresses an inventory gap for rare high ASP items, while giving Goldin sellers access to eBay's scaled global demand.

In December, Season 3 of King of Collectibles: The Goldin Touch debuted on Netflix and ranked in the top 10 shows in 7 countries, including the U.S., U.K., Australia and Canada. This season featured Goldin's first on-the-ground collaboration with eBay in Japan, highlighting how our teams are working together to connect global Collectors with high-value inventory.

Motors, Parts and Accessories, or P&A, also finished the year strong, contributing over 1 point of GMV growth for our overall marketplace in Q4. We are seeing a repair-over-replace trend among consumers maintaining aging vehicles. And with more than 800 million live P&A listings globally, our inventory depth uniquely positions us to meet this demand.

In the U.S., we scaled our automated fitment capabilities, enhancing millions of domestic listings with billions of compatibility attributes in Q4. By leveraging our proprietary data to automatically populate these details on behalf of sellers, we are reducing friction while expanding the inventory backed by our guaranteed fit protection.

Our easy and free returns program also continues to drive conversion lift while return rates remain stable, demonstrating that reduced friction builds confidence for auto enthusiasts.

Fashion was also one of the leading contributors to growth in Q4, led by our luxury and pre-loved apparel-focused categories. Fashion overall generated well north of $10 billion in GMV globally in 2025. Similar to what we've done in collectibles, we've increasingly leveraged every aspect of our build-buy-partner strategy to improve our value proposition for fashion enthusiasts and accelerate GMV growth.

On the build side, we've completely reimagined the selling experience through multiple iterations of our magical listing technology. We modernized the fashion shopping journey by expanding our AI-powered discovery platform from the U.K. into the U.S., Germany, Australia, Italy and France. We invested in technology and talent to broaden the Authenticity Guarantee program to cover more categories, brands and price points, including optional authentication to enhance trust for lower ASP goods, and eBay Live has been particularly impactful for fashion as the ability to story-tell and showcase inventory in real time enables sellers to build immediate trust with their community and ultimately drive greater sales velocity for the stores.

Our work with key partners also contributed to notable improvement in consideration of eBay in fashion throughout the course of 2025. We partnerships with Love Island, Conde Nast and Vogue Vintage market helped elevate the perception of eBay as a trusted place to shop. Passionate eBay advocates like Chaperone and Emma Chamberlain, have raised awareness of eBay's fashion offering during some of the biggest cultural moments for enthusiasts like the Met Gala.

Our collaboration with Marks & Spencer one of the U.K.'s most iconic retailers, enables consumers to drop off apparel at hundreds of store locations to be resold on eBay and our Certified by Brand and Pre-loved Partner programs have enabled many more of the world's leading brands and trusted resellers to increase the breadth and depth of fashion inventory on our marketplace. Our momentum in fashion has meaningfully benefited organic growth in our marketplace. With fashion serving as the second largest contributor to our U.S. GMV growth in Q4 with particular strength in C2C.

We complemented this organic momentum with the recent acquisition of Tise, a leading C2C marketplace in Nordics, which further extends our value proposition globally.

And now we're excited to further expand our total addressable market in C2C with the acquisition of Depop, which a natural strategic and cultural fit with our company, offering clear opportunities for synergies between our respective market places.

Depop has established itself as a leading C2C marketplace that currently serves the base of approximately 7 million active buyers and 3 million active sellers with most of its audience under the age of 34. Depop facilitated approximately $1 billion in gross merchandise sales in 2025 and with nearly 60% year-over-year growth in the U.S. market.

This acquisition is compelling on a number of fronts. Recommerce is one of the fastest-growing segments in global retail, led by Gen Z and millennial consumers who prioritize sustainability, individuality and value. These consumers are accelerating the shift towards circular fashion through social-driven shopping behaviors.

Depop's mobile-first social forward experience has cultivated an extremely engaged user base that complements eBay's global scale. For instance, over 1/3 of Depop buyers listed 1 or more products on the marketplace in 2025. And this engagement fuels a sell-to-buy flywheel that drives sales velocity across a broad array of brands and price points.

I'm confident this acquisition will drive meaningful benefits for users across both eBay and Depop. Depop seller and buyer communities will gain access to eBay's suite of value-added services, including financial services, shipping and cross-border trade solutions as well as trusted experiences like Authenticity Guarantee.

Depop strengthens eBay's leadership in C2C, broadens our demographic reach and expand the presence in fashion and adjacent lifestyle categories. Similar to how we've demonstrated the power of cross-listing inventory with Goldin and collectibles, we see a clear opportunity to replicate that success with Depop, given its complementary range of brands and price points.

Integrating Depop in the eBay's portfolio should further reinforce our customer proposition in a rapidly evolving recommerce environment and ultimately drive long-term value for shareholders.

Another emerging growth vector we're excited about in 2026 is the momentum we're seeing in eBay Live. eBay Live is rapidly evolving into a multi-category shopping destination as we diversify our inventory and programming beyond collectibles. Fashion is becoming a more significant growth driver particularly in luxury watches.

During the holiday season, we achieved a single day record for eBay Live GMV on Black Friday, including approximately $2 million of sales in a single event. In recent weeks, eBay Live GMV is tracking at an annualized run rate roughly 7x higher year-over-year, led by rapid growth in the U.S. market.

In Q4, we expanded our global footprint by launching eBay Live in Germany and Australia, followed by recent additional launches in France, Italy and Canada in Q1. 2025 was also a watershed year for horizontal innovation, as our proprietary AI infrastructure enabled us to transition from generative AI pilots to scalable agentic experiences that actively do more of the hard work for our sellers and buyers. In Q4, we began rolling out the next generation of our magical listing experience, a true breakthrough that move beyond AI-assisted tools to a fully AI-native architecture.

Unlike prior iterations where we integrated generative AI technology into legacy workflows, this new experience leverages AI agents from the start to autonomously build listings from images alone. Now any smartphone camera can act as an AI agent that guides you on which photos to take for your specific product to increase the likelihood of a sale.

In the background, AI agents create the title, category and item specifics by leveraging advanced models and our product knowledge graph. AI also provides intelligent pricing recommendations based on real-time transaction data, helping sellers balance velocity and price realization to optimize their cash flow. The early results have been powerful.

After making this the default listing experience for all new and reactivated listers on iOS and Android in the U.S., we have seen a more than 1/4 decrease in average listing time and greater than 50% increase in new listing creation rate, double-digit percentage increases in sold items and GMV per lister and customer satisfaction exceeding 95%. We are continuing to fine-tune the experience and are excited to bring this game-changing capability to more countries and seller cohorts over the coming months for unlocking our total addressable market in recommerce.

For buyers, we are redefining discovery through a agentic search, which we started rolling out to a subset of our U.S. mobile traffic in December. This technology allows buyers to shop using natural language in a back and fourth dialogue, just like they would with a knowledgeable sales associate that understands their style, preferences and shopping history. As a result, new buyers are able to seamlessly filter results and more easily discover the amazing breadth and depth of inventory on eBay just like enthusiasts have been able to, do for many years.

As this technology is built into the core search experience rather than off to the side, it's important that it's scalable. We've powered this experience using a set of lightweight proprietary models that leverage a query agent to classify intent, which enables us to effectively balance the trade-offs between latency, compute costs and query optimization quality. We plan to scale agentic search to more users throughout 2026, laying the groundwork for an even more personalized shopping journey for our customers.

In October, we launched eBay International Shipping or EIS, in Canada, our third largest quarter for U.S. imports. This rollout brings the benefits of our U.S. program to Canadian sellers, including delivery duties paid functionality and the automated application of country of origin data. Our Canadian seller ramp has progressed ahead of schedule and we'll continue to expand seller and listing eligibility in 2026 as we refine our offering.

In Q4, we also enabled business sellers in Germany to access SpeedPAK, our end-to-end cross-border shipping solution enabled through a joint venture, which was already offered in Greater China and Japan. SpeedPAK automates customs documentation and tariff calculations, simplifying compliance for small businesses that lack the resources to manage these changes independently. In Japan, where SpeedPAK has seen strong adoption, SpeedPak is now utilized for the majority of direct shipments to the U.S., ensuring a reliable transparent experience for buyers.

Importantly, between EIS and SpeedPAK, we now have cross-border solutions in place for our largest corridors, importing goods to the U.S., and we'll continue to ramp shipping solutions to additional corridors throughout 2026. I'm also pleased to share that we closed out 2025 by exceeding our ambitious 5-year impact goals. From 2021 to 2025, we set out to drive $22 billion in positive economic impact from the sale of pre-loved and refurbished goods on our platform.

Based on our outperformance in recommerce, we estimate we achieved a cumulative positive impact of close to $25 billion. We also helped prevent nearly 8.2 million metric tons of carbon emissions from entering the atmosphere above our target of 8 million.

Lastly, we estimate over 360,000 metric tons of waste were diverted from landfills from recommerce on eBay, exceeding our target of 350,000. These results demonstrate how promoting the circular economy delivers tangible environmental benefits while creating meaningful economic value for our global community.

In closing, 2025 was a milestone year for eBay. We accelerated GMV growth to nearly 6%, with 8% growth in the second half of the year. Roughly 2/3 of our GMV was driven by our most established strategic priorities: focus categories, C2C and recommerce. This GMV grew 10% in 2025 and exited the year growing even faster. I'm incredibly proud to see years of investment and execution reflected in the strength and momentum in our business. At the same time, I'm even more excited about the road map for 2026.

In addition to scaling our established strategic priorities this year, we plan to accelerate emerging growth vectors like our secure, fully digital transaction solution for vehicles. which serves as a powerful multiplier for our broader eBay Motors offering. Each enthusiast vehicles sold on eBay unlocks further customer lifetime value, driving recurring demand for our P&A business as buyers return to maintain, modify or restore their newly purchased vehicle.

We also have ambitious plans for eBay Live, which has evolved from a fast-growing U.S. pilot at the start of 2025, to a rapidly scaling commerce engine that's available in 7 countries today. By integrating live shopping directly into our core experience, we are building a new flywheel that allows enthusiasts to discover, interact and transact in real time across many of our strongest categories.

Lastly, I've never been more optimistic about our AI road map as we start 2026, as we build upon the robust technical infrastructure and the foundry of proprietary models that we've developed over the past year. This foundation enables us to further raise the bar for innovation, unlock our decades of proprietary data and deliver hyperpersonalized agentic experiences that anticipate our customers' needs and drive tangible value for our business.

I want to thank our employees for their incredible execution this year and our community of sellers and buyers for their continued partnership. With that, I'll turn the call over to Peggy to provide more details on our financial performance. Peggy, over to you.

Thank you, Jamie. I'll start with our financial highlights for the fourth quarter. GMV grew over 8% to $21.2 billion. Revenue grew over 13% to $2.96 billion. Our non-GAAP operating income grew over 11% year-over-year to $775 million. Non-GAAP earnings per share grew nearly 13% year-over-year to $1.41 and we returned $756 million to shareholders through repurchases and cash dividends, demonstrating our continued commitment to capital returns.

Now let's go deeper into the key drivers behind our strong Q4 performance. GMV grew over 8% to $21.2 billion on an organic FX-neutral basis. Foreign exchange provided a tailwind of approximately 150 basis points to spot GMV growth. Focus category GMV grew over 16% in Q4, outpacing the remainder of our marketplace by roughly 12 percentage points. Consistent with recent quarters, strength was broad-based across our business and was most pronounced in the areas where we have been actively investing. All focus categories contributed positively to GMV growth in the quarter, led by collectibles, P&A, luxury, refurbished apparel and sneakers.

Within trading cards, while Pokemon decelerated as expected due to tougher year-over-year comparisons, GMV from the rest of collectible card games still posted strong growth and sports trading cards growth accelerated. Outside of focus categories, we also saw strong GMV growth in other collectibles like bullion, coins, action figures, comics and other toys.

Looking at our business by geography. Our U.S. GMV growth was particularly strong, while our international performance was pressured by the relatively softer macro environment in Europe, and continued pressure on U.S. imports driven by recent trade policy changes.

U.S. GMV grew nearly 19%, accelerating by nearly 6 points sequentially due to several factors. Our U.S. volume saw a disproportionate benefit from the strength in collectibles because of its higher mix in this category. Our U.S. business also benefited from strong growth in luxury and pre-loved apparel and an uptick in demand in certain electronics categories. Growing contributions from our emerging growth vectors, notably live and vehicles also benefited our U.S. growth as well as a favorable lower funnel marketing environment and continued strength from our Klarna partnership.

International GMV declined nearly 1% on an organic FX-neutral basis with foreign exchange providing a tailwind of 290 basis points to spot GMV growth. International performance was impacted by challenging macroeconomic conditions in the U.K. and Germany and a deceleration in our cross-border volume growth due to U.S. trade policies, including the removal of de minimis exemption for all countries at the end of August. However, our focus categories continued to perform well internationally in Q4, reinforcing the resilience of our marketplace.

Moving on to our buyer metrics. Our trailing 12-month active buyers totaled roughly 135 million in Q4. Excluding buyers from recently acquired Tise, active buyers were over 134 million up nearly 1% year-over-year organically. Enthusiast buyers were stable at roughly 16 million while spend per enthusiast buyer grew year-over-year to over $3,300 on a trailing 12-month basis. Our buyer metrics also reflected the divergence in our geographical performance. In the U.S., both active and enthusiast buyer growth accelerated in 2025, exiting the year at mid-single-digit growth. However, our enthusiast buyer count in international markets has been pressured by persistent macro headwinds as some buyers fell below the volume or frequency thresholds.

Next, let's take a closer look at our income statement. We generated revenue of $2.96 billion in the fourth quarter, up over 13% on an organic FX-neutral basis with foreign exchange providing a tailwind of 160 basis points to spot growth. Our take rate was 14%, up 60 basis points year-over-year primarily due to the shipping, U.K. buyer protection fee, and advertising revenue growth. As a reminder, we eliminated final value fees for U.K. C2C sellers as a part of our C2C initiative in October of 2024, then progressively scaled our remonetization throughout 2025.

By Q4, we had effectively completed our C2C remonetization efforts through our buyer protection fee and manage shipping mandate on eligible items. Trade policy changes and mix shifts in our business continue to apply some pressure on our take rate year-over-year.

Last quarter, we noted returned and canceled orders had emerged as a headwind to our take rate in recent months. Encouragingly, we did see return in cancellation rates stabilize sequentially in Q4 as sellers and buyers adjusted to U.S. trade policies.

Total advertising revenue was $544 million, representing GMV penetration of nearly 2.6%. Within the eBay platform, first-party ads grew over 17% to $517 million. Promoted listings comprised nearly 1.2 billion of the roughly 2.5 billion total listings on eBay while 4.8 million sellers adopted at least 1 promoted listing product during the quarter. We continue to deprecate legacy third-party display ads, which declined by 41% to $7 million.

Off-platform advertising revenue was $21 million. Non-GAAP gross margin was 72.1% in Q4, declining by nearly 80 basis points year-over-year as tax-related tailwinds and cost of payment efficiencies were offset by managed shipping traffic acquisition costs related to promoted off-site ads and Authenticity Guarantee program costs. While these programs pressure gross margins as they scale, they provide meaningful strategic benefits to our marketplace by reducing transactional friction, driving sales velocity and enhancing trust.

Our non-GAAP operating margin was 26.1% as marketing efficiencies were more than offset by product development expenses and transaction losses. The losses were primarily attributable to our recently launched shipping programs, which significantly improved the seller and buyer experience. Losses with these types of programs are typically higher initially and we expect them to decline over time as we gather data and optimize these programs. Overall, while we continue to reinvest a portion of our top line upside in strategic initiatives, we flowed through more incremental revenue to operating income in Q4 compared to the prior 2 quarters, resulting in 11% year-over-year operating income growth ahead of our guidance. Non-GAAP earnings per share was $1.41, up nearly 13% and GAAP earnings per share from continuing operations was $1.14.

Moving on to our balance sheet and capital allocation. We generated free cash flow of $478 million in Q4 and ended the year with cash and fixed income investments of $4.8 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments were valued at over $900 million. We repurchased $625 million of eBay shares in Q4 at an average price of nearly $86, and paid a quarterly cash dividend of $131 million in December or $0.29 per share.

Before I discuss our outlook, I'd like to point out 2 accounting policy changes we are making, starting on January 1, 2026. First, we are adopting a new accounting standard for internal use software, and as a result, we will expense all product development costs starting this year, reducing the amount of capitalization. We are providing a recast of the 2024 and 2025 income statements in the appendix of our earnings presentation, which offers a comparable baseline to the financials we'll report starting with Q1. My upcoming comments on Q1 and 2026 growth rates are based on the recast financials.

Second, since we first launched our U.K. managed shipping program over a year ago, we have expanded our partnerships with carriers and provided sellers with more choice and control over which shipping services buyers can select. Given the increased flexibility for sellers, we are switching our accounting treatment for this program from gross to net revenue recognition, which will modestly pressure our take rate in 2026.

Now I'll share some thoughts on 2026 and starting with our outlook for the first quarter. We expect GMV between $21.5 billion and $21.9 billion for Q1, representing total FX-neutral growth between 10% and 12% year-over-year. Based on current exchange rates, we estimate FX would represent a roughly 450 basis point tailwind to spot GMV growth in Q1. Our guidance assumes continued strength from our strategic priorities, driven by focus categories, C2C and recommerce.

Our year-over-year GMV growth is also expected to benefit from continued efficiency in lower funnel marketing and our corner partnership, which each emerged as more noticeable growth drivers in Q2 of last year.

In addition, we do expect increased growth contributions from what we perceive as less durable growth drivers, including bullion and collectible coins.

We forecast revenue to be between $3 million and $3.05 billion, implying total FX-neutral growth of 13% to 15% year-over-year. Based on current exchange rates, we estimate FX would represent roughly 310 basis points of tailwind to spot revenue growth. Our guidance implies a roughly 3-point delta between FX-neutral revenue and GMV growth year-over-year in Q1. Continued healthy growth in advertising is expected to be a contributor to this delta. A portion of this delta is also related to the lapping of our phased remonetization of U.K. C2C volume last year, but this component will no longer be a tailwind in Q2 as managed shipping revenue faces lapping pressure from the aforementioned accounting change.

We expect non-GAAP operating income growth between 11% and 16% year-over-year in Q1, implying non-GAAP operating margin between 28.3% and 29.2%. Our strong operating income growth reflects disciplined reinvestments in strategic priorities and healthy flow-through to the bottom line. We forecast non-GAAP earnings per share between $1.53 and $1.59 in Q1, representing year-over-year growth between 12% and 16%. Our EPS guidance implies the net interest and other line item is roughly neutral in Q1 due to onetime items.

Next, I'll share our preliminary views on the full year excluding the potential impact of the pending Depop acquisition, which I will outline separately. For 2026, we are planning our business around the assumption that year-over-year GMV growth is similar to 2025 on an FX-neutral basis, reflecting the continued momentum we're seeing from our established strategic priorities and increased contributions from emerging growth vectors this year. We expect this strong GMV growth despite the incremental impact of tariffs and other lapping considerations we identified last quarter. These impacts are not expected to be linear from quarter-to-quarter influencing year-over-year growth rates in 2026.

However, on a 2-year stack basis, our commentary suggests GMV growth is relatively consistent between Q2 and Q4, implying strong underlying growth trends. We are planning for revenue growth to be in line to slightly ahead of GMV for the full year on an FX-neutral basis as healthy growth in advertising revenue is expected to be partially offset by mix shifts in our business, including higher growth contributions from live and vehicles. We believe these emerging growth vectors will contribute long-term top and bottom line growth and improve the health of our marketplace.

We expect non-GAAP operating income growth between 8% and 10% year-over-year in 2026, as we balance reinvestments in our strategic priorities and emerging growth vectors with strong flow-through to the bottom line. Importantly, we will continue to be disciplined in our investments and drive operational efficiencies in our business whenever possible. We expect non-GAAP earnings growth to be relatively in line with non-GAAP operating income in 2026, due to below-the-line items that are expected to roughly offset the EPS accretion from our share repurchases. We anticipate our lower cash balance and higher interest expense would pressure the net interest and other line item year-over-year after Q1.

Additionally, as we alluded to last quarter, we are increasing our non-GAAP tax rate assumption in 2026 to 17.5% to reflect the impact of global tax policies and our geographical business mix.

Next, let me share a few thoughts on capital allocation. We forecast capital expenditures to be between 4% and 5% of revenue for the full year. As we outlined last quarter, we plan to target repurchases and cash dividends totaling between 90% to 100% of free cash flow in a normal year. For 2026, we are targeting roughly $2 billion of share repurchases, which is squarely within that range despite our planned acquisition of Depop, underscoring our ability to balance inorganic investments with strong capital returns to shareholders.

In February, our Board authorized an incremental $2 billion under our stock repurchase plan in addition to our remaining authorization of roughly $800 million at the end of 2025. Our Board also declared a quarterly cash dividend of $0.31 per share for the first quarter to be paid in March, which is an increase of $0.02 from the quarterly dividends paid out in 2025. Now I would like to take a few minutes to walk through the financial implications of our pending acquisition of Depop.

We have entered into a definitive agreement to acquire Depop from Etsy for approximately $1.2 billion in cash subject to certain purchase price adjustments. We currently expect this acquisition to close in Q2 of 2026, subject to the satisfaction of customary closing conditions and regulatory approvals. As Jamie noted, Depop is a great strategic fit and builds upon the significant organic momentum in our business, driven by years of investment in C2C and growing value proposition in fashion.

Overall, Fashion is one of our largest categories, generating more than $10 billion in GMV for eBay annually. And in 2025, our U.S. market alone added over $500 million of incremental fashion GMV year-over-year, the majority of which came from C2C sellers. Our acquisition of Depop would add a business generating approximately $1 billion of annual gross merchandise sales, primarily in the U.S. market, where it grew by nearly 60% year-over-year in 2025.

Upon completion of this transaction, we expect Depop would contribute 1 to 2 percentage points to total FX-neutral GMV growth year-over-year in 2026, assuming the deal closes as expected in Q2. Given the immense potential we see for this marketplace within eBay's portfolio, we plan to invest in Depop to support future growth and synergies between our respective marketplaces.

Our current assumption is that the acquisition would represent a low single-digit headwind to the 8% to 10% operating income growth we forecast for the core eBay marketplace. This estimate reflects not only the current operating profile of Depop, but also integration costs and planned investments. We would also expect the acquisition to dilute our non-GAAP earnings per share growth by low single digits, with the EPS impact modestly higher than operating income dilution due to foregone interest income from the cash used for this transaction.

Over the long term, we are highly confident this acquisition will be meaningfully accretive to operating income and EPS growth and drive significant value for shareholders. On a consolidated basis, including synergies, we expect the acquisition of Depop to become accretive to non-GAAP operating income in 2028.

In closing, our Q4 results capped off a tremendous year for eBay. In 2025, we accelerated GMV growth to nearly 6%, increased non-GAAP operating income by roughly 7% year-over-year and grew non-GAAP earnings per share by nearly 13% year-over-year, marking our second consecutive year of double-digit earnings growth. We demonstrated our ability to accelerate growth invest in our strategic priorities and transform the eBay experience through AI, all while delivering strong bottom line results and healthy capital returns to shareholders.

Despite a full year of impact from trade policy changes and the lapping considerations we've laid out, our outlook for 2026 implies another strong year of balanced top and bottom line growth with our investments supporting an exciting innovation road map for our customers.

With that, Jamie and I will now take your questions.

[Operator Instructions] Our first question will come from Nikhil Devnani with Bernstein Research.

Jamie, it's pretty staggering to see numbers like 10% to 12% consolidated growth given where things were only a few quarters ago. I know you've acknowledged already some of the shorter-term benefits in a few categories. But when you look beyond that, it seems like there's been some sustained acceleration just generally for you in the U.S. So my core question here is, I guess, what's changed? Are you seeing -- have you seen step-ups in conversion rates? Have you seen influx of new customers to some of those other core categories? Like what's driven this improvement across the board in the domestic market?

Yes. Look, thanks for the question, Nikhil. What I feel great about regarding Q4 is the broad brand strength that we're seeing. The underlying health of the business is the strongest it's been since I've joined the company 6 years ago. And I think what you're seeing is that years of investment that we've made are paying off, and that's really evident across our strategic priorities. Focus categories, C2C and recommerce, each of these areas grew in the high single to low double digits in '25. And collectively, they drive a significant majority of our GMV.

So we've been transparent and Peggy has talked about some of the unique tailwinds in recent periods. And we've been prudent about our go-forward assumption in those areas. But overall, I'd say we're really pleased with our performance in Q4, the broad-based nature of our growth and how that momentum is translating into early 2026.

We had some specific commentary about bullion and collectible coin specific to Q1. But other than calling that out -- potentially less durable, we see that as less durable. Overall, we see the broad-based nature of our growth and that momentum really carrying through to 2026.

And maybe a follow-on, sticking with GMV. For the guide for this year, how much contribution are you embedding from some of the newer emerging vectors like Caramel and eBay Live?

Yes. Look, we're excited by the new growth vectors in the business. But I would say the majority of what we're excited by is just the strength of the core business. When you look at our focus categories and the growth that we saw in Q4 and what we're seeing in Q1, that continues to perform -- those continue to perform really well.

I'm excited by some of our newest categories that we have in -- or newest areas that we have with both eBay Live and with Vehicles. we're seeing a nice run rate in eBay Live, a 7x run rate for year-over-year. But I would say, in general, our strategic priorities around focus categories, C2C and recommerce are going to be consistent and strong drivers for us in 2026.

Our next question will come from Colin Sebastian with Baird.

Great. Congratulations on the quarter and the year. I guess, first, on the International segment, I know the macro factors continue to weigh on growth, but also curious if you're seeing, Jamie, any changes in the competitive environment in key markets? And then likewise, are you seeing benefits from focus categories and AI tools or other platform initiatives as they do roll out in Europe?

Yes. Yes. Thanks for the question. Clearly, it's a dynamic macro environment and a clear divergence between the U.S. and our international markets in Q4. In the U.S., while we faced uncertainty relative to trade policy, consumer demand has been resilient, and we saw broad-based strength across categories in Q4.

I would say in contrast, Europe has been more challenged as consumer confidence remains low and retail sales trends are subdued there. But what I would tell you is the focus category stuff that we've rolled out internationally has been performing well. The C2C initiatives that we've been driving continue to perform well in that market.

We recently expanded eBay Live to a number of our other markets across Germany, France, Italy and Canada. And so overall, we feel like we're well positioned and the things that are working in the U.S. are working as well internationally. It's just a very different macro environment from what we're seeing in the U.S.

Got it. Okay. And then maybe my follow-up is on the agentic side. I know it's really early. But at a higher level, what sort of user behavior changes are you expecting as this rolls out on the buyer side? Does this impact your advertising business and also maybe the architecture for how you're building this out to connect with partners like OpenAI?

Yes. Look, we feel really well positioned to bring a differentiated experience to agentic commerce which makes us really confident we'll be a long-term beneficiary of this trend. The first thing I'd hit on is the experiences that we're building on eBay, leveraging this technology.

Our next generation of magical listing is really a game changer. It's an AI-native solution that leverages our product knowledge graph that leverages 30 years of data and build this amazing experience where we essentially do everything for you in the background. I've been doing this for a long time in decades. And having a new product rollout with 95% customer satisfaction shows you the strength of what we're building using these tools. I would say the same thing with agentic search and what we're seeing as people pilot that and the ability to use natural language against our inventory.

But the other thing I would tell you is that the other reason we feel well positioned is our inventory is really different from most marketplaces. Roughly 90% of our GMV is not new in season and 2/3 of that intersects with focus categories, recommerce or with C2C. So these are highly considered purchases of unique items, think used, refurbished, collectable or luxury items where conditions, scarcity and the human judgment matter.

The last thing I'd say is that all the work that we've done in our experiences with trust, plays a huge differentiator for us and a real structural advantage. You think about seller feedback, Authenticity Guarantee and the post-transaction Protections that we provide, that's hard to replicate along with financial services and global shipping solutions really do kind of reduce the transactional friction for buyers and sellers.

So all of these factors, I think, put us in an incredibly strong position to thrive in an agentic AI world. and I'm really excited by the investments that we're making and the customer responses to how we're using that technology on the eBay experience.

Your next question will come from Ross Sandler with Barclays.

Great. Hopefully, you can hear me.

Yes, we can hear you, Ross.

Excellence. Okay. So just 2 questions. One on the full year '26 guide, you guys have talked about how we're going to lap some of these like nondurable things in the second half of '26. Could you just talk about how you're thinking about like the growth cadence throughout the year and some of the like durable versus nondurable as we get into the second half?

And then on Depop, so those guys have done a great job in their U.S. side of the business. And I think the international has trailed the U.S. performance. So how is like combining eBay and Depop potentially going to advance the cause on like U.K. and Australia and frankly, just the overall fashion segment at eBay in general? Just curious to your comments on that.

Peggy will take the first one and I'll take the second.

Sure. Thanks for your question, Ross. So we feel really good about the broad-based strength that we're seeing. As Jamie mentioned, they're really focused on our strategic priority areas, focus categories, C2C, recommerce. Our commentary reflects the continuation of the strength as well as we're really excited about the contribution that we're expecting from our emerging growth vectors like live and vehicles.

In terms specifically on -- in terms of specifically on lapping, a couple of things to keep in mind. So we are expecting a deceleration in Pokemon growth in '26 just given the triple-digit growth that we saw in '25, although I will point out that we expect healthy overall growth in trading cards. We started seeing a little bit of the deceleration in Q4 of '25 and the comps get a bit tougher as we move throughout the year.

Jamie mentioned bullion, we are expecting a significant amount of the acceleration that we saw from Q4 to Q1 was related to just the bulion and collectible uptick. And so we are planning for that to moderate during the year after Q1. We're lapping our U.S. Klarna partnership starting in Q2 of '26. And then we talked last year -- in '25 about our marketing efficiency gains in paid search, we'll be lapping those from a favorable competitive dynamic starting in Q2 of '26. So overall, I'd say we believe that the majority of the growth is durable and we remain very confident in the strength of our business. Just want to point out a few of those factors.

Yes. And then regarding your questions on Depop, Look, I'm really excited by the acquisition. I think it's really going to supercharge our C2C strategy in several ways, and it's building on strong growth that we're seeing today, particularly in the U.S. Our U.S. C2C business grew in the mid-teens year-over-year in 2025 with growth accelerating in '24. And our learnings across the globe have really helped drive that.

We're also doing this acquisition from a real position of strength. We're seeing strong growth in Fashion, its an over $10 billion GMV category for us on eBay and we've been increasing our investments there. I've been talking about that over recent quarters. In 2025, U.S. fashion grew 10%, with even faster growth in C2C. So if you look at it, we added over $500 million of GMV in the U.S. in fashion alone.

Depop as really prioritized the U.S. market in a world with limited investments. They've been really leaning in, and they've seen really great growth. They've seen 60% growth in the U.S. market, which is obviously great with the strength that we're seeing in the overall business.

The last thing I'd say is that Depop brings a younger consumer base and they're amongst the fastest-growing demographic, especially in this sustainability, recommerce and fashion piece. And so we see it as a great strategic fit for eBay. It builds on the strong growth we're already seeing in C2C in fashion, and I'm excited about the strong growth potential for both marketplaces go forward.

Your next question will come from Nathan Feather with Morgan Stanley.

Congrats on the quarter. I guess, first, just to follow up on Depop a little bit. Interested to hear how do you think about the revenue synergies that are available through the Depop deal, and what is that opportunity to drive across the listing from both Depop to eBay and eBay to Depop?

And then just a clarification, Peggy. You said that coins and bullion was the majority of the acceleration from 4Q to 1Q. So just to clarify, that means GMV is still accelerating even excluding the coins and bullion impact?

Yes. So let me talk first on what excites me about the Depop from that side and the integration. So first is, we'll keep Depop as a stand-alone brand experience, et cetera. It's resonating great with consumers. It's growing well as I talked about, et cetera. But we do see the opportunity to help support that growth and drive it even further, by bringing assets from eBay that we've developed over the last couple of years.

So think about the Authenticity Guarantee work that we've done, the shipping and cross-border trade, payments and financial services in recent years, we've turned more of our back-end resources into services to really help grow not only core eBay Marketplace but other stand-alone platforms. And I'd probably draw a parallel here for you, Nathan, to what we've done in Collectibles.

Years ago, we bought TCGplayer and Goldin Auctions, and you see us now integrating Goldin Auctions with a single sign-on experience. We've integrated Goldin Listings onto the platform. And I'm really glad we did those acquisitions because they're really helping accelerate the strategy of what we're doing in collectibles, and I'm similarly excited for that opportunity with what Depop has done with fashion of the ability to take the marketplace to the next level and drive synergies across a number of those areas. Peggy, do you want to take the second piece?

Sure. Just a quick clarification. So as I mentioned, due to the increases in precious metals, we did see an acceleration in the demand for bulion and coins in Q4, and that continued into Q1. This -- what I meant to say was that, the bullions accounts for a significant portion of the sequential acceleration, not all of it. We continue to see broad-based strength going into Q1 and looking beyond some of the near-term unique dynamics that we called out, we feel very good about this broad-based and durable nature of the GMV growth that we're seeing.

Your next question will come from Shweta Khajuria with Wolfe Research.

Let me try 2, please. First is on earnings growth. So when we think about EPS growth, could you please talk about the puts and takes? So how would -- what would drive the potential upside and how you're thinking about buybacks? And then the second is a follow-up to a prior question on agentic commerce I guess, how do you think -- when we think about long term in terms of your position in agentic commerce, how do you see it evolve? And perhaps, is there -- what is your view on eBay's position in agentic commerce as it relates to shoppers perhaps potentially moving to these AI platforms. Is that a positive for you or negative? And are you compelled to partner with them?

Yes. Look, what you've seen from us with partnerships is we've always been open to making our unique inventory available on scaled third-party channels. We've done that with Google Shopping. We've done that with Facebook Marketplaces, which are 2 great examples. We're also thoughtful about where and how we do so, and we're taking the same approach here with agentic commerce.

My first priority has been to build the agentic in-house capability. That's why I talked about agentic search. When I talked about the newest version of magical listing, and we've got an exciting road map coming up. But in regard with partnering with other platforms, we built a unified agentic commerce platform that enables us to plug into third-party agents and test different type of experiences to see what works best for our marketplace.

For instance, we recently signed on to be an early participant in the OpenAI Ads Pilot Program to test that out. But when I take a step back, yes, we believe we're in a strong position to be a beneficiary of agentic commerce. And it's a lot because of what I talked about earlier. Our inventory is fundamentally different from most marketplaces. It's 90% non-new in season, and we've built a lot of trust and other things around it. When you think about our 70,000 -- sorry, our 16 million enthusiast buyers that we have on the platform that buy 70% of the they're really driving sales in this used, refurbished, collectible, luxury or more considered purchases.

So we're going to be very thoughtful about how we do it, and I'm really proud of the technology that we've built to enable us to do so. And we'll continue to develop our platform to create more opportunities that promote discovery of our sellers' unique inventory while we continue to invest internally in loading the leading AI experiences for our enthusiast customers.

In terms of your question on EPS and operating income growth, we are expecting strong non-GAAP operating income growth in Q1 and the full year, and we're expecting that the majority what's driving the EPS growth. In terms of our buyback policy and our capital allocation plan. It remains the same. We first -- our first priority is organic investment in the business because we believe that, that is ultimately what's going to drive EPS growth. When it comes to excess capital, we have a strong track record of returning cash to shareholders.

In a normal year, we plan to target repurchases and dividends totaling between 90% and 100% of free cash flow. For 2026 specifically, we're targeting roughly $2 billion of share repurchase, which is within the range for a normal year, and that's despite our planned acquisition of Depop. This is reflecting our business performance. We have a healthy balance sheet and strong cash flow generation. And so we feel really good about this balance we've been able to achieve between investing in future growth and returning shareholder cash.

Your next question will come from Tom Champion with Piper Sandler.

Jamie, can you talk a little bit about eBay Live. Maybe give us the update there and your plans for this year? And curious what the long-term benefit is going to be there. Is that dollar volume of transactions? Is it a new customer demographic or is it engagement on the platform? Just curious any additional comments there. And maybe just relatedly, any update to the Facebook partnership?

Yes, Tom, thanks for the question. And it's really what's exciting about this opportunity, it's really all of the above on the things you mentioned. We see it as a really exciting opportunity, and I'm really encouraged by the traction we're seeing as we expanded into new markets and categories. It's really a natural extension of our marketplace, and it's already contributing to the double-digit growth that we're seeing in focus categories. And what we've been doing is investing and making Live more discoverable across the site, integrating into streams at relative points in the buyer journey.

In Q4, we actually expanded Live into Australia and Germany, and we've since expanded it into France, Italy and Canada. We've been hosting high profile activations at the world's kind of biggest football game. We had Christian McCaffrey, Gronkowski, Jerry Rice raising awareness of what we're doing there.

And to your question, we're seeing that it helps sellers because it builds this great new capability, right? You put it out there and you watch what sellers do with it, and it's pretty exciting, but it's also helping them grow their core business because they're building trust back in their core business with what they're doing with Live on the platform. It's helping us attract new buyers into the platform and drive more engagement out of our buyers because of the live streams and what we're seeing there, and that's why we've been scaling it up more geographically over time.

I was excited to see that we did a single event. We did over $2 million of sales in a single live event that kind of shows you the scale of what's possible for our sellers to really drive GMV. And our scale, our global buyer base and our high bar for trust really differentiate eBay and live commerce. And while it's still early in our growth phase, we believe eBay Live can be a meaningful growth vector over time and an increasingly important part of how enthusiasts shop on our platform.

To your question on the Facebook Marketplace, we continue to make progress on our partnership there. In Q1, we expanded our eBay inventory into Search, which is a new platform for us in the partnership or a new surface, if you will, that reflects higher intent user engagement earlier in the shopping journey. We're also expanding the volume and the categories of inventory shared on Facebook Marketplace, which benefits our existing presence in the marketplace feed.

So we believe this partnership is great for the eBay seller community as we expose their listings to Facebook scaled audience, and it's great for Facebook Marketplace users as they discover our breadth and depth of unique trusted inventory. So I think both teams are encouraged by the continued progress and the learnings to date, including the new learnings that we're seeing with the new surface in search.

Your final question will come from Michael Morton with MoffettNathanson.

My first one, I love the commentary on the trading card business, you've done some incredible things there. An investor question we frequently get is on the sustainability of that business. I know that there are some tough comps. But big picture, could you maybe talk about or quantify how you've grown the user base of people who sell trading cards on the website to help people appreciate that it's not just price appreciation. That would be my first question.

And my second question, Jamie, I wanted to follow up on Colin's question a bit on Shweta's question. But on agentic and just trying to be really explicit on what we're looking for here, are you seeing any change in behavior from users who are sent from AI search platforms to eBay's website. You do have, exactly what you said, it's high consideration goods, are you seeing higher conversion rates when they come from these platforms because they're coming in with more intent? And does it change the amount of products they click on.

So what I would say first on the trading cards is, look, we continue to see a long runway for secular growth in trading cards, and we attribute much of the recent growth to the innovation that we are driving, which has fueled renewed excitement amongst hobbyists. If you look at the Q4 strength, Mike, it was really broad-based across sports, trading cards and collectible card games, Pokemon trains remained extremely strong despite GMV decelerating year-over-year due to tougher comps, but sports trading cards accelerated with the strong growth across the 3 major U.S. sports. And while emerging collectible card games, like there's this new one called One Piece, which is exciting now are starting to gain traction.

To your question specifically though, encouragingly, we're seeing GMV growth driven by a balance of new buyers, sold items and ASP, and much of the ASP has been driven from a mix shift towards higher priced items. So stepping back, if you look at the innovation, whether it's live, the new AI card scanning thing that I talked about upfront, which we're seeing great momentum from consumers, we're really excited to see kind of the renewed energy based on the years of investment that we've had.

And we believe most of the growth is broad-based and secular in nature. Our scale and our value proposition have really positioned us as a leader in this space. And I remain very optimistic about the multiyear growth opportunity ahead in collectibles.

To your question on AI, I'd tell you right now that the traffic is very small. And it's not just for us, like in general, there's not a lot of traffic being driven. The traffic that is being driven is high intent. And so we are seeing kind of high conversion on that in terms of the traffic that's there. The other thing I would tell you is that what we're seeing in our own experiences on our platform with the agentic commerce -- or the agentic search that we're running there is that our enthusiast buyers, especially that are part of the pilot are really loving the ability to have this back and forth conversation. The ability to kind of refine and filter their items using agentic search and get to the things that they want, and it's really resonating on the platform.

And then I would say the same thing about magical listing. I talked about the customer satisfaction of that being at 95%. But I think even more important, when you look at the stats of new listings that are coming on to the platform, it's achieving the goal that we've been working on for years now, which is the whole idea of having people say, well, if it's that easy to list it on eBay, let me start selling this, this and this.

The average household has $4,000 of stuff that could be sold on the platform, and less than 20% of that is online. So we're really excited to bring that new capability and unlock all that inventory and really drive the significant TAM and recommerce. And we also think Depop is going to help us do that in a big way, too. So thanks for the questions.

Thank you for joining. This concludes today's call. You may now disconnect.

Good day, everyone. My name is Leila, and I will be your conference operator today. At this time, I would like to welcome you to the eBay Third Quarter 2025 Earnings Call. [Operator Instructions]

At this time, I would like to turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's Third Quarter 2025 Earnings Conference Call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer; and Peggy Alford, our Chief Financial Officer.

We're providing a slide presentation to accompany our commentary during the call, which is available through the Investor Relations section of the eBay website at investors.ebayinc.com.

Before we begin, I'll remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance. You can find a reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. Additionally, all growth rates noted in our prepared remarks will reflect FX-neutral year-over-year comparisons, and all earnings per share amounts reflect earnings per diluted share unless indicated otherwise.

During this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons. You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K, Form 10-Q and our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of October 29, 2025. We do not intend and undertake no duty to update this information.

With that, I'll turn the call over to Jamie.

Thanks, John. Good afternoon, and thank you all for joining us today. I'm pleased to report we delivered better-than-expected results across our key financial metrics in Q3. Our gross merchandise volume grew 8% to $20.1 billion. Revenue increased by over 8% to $2.82 billion, and our non-GAAP earnings per share grew over 14% year-over-year to $1.36. We achieved these strong top and bottom line results amid continued macroeconomic challenges across our international markets and increased headwinds for cross-border trade into the U.S.

Now let's go deeper into the key drivers behind our strong Q3 performance. Focus category GMV growth accelerated to over 15% in Q3, outpacing the remainder of our marketplace by roughly 11 percentage points. This growth was broad-based as all of our focus categories grew positively year-over-year with most accelerating sequentially. Although we expect the level of growth in focus categories to normalize in the near future, our momentum speaks to the level of innovation we've driven for customers and the increased likelihood that enthusiasts consider eBay when shopping in these categories.

Within our focus categories, collectibles was the largest contributor to growth, driven by another quarter of accelerating year-over-year GMV growth in both collectible card games and sports trading cards. Our off-platform marketplaces, TCGplayer and Goldin also saw GMV accelerate sequentially. Pokémon GMV grew in the triple digits year-over-year for the third straight quarter, benefiting from a strong product release cadence. We believe our continued momentum in trading cards is a direct result of the trust and innovation we've driven for hobbyists in recent years with features like My Collection, AI-powered listing tools, authentication and grading, consignment partnerships and integrated PSA population data.

We've added new ways to buy and connect with other enthusiasts through eBay Live. We've also benefited from a consistent drumbeat of activations at major tentpole events like New York Comic Con and the National Card Collectors Convention, where we had our biggest presence ever this year. While we do not expect GMV growth in this category to be linear every quarter, particularly as we face more challenging comps starting in Q4, we are confident in a long runway for secular growth in trading cards.

Motor parts and accessories, or P&A, was our second largest contributor to GMV growth in Q3, generating more than 1 point for the overall marketplace. The introduction of easy and free returns in the U.S. continued to build upon our trusted value proposition in P&A, while the cost and return rates for this program are well within our forecasted ranges. We continue to expand choice and selection in key inventory segments such as salvage and used parts, which help consumers find value at a time when many are stretched financially. Overall, we have over 750 million live P&A listings, which enables us to offer the largest online selection of unique auto parts and accessories in most of our major markets.

Fashion was another notable driver of GMV growth in Q3, led by our luxury, streetwear and preloved apparel focus categories. In Q3, we reinforced our commitment to the circular economy through a collaboration with Marks & Spencer, one of the U.K.'s most iconic retail brands. U.K. consumers can now drop off used clothing at Marks & Spencer stores and give those items a second life through resale on eBay. The program keeps quality fashion in circulation by repairing, cleaning and reselling wearable items and responsibly recycling the rest. We're excited by the potential of this partnership to unlock more preloved clothing on eBay, extend the lifespan of high-quality products and raise awareness of our growing role in driving the circular economy.

In September, we expanded our authenticity guarantee program in the U.K. to cover 70 luxury and premium brands in apparel, shoes and accessories, building upon our existing offerings in sneakers, watches, handbags and fine jewelry. This makes the U.K. our first market where luxury items can be authenticated from head to toe, reducing buyer friction and unlocking more high-value transactions across premium brands.

eBay Live continues to build momentum with consistent quarter-over-quarter growth across every major key performance indicator we track, including viewers, watch time, sold items and GMV. In recent weeks, eBay Live's annual GMV run rate was up approximately 5x year-over-year. We've created more personalized entry points into eBay Live across our homepage, search and view item pages, making it easier for our scaled buyer base to discover and join live shopping events that speak directly to their passions.

In Q3, we hosted some incredible eBay Live shopping events in the U.S. The Backstreet Boys joined Paradise Card Breaks at the eBay Open in Las Vegas. We had Milwaukee Bucks superstar, Giannis Antetokounmpo and his brothers joined Ken, Goldin for a memorable event at the National. Ken also teamed up with Logan Paul for a high-end sports card box break, which drew approximately 20,000 viewers over a multi-hour stream. eBay Live is also gaining strong traction in the U.K. following its formal launch in May at Comic Con London. Since then, we've seen a consistent cadence of exciting live shopping events from a Love Island Charity Auction stream and eBay's Endless Runway event at London Fashion Week to Pokémon weekend and new channels for toys and memorabilia. In September, SharkNinja also hosted our first refurbished appliance sales event with great success. It's exciting to see how quickly eBay Live is building cultural relevance and meaningful engagement with enthusiasts across the U.K.

Overall, we're thrilled by the response we're seeing from sellers and buyers on eBay Live and see significant potential for live commerce to become a strategic growth vector for our marketplace.

Improvements to our consumer-to-consumer or C2C value proposition in key geographies represent another strategic growth vector for our business. One year after we launched our U.K. C2C initiative, we continue to see compelling results. In the first half of 2025, we saw U.K. C2C GMV growth remain well above our prelaunch baseline as we introduced a buyer-facing fee and ramped adoption of our managed shipping program, which streamlines the shipping process, reduces cost and improves trust.

In Q3, we introduced additional C2C changes, including faster payouts for long-tenured sellers, greater transparency into all-in pricing when sellers are listing items and negotiating offers and more competitive terms for items priced below GBP 20. As a result, we saw U.K. customer satisfaction improve notably alongside accelerating year-over-year GMV growth during the quarter.

We recently added shipping support for bulky and heavy items through DHL, and we exited Q3 with the majority of U.K. C2C transactions utilizing our managed shipping program, which is now mandated for all eligible items.

Earlier this month, we closed the acquisition of Tise, a leading social marketplace in the Nordics focused on pre-loved fashion and lifestyle goods. Tise has built a highly engaged Gen Z and millennial community and a strong track record in social community-led commerce. This acquisition strengthens our leadership in the circular economy, increases our presence in the Nordic markets and accelerates our work to make consumer selling more seamless, trusted and scalable. I'm excited to welcome the Tise team to eBay, and I look forward to our teams learning from each other as we drive innovation for fashion enthusiasts and accelerate the circular economy.

Our years of investment in artificial intelligence have enabled us to leverage our scale and three decades of commercially relevant data and insights to transform the eBay experience for customers. In recent years, we've utilized generative AI to dramatically improve the selling experience on eBay through progressive iterations of our magical listing technology. In addition to selling, we've been testing a variety of agentic experiences in search and shopping to learn how buyers and sellers engage with AI at different phases of the customer journey. This includes both on eBay agentic experiences like our AI shopping agent pilot and third-party agents from companies like OpenAI.

Our AI shopping agent has given buyers a new way to shop across our inventory with personalized product picks and expert guidance based on their individual shopping preferences. As the pilot has progressed, we've significantly improved the underlying technology powering the experience. For example, we were able to build hyper-optimized large language models in-house that perform specific shopping agent tasks at lower latency and for significantly reduced cost versus commercial models.

With these learnings and efficiency improvements, we're now poised to gradually bring agentic capabilities into the core of eBay's business through the main search experience over the coming quarters. Our early learnings have also guided the development of our unified agentic commerce platform, which integrates our hybrid cloud infrastructure, large language model ecosystem, our model context protocol server and other agentic protocols with our proprietary data layer.

This platform enables a fully connected experience between eBay agents and generalized third-party agents from companies like OpenAI, which allows us to service the most personalized and relevant products to shoppers in real time based on our 30 years of listings, pricings, transactions and behavior signals. We believe this platform will enable us to deliver more personalized, seamless and trusted experiences for eBay buyers regardless of where they started their shopping journey. With these capabilities now in place, we are well positioned to continue improving the on-eBay experience with agentic tools, touching more of the end-to-end shopping journey, but also connect to compelling third-party agentic experiences.

I'm also excited to see how easy and seamless it is to shop on eBay using the iPhone camera after our recent integration into Apple's visual intelligence feature in iOS 26. Now when a user takes a photo or screenshot of a product they like to shop for online, they can quickly surface relevant listings on eBay, helping more iOS users discover our breadth and depth of unique inventory through an intuitive experience. iPhone users can also take advantage of a great new feature for auctions after we launched live activities functionality on iOS in September, which gives bidders real-time updates directly on their phone's lock screen during the final 10 minutes of an eBay auction. This engaging feature has seen click-through rates more than 4x higher than our standard push notifications for auction listings, helping ensure buyers never miss a chance to bid on their next great eBay find.

Connections between buyers and sellers have always been at the heart of eBay's marketplace. And now we're using AI to make those interactions faster and easier to manage. In Q3, we rolled out an AI assistant for member-to-member messaging across the U.S., U.K. and Australia. This tool takes information from the listing details to provide immediate high-quality suggested answers to buyer inquiries, enabling quicker responses. Sellers have told us this feature has been extremely helpful in answering buyer questions promptly, giving them more time to list items and grow their businesses on eBay.

Within member-to-member messaging, we've also rolled out a fully integrated offers experience directly into the messaging flow for customers in the U.S., Germany and Australia. This means buyers and sellers can now negotiate offers, view their full offer history and execute counter offers without ever leaving the conversation thread, reducing friction and driving improved sales velocity. With each successive quarter, AI is becoming more embedded throughout the eBay experience. As we build on this progress, we believe AI will continue to make eBay simpler, more personal and more connected for every user.

Moving to advertising. In Q3, first-party advertising revenue on the eBay platform grew nearly 23%, driven by broad-based growth across our ads portfolio. Active Promoted Listings comprised nearly 1.2 billion of more than 2.4 billion total listings on eBay, while over 4.4 million sellers adopted at least a single Promoted Listings product during the quarter. Promoted Listings general ads were the largest contributor to the year-over-year ad revenue growth in Q3, followed by PL Priority placements, Promoted Offsite ads and Promoted Stores units.

We continue to leverage our proprietary AI capabilities to enhance advertising performance. For instance, we recently launched a new multimodal embedding model on view item pages to deliver more relevant recommendations to buyers. This model led to a measurable uplift in Promoted Listings revenue by leveraging the listings imagery in addition to its title and other listings details to surface higher-quality recommendations.

In Financial Services, we reached a major milestone for our Seller Capital program in Q3. Since the inception of this program in 2021, more than $1 billion in growth capital has been dispersed to eBay sellers across the U.S., U.K. and Germany through our financing partners, including more than $200 million through the first three quarters of 2025. Many sellers have told us this additional working capital has made a significant difference in their ability to invest in inventory, people and technology to grow their businesses on eBay.

Turning next to our shipping initiatives, which have become a critical strategic imperative in today's increasingly complex environment for cross-border trade. The recent elimination of the de minimis exemption for imports under $800 has created incremental cost and friction for cross-border trade into the U.S. To help our sellers and buyers navigate these challenges, we meaningfully accelerated our multiyear product road map for shipping solutions. In October, we launched eBay International Shipping in Canada, our third largest quarter for U.S. imports after Greater China and Japan. This rollout brings the best parts of the U.S. program to both business and consumer sellers in Canada, along with additional capabilities like delivery duties paid functionality and automated application of country of origin data.

In Q4, we also began enabling business sellers in Germany to access SpeedPAK, an end-to-end cross-border shipping solution offered through a joint venture, which is already available to sellers in Greater China and Japan. SpeedPAK automates customs documentation and tariff calculations, helping sellers manage new trade requirements with greater efficiency. By simplifying compliance and improving delivery time predictability, SpeedPAK strengthens the resilience of cross-border trade on eBay and ensures buyers continue to receive a reliable shopping experience with transparent duties.

As we advance our strategic initiatives, we're equally focused on fostering the culture and talent that makes this progress possible. I'm proud that our dedication to building an inclusive workplace environment continues to be recognized externally. eBay has been named one of Forbes America's Best Employers for Company Culture, one of Time World's Best Companies and one of Newsweek America's Greatest Companies for 2025. These acknowledgments reaffirm our efforts to foster a positive, high-performing culture that attracts and retains some of the best talent in the industry.

In closing, Q3 was another strong quarter for eBay, underscoring the momentum in our strategy and the resilience of our marketplace. Our focused categories continue to drive significant growth for our overall marketplace, driven by continued innovation, trusted experiences and increased selection for enthusiasts worldwide. Our agentic commerce platform opens up entirely new opportunities for eBay by enabling connectivity between on eBay and third-party agents to facilitate personalized conversational shopping experiences that bring eBay's unique inventory and trust to wherever buyers begin their search. AI also continues to make selling on eBay more seamless and efficient from our magical listing technology to our new member-to-member messaging tools that help sellers manage buyer inquiries in real time.

I'm incredibly excited about our expansion of eBay Live into new European markets, which builds upon the tremendous momentum we're seeing in the U.S. as we bring live community-driven commerce to more enthusiasts.

Lastly, our investments in global shipping services are not only helping us support sellers in the current environment, but are accelerating our road map to make cross-border trade more frictionless, which can drive more velocity for consumers and small businesses around the world.

Together, these investments keep eBay well positioned for continued long-term sustainable growth as we reinvent the future of e-commerce for enthusiasts.

With that, I'll turn the call over to Peggy, who will provide more details on our financial performance and outlook. Peggy, over to you.

Thank you, Jamie. I will begin with the financial highlights of the third quarter. GMV grew 8% to $20.1 billion. Revenue grew over 8% to $2.82 billion. Our non-GAAP operating income grew 9% year-over-year to $764 million. Non-GAAP earnings per share grew over 14% year-over-year to $1.36, and we returned approximately $760 million to shareholders through repurchases and cash dividends.

Let's take a closer look at our financial and operating metrics for the third quarter. GMV grew 8% to $20.1 billion on an FX-neutral basis, accelerating by roughly 4 points sequentially. Our growth in Q3 was primarily attributable to our focus categories and overall strength in the U.S. market, partially offset by a relatively more challenging macro environment internationally and changes to U.S. trade policy, including the elimination of de minimis exemption globally in late August. Foreign exchange provided a tailwind of approximately 180 basis points to spot GMV growth. Focus categories grew over 15% in Q3 with all focus categories contributing to our total growth from collectibles to P&A, luxury, refurbished, apparel and sneakers. In our U.S. market, GMV growth accelerated to nearly 13%, driven by broad-based strength across categories and by increases in both sold items and average selling price.

In addition to overall strength in the U.S. market, our GMV growth continued to benefit from tailwinds like our Klarna partnership and efficiency and lower funnel marketing spend. Because GMV is reported based on the location of the seller, the delta between U.S. and international GMV growth was also influenced by demand shifting toward domestic sellers due to tariffs. International GMV grew nearly 4% on an FX-neutral basis with foreign exchange providing a tailwind of 350 basis points to spot growth. Despite facing relatively more challenging macroeconomic conditions outside of the U.S. in Q3, our international GMV growth also improved sequentially.

Recent enhancements to our C2C value proposition in the U.K. contributed to an overall acceleration in U.K. volume growth. Our cross-border business was resilient in the third quarter. However, we saw a deceleration in year-over-year volume growth starting in September in key markets importing into the U.S. after the removal of the de minimis exemption.

Shifting to our buyer metrics. Our trailing 12-month active buyers were over 134 million in Q3, up 1% year-over-year. Enthusiast buyers remained stable at roughly $16 million, while spend per enthusiast buyer grew year-over-year to over $3,200 on a trailing 12-month basis.

Moving on to our income statement. Revenue grew over 8% to $2.82 billion on an FX-neutral basis in Q3, while foreign exchange was a tailwind of over 120 basis points to spot growth. Our take rate was 14% in Q3 as continued strength in advertising was partially offset by several headwinds. As sellers and buyers adjust to the new trade policies, we are seeing an uptick in returned and canceled orders, which led to a roughly 10 basis point headwind to our Q3 take rate as these transactions are included in GMV, but not revenue. Our average selling price was also increased in recent quarters, mostly driven by category mix shift, which also pressured our take rate. In addition, U.K. C2C represented a modest year-over-year headwind as we continue to scale our managed shipping initiative during Q3. Lastly, foreign exchange was a headwind of nearly 10 basis points to our take rate year-over-year.

Total advertising revenue was $525 million, representing GMV penetration of 2.6%. Within the eBay platform, first-party ads grew nearly 23% to $496 million. We continue to deprecate legacy third-party display ads, which declined by 40% to $7 million. Off-platform ads grew 32%, reaching $22 million.

Non-GAAP gross margin of 71.6% declined by over 80 basis points year-over-year due to expected headwinds from managed shipping, traffic acquisition costs related to promoted off-site ads, depreciation expenses and foreign exchange. These factors were partially offset by tax-related tailwinds as we lapped onetime expenses a year ago and continued cost of payment efficiencies in the quarter. Our non-GAAP operating margin was 27.1%, down 10 basis points year-over-year, including a foreign exchange headwind of 10 basis points.

Marketing and operating efficiencies generated leverage in the quarter, which was partially offset by product development expenses. As we noted last quarter, given the recent strength in our business, we are reinvesting a portion of top line upside in order to accelerate our strategic initiatives, including eBay Live, shipping solutions and vehicles. We are also expanding our global employee footprint in order to optimize our location strategy and to comply with U.S. data transfer policies.

Non-GAAP earnings per share was $1.36, up over 14% year-over-year, and GAAP earnings per share from continuing operations was $1.28, down 1% year-over-year as we lapped investment gains in Q3 of last year.

Turning to our balance sheet and capital allocation. We generated free cash flow of $803 million in Q3 and ended the quarter with cash and non-equity investments of $5.3 billion and gross debt of $6.8 billion on our balance sheet.

Our equity investments were valued at over $900 million. We repurchased $625 million of eBay shares in Q3 at an average price of nearly $88 and paid a quarterly cash dividend of $132 million in September or $0.29 per share.

Moving on to our outlook. For the fourth quarter, we expect GMV between $20.5 billion and $20.9 billion, representing FX-neutral growth between 4% and 6% year-over-year. Based on current exchange rates, we estimate FX would represent roughly 180 basis points of tailwind to spot GMV growth. Our guidance reflects a continuation of the durable growth trends we've observed in recent quarters, driven by our momentum in focused categories and other strategic initiatives.

Additionally, as commodity prices for precious metals have appreciated in recent months, we've observed a notable acceleration in demand for bullion and collectible coins on eBay, which may be a less durable trend. Our acquisition of Tise is also expected to contribute roughly 10 basis points to total FX-neutral GMV growth in Q4. These tailwinds are expected to be offset by a few lapping dynamics. In Q4 of last year, we observed exceptional GMV growth in trading cards due to a strong release calendar. We also saw a double-digit improvement in U.K. C2C volume growth and better-than-expected holiday season demand overall. This year, we will also face a full quarter of impact from the removal of global de minimis exemption versus a single month of impact in Q3. We expect the net of these headwinds to lead to a modest deceleration in GMV growth during Q4.

We forecast revenue to be between $2.83 billion and $2.89 billion, implying FX-neutral growth of 8% to 10% year-over-year. Based on current exchange rates, we estimate FX would represent roughly 190 basis points of tailwind to spot revenue growth. Our guidance implies year-over-year take rate expansion primarily due to our remonetization of U.K. C2C volume and first-party advertising growth, partially offset by mix shift and headwinds related to trade policy.

As I noted for GMV, we expect a full quarter impact from the de minimis change to apply incremental pressure on our core take rate, advertising and financial services monetization. On a sequential basis, take rate is expected to be modestly lower due to these factors as well as normal Q4 seasonality attributable to category and ASP mix over the holidays.

We expect non-GAAP operating margin between 25.8% and 26.3% in Q4, representing non-GAAP operating income growth between 5% and 9% as reported. The year-over-year decrease in operating margin is primarily due to continued investment in our strategic initiatives as we reinvest a portion of our top line strength in order to drive medium- to long-term growth.

We forecast non-GAAP earnings per share between $1.31 and $1.36 in Q4, representing year-over-year growth between 5% and 9%. We expect net interest income to become a headwind to year-over-year earnings growth in Q4 given prevailing interest rates and our lower cash balance. We forecast capital expenditure to be between 4% and 5% of revenue for the full year and our non-GAAP tax rate to remain stable at 16.5%.

We expect reported free cash flow of approximately $1.5 billion for this year, including a headwind of $935 million from the unique tax items we paid this past Q2. On a normalized basis, free cash flow is expected to be roughly $2.5 billion for 2025.

Lastly, we continue to plan on repurchasing approximately $2.5 billion of our shares for the full year. In addition, our Board declared a quarterly cash dividend of $0.29 per share for the fourth quarter to be paid in December.

Next, I'll share a few preliminary thoughts on 2026. We are planning our business around a third consecutive year of positive FX-neutral GMV and revenue growth, reflecting our confidence in our initiatives and a continuation of the strong underlying momentum from this year. However, we are also mindful of several notable lapping dynamics in 2026. These include exceptionally high growth in trading cards and more recently, in bullion and coins and unexpectedly strong marketing efficiency. In aggregate, we estimate these factors could represent a lapping consideration of approximately 2 points of GMV growth for the full year in 2026.

In addition, we expect to face incremental headwinds from annualizing breakage associated with the global de minimis changes. If the current level of impact remains stable throughout 2026, it would result in a headwind to FX-neutral GMV growth of approximately 1 point. We expect the gap between GMV and revenue growth to be relatively narrow in 2026 as continued healthy growth in first-party advertising revenue is expected to be partially offset by pressure on cross-border sellers and a higher mix of GMV from emerging businesses like Vehicles and eBay Live next year, which have lower average take rates.

With regards to profitability, as we finalize our planning decisions, we'll maintain our focus on targeting the optimal combination of GMV growth and operating margin to maximize operating income dollar growth over the medium to long term. We expect to face a few modest headwinds in 2026 below the operating income line. Our lower cash balance and the expected slope of interest rates would pressure our net interest income year-over-year. And we are reevaluating our non-GAAP tax rate in 2026 and beyond, which may result in a modest increase partially due to the U.S. tax dynamics.

Finally, a few observations on capital allocation. We expect to return approximately $3 billion of cash to shareholders through share repurchases and cash dividends in 2025, which would amount to over $12 billion of capital returns to shareholders from 2022 to 2025. Over the last few years, we were pleased to monetize several equity investments at attractive valuations, including Adevinta, Adyen and Gmarket. These asset sales enabled us to return significantly more capital to shareholders than our normalized free cash flow. Going forward, our framework for capital allocation has not changed. Our priority remains organic investment in the business to drive sustainable growth, and we will continue to evaluate inorganic opportunities to accelerate our road map.

With regard to excess capital, we will continue to lean into returns to shareholders. Given our remaining investment portfolio, we do expect that free cash flow from our core business will be the primary source for capital returns in 2026 and beyond. In a normal year, we plan to target repurchases and cash dividends totaling between 90% to 100% of normalized free cash flow, absent organic or inorganic needs for that capital.

In closing, we believe our strong Q3 results and Q4 guidance reflect the momentum we are seeing in our business. Our strategy is working, and we believe much of our growth is sustainable. We are taking advantage of the strength in our business this year and making incremental investments in focus categories, C2C, eBay Live, shipping, vehicles, Gen AI and other areas, which will help drive balanced top line and bottom line growth over the medium to long term.

With that, Jamie and I will now take your questions.

[Operator Instructions] Your first question will come from Scott Devitt with Wedbush Securities.

It's been impressive to see the business growing at the rate that it is again. And we're kind of entering this new moment in time. And so I just wanted to zoom out for a minute. When you look back on the history of the Internet, Google Search and then the transition to mobile were significant developments that caused seismic change. And so we're kind of here again with AI. You talk a bit about some of the features, functionality that you're integrating into the into the platform and how you're attempting to use ChatGPT and otherwise.

And I'm just curious, as you plan for the changes that AI is going to bring to the business, what do you think are the two, three, four most significant changes that you're anticipating in the way that eBay is going to be connecting with buyers and sellers as well as the approach to advertising in coming years?

Yes. Thanks for the question, Scott. So, look, I think in a number of ways. I think one of the biggest opportunities for us being really focused on non-new in season and used supply is to really be that unlocker of supply for consumers across the world. And so when you think about what's sitting in garages, closets, people's houses, the ability to leverage AI to make that almost instantaneous to list is a vision of ours that we've been progressing towards magical listing and is going well. And what I hear from consumers is, oh my God, if it's that easy to list, I have so much stuff that I could sell on the platform. So that's a big opportunity for us.

I think the second is how it's transforming how people shop and the level of discovery that we can give them on the platform. When I look at what we're doing now with having so much rich data of 30 years of data of what's happening with our consumers in the marketplace, being able to leverage that in a way that really kind of delights the user and gives them an ideal experience, I think, is another huge benefit. How it changes recommendations, how it changes search, how it changes discovery on the platform is probably the second area that I'm most excited by.

And then the last one I would say is really kind of the pace of innovation of the company leveraging AI. And you're seeing that this quarter as we announced a new visual camera intelligence with Apple in the camera phone as we bring new capabilities to save sellers time like in our member-to-member messaging that we're launching here, the work that we're doing in our own shopping assistant, we have a screenshot of some of that type of stuff that you're seeing in the slides that we put together, giving more relevant recommendations to our buyers on the view item pages.

You talked about advertising. Even what we announced this quarter, where we're taking a multimodal approach to our advertising performance provides more high-quality recommendations.

So, I'd say every quarter, AI is becoming more embedded throughout our experience. I feel privileged to be in a situation where we've got a technology infrastructure that really blends a hybrid cloud infrastructure, our own LLMs that we've been building on, agentic protocols and 30 years of data, bringing that all together to kind of bring those simpler, more seamless and more magical experiences to life for customers.

Your next question will come from Nikhil Devnani with Bernstein Research.

I wanted to ask about margins. You've had really strong growth this quarter and again, in the guide, but it doesn't seem to be flowing through the margin upside to the same degree. So could you please elaborate on where some of the incremental investments are right now? It's noticeable that product development has been ramping for the last couple of quarters. Should we be looking at this as a pull forward of certain fixed costs that would otherwise have happened in 2026 because you can now? Or are there also other more variable and persistent expenses that we need to take into account as we think about margins next year?

Sure. Thank you for the question. So when we think about margins, we're really trying to balance driving long-term growth and then returning and flowing through upside to the bottom line. I'm very pleased with the 9% operating profit growth that we achieved in Q3 and this momentum that we continue to see in the business. Our non-GAAP operating margin in Q3 was 27.1%, and that included an FX headwind of 10 basis points, and we did generate operating leverage in the quarter.

In terms of some of the expense lines, sales and marketing expense was up 2% year-over-year and flat quarter-over-quarter. and this was due to marketing efficiencies. Product development expenses that you mentioned, we actually did take some of the upside, and we were investing in product development against some of our very strategic initiatives, including eBay Live, our shipping solutions where we pulled forward our CBT road map to really help sellers navigate the changes in the trade policies and then really looking at more investment in our vehicles business as well. And we believe this strategy is working and will primarily benefit our growth next year and beyond.

Our G&A expenses were up about 4% year-over-year and down 40 basis points as a percentage of revenue, and this was driven by lower employee-related spend. And then lastly, transaction losses were up 19%. A lot of it had to do with our higher consumer protection losses that were due to the ramp of the U.K. managed shipping program as well as some unfavorable fluctuations in buyer and seller fraud. This is an area that fluctuates quarter-by-quarter, but nothing really concerning in the trends.

So, overall, we will continue to focus on ensuring that we're balancing top line growth and margin flow-through and trying to really get this balance right as we think about it going forward.

If I could just follow up there. Do some of the investment this year ease the burden on next year? Or is there just a long list of things you want to go after as you think about the product road map?

We will continue to invest in our priority areas as we look into Q4 and next year. We're pretty early in the planning cycle. And so we'll definitely provide more commentary as we get more information about how we want to invest in getting that balance right between top line and bottom line. But you can be assured that, that's what we'll be focused on.

Your next question will come from Nathan Feather with Morgan Stanley.

Really impressive growth this quarter. I guess just two on my end. First, given how quickly the marketplace has accelerated, how are you thinking about the portions that might be more temporary to this year and the portions that are more durable for 2026?

And then looking forward to next year, what are the key kind of one or two opportunities that you think could be the most incremental to continue the sustained improvement?

Yes. So good to hear from you, Nathan. So look, I think the strength that we see was really broad-based in Q3, both in our focus categories and in our core categories. And it's really for us the culmination of years of investment, and that's helped us fuel consistent market share gains.

When we look at the first half of this year, we actually think we picked up 2 points of segment share gains in our focus categories. And you saw the strength across core and across our focus categories.

In terms of the durability, we did see some GMV upside from what we would characterize as transitory factors, which we discussed in our prepared remarks. But we do believe the majority of our growth was durable in nature. And overall, we're confident our strategy is working, and we're leaning in towards a path of sustainable growth.

And as we think about growth vectors, I think it's a continuation of the areas that you've seen, the acceleration that we're seeing in focus categories. We've added fashion as our newest focus category, and we're seeing continued momentum there. We're going to continue to invest in the horizontal areas that we've been going after across selling search, leveraging AI, new discovering experiences, which we think will help focus categories and core categories. And we're excited about some of our newest areas of growth, particularly eBay Live.

I talked about the growth we're seeing, which is a 5x greater run rate than we saw a year ago. And we're just launching some new geographies there in U.K. and Germany as well as our vehicles business. We're in the early phase of growth there, but the early customer satisfaction and feedback from our sellers and buyers is that the new secure checkout proposition is really resonating with them. And we're seeing great activity and purchases, multistate purchases that are now leveraging our financing, our insurance, our warranty, our transportation, title verification, that end-to-end process, which is pretty exciting. So those are the growth vectors that I would point out to you.

Your next question will come from Deepak Mathivanan with Cantor Fitzgerald.

Great. Jamie, maybe I'll ask a couple of questions for you. So, first, how do you -- how are you currently strategically approaching partnerships with AI assistants and agents? Obviously, it seems like a lot of things are happening fast in e-commerce on the agent side. Are there any technical constraints or any other things that you would call out as a potential constraint for you?

And then second question, staying on the AI topic, how should we think about the areas where you would be deploying the advancements that we are seeing with LLMs and other AI tools in 2026 into the eBay platform to improve the buyer experience. Anything you can share there would be great.

Yes. Great. Thanks for the question, Deepak. So, look, on the -- working with agentic partners, like we've seen on the selling side, where it's really helped us improve our experience, we're excited that our early work for buyers with agentic shopping and discovery really opens up new ways to explore eBay's inventory.

So for now for more than a year, we've been testing a variety of agentic experiences to learn how buyers and sellers engage at different phases of the journey. We've called that our AI shopping assistant that's been live and making improvements month after month to really kind of fine-tune the experience there.

And that's all led us to build what we call the unified agentic commerce platform. Think about that as taking our hybrid cloud infrastructure, the LLM ecosystem that we've built, including these models that we've been fine-tuning over time, along with our MCP servers and driving that, leveraging the LLMs that we've built with these Agentic protocols, combining eBay's 30 years of data and our rich history of what's happening with our customers.

That now puts us -- and this is more to your second question, Deepak. That now puts us more in a really in an enviable position from a technology standpoint to experiment and innovate and really leverage the insights that we've had and that we've gained by doing that work.

When I think about eBay as it relates to agentic commerce, clearly, we're working on bringing agentic commerce to our buyers on the platform, allowing them to search via natural language searches, et cetera. You'll see an example of that in the slides that we put forth together, if you're not in that test case of how we're using that to give them more variability and discovery opportunities as well.

But as we think about our inventory, look, we think we've got really unique inventory because we're focused on non-new in season and used and refurbished across both C2C and B2C sellers and have 2.4 billion listings. Secondarily, when you think about eBay's inventory, it's generally more what I would say is a consider purchase rather than a commodity type of thing that you're just kind of refilling. And the third is that our focus category strategy over the last couple of years has really allowed us to apply services and value around the transaction. Think about authenticity guarantee, guaranteed fit, warranties on refurbish, one-click rating, what we're doing in international, et cetera.

So, all of those, I think, gives us the experience of a really unique set of inventory, which is why we fine-tune and trained our LLMs to be able to search and discover that inventory and collect all those into an MPC -- or sorry, an MCP server that really leverages that data and insights.

So overall, we're going to continue to do the type of thing that we showed in that -- in the slides there, which is allow agentic technologies to be used on the platform to discover inventory, to improve how our sellers surface inventory on the platform, to improve how recommendations show up on the platform by leveraging AI agentic technologies. And we also now have the technology that we can really have this collaboration between third-party agents and first-party agents on our own platform.

Our next question will come from Shweta Khajuria with Wolfe Research.

This is Andrew on for Shweta. I just want to focus a little bit on trading cards. So how should we think about the sustainability of growth within the category? And what type of signals or metrics could we use to kind of evaluate the success of the category?

Yes. Thanks for the question, Andrew. Look, as it relates to trading cards, we see a long runway of growth for trading cards. We believe most of the recent growth has been driven by the trust and the innovation that we've driven for hobbyists over the last several years. Think about all the things we've introduced, Andrew, like My Collection, magical listings, bulk listing capabilities, our partnership with PSA on grading and authentication and on vault storage.

So I've always said that our trading card business is not linear. It's going to ebb and flow based on the popularity of whether it's new releases or collaborations or new rookie classes or chase cards. And we won't always be firing on all cylinders like we are now with all the sports leagues, NFL, NBA, MLB as well as Pokémon and Magic really having strong years. But what we see today is really a healthy balance between new buyers, sold items and ASP contributing to that growth. And that's what gives us the confidence in the durability of our GMV run rate moving forward, even if the year-over-year growth decelerates in the coming quarters.

Your next question will come from Michael Morton with MoffettNathanson.

One big picture one and then maybe one more near-term financial. When we look at the strategy that you deployed with the trading cards, what seems to be really successful was the ability to reduce friction. I like walk through all the steps, but we know how that played out through the business. And a question we get a lot from investors recently is how big can your vehicles business be? And like when we look at what Caramel does and what you've done with prior focus categories, it was pretty effective and it's obvious that the cars come at high ASPs and it's going to be booked as GMV. So how should we think about this flowing through the model over the next year and any implications for take rates that could move one way or another we might not have thought through?

And then just a near-term one, I think you rolled out halo attribution in the U.S. and like other North American markets starting in 2026. And I think you had a lot of success with that in other countries around the ad product. So wondering what the expectations are there to drive ads and the take rate.

Yes. Look, you're right on the vehicles experience, it really is about making it a seamless experience end-to-end, like we've done in trading cards and in other categories. And what we saw in Caramel was really this opportunity for sellers and buyers where we handle everything for them. So identity, title verification, the transfer of ownership, payments, financing, insurance, warranty and transportation because a lot of these cars go across state lines, for example.

So where we're focused is really in the collectible car market, which is about a $75 billion addressable market of the $1 trillion-plus used car market that's out there. And we're excited by it because, a, it's really resonating with customers. We're seeing great activity that's really leveraging this end-to-end platform. So we just had a 2015 Rolls-Royce Ghost sold for $113,000, and it uses our secure purchase, our DMV services actually uses our buyer financing, et cetera, ranging all the way to a school bus from 2008 that was converted into an RV that's sold for $31,000 for a seller in California and a buyer in Missouri. And again, using that full end-to-end suite of services. So it kind of speaks to the opportunity that we have in vehicles.

I think the other reason we're excited by it is because of the synergies and overlap we see with our parts and accessories business. Since we are going after this collectible car market, it's really congruent with those that want to restore, fix up older and collectible cars. And it tends to be enthusiasts that are into parts and accessories are also really into these collectible vehicles. So we think there's really nice synergies from both the buyer and the seller base there.

Peggy, maybe you want to touch a little bit on the higher ASP of vehicles and the impact of that on take rate?

Sure. Absolutely. So we're really excited about this long-term opportunity in vehicles and what secure purchase unlocks. Vehicle volume has seen significant growth quarter-over-quarter since we launched early this year. But the contribution to total volume is still very modest as we expected.

We estimate that Caramel's effective take rate will fall to the low to mid-single-digit range when including both the buy side and the sell-side monetization. But the revenue contribution also so far this year has been immaterial. And so I don't expect that it would have any material impact to your models for the rest of this year or next year.

And look, on the ads attribution change, we think the new halo attribution better aligns the value of our CPA ads with the velocity that we provide to sellers. And I think it helps better calibrate the return on ad spend levels between CPA and CPC.

You're right, Michael, this is something that we released back in Germany in February of this year, expanded in the June time frame to other key markets across the European region. And then we announced today, we plan to roll that to U.S. and Canada in the new year. And this was really based on the learnings that we saw from other markets where those learnings said that what we saw from sellers was they can certainly adjust and adopt their bids as a result of these changes. But the net effect of the attribution change was positive for our ads monetization in Germany.

And importantly, we're very focused on the ROAS levels for our sellers, and our ROAS levels remain healthy for our sellers, and they continue to adopt our CPA ads. So that's why we've extended it now to the U.S. and Canadian markets.

Your next question will come from Tom Champion with Piper Sandler.

Jamie, it looks like engaged buyers spend increased and your listings count has made tremendous progress over the last couple of years. I think it was $2.4 billion this quarter. And I guess the question is, when do you think this better inventory and maybe personalization features translate into more active buyers and enthusiast buyers? I'd be curious your view on that.

And then maybe just any update for us on the Facebook Marketplace partnership.

Yes. Look, on the buyer side, our trailing 12-month active buyers grew by 1% to 134 million in Q3. As you say, top of the funnel is important for us, but we are very focused on driving active buyers to become enthusiast buyers. And what we're seeing there is that we've seen consistent, albeit gradual improvements in our year-over-year growth rate for enthusiasts over the past three years. We've seen GMV per enthusiast buyer grow. In Q3, it was over $3,200 annually and continue to grow year-over-year.

And what we also see is despite the fact that we're in a challenging environment -- macro environment in Europe, and that's part of our buyer growth, we really don't see our enthusiast buyers churn on the marketplace. If anything, because of the macro, they may move to mid- values. But our mid-value buyers, which is the cohort just below enthusiasts have been growing year-over-year every quarter since the beginning of 2024. So we're continuing to invest in full funnel marketing across the board. We think that, obviously, that has a longer payback for buyers than just pure kind of lower funnel spend, but we think it's the right mix of marketing that we're doing across the board.

As it relates to Facebook Marketplace, we continue to be optimistic about the long-term potential of our partnership there. Both companies are working together to optimize the experience. And during Q3, we continued to scale that test and improve the integrated checkout experience, which was important for us to kind of get that right. And we believe it's great for our seller community because as we expose their listings to Facebook scaled audience, that's great for Facebook Marketplace users as they discover the breadth and obviously great for our sellers on the platform. So we're going to continue to scale that test and work on every piece of the funnel. Every time we've worked on it, we've seen pretty significant and great improvements, which has been great to see.

Your next question will come from Andrew Boone with Citizens.

I wanted to ask about one of the pieces you gave for 2026 in terms of the narrowing of revenue and GMV, and it sounds like some pressure on advertising. Can you guys just unpack that and help us understand kind of what exactly that means?

And then magical listings has really made the seller process easier. Can you guys just help us understand how that manifests back into GMV? What happens on the sell side as you guys do get that long tail of listings? And how do you guys really optimize that?

Yes. So let me start with the magical listings point, and then we'll talk a little bit about the advertising of the pieces. So what we see with magical listings is really kind of an unlock of more inventory when sellers are starting to use it. So it helps them spend less time creating listings and more time growing their business. So over 10 million sellers have used our magical listings tool. I think we're up to over 300 million items have been augmented, leveraging AI.

And so it's really about driving more velocity in selling and driving our overall CSAT experience in selling. Think about that as listing completion rates, listings per lister, et cetera, which all help us perform really well. And we're not just focusing on the listing experience, right? It's we're helping them create better pictures to help them sell more. We're actually using AI to figure out if you're putting a promoted offsite together, how do we -- which pictures do we use and how to alter all of that to kind of help you drive sell-through, et cetera.

And what's great about eBay is we have a large base of C2C sellers, and they're bringing really unique items on the platform. And so if you look at the average household, we think they have $3,000 to $4,000 of items that could be on eBay and less than 20% of that is on eBay today. So it's really about unlocking all of that inventory by making it so easy with magical listings.

I think on advertising, the comments we were making were more about Q4 versus Q3, where we saw strong ad growth in Q3 due to our strong volume growth and ads adoption, and we expect our 1P ads to normalize to the low to mid-teens growth in Q4 was the comment that we're making about advertising. But when you look at the ROAS that we're providing to sellers, when you look at the experience that we're providing, we feel really good about the trajectory of our advertising portfolio and opportunities.

And then, Andrew, in terms of your question around the narrowing of GMV versus revenue that we commented on in 2026, we do expect the gap between GMV and revenue growth to be relatively narrow in 2026, and this is driven from our continued healthy growth in first-party advertising, which is partially offset by two things: one, fewer imports into the U.S. by CBT sellers, which slightly pressures our advertising and financial services monetization. And then we are seeing -- we expect to see a higher mix of GMV from our emerging businesses like vehicles and eBay Live that have a lower average take rate. So that's what's driving that.

Operator, can we do one last question, please?

Yes. Your final question will come from Ygal Arounian with Citi.

I guess just to look at the 2026 guidance, maybe a little bit more closely and the commentary on positive GMV growth. And Pat, you gave the kind of 3 points of headwind impact. Can you maybe elaborate a little bit more on what positive means and kind of where you feel like you fall in that trajectory. We've spent the better part of an hour talking about a lot of the improvements you guys have made. Jamie, you've called a lot of the growth durable. So I think just helping investors kind of feel sort of frame where we land in that positive. I know it's early.

And then on the de minimis impacts, Clearly, that's gotten bigger. Any way to frame in a little bit more detail what you're seeing there?

Sure. So we are early in our planning process, which is why we sort of provided only high-level remarks on our preliminary commentary for next year. We have the holiday ahead of us, and so it would be premature to talk too much about how we're thinking about it specifically. We do expect our strategic initiatives to remain the core driver of our growth, namely, as we've talked about, focused categories, geographic initiatives, horizontal innovation, we're super excited about what we know eBay Live and vehicles will contribute given the incremental investments and focus that we had this year.

We've pointed out some of the lapping dynamics that we're expecting. Some of those are, as you were asking, related to the tariff announcements where we do expect to see a full annualized amount from the one month we saw in Q3 and the full quarter that we'll have in Q4. And our expectations in terms of that 1 point was really annualizing a similar trend to what we're currently seeing.

Yes. And on your question on de minimis, Ygal, so we did observe breakage related to tariffs in Q3, particularly after de minimis exemption was removed for the rest of the world in late August. So that subjected a significant amount of imports to tariffs for the first time. And sellers in Japan and Canada were amongst the most impacted.

What we've really focused on is supporting our customers, which is why we're accelerating our product road map for cross-border shipping services. So we talked earlier about eBay International Shipping in Canada. That's our third largest corridor into the U.S. and really giving them a solution similar to what we brought to U.S. sellers. And that's launched and is performing well. We're extending SpeedPAK, which we've talked about for China, then we extended it Japan. We're expanding SpeedPAK to our German sellers. And these tools help sellers manage the friction and the complexity associated with the changes while providing buyers price transparency.

So, overall, we feel confident our marketplace is well suited to help sellers and buyers navigate these challenges. Peggy talked about some of the lapping dynamics for next year from that. But one of the benefits we have is our diversified supply of domestic and cross-border inventory is an advantage in this environment, while also our non-new in-season used and refurbished inventory can help consumers find value as well.

Thank you for joining. This concludes today's call. You may now disconnect.

Okay. I think in the interest of time, we're going to keep moving with our next one here. It's my pleasure to introduce the team from eBay. We have Jamie Iannone, CEO; and Peggy Alford, new CFO. So first off, to start saying Peggy, congrats on the new role. And to both of you, congrats on eBay's 30th anniversary. There was a lot of press coverage around it. Congratulations on the milestone for the company. And what were some of the memories of celebrating it with the team and with being out there talking about it the last couple of days?

Yes. We had our very first employee who still is with the company there. We have long-time sellers there representing the company, which was awesome. And it was fun celebrating 30 years, but it was also a moment to talk about we're just getting started and all the excitement of what's happening in the company. So it's fun.

And I want to take that as the jumping off point because you've been on quite a journey since just you came into this role in the company and took over the leadership role. Talk a little bit about the journey you've been on and what some of your big strategic priorities are looking forward?

Yes. So for those of you that are new to the eBay story, let me just back up and share a little bit. When I came back, I was at the company in the early 2000s. When I came back 5 years ago, we really refocused the company on non-new and seasoned inventory, which is now about 90% of what we sell, think used, refurbished or [ last ] season's or new with tags, et cetera. And that's been a really great strategic pivot for us.

We also started focusing on category by category, building really the next level of experience as we call those our focus categories on the platform, and we've been growing the number and really accelerating what we're doing there on the experience, on the trust, on the inventory, et cetera, and that's been working out really well for the company. We got focused on a strategy of reinventing the future of e-commerce for enthusiasts built on 3 pillars: relevant experiences; scalable solutions; and magical innovations, and that's worked out really well. On that third pillar of magical innovations, we've been really leaning into AI and how we leverage that to really take all the friction out of the experience on eBay and create these game-changing experiences for our customers.

For those that don't know the scale of eBay, it's a pretty significant scale. We have about 134 million buyers on the platform. We ship to 190 different countries. We do about $75 billion of GMV on the platform. About 20% of we do is cross-border trade and really an entirely marketplace for buyers and sellers. We don't sell anything ourselves. When you look at the recent success that we've had on the business, whether that was the numbers that we put up in Q2 or the guidance that we put out there in Q3, you see the real kind of financial strength and underlying health of the business, which has been performing quite well, really based on the backs of the strategy that we have driving forward, the changes that we've seen in customer satisfaction, how we've leaned in against AI to really help us grow the business.

And overall, though, like I said about the 30th, we're just getting started. There's so much potential in this business in any of the categories that we're in. We can get into it, Eric, but we recently announced 2 new areas of growth, one being the Vehicles business that we're selling in the collectible cars market, a $75 billion market. We've seen some great success with eBay Live, a new live commerce format on eBay. And the overall core business is really healthy. So excited for our past where we came from, but much more excited for the future.

Maybe 2 quick follow-ups on AI because I think you obviously made it a pretty big cornerstone of where you want to go strategically. Where do you see the most friction on the buyer or the seller part of the marketplace where AI can be applied to? What [ most ] excites you about reducing friction on either side of the marketplace?

Yes. Let me start with the selling side. So what's exciting about eBay is that the average household has $3,000 to $4,000 of item sitting in their house that they could sell and less than 20% of that is online. And so a big part of our AI focus, Eric, is how do we use that technology to unlock all of that inventory. And so many quarters ago, we launched a product called Magical Listings. And think about that as really just holding your camera up to an item. We recognize it. We write the description for you. We fill in the data fields that you need to put in there. We have 30 years of amazing pricing data. So we tell you how to price it. We put it on a beautiful background and make your item look gorgeous and really kind of help drive our overall kind of C2C business. And these products are now being used at scale.

Over 200 million listings have been created that, over 10 million sellers have used our listing tools. And every single day, 0.5 million listings are coming on, leveraging the AI that we've built on the platform to really drive it [ though ] at massive scale. But we're not just stopping with listing. We're looking at the full end-to-end process and saying, how do we use AI to make you a better seller on the platform or to help you grow as a seller on the platform. Just a few weeks ago, we announced we're now leveraging AI to help our sellers respond to buyers' questions. So we've been one of the leaders on the customer service side with self-service and leveraging AI from that perspective. And we've now turned that over to our community and said, you can use the same technology for your buyers.

So if a buyer asks what condition is in or something that is available to the AI, it will just answer those questions, saving the seller time to provide it. Think about a customer that only speaks one language, wanting to communicate with a seller that speaks a different language. These are the types of things that we're leveraging AI to help our sellers on the platform. On the buy side, it's equally compelling and being able to show new discovery, new inspiration. So we have [ our ] Shop the Look features to help you shop and see different styles based on whatever style of apparel you're into and what size you're into.

We now have endless feeds of discovery that we've built in a new Explore feature that lets you see inspiration. And eBay has historically been a very search-driven marketplace where people come in and I know I want this Buck Mason thing or this Lululemon. And now we're building these great kind of AI-based things on the front end, which really change the experience. I could go on forever because it's easier for me to talk about where we're not using AI than where we are using it because we're really looking at the end-to-end experience from a customer standpoint as well as everything about how our employees work to really leverage that to change eBay in a pretty dramatic way.

Okay. Really interesting. Peggy, let me bring you into the conversation. So in your role as the CFO, obviously, there's a fairly complex world out there. We're dealing with tariffs. We're dealing with changes in de minimis exemptions.

When you look at the broader consumer demand landscape and the elements of some of these uncertainties playing out in sort of the broader macro environment, maybe reflect a little bit about what you're seeing in terms of consumer demand and how that factors into sort of planning to match the strategy with the allocation of OpEx and things like that?

Sure. Well, first, I'll just say that I'm so excited to be back here at eBay. I'm a boomerang [ who ] was here in the early 2000s. And I think the focus that the company has had around sort of a differentiated right-to-win focus around the focus categories and some of the horizontal has built a very resilient marketplace. That marketplace, though, is obviously not immune to the macro conditions out there. I think the strength that we have and the breadth of our platform helps, but we definitely have seen for many quarters, the impact of a pressured consumer from a discretionary spending perspective, especially in Europe and some of our large markets in Germany and the U.K., where the macro environment has been very challenged.

We have seen the consumer demand pressure. In the U.S., it's been -- the consumer spend has been a little more resilient, and we saw that in the strength of our numbers in the U.S. We've really been just really focused on -- if you think about non-new and seasoned, sometimes the consumer is looking for a deal in these times. And so for that reason, eBay has really been able to sort of counter some of that macro pressure. From a tariff perspective, very uncertain times through the year, a lot of volatility in Q1 and Q2, we were able to really counter some of the volatility, and we didn't see a lot of impact to our business. We did, however, because of all the uncertainty in the second half, build a lot of scenarios in the guidance that we released in Q2 for the rest of the year.

That contemplates a number of the scenarios like de minimis that we've seen rolled out. And we also have been really focused on building tools to help our sellers navigate these uncertain times. And I think a lot of the tools that we have at eBay has really helped our sellers do just that. And then I think the focus that we have on what we can control around our focus categories is where we put our focus. And I've been excited to see the growth that we've been able to post despite all this uncertainty.

Yes. Thank you for that. And I want to take Peggy's answer and bring it back to you, Jamie. When you think about your enthusiast buyer base and you think about aligning them with your focus categories, talk a little bit about what you're seeing from enthusiast buyers today, how that activity level might evolve over time? And how much of it is tied back to some of your focus category efforts?

Yes. So when you look at our enthusiast buyers, we have about 16 million enthusiasts on the platform. They spend about $3,200 a year. They make up about 70% of the GMV on the platform. And what we've been really focused on is how to give them kind of more tools and capabilities to be successful on the platform. So whether that be guaranteed fit in motor parts and accessories or what we're doing in authenticity to really kind of drive that behavior. We've been leading into full funnel marketing on the platform, really kind of from the top of the funnel down to go after and acquire enthusiasts.

So things like at the Met Gala for the first time, you had influencers like Chappell Roan and Emma Chamberlain, they're talking about eBay. Actually, the very first time ever that someone was dressed head to toe in a non-designer outfit, so entirely sourced from eBay, which was pretty excited. You think about what we're doing with McLaren, we've got a new partnership in the U.K. with Marks and Spencer around preowned clothing and bringing that into Marks and Spencer stores and selling it on eBay. So really an opportunity to kind of continue to go after and drive that enthusiast.

And what's compelling about eBay is that when we acquire an enthusiast, they tend to shop across the whole platform, and we get a real cross-category shopping benefit. So just take Handbags as one of our categories on the site. If a buyer comes in and buys handbags on the platform, a handbag over $500, they'll end up spending $1,500 in Handbags on eBay, but then they'll buy $7,000 outside of Handbags and other categories on the platform. And that's a massive for us when you think about the CAC that we can afford, the CLTV that we can create for our customers and what that means.

In addition, we have the opportunity to turn them into a C2C seller on the platform, which further enhances their buying activity. And all the efforts that we've been doing to drive consumer-to-consumer selling with Magical Listing, with some fee changes that we made in Europe with new technologies that we brought on to make it easier to first sell it to onboard, that's helping fuel the buyer piece as well. So you can see this great kind of flywheel of our strategic initiatives with driving the objectives of what we're trying to do with our enthusiast buyers on the platform.

And then maybe just double-clicking on that with one quick follow-up. Are there any aspects of those categories, in particular, on the focus side that you think potentially present more interesting opportunities to continue to accelerate and maintain high levels of growth versus what you've seen over the last 18, 24 months because you've certainly improved the growth rate of the company in the more recent periods?

Yes. So for those that are new to the story, our focus categories in total grew about 5% last year. I think grew 6% in Q1. In Q2, we announced that they grew 10%. And that's an environment where a little more than half our business is in Europe, as Peggy talked about with some of the challenging macro environment. So we're feeling really good. And that strength in focus category is really across the board, right? If you look at our collectibles space, it was our largest contributor to growth in Q2. And we had some categories like Pokémon and others [ accelerating ] at triple digits. We saw really healthy double-digit growth. And this is the back on a lot of strategic work that we've done.

We did a great partnership with Collectors Universe, which owns the PSA brand, about how it's easier to take a card and get it graded or take an ungraded card, get it graded to get it sold on eBay. Those used to be multiple steps, multiple shipping legs back and forth waiting for the card to come back. We've integrated that and made it seamless. We launched eBay Live, which is live commerce and launched a number of great new features in Live to help drive the Collectibles business. And collectors are loving it, right? We launched features [ like ] by spot where you could buy. We're here in 49ers country, you could buy the 49ers. And like as cases get breaks, you get those cards. So it's super exciting. Our Luxury business has had 10 quarters now of positive growth even through all the kind of macro stuff that we've been through on the backs of a really amazing authentication.

We just authenticated our 15 millionth item. It was our first quarter that we authenticated 1 million items in the quarter. And we've been building a real new kind of value proposition in these luxury spaces. We did a partnership with Klarna for Buy Now, Pay Later in the U.S., which we have done other partnerships like that internationally, and that worked out really well. So that category is performing well. I'll talk about Motors, Parts and Accessories, one of our largest focus categories on the platform, well north of $10 billion. Over '23 and '24, that's been growing mid-single digits. We feel great about the performance of all the innovation that we've done in that category. It's contributed 1 point of -- nearly 1 point of contribution to growth in the past quarter.

And so you see that as a massive category, it's really worked for our focus category experience. And what we see is really enthusiasts leaning in, loving the trust that we've got on the experience. We've built entirely new fitment-based experiences. Eric, that's performing well. And then we recently acquired a company called Caramel, which really handles the end-to-end experience in motors, parts and accessories with buying vehicles. And so now every day, it's fun to wake up and look what happened yesterday on the platform like, all right, some guy in Florida bought a Porsche for $160,000 from somebody in South Dakota. And that whole process, title, insurance, delivery, financing, all happening now end-to-end on eBay, and it's really resonating with the customer. And we get to kind of -- there's huge synergies with our Parts and Accessories business.

So it's a very long answer to say, across the board in focus categories, we feel really good about the innovations that we're driving, the resulting impact of what we're seeing with performance from the customer. And we still have a lot of the categories left to go. So Fashion is our newest focus category, and I'm really excited by the potential in our newest focus categories.

That's great on like those are all elements, and I think I agree on the things inside your control. When you think about responding to some of the competitive environment, there were players that were taking advantage of direct shift into certain parts of the world and a lot of that competitive intensity seems like it's at least come off a little bit. How do you think about leaning into some of your potential competitive advantages against a shifting competitive landscape that can even potentially amplify that growth as well?

Yes. Look, cross-border trade has always been and continues to be a massive advantage for the platform. It's about 20% of what we do on eBay. And when you think about it even for a C2C seller, we open up access to 190 different markets. And a big part of that, Eric, is the shipping solutions that we've built to make that really easy.

So if I'm sitting here in this country and I want to sell something to someone in Sweden, now on eBay, all I do is I ship it to Chicago. So it's a domestic transaction, eBay takes care of the duties, taxes, returns, like all those elements are handled by eBay, which makes an incredibly eBay -- an incredible experience. If I think about our businesses based in China or Japan, we built these solutions like SpeedPAK, which started in China, now up in [indiscernible] other quarters. And basically, it provides transparency to the buyer. It has the end-to-end elements of having all clarity of what's included in the transaction, and it makes it super easy. We run some ventures where sellers can help [ Ford ] deploy their inventory into their end markets. That's helped not only speed up transaction time, but also adjust for things like bringing over goods at a cost of goods level, et cetera.

We just announced our newest one, which is coming in another month or so, which is that same technology we've built, we call it eBay International Shipping will now be available to our Canadian sellers where it's basically seamless to make the shipping happen. So we're really leaning in to take advantage of the unique elements that we provide for sellers and buyers because our job is to make their lives easier.

So all of these things are really designed to just take the friction out of the experience, make it super easy and open up a much larger market, especially for our sellers in the marketplace.

Maybe one more for you, Jamie, before bringing Peggy back into the conversation. You put up some nice advertising growth. Last quarter, you've seen the evolution of your Advertising business on the platform. Talk a little bit about what you've learned as Advertising has scaled as a company and what you're most interested in continuing to scale and explore with where Advertising might go over the next 12, 18 months?

Yes. Good quarter for Ads. Our first-party Advertising business grew 17% in the quarter. And when you look at it, what I love about our Ads business is we are helping sellers accelerate their business. And so we're growing our Ad business in a really healthy way. Sellers are seeing really nice ROAS and return on ad spend on the platform that they have and increasing sales.

We have the original format we launched 10 years ago, which is Promoted Listings General, [ our ] CPA, continues to be our largest contributor to growth. But we're leaning into new formats like Promoted Stores and Promoted Offsite on the platform, which are helping driving new growth. And the second is it's another area where we're really able to leverage AI to drive the experience. So we're able to use it in, for example, recommendations and in search technologies to drive more relevant listings. We're able to use it to actually change images for Promoted Offsite so that we put more compelling and more compliant images out there for helping our sellers do it. They do Promoted Offsite, which is buying advertising on third parties like Google through eBay, they do it because they're able to leverage all the expertise, all the AI that we've driven. We rolled out a new dashboard for our sellers, which every day gives them AI-based recommendations about ways to adjust their campaigns or their strategies to help drive more sales on the platform.

So we feel really good. We put a medium-term target out there of 3%, not a ceiling, but -- and we feel like we're progressing very nicely to that. And I continue to see a long runway of opportunity for advertising on the platform, especially given the ROAS that we provide to our community of sellers.

Okay. Thanks for that, Jamie. Peggy, bringing you into the conversation, Jamie talked a lot about the growth drivers and where the platform is going. The other question I get a lot from investors is just balancing investments in growth against the evolution of margins and revenue take rate and things like that.

So talk a little bit about where you see room for investments that might pressure take rates, but also things that are also tailwinds for take rates that are from some of the initiatives that Jamie maybe referenced as well.

Absolutely. So obviously, it's always a balance. We focus first on just driving long-term GMV growth. We have seen that there are many different factors, a lot of growth areas that come with different take rates. As we sell more expensive things, ASP goes up. But at the end of the day, we're focused on profitable dollars. That's really where the focus is. The C2C initiative, for instance, we really saw that as an opportunity to build a lot of resilience in the C2C market around recommerce. And we really wanted to focus on attracting the consumer seller and bolstering the buyer experience as well. And we've seen success in that. We've seen the GMV growth rate higher than the baseline. And in the last couple of quarters, the take rate has improved as we've introduced both the buyer fee as well as ramped our managed shipping.

And once we finish ramping managed shipping, we expect parity to the previous take rate. And so that's great news, especially combined with the higher GMV and the better experience for the U.K. market. Advertising is another area, as Jamie was talking through that is a contributor to take rate accretion. And so we see a lot of opportunities to grow take rate through the growth of our Advertising business. Also some of our financial services products, things like Seller Capital is accretive to our take rate. But overall, when we think about take rate, we actually are more interested in driving revenue rather than focusing just on GMV or take rate just because of the different dynamics.

Very clear. When you think about the conversion of revenue on the platform into operating profit, maybe the same sort of question, how do you as a team think about the key strategic priorities that are necessary to continue to drive good growth on the platform versus managing the outcomes of certain types of margin trajectory, whether it be flat, rising or not? How do you think about the balance and striking that balance in your financial planning?

Yes. What we've seen, what's so exciting about our business is that when we focus on driving GMV, and we focus on driving a really positive consumer experience through our CSAT metrics, we see that we generate a lot of profitable dollars to then invest in further growth. And so our first focus has been around these focus categories, which we know we're going to drive really great user experience and really nice customer feedback, which then is going to return into GMV growth.

And then we watch to make sure that the flow-through down to operating profit, even if it comes at different sort of take rates that -- that's really what our focus is. We're always also looking across the business for areas to improve the efficiency of how we operate so that we can generate additional capital to both invest in top line growth as well as return to shareholders.

Maybe just one follow-up there. And Jamie, you alluded to it earlier. We talked a lot about how AI can be applied to the platform and be external facing. How to think about sort of AI being applied internally and creating operating efficiencies that maybe could actually speed up some of the investments in growth over the longer term if they were scaling. Just curious how you think about striking that balance as well?

There's so many opportunities. Jamie talked about some of the ways that we're using it for the customer, which is really driving really meaningful experiences and turning into really exciting GMV growth. But we also are really focused on across the company, how do we actually use AI automation to really drive efficiency in the way we produce these solutions and this innovation, everything from our engineers using it in ways to code. But even in my department, if I think about all of the manual processes around accounting and tax and treasury using AI to really enable automation and then redeploy our very precious resources to things that are going to really help from a value-add perspective, customer growth.

I was just going to say, and it excites me to see our adoption of AI inside the company. Like we had an AI week recently. We had thousands of employees come. We had leaders from OpenAI and all over do lots of amazing sessions. And the way this employee base is leaning in has been awesome. Peggy gave lots of examples, but we had legal up there, like everybody talking about how they're really pushing the envelope to change how they use AI. I love hearing when our engineers say that used to take me 4 days to code, and I'm now doing it in 2 hours. And when they're pushing on, okay, I'm using Claude for this and Cursor and really kind of stretch the envelope of how can we drive our pace of innovation is exciting.

The last thing I'd say is what's compelling about eBay is that how we build on AI for our customer. So we have a huge on-prem set of data centers. We use a lot of our own proprietary LLM models. We've been able to do it with a great kind of financial architecture, staying within kind of the 4% to 5% of CapEx because how we've thought about it of making these models, training the right-sized models. We have one of the largest supercomputers now, top of few supercomputers that we announced a few quarters ago, really because of how the company -- and our long history in using AI, we've been using it for a very, very long time. So when generative AI came along, just the passion is exciting to see.

Okay. Peggy, maybe one last one for you, just capital allocation. Obviously, we always get a lot of questions about the balance sheet and incremental capital and free cash flow and uses of it. Just hit refresh on what the continued strategic priorities are for capital inside the business?

Sure, absolutely. I mean the capital allocation strategy hasn't changed. We are first focused on driving long-term profitable growth because that's the best way that we can return to shareholders. But we've had a rich history of both dividends as well as share buyback. We announced in Q2 that we would increase our share buyback to about $2.5 billion. We've had a $0.29 dividend that we've increased over the last 6 years. And so I think the combination of all of that is what we are really focused on doing, obviously, first and foremost, with investing in growth.

Understood. Jamie, every year, I sort of give you the opportunity, you're nice enough to come to be a part of the conference. Why don't you close this out on when you think about the next 3 to 5 years, what are your biggest key strategic priorities for eBay? What are you most focused on in terms of how the platform of the company is going to continue to evolve?

Yes. So look, first off, I feel like our strategy is only going to be enhanced by AI. When you think about focus categories, what we're doing, we're only to a little more than 1/3 of the site. So we have a lot of potential left to keep rolling out that strategy to drive growth from a platform. I think secondarily, when you look at horizontal investments that we've made now leveraging AI, whether it be Magical Listings or Advertising, we didn't get into Financial Services today, but what we're doing in Financial Services to really kind of unlock opportunities for our customers on the platform.

Those are going to be kind of really accelerated with AI from a horizontal. From a geo-specific initiative, we've leaned into our U.K. and our German businesses, our second and third largest businesses and their C2C businesses are much stronger. We're performing well. And as Peggy talked about, eBay is a bit more resilient because when the dollar stretch, they look for that pre-loved item or that used or [ that ] refurbished. And we've really kind of leaned in from a value perspective there to be there for customers. And then lastly, I'm going to say, I've been on the road recently, I was over in the U.K. and Germany. I was with a bunch of sellers at our 30th last week in New York, ringing the bell at the NASDAQ.

And I will tell you the excitement from our seller base about the new capabilities and tools that we're giving them. When we gave them the ability to use AI to answer member questions, it was like huge applause because this is what they do 24/7, right? They're dealing with customers on eBay, and it's going to free up a ton of their time to list more products. When we talked about bringing Magical Listing in bulk to our business sellers because like we love what you're doing, how do we do that in bulk. It now, for example, our most popular tool in trading cards is like listing tons of trading cards because now the AI does that for you automatically. And I'll end on eBay Live, eBay Live really started as a collectibles phenomenon, but now we're seeing it in handbags, in watches and jewelry. And it's a new tool to give our sellers to connect with their buyers in a completely different way.

And what I hear from sellers is it's fun to watch the same buyers show up to their streams, they start to recognize them, buyers start interacting with each other. I had one seller tell me that they feel like their core business, their non-live business is getting better because buyers are finding them via their live business and that's building trust for their core business on the platform.

At the same time, I have buyers saying, "Hey, I was never a comic book collector, but I started watching live", and so then I started collecting comic books, and now he's buying comic books on our core marketplace because of kind of watching these live streams. So what's interesting about eBay is to see how live and our core business kind of interact in a new way. And it's another example of basically giving these community tools as a marketplace and kind of seeing and watching what they do with it.

So I feel like, Eric, it's an exciting time at eBay. I feel like I'm lucky to be CEO of this company with all this technology and this amazing seller and buyer base to really lean into and leverage to grow these new businesses and help accelerate what we're doing from the core. And we're celebrating 30 years, but I think the next and most exciting chapters for this company are being written right now.

Well, thank you so much for being part of the conference this year. You're always so generous with your time. Please join me in thanking eBay for being part of the event.

Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to the eBay Second Quarter 2025 Earnings Call. [Operator Instructions]

At this time, I would like to turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's Second Quarter 2025 Earnings Conference Call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer; and Peggy Alford, our Chief Financial Officer. We're providing a slide presentation to accompany our commentary during the call, which is available through the Investor Relations section of the eBay website at investors.ebayinc.com.

Before we begin, I'll remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. Additionally, all growth rates noted in our prepared remarks will reflect organic FX-neutral year-over-year comparisons, and all earnings per share amounts reflect earnings per diluted share, unless indicated otherwise.

During this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons. You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K, Form 10-Q in our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of July 30, 2025. We do not intend and undertake no duty to update this information. With that, I'll turn the call over to Jamie.

Thanks, John. Good afternoon, and thank you all for joining us today. I'll begin with highlights from the second quarter. Then I'll go deeper on the fundamental drivers of our results and progress against our strategic initiatives. Following my remarks, I will turn the call over to Peggy, our new CFO, and who will discuss our financial performance and outlook in greater detail before we open up the call for Q&A.

We delivered another strong quarter in Q2 with all of our key financial metrics, exceeding both consensus expectations and the high end of our respective guidance ranges. Our gross merchandise volume grew by 4% to $19.5 billion, accelerating by over 2 points sequentially. Revenue grew by more than 4% to $2.73 billion. Non-GAAP operating income grew 8% to $775 million, and our non-GAAP earnings per share grew 16% year-over-year to $1.37. These results are a testament to our continued progress in reinventing the future of e-commerce for enthusiasts. The fundamental drivers of our return to profitable growth remain intact, while our marketplace has proven resilient to recent uncertainty brought on by tariffs and trade policy changes.

Now let's go deeper into the key drivers behind our Q2 performance. Our focus categories continue to be a significant engine of growth for eBay. In Q2, focused category GMV grew by over 10%, outpacing our core categories by 9 percentage points. This momentum was broad-based as all of our individual focus categories accelerated year-over-year during Q2. Collectibles was once again the largest contributor to growth as year-over-year growth in trading cards GMV accelerated for the tenth straight quarter on the back of continued momentum in both collectible card games and sports trading cards. Interest in Pokemon cards has surged recently, with GMV growth in the triple digits for the second straight quarter, amid renewed interest from collectors and a particularly strong slate of product releases. While we expect to start lapping elevated growth in Pokemon in Q4, we continue to see strong secular growth across all our major trading card subcategories.

For instance, sports trading cards and MAGIC: THE GATHERING also accelerated sequentially, the GMV growth for each remains in the healthy double digits year-over-year. Our TCGPlayer subsidiary is also consistently posting healthy double-digit GMV growth and set a new record for weekly GMV during its Mayhem event in Q2, which coincided with the pre-release window for the highly anticipated final fantasy universes beyond crossover. Overall, we remain confident in the durability for the trading cards category even if our growth is not linear from quarter-to-quarter due to the varying cadence and relative strength of product release cycles. Our strategic initiatives and partnerships have meaningfully contributed to our recent momentum in collectibles as we improve on our industry-leading experience for During Q2, we fully ramped our grading add-on solution in the U.S. in partnership with PSA and continue to see healthy attach rates. We introduced bulk selling capabilities for cards added to my collection to effortlessly populate multiple listings with just a few clicks. We began integrating inventory from Golden auctions into the eBay marketplace, generating more exposure for these highest listings. And our Golden subsidiary acquired Studio Auctions, which expands our offering for collectors of Hollywood and pop cultural memorabilia. Motors, parts and accessories or P&A, also contributed nearly 1 point of year-over-year GMV growth for our overall enterprise, driven by strength across our major markets and trade quarters. While we've observed some pressure on direct shipped inventory from Greater China following tariff increases and removal of the de minimis exemption, we've seen increased adoption of SpeedPAK and resilient growth trends within forward-deployed inventory.

We also continue to expand buyers access to well-priced supply in key areas like used and green parts, many of which are sourced in their local markets. In the U.S., we've begun automating the enhancement of fitment data to P&A listings in recent quarters, which exposes them to a larger number of relevant auto part shoppers. And in July, we launched easy and free returns for P&A in the U.S., which enables buyers to easily return eligible purchases for any reason, further improving our leading value proposition for auto enthusiasts. Our luxury and apparel focused categories also contributed positively to growth in Q2. In recent months, we've expanded the number of streetwear and luxury apparel brands eligible for authentication in the U.S. And in June, we launched luxury apparel authentication in the U.K., covering dozens of the world's most sought-after brands.

Our Authenticity Guarantee program achieved 2 significant milestones in Q2, inspecting over 1 million items in a single quarter for the first time and reaching a total of more than 15 million cumulative items processed through our authentication centers. Our momentum in fashion continues to benefit from improved consideration among enthusiasts, which has been amplified by our full funnel marketing strategy.

In May, we sponsored the Met Gala live stream, and had a major presence on the red carpet, resulting in nearly 5 billion earned media impressions. eBay became the first non-designer brand to dress attendees head to toe with celebrities like Chappell Roan, Emma Chamberlain and Jeremy Pope wearing pre-loved and vintage items sourced from eBay. Our marketing efforts have also benefited from our increased capabilities in generative AI. In recent months, we've started leveraging Gen AI to optimize listing titles in our product listing ads syndicated to Google, resulting in measurably higher quality scores, ranking and overall performance for these listings, leading to incremental GMV.

We have also leveraged proprietary models to detect and replace low quality or clutter listing images with higher-quality AI-generated alternatives for Google PLAs, which has increased the acceptance rate on these listings and shown a significant lift to GMV. We're also leveraging generative AI to drive personalized engagement with our customers. In late 2024, we introduced AI-generated subject lines and headers for personalized CRM e-mails in the U.S., which drove a greater than 40% increase in quality visits versus our prior approach. In recent months, we've expanded this feature to the U.K. and have seen similar results. We are now expanding these personalized e-mails to more use cases such as abandoned carts and followed seller e-mails.

We've leveraged proprietary LLM to generate these personalized messages. And our teams have managed to keep GPU utilization costs low by optimizing customer segmentation as we've seen the strongest uplift when focusing on our enthusiast customers. We're already sending millions of these tailored e-mails each week and plan to continue leveraging generative AI to personalize more touch points of the customer experience through CRM channels. Our geo-specific initiatives represent another key building block for growth in 2025, and we made notable progress on our U.K. initiative during Q2. Since launching a suite of new capabilities to upgrade the consumer-to-consumer experience in the U.K. in Q4, we have seen notably stronger GMV growth trends versus our prior baseline even after introducing a buyer-facing fee in Q1. During Q2, we continued to scale adoption of our managed shipping solution for U.K. C2C sellers as we introduce new features and functionality. We added package collection services for convenience, and a delivered store feature that enables buyers to have their item shipped to anyone of over 10,000 every parcel shops or lockers in the U.K., which yields significant cost savings relative to home delivery.

In late Q2, we began mandating adoption of managed shipping for all new C2C listings outside of certain edge cases. Over the next few months, we plan to continue improving the managed shipping experience by adding new solutions for bulky items and age-verified products. We are also planning to expand the thousands more collection and drop-off points in the U.K. and drive awareness of the cost savings and sustainability benefits of adopting these services. These enhancements built upon the already strong value proposition that managed shipping offers, faster listing times, lower shipping costs, greater transparency from added tracking and protection against lost or damaged items.

eBay Live is another major area of focus and investment in 2025. eBay Live brings our most engaged communities to life, transforming how enthusiasts discover, assess and compete for high demand inventory in real time. It's a natural extension of our leadership in categories like trading cards, fashion and luxury goods, where trust, storytelling and scarcity are core to the purchase experience. By layering live commerce on top of our scaled marketplace, we're creating new shopping experiences where sellers can connect directly with their audience and like-minded buyers can engage with each other, all while leveraging the sellers, inventory and demand we already have. GMV and watch time for eBay Live continues to grow quarter after quarter as we onboard more sellers into the program.

eBay Live initially ramped within the trading cards category, but during Q2, we saw accelerating contributions from luxury watches, jewelry, handbags and pre-loved apparel. In May, we formally launched eBay Live in the U.K. market alongside a major activation at London. Our teams also continue to innovate on the live commerce experience for sellers and buyers. During the quarter, we introduced a redesigned host console for sellers that enables real-time edits to listings, item lineup viewing and a greater number of one-click actions to increase sales velocity. In the U.S., we launched 2 of our most requested features for eBay Live, auto charge and combined shipping capabilities, which improve trust and reduce friction.

We also debuted eBay Live on tour, a series of in-person events, bringing eBay live to the community via trade nights, hobby parties and pop culture events. We see eBay live as a way to harness the power of the vibrant communities that have organically developed on eBay over the past 30 years. We have already seen significant evidence that live commerce can deepen engagement among eBay enthusiasts and unlock even greater velocity in our strongest verticals, which validates our continued investment in this experience.

Turning next to advertising. During Q2, our first-party advertising revenue on the eBay platform grew 17%, driven by balanced growth across our ads portfolio. Active Promoted Listings made up nearly 1.2 billion of the close to 2.4 billion total listings on eBay, while 4.1 million sellers adopted a single Promoted Listings product during the quarter. Within Promoted Listings, general adds were the largest contributor to the year-over-year growth in Q2, followed by priority adds and promoted offsite units. Promoted stores also continue to scale quickly off of a small base. During the quarter, we implemented several optimizations for our ads portfolio that contributed to growth, such as leveraging proprietary models, trained on more granular buyer behavior to service more relevant products, and using LLM to analyze search queries and surface more relevant promoted products. We also extended priority ads to vehicle sellers for the first time, enabling both dealers and C2C sellers to generate more exposure for their vehicle listings.

Within Payments and Financial Services, we continue to focus on enhancing buyer choice, reducing conversion friction and expanding our solutions for sellers. A key highlight this quarter was the successful expansion of our partnership with Klarna into the U.S. market on April 1, building on our established global strategic partnership. Following our successful expansion in Europe late last year, Klarna's U.S. launch has surpassed our initial expectations in terms of incremental GMV and new and reactivated buyers. The average order value on Klarna's transactions is approximately 3x the U.S. marketplace average. While adoption has been particularly strong in focused categories like P&A, fashion and electronics. Klarna is also helping us attract a younger demographic with roughly 50% of sales coming from Gen Z and millennial buyers and a higher mix of sales generated by female shoppers.

Beyond Klarna, our other financial services initiatives continued to deliver value for customers. In the U.K., our eBay balance feature continues to gain traction, enabling our several million active U.K. C2C sellers to utilize their sales earnings for eBay purchases, generating incremental GMV and while lowering our payment costs in the process. Our seller capital program continues to empower small businesses with access to crucial funding, having dispersed over $100 million of growth capital year-to-date to more than 10,000 sellers globally.

Beyond our operational performance, our dedication to the impact and sustainability of our marketplace continues to be recognized. I'm proud to share that eBay was named one of Time World's most sustainable companies and Newsweek's world's greenest companies 2025, underscoring our unwavering commitment to e-commerce and a healthier planet. Our purpose-driven community also continues its incredible work, notably through the eBay Foundation's One Good Thing campaign, where more than 8,500 volunteer hours and over $790,000 were donated by employees and the eBay Foundation to over 250 nonprofits globally, truly embodying our mission to create economic opportunity for all.

In closing, Q2 was another strong quarter for eBay, demonstrating the continued momentum of our strategy and resilience of our marketplace. Focused categories remain an engine of growth for our marketplace and accelerated to 10% GMV growth. Our U.K. business is benefiting from a similar playbook being deployed at the geographic level with GMV growth comfortably above our baseline before our investments in overhauling the C2C experience. AI continues to fundamentally change the eBay experience for customers as we streamline the listing experience, improve the efficacy of search to connect the right buyers in inventory, created more inspirational shopping experiences and enhanced trust throughout our marketplace.

Additionally, we are increasingly leveraging AI to improve the effectiveness of our advertising products and marketing and personalize our CRM communications with our enthusiast customers. We also continue to invest in medium- and longer-term initiatives like eBay Live in our vehicles business enabled by the acquisition of Caramel, which are contributing modestly to GMV in 2025, but represent significant opportunities in the years to come. As we approach the 30th anniversary of eBay's founding in September, I would like to thank our teams for the significant progress they've made in reinventing the future of e-commerce for enthusiasts in recent years. Their unwavering dedication towards our mission has kept us firmly on the path towards sustainable long-term growth, yielding significant value for our shareholders.

With that, I'll turn the call over to Peggy who will provide more details on our financial performance and outlook. Peggy, over to you.

Thank you, Jamie. I'm incredibly excited to return to eBay and help build on the strong foundation we have in place in order to accelerate our transformation. The opportunity ahead is significant, and I look forward to partnering with Jamie and the rest of our leadership team to drive the next chapter of eBay's growth story.

I will begin with the financial highlights of the second quarter. GMV grew 4% to $19.5 billion. Revenue grew over 4% to $2.73 billion. Non-GAAP operating income grew 8% to $775 million, and non-GAAP earnings per share grew 16% to $1.37. In addition, we returned approximately $760 million to shareholders through repurchases and cash dividends. Let's take a closer look at our financial and operating metrics. GMV grew 4% to $19.5 billion in Q2 on an organic FX-neutral basis. The strength in the quarter was primarily driven by the continued execution of our strategic initiatives and more favorable trends in the U.S., where consumer demand improved through Q2, and the impact of tariffs was more muted than we anticipated.

Golden added over 10 basis points of growth in the quarter and we lapped the acquisition in mid-May. Foreign exchange also provided a tailwind of roughly 170 basis points to spot GMV growth. Focus categories were a key driver of our performance, growing over 10% in Q2. We saw year-over-year growth rates accelerate sequentially across all focused categories, luxury goods, collectibles, refurbished, sneakers, P&A and apparel. In the U.S. market, GMV growth accelerated to 7% and exceeded our expectations due to several factors. Healthy consumer demand drove broad-based strength across both focus and core categories with particularly strong performance in trading cards. Our U.S. results were driven by growth in both sold items and average selling prices. The increase in ASP was partly attributable to category mix shift and also our expansion of our Klarna partnership to the U.S. market, which improved conversion on high ticket items.

We also observed enhanced efficiency in our lower funnel marketing spend, partly due to competitive dynamics. International GMV grew nearly 2% on an FX-neutral basis, with foreign exchange providing a tailwind of more than 330 basis points to spot growth. Our investments in the U.K. and Germany have been instrumental in helping us navigate lower growth environments in both countries. Our cross-border volume growth in Q2 was similar to Q1 as U.S. tariffs have had a limited impact on GMV to date. We did experience some disruption to direct shipments from Greater China to the U.S. following the elimination of de minimis exemption, but the volume that persisted saw an uplift to ASP.

As a reminder, the vast majority of our volume in this corridor is either forward deployed where tariffs are applied against sellers' wholesale cost, or utilizes our shipping service feedback, which helps sellers and buyers navigate applicable tariffs. Moving on to our biometrics. Our trailing 12-month active buyers were $134 million in Q2, up 1% year-over-year. Enthusiast buyers remained stable at roughly $16 million and spend per enthusiast buyer continued to grow year-over-year, reaching nearly $3,200 in Q2.

Shifting to our income statement. Revenue grew over 4% to $2.73 billion in Q2 on an organic FX-neutral basis. Foreign exchange was a tailwind of nearly 170 basis points to spot growth. Our take rate was 14%, up modestly year-over-year. Advertising, shipping and financial services contributed positively to take rate, which was offset by our U.K. C2C initiative and mix shift across our categories and geographies.

On a sequential basis, U.K. C2C improved overall take rate by over 20 basis points in Q2, benefiting from a full quarter of buyer protection fee contribution and our managed shipping ramp. Advertising revenue was $482 million, representing GMV penetration of nearly 2.5%. Within the eBay platform, first-party ads grew roughly 17% to $455 million. We continue to deprecate legacy third-party display ads, which declined by 43% to $8 million. Off-platform adds grew 46%, reaching $19 million. Non-GAAP gross margin expanded by over 20 basis points year-over-year as pressure from shipping initiatives, traffic acquisition costs related to promoted offsite ads and depreciation expenses was more than offset by cost of payments efficiencies as we lapped onetime tax expenses in the prior year.

Our non-GAAP operating margin was 28.4%, up roughly 50 basis points year-over-year as volume leverage and contributions from advertising, financial services and marketing efficiencies offset headcount-related costs our U.K. C2C initiative and M&A expenses. Additionally, FX represented a 40 basis points tailwind to operating margin in Q2. Non-GAAP earnings per share was $1.37, up 16%; and GAAP earnings per share was $0.79, up 77%. The higher GAAP earnings growth rate was primarily due to the lapping of investment losses a year ago.

Moving to our balance sheet and capital allocation. Free cash flow was negative $441 million, in line with our expectations due to roughly $935 million of cash outflows in the quarter relating to taxes on equity investment sales last year and our final repatriation tax payment. We repurchased $625 million of eBay shares in Q2 at an average price of $71 and paid a quarterly cash dividend of $134 million in June or $0.29 per share. At the end of the quarter, we had cash and nonequity investments of $5.4 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments were valued at over $900 million.

In May, we received approximately $225 million from shareholder distribution. This return of capital reduced the carrying value of our investment to approximately $650 million at the end of Q2. Turning to our outlook. While the environment remains uncertain, our business has performed well in July, reflecting sustained healthy consumer trends in the U.S. and continued execution of our strategic initiatives. For the third quarter, we expect GMV between $19.2 million and $19.6 billion, representing FX-neutral growth between 3% and 5% year-over-year. Based on current exchange rates, we estimate FX would represent roughly 170 basis points of tailwind to spot GMV growth.

While we have largely navigated the impact of tariffs to date, our guidance range does contemplate potential disruptions from impending tariffs and the potential elimination of de minimis exemptions on other trade corridors. We forecast revenue between $2.69 billion and $2.74 billion, implying FX-neutral growth of 3% to 5%. Based on current exchange rates, we estimate an FX tailwind of roughly 120 basis points to spot revenue growth. On a sequential basis, this implies take rate is roughly flat as advertising and managed shipping monetization are expected to be offset by an FX headwind of 10 basis points and some additional pressure from mix shift. We expect non-GAAP operating margin for Q3 to be between 26.6% and 27.1%, representing non-GAAP operating income growth between 2% and 6% as reported. We remain focused on maintaining a disciplined balance between top and bottom line growth as we invest for the future.

Given the year-to-date strength in our business, we intend to reinvest a portion of further top line upside and strategic initiatives aimed at driving long-term value for shareholders. We forecast non-GAAP earnings per share between $1.29 and and $1.34, representing year-over-year growth between 8% and 12%. Next, I'll share some updated thoughts on the full year. For 2025, our GMB is tracking towards the high end or slightly above our prior expected range of low single-digit FX neutral growth. We continue to view much of the year-to-date strength in our business as durable, particularly the momentum within focus categories and contributions from other strategic initiatives. However, our outlook for the remainder of the year contemplates several mitigating factors to recent GMV trends. First, we faced tougher year-over-year comparisons in Q4 overall due to an especially strong holiday season. Second, we anticipate some potential moderation in trading cards growth in Q4, which improved substantially in late 2024 due to an exceptionally strong series of product releases. Third, we will lap an acceleration in the U.K. C2C volume as we launched our initiative in October of last year. Lastly, we continue to contemplate a range of scenarios regarding tariffs as new trade policies are announced and implemented.

We forecast revenue growth modestly higher than GMV for the full year on an FX-neutral basis, driven by advertising, shipping and financial services. We expect non-GAAP operating income growth between 4% and 5% year-over-year on an as-reported basis, which includes the impact of several unique headwinds to non-GAAP operating margin outlined in our earnings presentation. We forecast capital expenditures to be between 4% and 5% of revenue for the full year and expect our non-GAAP tax rate to remain stable at 16.5%. We now expect reported free cash flow of approximately $1.5 billion in 2025, which includes a headwind of $935 million from the unique tax items noted earlier. On a normalized basis, free cash flow is expected to be comfortably north of $2 billion. We are now targeting share repurchases of approximately $2.5 billion for the full year. Additionally, our Board declared a quarterly dividend of $0.29 per share for Q3 to be paid in September. Based on these assumptions, we now expect non-GAAP earnings per share growth between 10% and 12% year-over-year in 2025.

Before we start Q&A, I'd just like to reiterate how thrilled I am to be joining as eBay's CFO and helping lead the company into our next stage of growth, focusing on categories where we are uniquely positioned to win. What I've seen so far has been impressive and energizing from the level of innovation and collaboration of our teams, the increased focus on serving the needs of our customers and our deep commitment to connecting people and building communities to create economic opportunity for all. We are uniquely positioned to thrive in this next stage of growth. We have a strong balance sheet, clear strategic priorities and a world-class team. My focus will be on driving operational excellence and disciplined allocation of capital to support our longer-term growth ambitions, unlocking significant value for our shareholders in the process. And I look forward to meeting our shareholders and analysts community soon.

With that, Jamie and I will now take your questions.

[Operator Instructions] Our first question will come from Eric Sheridan with Goldman Sachs.

Thanks so much taking the question, hopefully you can hear me okay. Peggy, first, congrats on the new role and look forward to working with you going forward in it. Jamie, maybe a quick question on what you saw in the quarter and how to think about going forward with respect to marketing. There's been a lot of talk about elements of reduced competition in some of the lead gen or the performance marketing channels in the quarter. I wanted to get a little bit more granularity on what you saw in terms of return on marketing spend. And then when you look at where the world might be going with respect to AI agents or even agenetic browsers, how do you think about repositioning or positioning the company more broadly for where traffic generation might come from when you look out over the next couple of years?

Yes. Thanks, Eric, and good to hear from you. So first, on the marketing side, look, we had a real full funnel approach over the course of the quarter. Some great upper funnel campaigns that we're running throughout the globe and then supported by some in-person events like at Met Gala, and what we're doing with fashion with Emma Chamberlain and Chappell Roan just head-to-toe in eBay, what we're doing in F1. Specifically, as it relates to lower funnel, which I think is where your question was going, we did see some ability to lean in due to the competitive dynamics and saw some efficiencies there in the marketplace. As you know, we're less reliant on kind of lower funnel and paid search than other players given how much of our traffic is organic. But we were able to kind of see some efficiencies in our spend over the course of the quarter. Relative to agentic commerce, we think AI represents a really significant opportunity for us because the technology can really accelerate personalization and relevance for our customers. And we have a multipronged strategy to ensure that we continue to thrive as our agents become more pervasive, really remaining a destination for enthusiast by doubling down on the breadth and depth of non-new and seasoned inventory we have, investing in specialized experiences for key verticals and focusing on kind of continued innovation in new community experiences like eBay Live. .

Second is, I think our focused category strategy that we've had and the value-added services that we build really help us be the seller platform of choice. Whether that's the physical authentication. We just hit 50 million items authenticated. We did 1 million in this quarter alone or a guaranteed fitment or the frictionless payments pieces, really creates a unique and compelling offering for buyers and sellers. Lastly, I'm excited by the work that we're doing on our own agentic capabilities on platform. We recently announced an AI shopping assistant that we've been working on and testing. We've got other specialized agents across the experience. You know about the work that we're doing in magical listing to really kind of unlock the closet, et cetera. So ultimately, we believe our scale, our unique inventory and our differentiated value proposition as well as accelerating our own AI capabilities position us extremely well to thrive in an agentic commerce future.

Our next question will come from Michael Morton with MoffetNathanson.

Thanks for the question. First one, I wanted to start with. I really appreciate the details on the category performance and it leads into probably the most frequently asked question we get from investors. And when they think about an eBay future and the reacceleration of GMV growth, they always ask what category growth they're underwriting in that thesis, and you've done really well, obviously, in collectibles and P&A. But I wonder if you could maybe shine a light on what your expectations are as the drivers of future growth. I mean, I would expect you say broad-based, but if there's any categories you could call out that you're looking to going forward. And then following up on your remarks with AI. Just curious, I know it's very early days, but the traffic you're seeing coming from AI search to eBay, are those buyers behaving differently? Are they converting at higher rates? Are they spending more or less time on the marketplace? Anything around that would be really interesting.

Yes. So first on your category point, Mike. I think we really believe it's existing focused categories that we've launched and then ones that we still haven't launched to date. So if you look at our focused category performance, it was plus 5% in '24, 6% in Q1 and then 10% this quarter. It was really across the board strength in all focused categories. I called out collectibles and strength we're seeing there, P&A. And think about these, these are categories that we've launched a while ago. And I've always said, in addition to launching new categories like we're doing with fashion, we're reinvesting in categories that we've already launched because we like the ROI of the investments that we're seeing. And collectibles is a good example where, once again, we innovated with the partnership of what we're doing with PSA in parts and accessories this quarter. We launched a number of new features like free and easy returns in the U.S. and expanded fitment. And we have 5 categories in the platform that are over 10 billion, and we think all of them are relevant for our focus category playbook. At the same time, the horizontal efforts that we've been making, especially around innovations in AI, have helped us both in focus categories and in core categories. And so we're pleased with what we're seeing there and the investments that we're making and how that's paying off. With respect to your question about kind of agenetic commerce, I would say it's small at this point, but it is -- it has a nice growth rate, it's growing pretty decently. I'd say the 1 thing that I would call out is users are coming to eBay with a high shopping intent. And so we see that in terms of the traffic. And that's consistent with our strategy, which is eBay has really unique inventory. We've been leaning into non-new in season and refurbished. I talked last quarter, that's up to 40% of the inventory that's being sold on the platform, combined with the unique kind of value-added elements we do around authenticity guarantee, guaranteed fitment, et cetera, really kind of helps drive that shopping behavior.

Our next question will come from Nathan Feather with Morgan Stanley.

Really encouraging results on the quarter. Two on my side. First, the U.S. showed really particular strength in 2Q. Can you stack rank the primary drivers of that improvement relative to the international business? And how should we think about the ability for that to persist into the back half? And then I'm talking about -- you talked about reinvesting some of the year-to-date upside into strategic initiatives. Can you give us a little more color on what those are and how it could show up in

Yes. Look, when you look at the macro environment, U.S. in Q2 was more favorable than we expected despite the tariff announcements and the elimination of the de minimis for imported goods. Consumer demand held up through Q2, and we really saw broad-based strength across different categories as both our sold items and our average selling prices grew year-over-year in Q2. And then to your question about versus international, I would say Europe remains tougher similar to recent quarters. We've not seen a meaningful improvement in the European macro environment, though our investments across our initiatives are working and have offset some of the macro trends. Fortunately, our business, I think, is well suited to navigate these conditions and we remain confident that our emphasis on e-commerce and non-new in season will be a strategic advantage in this environment, especially as consumers prioritize value as they appear to be doing in the European markets. Related to our H2 investments, I would say it's really across the board. We talked in Q1 about investing in U.S. pre-Live fashion as our newest focused category. We've been investing in the C2C work that we've been doing in geographic specific areas across U.K. and Germany. I talked about eBay Live, while in the early phase of growth, we think this has a lot of potential, and we like all the early metrics we're seeing in terms of engagement and how sellers are adopting the product. And then finally, I would just say, continuing to invest in AI. The return we're seeing from the investments that we're making in both the customer experience and how our employees are leveraging AI to make them more effective in their roles is another key area for us to lean into and take advantage of.

Our next question will come from Ross Sandler with Barclays.

Great. And Peggy, welcome to the call to the arena, all the above. So Jamie, just following up on that last question on the U.S. So it didn't sound like given that ASP grew in the second quarter that there was any like a natural benefit from in that channel kind of having problems in the U.S. market. Is that fair? And if so, and if the strength is kind of based on what you're seeing in collectibles? How much of that's like share gain from Golden and some of the other initiatives you guys have done versus just that category being strong? And then the second question is just on, not on the U.S., but just broadly -- so fashion sounds like that's one of the next kind of reskin focused categories. How big could that be in terms of the opportunity over the next couple of years?

Yes. So look, first on your question on ASP. I think it was really growth across sold items and ASP. The areas I'd call out for ASP for us was a slight increase in forward deployed China-based inventory as they replenished at higher tariffs, probably contributed a bit there. The second thing I'd say is that we introduced or expanded our Buy Now Pay Later partnerships into the U.S., specifically Klarna, and that helped us drive additional high ASP items and got some boost for that in our U.S. market. Those items tend to be about 3x the average of the rest of the marketplace. Specifically to your question on collectibles, it was sold items primarily with a little ASP boost in there and things like Pokemon, et cetera, but it was really kind of across the board. And it's not just Pokemon. We saw strength in MAGIC: THE GATHERING and in sports trading cards. So lots of different kind of subcategories that were performing well in there in addition to my other comments. And then to your question about fashion, I'm very excited about the potential in fashion. If you think about it, we do over $10 billion in fashion on the platform. And I think especially with generative AI capabilities, we're bringing kind of new ways to discover, to explore and define items on the platform. And we've been a great source of pre-live fashion for a very long time because of the inventory that we have on the platform, the unique value and being the kind of real unlocker of that supply. So I'm excited by, is to bring these new technologies like the Explore technology, which we've now put in kind of our key pages within fashion. I'm excited to see how brands are leaning in with direct sales on the platform. I talked about our marketing about how we're using influencers. We have literally at the Met Gala, Chappell Roan dressed head-to-toe in eBay. That's never happened before that it's done by a non-designer, and so really kind of across the board, changing in that category. And I think we're just getting started with the sense of the improvements that we can see in that category. So overall, I feel really good about across the board about what we're seeing in focused categories, but excited we're bringing some of the elements from the U.K. to the U.S. in fashion specifically. .

Our next question will come from Nikhil Devnani with Berstein Research.

I appreciate it. A follow-up on trading cards. I appreciate that right now, demand looks very good for that category. Is this a market that consistently grows double digits? Or are we in a particularly strong window right now? I guess it would just be helpful to understand what you see as durable growth in trading cards as you look forward beyond the quarter? And then my second question is on margins, but I can follow up after...

No, go ahead, ask your question about margins, then I'll answer it.

Sure. Just the last few years has been this reinvestment cycle, mix shift, GMV pressure, all of that probably has been a headwind to margins. If this business is now growing low single digits to mid-single digits consistently, you just get the natural benefit of positive operating leverage? And does that naturally just start to push margins up again?

Yes. So look, first on trading cards and in collectibles. Growth has never been linear. So it will ebb and flow based on various factors. Release calendars, the caliber of rookie classes, chase cards for major stars. And so since late last year, we've seen an exceptionally strong series of cards and game series on top of the fundamental improvements. And those fundamental improvements have been key to the growth of the category. And now how easy it is to get a graded card sold on the platform or to get an ungraded card graded there. And so while the recent strong releases may moderate and we'll face a tougher year-over-year comparison later this year, as Peggy talked about, we continue to believe in the long-term growth potential of the hobby and we're going to continue to invest in and improve the experience in collectibles. And eBay Live is probably the greatest example now of kind of another new invention that -- or another new capability we're giving sellers in the overall business. Peggy, do you want to take the margin question?

Sure. Absolutely. Nikhil, nice to meet you. What we found is that a high gross margin -- high gross margin comes -- gives us operating leverage. And what we really focus on top line growth because what we find is that when GMV grows, we actually get to very healthy margins. We focus a lot on the balance of top line growth and bottom line margins -- operating income dollars is what we're really after. And we find that as we focus on our strategic initiatives, which are really driving accelerated top line growth, that's what gives us very healthy margins since that's how we've kind of balanced our philosophy here.

Our next question comes from Colin Sebastian with Baird.

Great. I have a couple of questions as well. Jamie, congrats on the strong quarter, and Peggy, welcome back. So I guess along the same lines of the sustainability of GMV growth question, I'd be curious to hear how important the active and enthusiast buyer base will be maintaining that level of growth as you look out beyond this year. And without getting too far ahead here, Jamie, does the performance year-to-date at all change your outlook for the medium and long-term growth potential of the marketplace?

Yes. So look, I'm happy with what we're seeing in terms of GMV growth. And to your comment on active and enthusiast buyers. Active grew 1% year-over-year to $134 million in Q2, and we like what we saw there because obviously the top of the funnel is incredibly important to us. But we are very focused on enthusiast buyers as they buy 70% of the GMV on the platform. And turning those active buyers to enthusiasts and importantly, making sure that our marketing is focused on attracting enthusiast buyers to the platform. So we do aim to grow across the funnel, but that's really kind of the end goal of what we're doing. And we like what we're seeing in terms of the health of our biometrics. I don't want to get ahead of myself with respect to kind of looking out in future years. What I would tell you is that I feel like the growth right now is made up of a couple of components. It's obviously the focus category work that we're doing. It's the geo-specific investments that we're making in our business, specifically the ones that we're doing in U.K. and C2C, and it's the horizontal initiatives. And what excites me about the horizontals is that they're helping in the focus categories and in the core categories, and that's helping drive new and reactivated buyers to the platform, helping drive more engagement and more retention. And so we're going to continue to kind of stay on that strategy and execute on the playbook, and it's been working well for us. .

Our next question will come from Tom Champion with Piper Sandler.

I wanted to ask about total listings volume on the marketplace. It seems like your AI investments, managed shipping, payments, all the product improvements have been aimed at lowering listings friction. And I'm just curious how that is trending and maybe the opportunity ahead to increase the total number of listings. And then maybe secondly, I don't want to put words in your mouth. I think your comments suggested some excitement around Caramel. I think that's a newer acquisition maybe a '26 opportunity. But just curious what you are seeing with that addition to the marketplace and thoughts on the opportunity ahead.

Yes. So look, on our listings base, we continue to grow our listings. We're now at 2.4 billion listings and they've been consistently growing double digit year-on-year. And what we're focused on is really how do we get unique well-priced inventory onto the marketplace. And a lot of that inventory is -- that's really unique is in that C2C category. So if you think about the combination of the work that we've done in the U.K. and Germany to focus on improving the C2C experience there, really doing a lot of more full funnel marketing about unlocking that inventory, combined with magical listing, and this idea that we want you to just be able to hold your camera up to an item and be able to kind of get that listed really quickly on the platform. So it's why we're auto writing the description. We're filling in the key data fields. We're even helping users with things like their backgrounds, where they can take it on any kind of table or whatever and put it on a beautiful mountaintop. And as of now, what we're seeing is we get over 0.5 million listings a day that are using generative AI on the platform. So the adoption has been great to see. If you look at some of the growth in trading cards, I talked last quarter that the majority of those were coming through a product that we call kind of the bulk version of magical listings. And so we see a really nice correlation between kind of the work we're doing to improve the experience and take the friction out with the incremental listings that we get, and that non-new in season really attracts a lot of demand on the platform. With respect to vehicles and the new business that we have with Caramel, eBay has been involved with vehicles over time in different ways. And we really kind of leaned in because what we saw in Caramel was the ability to have a real end-to-end experience for a customer. From financing to delivery to identity authentication to title transfer, and really making it kind of seamless end-to-end. And what we're focused on is going after the really collectible car market, which is about $75 billion of the $1 trillion-plus used car market that's out there. And so I would say it's early. It's kind of very modest, but we believe that there's a lot of potential for it to be significant in future years. And we're excited for it not only as a category, but because of the synergies that we see with parts and accessories. And so a lot of the same enthusiasts that are looking at collectible cars, buying collectible cars, are involved in our over $10 billion parts and accessories business. And so the synergy between those 2 is exciting. And every day, I get a report of fun things that are sold. We just sold a 1964 Lincoln Continental, a Porche 911 Turbo S just sold for $144,000, and those used like the end-to-end experience and is fully secure checkout and kind of just shows up on your doorstep. So it's really resonating with vehicle buyers.

Our next question will come from Ygal Arounian with Citi.

Peggy, just to expand on the margin question from earlier. It sounds like the focus is on driving top line to expand margins. You talked about operational, I think, you used efficiency or excellency. Can you just maybe talk about the opportunities you see now that you've been in the seat for a little bit. And then one sort of tactical on the de minimis impact. So so far, some impact from the China's U.S. corridor, but not a but is this potentially or looks like it's going to expand across to other regions as well. Just walk us through what exposure you have in some of those regions, too?

Peggy, you take the first one, and then I'll take the tariff, the de minimus.

Absolutely, yes. Nice to meet you, Ygal. So what I would say is our first priority is investing in our business organically to drive sustainable long-term GMV growth. When it comes to margins, we continue to target the optimal combination of GMV growth and operating margin with the goal of maximizing operating income dollar growth over the medium and the long term. In terms of specific areas of investment, we're -- as Jamie mentioned, we're really focused on investing in our strategic initiatives across our focused categories, our specific geographies as well as the horizontal initiatives because we know those really bolster the health of our marketplace. We've also invested in mid- and upper-funnel marketing with the goal of growing awareness and consideration in our key verticals. And at the same time, we're always looking to find operational efficiencies to create capacity in order to support these investments. Over the long term, we believe we can drive sustainable earnings growth, while investing in strategic initiatives to fuel GMV growth and also deliver healthy capital returns to our shareholders.

Yes. And to your question on tariffs and de minimis, look, our business is not immune to the increased costs from tariffs associated with these changes, but we believe we're relatively resilient from that perspective more so than others. And what I'd tell you is we did observe some breakage in elasticity relative to tariffs and de minimis in Q2, which primarily impacted our sellers in Greater China and, to a lesser extent, Japan, but there were some offsets that made the net impact to eBay relatively modest. In particular, we saw a reasonable or a notable amount of deceleration in our direct ship inventory into the U.S. from some of our greater China sellers, but they partially offset that by making their products available to buyers in other countries like the U.K. and Germany. And from a forward deployed standpoint from inventory forward deployed from China to the U.S., while there was some breakage as those sellers paid higher tariffs, when they replenish their inventory, we benefited from an uptick in ASP on the sales that remained, which more than offset that elasticity. So overall, our guidance for Q3 and outlook for the full year contemplates a range of scenarios regarding tariff policies, including the de minimis exception. And if you look specifically at Q2, what I would tell you is that the GMV growth from 4 deployed items accelerated sequentially and the year-over-year growth for Greater China GMV overall was similar in Q2 versus Q1 on an FX-neutral basis. .

Our next question will come from Shweta Khajuria with Wolfe Research.

I have one on ad revenue growth and another on just durability of GMV growth. So ad revenue has been growing pretty nicely. How do you think about durability of this revenue segment? Is it ad load, new ad services, pricing, ongoing share gains? Where do you see that sort of continue to growth to come from? And then the second one is on durability. I guess, it's of GMV growth. It's a follow-up to one of the prior questions. When we think about your growth profile, is it fair to think of it as increasing penetration of focus categories plus benefits of horizontal initiatives, both combined in addition to improving core GMV growth to get you to maybe even potentially higher than mid-single-digit growth in the mid- to long term. Is that the right way to think about it?

Yes. So when you look at our ads growth, we see a long runway for ads growth and penetration from adoption, from listings penetration, ad rate optimization and scaling our new products. Our first-party advertising business grew 17% in Q2. And it was really broad-based and balanced across our portfolio of CPA, CPC and our offsite ads, all contributing to that growth. We reached 2.5% of GMV, and we've talked to about having a line of sight to at least 3% penetration. And we see that more as a medium-term goal than a ceiling, and we expect advertising revenue outpaced GMV for the foreseeable future. I'm also excited by how that team is adopting new AI technologies, not just in kind of the dashboards and recognition to sellers, but in the quality of how we're applying our advertising to the experience. On your question on the GMV opportunity, I'd say what we laid out was that we thought at our Investor Day was we thought the medium -- I'm sorry, the core categories could get to essentially flat, and that in a normalized environment, our focus categories would be growing kind of in the 9% to 10% range. Obviously, core categories grew this quarter at 1%, and you see where focus categories are driving. But I guess to back up and go at a higher level, I think what you said at the upfront, Shweta, is exactly what I'd say, is it's a combination of all of those growth drivers. It's -- the success that we're seeing in focused categories and that growth above and beyond the core categories. The work that we're doing in horizontal, which helps our core categories also helps our focus categories and a lot of our focus category buyers tend to buy in our core categories on the platform. And then the third is the geo-specific investments, especially around C2C, all of those really contributed to us, started contributing in '24 and contributors to us in '25 and will be kind of the key growth drivers for the business going forward. We have time for 1 more question. .

Our next question will come from Lee Horowitz with Deutsche Bank Research.

A couple if I could. Maybe just following up on an earlier question on international GMV. Obviously, the delta to the U.S. is quite wide right now. Is this all meant to be due to the macro environment and just the overall consumer backdrop? Or are there pieces of the U.S. market that are working quite well right now that could be on the for the international side of the house in the coming years? And 1 follow-up, if I could.

Yes. Look, what I would say is it's predominantly vastly the macro environment. If you look at the U.K., consumer confidence remains low, inflation remains elevated and the latest GDP forecast calls for very little growth in 2025. And I think Germany is even tougher with declining consumer confidence and no real GDP growth expected in '25. There's obviously some other kind of idiosyncratic factors like the challenges in the auto and the manufacturing sectors further, I think, straining the German retail landscape. I think the initiatives that we're doing are helping kind of our performance in international, specifically the work that we're doing around C2C is helping navigate well what I think is -- still remains to be a challenging backdrop in the EU. We continue to take innovations from every part of our business and looking and extending them to other geographies. But predominantly, I think the challenge we're seeing in Europe right now is the macro backdrop. .

Then maybe 1 follow-up on eBay Live. Maybe if you could help us better understand the opportunity you see here a bit more. How do you think about what the size of the overall market may be here? What sort of signal maybe you're getting from buyers or sellers that this is the right place to invest? How you're thinking about maybe the incrementality of using this as a format to move some of your categories? Any help on how you guys decided to move in more aggressively in this category would be great.

Yes. Thanks for the question, Lee. So look, Live is a major focus for us for 2025. It's still in its early phase of growth, but we're really encouraged by the strong interest that we're seeing from sellers and buyers. That's not just within the collectibles category, where there's a lot of adoption, but also in other areas like luxury watches, jewelry, handbags, pre-loved apparel, I'd like to go on to just kind of see who's using the product. We've been expanding the product. In Q2, we actually launched eBay Live in the U.K. at London's Comic-Con. We've kicked off the eBay live on tour throughout the U.S. for kind of live streaming events. We've been innovating on the product with a new kind of seller host console, which makes things much easier. Everything is like one click away and easier to kind of execute on eBay live. And we brought out 2 of the most requested features from our live sellers, which were autocharge and combined shipping. The way I think about the potential is I've been around this business since 2001. And what's always been exciting and I've always said is give sellers a tool in this marketplace and watch what they do with it, and it's just going to be exciting. And that's what I find here with eBay Live is these buyers, they don't want to see like some celebrity on live. They love the authenticity of our sellers that really know that Pokemon area or that anime, or are really into luxury handbags. The community elements that we see coming out from eBay Live are exciting because you see sellers interacting with their buyers, buyers interacting with each other on the platform. And eBay is really at the home of these community enthusiasts. And so seeing those pieces come out, I think, has been great. So it makes me super excited by the potential, and I'm optimistic that given the level of engagement, the metrics that we're seeing around how buyers are gravitating to them and the increasing value contribution. So we plan to continue to invest and improve this experience for buyers and sellers. And that will be fun to watch kind of all the different areas where they can take eBay Live.

Thank you for joining. This concludes today's call. You may now disconnect.