Earnings call transcript Q1 2023

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Operator

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the eBay First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be question-and-answer session. Instructions] [Operator

Director you Senior conference. begin Investor of Egbert, may Relations, your John

John Egbert

afternoon. us call. earnings joining you eBay's Good for XXXX for Thank first quarter conference

me the We're section website providing our slide Jamie Investor presentation Steve call Relations our on of is a our Executive at commentary available accompany during the Priest, Officer. Officer; eBay and which investors.ebayinc.com. Joining Iannone, Financial Chief to today call, the the Chief are through

call, remind you discuss that Before we we conference to will non-GAAP this performance. begin, related measures I'll certain during our

the can comparable slide reconciliation You a of find measures these accompanying measures our to nearest in GAAP presentation.

all comparisons, Additionally, will year-over-year unless remarks indicated prepared otherwise. in rates growth our neutral reflect organic FX noted

limitation, results. future and and During will call, forward-looking this These uncertainties. conference management and regarding without expected performance statements unknown financial make involve including statements known statements, risks our forward-looking

results Our materially a forecast our reasons. actual of may variety differ for from

more affect earlier XX-K, find and can on information Form earnings other Form uncertainties results and recent reports most from release operating You our our our that periodic risks, could today. XX-Q about factors in

do information. should intend duty on any forward-looking We presentation is undertake statements. and You this as of not to XX, XXXX. information update in no April All rely this not

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

Jamie Iannone

afternoon, financial key challenges the quarter. our We first metrics for Thanks, joining than with during performance results the us operating everyone, across in you Good and thank environment. despite pleased delivered John. strong today. I macro our am and expected continued better

of long-term and have achieving strategy, and non-new-in-season the kept our category innovation site-wide for enhanced our investments growth. advancements sustainable us and trusted buyers to of on in on emphasis marketplace path experiences goods, the durability Our sellers focused

XXXX. billion points, roughly organically, growth advertising. and and of contributions in primarily $XX.X gross the over eclipsed year-over-year GMV from X% point X representing QX, by $X.X X acceleration outpacing generated to first grew over organic quarter sequentially X% in Revenue versus billion organic volume growth a merchandise due We of

of $X.XX, we Our was and margin year-over-year. operating X% XX.X% up earnings share per delivered non-GAAP

Our driving our our and working provide that in growth financial clear evidence business. results is strategy underlying

evident focused rest of by overall. during grew the is QX low-single our categories, in which year-over-year digits and progress points X Our most roughly marketplace outgrew

Our or the during satisfaction motors, focused sequentially seeing, a contributor and few parts are largest and Based market rates possible P&A category, largest accelerated results data that QX. and to of customer a are we this on focused to we grew the is P&A, growth in on testament category accessories, was driving even awareness in laser the we points GMV at growth believe the which for the are quarter, when categories. largest

the knowing launched receive parts extend with In February, they'll the a launch video, Fit which auto across full of it with funnel to channels of enables money program TV, their buy millions to to are shoppers and compelling consideration their and streaming later program U.S., P&A audio initial the this trust to U.K. or and reception markets Fit campaign drive pleased of with year. eBay unlock. We're Guaranteed confidence We fit Guaranteed awareness German will excited back. we the and in the social the this marketing accompanied

web revamp improved to installation experience major We also apps on the desktop experience expanded QX tire recently eBay. on tires began shoppers in We our in a mobile QX. mobile overhauled of how and buy and

delivery having hard Across that installation can rather tires easily can of browse markets, evaluate auto Now directly their to to compare and these ship buyers for XX,XXX items. vehicle. major they take to five local one of fit buyers as options than more installation over transport tires shops

be driving already uplift in installations the are attach Within in rate online launches connecting our still focused P&A, a early valuable proven these sales also than off-line of benefits of consumers the are are purchases. categories, to sustainability has ever continues and to current products. in services economic our more of refurbished installation meaningful program Refurbished standout. tire increasingly eBay we climate, a these In to aware of the stages be While our of the to range purchasing initial goods

game Building program during dozens added to peripherals. record accelerated double-digit last holiday and eBay Refurbished notably quarter, categories posting growth. off its including quarter, new the We GMV in growth of computing QX, year-over-year video

OEMs We sell categories directly eBay. existing to on also and signed up in more refurbished brands inventory

processes. business scalable months, program and Additionally, we've sales the Refurbished on automating sellers small goods to and in eligibility the recent of steps inventory eBay taken small elements majority unique of sign-up the some is refurbished more process because and sellers important by faster in business eBay up for valuable of onboarding to most This check bring the make platform. the our and make

Our work continued first to improve build the on site-wide the momentum quarter. experience to in eBay

AI last a operated an platform of our core upgrade areas has accelerated has multiple this to year across meaningfully development organization. philosophy AI for years, eBay platform our While

we state-of-the-art $X marketplace estimate and AI-powered on basis. a billion and In which relatively delivers A a during that marketplace, buyers. an demonstrates improve that scale. measurable uplift amount listing choices ranking for search, our series number we can to continue incremental This QX to better deep of annualized of enhancements in leveraging to data in models our we our value structured the learning the of search GMV using generate made on led retrieval vast more amount deployments a roughly small to would conversion of relevant

using technology. directly images live historical of the our is Another world one eBay proprietary billion networks sales, billions from images few the vision key to elements. in companies tens deep training X.X neural With data more foundational of commercially listings and billions of relevant is area improvement of computer linked

search features driven dramatically and our Leveraging Visually Similar and See speed the a change It team relevant enables adoption, results substantial increase query new results are we the of furniture module, subcategories decor. and has image within assets, select recently of volume on which in also testing like home more purchase similarity visual our search and models, behavior. This these image product eBay. efficacy reengineered improved has

These the items helping marketplace. in our describe on and eBay more buyers capabilities are of unique discover unlocks hard powerful to

For just can potential of eBay. on you take a antique have if find you example, replacement a breaks, pattern now exact picture that for an and the vase an match

Our the advancements in for have eBay. computer profound implications experience vision also selling on

new of harnessing in the quarters, images you'll listing understanding improved visual contextual sellers us see and Over testing experiences, assist product to our products. coming our

sellers time from For eBay be managing soon generative benefit recent to from and photo, on specifics enabling categories item single and growing positioned and inventory leaps businesses. will also a instance, well more spend AI them to able is their of their in capabilities. inputting pre-populate to forward less

the generate item of process flow will on product text ChatGPT core soon API their into the enables and known in sellers our a for beta launch to that listing plug-in are We description a automatically release integrating attributes. of based

Generative across more you a has marketplace AI with magical and outside enable our that number about descriptions, exploring of over coming excited truly potential cases use applications of these customer can we're numerous share to quarters. initiatives the I'm exciting experiences.

published listings is recently we automatically content across seamless browse accounts shoppers into popular content XX% carousels Hub a store through in more centralized each across several on store and already of For their for social click rates average, linked publish new versus launched that it it was medium, post. allow promote sellers the available. integrated and to observed including listings date, to and Thousands sellers, engaging tool social to higher is new using channels that what on tool, optimized multiple previously have single bulk their makes Seller with to they feature easier social making media. This post a this

eBay more Shipping easy you is program effective of for revamped and process. ship program, which end-to-end also our only cost to The buyers, to February Sydney sellers not coordination from and new seamless eBay's as talked trade Louis. shipping in Silicon we eBay International St. the to improves as makes the it quarter, making sellers but is trust Last for it Valley to of cross-border rollout about it to ship

to in U.S. from previous program sellers of migrated XXX% this ramped the shipping fully global we and QX, our program. During listings

we're While a its program, on the satisfaction. new customer for already early observing impact days positive

term, available and price to GMV. for Shipping ultimately velocity improve sellers drive long and International the Over sales eBay realization incremental border buyers, believe inventory cross will increase we

Now transitioning to advertising.

advertising broader than for $XXX $XXX of the Our in Listings grew Promoted business straight ad digital challenges third advertising faster the revenue continues GMV despite million. revenue more to to growth growth Strong than robust at scale XX% quarter. market. for first-party or XX points advertising XX% demand deliver million, Total drove up

than X reached single XXX over products, QX, ad adopted million million we During and more live Promoted Listings. sellers

ads QX, In for model evaluate contributor CPA to continue This from enables products learning as expand to ranking new performance model once multiproduct buyers. also improved beneficial will benefiting conversion ranking ad to decisions product improvement. a we of and and was Our largest continued sales This advertising be performance that other our in rolled philosophy portfolio. the for CPA ad-serving than standard machine alongside we rather optimization for silos. growth, out again making advertising each multiple the us change expected sellers

ads quarter-over-quarter to which as during upgraded in continued Advanced, model This our quarter well deployed ad mid-single within Promoted of benefited digits existing slower by per an as click grew growth and was inclusion also from led more products format, CPC services. of scale the Listings Promoted cost seasonally emerging Our the Listings relevance QX. our the

we that progress key Now to let's having on discuss the ESG make I'm the we pleased on serve. our continue impact we're meaningful initiatives. communities

insight four and belonging, strategic communities Diversity published and provides representation, we our seventh inclusive Equity technology. build sense This report. yesterday, Annual a our our allies, objectives: into engage and Just report increase Inclusion of cultivate

place truly a us and equitable objectives fiercely sell These inclusive richly buy, help build and work. diverse, to

We the of XXXX, global XX% report at equity XXX% workforce. levels number to representing women steady eBay's globally. in also in gender increase minorities a and with underrepresented is of enrolled all have proud pay our women I'm seen since

we I would XX% we here X% long-term impact years X like targets. and by based X on versus next ambitious XXXX, reducing highlight Two planet. our In XXXX. is set our by science and emissions Scope baseline from XXXX ago, The to the in reduced around

to also on Scope progress goal. our make We continue X reduction

our a sources and from carbon-neutral remain of we now company. XX% Lastly, energy comes renewable

our find about our details programs next sustainability out month. coming impact can in report more You annual

to encourage sustainable industry Postal sustainability. other on U.S. for more addition, the with make e-commerce Service peers with XXXX, innovative across an In organizations small continue and to Throughout to impact bigger our practices some even adopt of we shipping we the partnered partner to businesses.

Our for commitment an lower enabling by in the costs letter to delivery by congratulating their exclusively environment offered by in only published not other our XXXX. This and February a purchasing customers delivery vehicles helps culminated shift fleet. electric also USPS XXXX efforts but all-electric benefits

continues to and I'm this its contributions community program. eBay Turning X% from $XX over to The demonstrate tremendous QX, eBay by the raised for eBay Charity. In million, always year-over-year. impressed generosity, Charity for up

the important quarter, campaign, sneaker influencers. sneaker support program Black a the Month initiatives like History designers During to highlighting and continued Black

committed relief efforts advancing The during Foundation the to Additionally, $XX with employee matching QX, non-profit disaster foundation gifts. inclusive eBay entrepreneurship. supported and organizations also million contributions

of our we community efforts our driven recognized be purpose All for combined honored and these progress. demonstrate are to

as Newsweek workplace as the recognized for eBay customer our efforts our service. diversity in around well

eBay JUST America's employee CNBC's such included and which DE&I areas Capital change, of Additionally, once Companies, was Just performance again and Most in as efforts climate measures wellness. in list corporate and

corporate were sustainability. the in Sustainability Global their S&P's Yearbook, top distinguishes companies for ranked which we some among companies of strengths on Lastly,

eBay. while objectives. closing, was progress strong exceeded commitments our long-term against our In for quarter significant QX quarterly another making We financial

QX. grew reached categories which our acceleration faster focused marketplace, rest market rates an the than of category, in roughly by points of the in Our growth X P&A led

our and platform search, velocity, accelerated improved Our has generative tech advertising. leading innovation areas vision, core AI AI in dramatically like to computer

charitable contributions with being we unique to Shipping We border for platform make International our believe the ways benefit continue This reducing pay costs, is cross environment. program. And ultimately, our recently progress it representation sellers, And more our most inventory our alleviating friction sellers' initiative made and scale leverage available the continue transactions. to to more for trust on of improving eBay find through of meaningful globally. our made to our impact efforts, and equity, lead will with we

last eBay the employees the Lastly, relentlessly seeing I'd grateful to customers. and quarter. on I'm number a was focused service for eBay feedback our sellers also personally and innovation during raising I able thank having our their of talented travels been to meet like their our with is on have who is businesses impact connect Hearing bar my truly inspiring. to and

marketplace vibrant buyers a more sellers, Our truly with along make our and eBay community. enthusiast

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

Stephen Priest

joining from with and of X I'll today. first for begin you, earnings our on highlights thank Thank Slide the presentation. quarter Jamie, all us you

Next, metrics walk financial through and operating I'll greater our in key detail.

outlook second on for year we I'll our the and quarter begin Finally, the before half second provide Q&A. thoughts some of additional the

basis As comments reflect year-over-year usual, neutral comparisons note unless will FX I my an otherwise. organic on

sequentially, while QX $X.X by Overall, X% FX our billion, point growth. primarily momentum e-commerce. X metrics a billion, was X% to I am financial results down up to with to exceeded $XX.X Revenue year-over-year environment expectations navigating X X advertising due business. to reported for points key within headwind approximately volume volume improving continued which our was macro a merchandise challenging outpaced as was pleased our despite points Gross

initiatives. full volume to share, up non-GAAP strategic while to Non-GAAP and continued to year-over-year, operating delivered we XX.X%, dividends. $X.XX funnel per generated shareholders down $XXX product deleverage investment X% And and marketing cash million margin was in $XXX of our points and through flow, free innovation returning We of XX% repurchases year-over-year. up support earnings year-over-year due X.X million

demonstrate strategic trajectory. initiatives durability of periods during QX uncertainty, as meaningful having on growth results scaled our global economic the marketplace well are strength of the our impact Our our as long-term and

horizontal down Let's financial the organic take outperformance areas driven by focused a and merchandise billion initiative volume Gross of sequentially marketing healthy strong within accelerated $XX.X on performance closer our the Organic or including investments. X% during FX points by search growth down quarter. M&A. delivery continued on was in look recent basis like GMV X%, at neutral impact an categories, of our X year-over-year QX, ROI first in

was points roughly than versus macro our which worse aided FX the in first improvement QX headwind through last an the the improvement sequential point point but X lapping to growth, midway QX. GMV is downturn on quarter. year's year-over-year X also reported The by the headwind outlook X.X of implied represents of

we $XXX open CBT estimate during stores As to which noted Lunar GMV quarter, Year. to contributed QX, in last million keeping attribute roughly one-time we primarily the factors sellers New

continue roughly QX accelerated as Our becoming remainder underlying Focused QX. categories the business, points as to aggregate, our our growth pressures categories focused is low-single during that a growth focused subside. delivered macro-related by in In categories more trend overall. drive outgrew X our visible business in positive of digit marketplace

few our of benefited growth in our product contributor was P&A focus momentum of from largest accessories, parts, accelerated GMV full Motors, to QX, quarters sequentially and raising consideration in category as for has P&A, among at are the investments we or points shoppers. once marketing again categories. P&A to and growth aimed multiple climbing a believe awareness by in what this rates fitment all funnel as largest markets. well market

authenticity leaned support grow program particular guarantee focus healthy millennials meaningfully a focused in QX, we accelerated on our categories, goods owned refurbished in luxury our Z. Gen double-digit a of Growth media recently outperformance. contributing category In growth to to earned and awareness into our of and paid, with

perceptions has campaign improved trusted items. this for place a started, has it eBay ASP of just high Although shop as to already

in down cross geographic buyers chains Now favor pressures. GMV sales at in U.S. QX. to among border versus the quarter, and accelerating our over did roughly categories and strength imports our driven organically basis. looking by business X X% headwinds overall lapping supply strength a domestic moderating by focused on in global prior Diminishing QX, in U.S. trade was points

GMV outperformance basis, as particularly declined benefiting by trade, in from on sequentially, categories. within P&A focused robust roughly our cross-border well X X% FX-neutral as points International other accelerating an

growth stable internationally. macro quarter-over-quarter U.S., business notably remained conditions and of key relatively e-commerce outside weaker Although appeared the GDP like indicators

Moving eBay XXX ending business, to ceased and XXX shopped million Turkey months during XX buyers buyers M&A buyers. the active recent on in March. trailing July. We last active operations excluding had where active million our we buyers, from

buyers Excluding sequentially. million less active than these impacts, were down X

initiatives driven buyer P&A. and continue by We buy account active stabilization to in reactivation strength in particular our see

buyers In QX to for make GMV improve. in stable patterns at sequentially XX% XX million relatively third to buyers roughly on up remained buyer while quarters. time and groups in for positive on spend $X,XXX approximately growth the growth of between the positive aggregate, straight new new continued modestly buyers average, quarter, year-over-year annually. first Enthusiast and buyer eight as eBay Enthusiast reactivated was showed migration

including revenue. revenue to by growth of Net point M&A a X%, currency X accelerating FX than year-over-year, neutral Turning Total growth. was represented while neutral X QX. $X.X points FX growth, billion revenue organic of to reported X% headwind more versus was

Our XX.X%, basis over points roughly up XX was XX but rate year-over-year. take points sequentially basis down

have currency, risen basis roughly our represented rate impact as headwind a take points. of quarter-over-quarter of would XX Excluding the FX

of take eBay points program financial International take the to services. drivers terms sequential the rate, aggregate Shipping M&A and QX. contributed of recent was rate, and our Managed accretive basis In in take rate payments sequential rollout by to driven XX roughly of modestly new our

Our continues excess deliver ads drive growth. in of to results revenue volume and impressive business

quarter, revenue while the product, with Listings This volume than XX%, growth first-party quarter. driven optimization Total emerging during like our by advertising XX% more products the ads Listings. performance was grew healthy Promoted by advanced and Promoted grew delta points for paired and straight external improvements third standard within in XX outpacing

year-over-year monetization rollout of pressure X.X was profitability. efficiencies. as by volume in margin down were and QX, Non-GAAP modest Shipping were Gross to XX.X% International eBay X.X margins points from roughly operating roughly of deleverage Moving year-over-year. the flat point offset

hire in the in as on support innovation rose marketing marketing talent and product a percentage continue X.X focused Product QX, of categories. platform. Sales investing full to year-over-year to as X funnel our by development to point we rose revenue and by accelerate we over continue points engineering and

deleverage. and non-GAAP M&A, from recovery by rose QX, a per earnings generated modest $X.XX driven point, of our $X.XX, of share by up We per portfolio. in a count share delivered X% earnings share X aided from Our reduction higher employee investment roughly volume year-over-year, benefiting G&A in We our X% in equity expense spend GAAP repurchases. by

$XXX in lower capital sheet Free our QX capital to flow to cash million Turning earnings. beneficial allocation. balance offset grew XX% cash and as working items

Our following at and in of with and under ended $XXX of and shares as billion remaining non-equity current repayment roughly $XX average debt $X.X QX $X.X position quarter authorization. approximately price investments repurchased we of robust billion during cash billion, roughly We balance remains have billion gross the a our January. an $X.X debt $X million buyback sheet of

We cash quarterly paid of in share. $X.XX million a $XXX dividend March or per

Our portfolio on our Slide detailed is of earnings XX investment presentation.

Our equity Adevinta This billion quarter. $X.X our driven at primarily value were end at investments shares. and represents in the the the warrants an recovery increase valued of in over sequentially, by

Moving our outlook. on to

anticipates the forecast an billion FX FX quarter, point. X.X over X% representing billion, negative neutral we between of to GMV growth and and reported For GMV This second negative headwind $XX.X outlook between year-over-year. $XX.X X% organic growth

to expect X% X% between revenue representing growth and $X.XX billion, $X.XX We generate year-over-year. between organic billion FX to neutral

non-GAAP $X.XX, margin and share per And and EPS representing non-GAAP between We year-over-year. $X.XX XX.X% we fall negative earnings operating to forecast between positive X% and XX.X%. anticipate growth between X%

negative range GMV quarter-over-quarter guidance QX growth On of neutral to implies X%. negative our X% a basis, FX total

continued is challenges prudent around believe the Given persistent macro it we uncertainty. prepare to world, for

spot observed the XXXX, plan our that from second to impact the sequential our continue in of XXXX we the guidance excluding GMV range. half currency, roughly GMV approximate around in we of trends business First, growth QX assumption the starting

investments seen increases remainder the foreign also incremental strong and we've of product as U.S. in driven this spot majority on the full on returns outlook versus expenses change weakening than or X inclusive to the investments a funnel mid-single revenue. by by revenue, digits year-over-year GMV expect currency, the of we of driven year, The of is on which grow expenses, is marketing the encouraged prior of approximately total dollar full in cost delta The impact and by our more basis. we're points the For by year-to-date. non-GAAP

XXXX, the advertising We excluding continue within continued to to by of primarily rate organically our expect FX, business. driven our in take impact momentum expand

the dollars Notably, expense the factors quarter, corporate last to our impacts aggregate margin basis one-time of year-over-year as rollout noted compared eBay QX. one-time in positive to approach are eBay M&A represent XXX expect our As by approximately expected we operating P&L. International These headwind generate from profit contemplates forecast and a operating Shipping. XXXX of we Shipping XXXX margin International program our to points and to recent in percentage operating

they passed costs are The for margin a be in with they for line predictable facing eBay. with almost shipping expectations been to program variable, entirely to have since this customer through date. can fees And

net growth efficiencies forecast look inward than OpEx Our from savings million we of more is program cost structured for business. of cost expense our in $XXX our as

baseline the FX, should minimal our noise reported for expense quarters of from and a QX With other XXXX. income remaining in be reasonable

continue estimate will tax our XXXX. throughout XX.X% rate We to at remain non-GAAP

year. a currencies for from at impact Lastly, prior hedging to point we hold if to minimis GMV de XXXX foreign gains today's point non-GAAP rates, EPS lap FX were X to in represent the X a would headwind and as

closing, for In a EPS strong for and global environment expectations dynamic was GMV, operating exceeded for eBay. QX e-commerce. another We amid quarter revenue

Our focused marketplace like areas while continue in search our to horizontal categories innovation Shipping growth our supports International in underlying and overall. business, drive

buyers consideration has in approach focused and fueled categories. to funnel and growth and reactivated Our in new awareness full improved disciplined marketing

$XXX Advertising dividends impact towards support shareholders by sequentially. straight to the steady progress our repurchasing reducing points due quarter gains. to outpaced than GMV to adoption growth continues of $XXX more free first-party to cash and be ads flow, and our through million for XX reduced continued net develop generated returned communities, We our we that robust optimization million on planet. third are share we as count importantly, and the continue And programs making

to sustainable, our I while macro short-term excellence, navigate continuing towards on thank business enabled our operational us for continued growth. has which their drive to employees challenges like long-term focus to would

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

Operator

Nikhil Bernstein. [Operator Devnani Instructions] Your of first line question the with from today comes

Your line is open. now

Nikhil Devnani

you both taking Thank questions. for my Great.

around couple a had I and expenses margins. So

digits. like growth changed looks X% spend now Thanks. to outlook, what's increased more provide maybe specifics I'll mid-single that's on bit margins around it this and And expense expect you Could had in year outlook more? then from you I XXXX some little second where after. a question that ask to the that now about On a

Stephen Priest

here. to speak thank Hi, question. to and Nikhil. Steve Great for you you, the

fully point at As the that the year due a uncertainty commentary me this full not the But you we are color to of more regards call. current guiding than with you aware, on macro shared the bit environment. give little the of to expense we're let

Last for that targeting M&A we when factors, quarter, amount talked of the total onetime eBay X% a with year-over-year we to about, Shipping, the rollout expense markets, expense about increase as growth. we contributed talked talked approximately significant and of growth XXXX like International of

provided corresponding continues both guide digit impact of we've have majority outlook. dollar the for obviously, This FX seen today the exchange the delta The that with mid-single the on will year. that and prior impact GMV weaker positive current And U.S. accounts assumes for we we rate remainder the you revenue. the of versus

first of we with incremental of performance are addition, we quarter, during execution pleased had us capacity providing line In is the investment top levels the the quarter, that the for XXXX. with

seeing you're growth. long-term a because the strong this And as aiding to forward. invest sustainable such towards on go investment getting we continue return towards so drive really our is in we're business And us

Nikhil Devnani

rate think, I take you tailwinds picture the some Obviously, big there's lot has M&A, a into shipping. out also on maybe of But Thanks. further. changed look as have between well. a And Business just payments, margins mix, important reinvestment you as happening. one

the So Thank we when for about of or profile as differently I should you back, it we mean, a should EBIT is you. kind this right margin long-term it business? think step approach being still now? structure what low-XXs

Stephen Priest

guided long-term As you we can imagine, haven't Nikhil, margins.

that I very ultimately a the about in encouraged is both I'm function the momentum, in. business. ultimately we thinking we the eBay, the cash from ultimately coming by net go as operate macro that say earnings by environment will think 'XX, of I things The which over is be we're earnings of would strong power underlying free impacted flow what improved driving and GMV margin

for the basis M&A in to of in As lean XXX on short term the we said, enables we’ve EIS income earlier, drive we’ve operating we’re program. leaning cost points about and growth impact above where to reinvest recent And talked the the for will ‘XX. XXXX. about, and That long-term that eBay. And we’re of going out program, the track said that will us, through drive million for in structural as drive long-term to into as laid slightly the increases on business continue dilution operational drive margin I efficiencies in well sustainable $XXX we’re eBay and

Nikhil Devnani

Thanks, Steve.

Operator

line comes with question of Your next from Sheridan the Eric Goldman Sachs.

is line Your now open.

Eric Sheridan

marketing made Thanks of so level just lower marketing what avenues back to you of a the multi-parter maybe sort is delivering the the everyone of higher questions ROIs? on of greater those some to on are that on wanted taking deploying spends much team focused one theme. the and comments Can for hope us well. you granularity give I come category versus and spend,

outside to qualify and buyer evolve spend in, think spend And the enthusiast Thanks the be should how it about so what and sort growth? Is Is when behavior? thinking time the most that monitoring might multiyear ahead be how about thinking look it that it the should to of trying spend in you on return that be spend? How we much. over return we the enthusiast do frame? on from what measuring years should at be a buyer will we that

Jamie Iannone

you When at a of at seeing market X-point marketing category of point by to growth. focused funnel I'd over first where like rest the right is of we're really outperformance categories look we're seeing In quarter, we're what this growth these largest the I to, thing and results Eric Yeah. the areas the date, types we're the business. Look, investing rates which we're in, of full look there. P&A, our at excited is the where

think buyers active in as well enthusiast and I the strong. quarter buyers were

And For first for we me example let buyer eight new was marketing. And growing ties into an straight an our quarter, and quarters. reactivated aggregate buyers third the time growth new how the you of positive had give that positively. in

P&A, large the had buyers faster double-digits in reactivated marketing campaign, where funnel new than the this So quarter. marketplace grew during full overall and we've actually

bit shift full takes and So optimization this lower evidenced along, to we’ve the time. moving creating that been a for us off has by business just consideration, which outperformance. healthy the a of results spend we’re great that seeing little what that of as really funnel, we’re long-term been which about is from talking category all seeing are more in a driving focused But funnel are

Operator

question comes the Anmuth from Your JPMorgan. Doug line with next of

Your now open. line is

Wesley Sanford

Hey. This for for Doug. Thanks one Maybe Steve Wes question. for for taking the on is Jamie. and one

think gross thinking go headwind than think than we on this were gross you quarter anticipated a originally rest through of little and it margins about bit we rollout. I you EIS should faster the how the had roll sequentially Did were the margins year? the of a bigger out we as

a doing And a space. separately and eBay but then collectible for of lot Jamie what kind maybe had little you're Live the one been in talking around

looking trading comics cards to So Thanks. more learn bit little the you're -- a about to go and after what just hoping was how looking beyond ahead. category

Stephen Priest

for quarter. very we pick program I'll the our global sellers here. this is EIS the of hub obviously Steve global fully question. on the up the the for we're ramp. -- existing the Thanks question. buying first stage Yeah. at And early ramped

a they we'd XX quarter. with line around terms point gross basis gross the your about in margin impact exactly expected are In question in margins, of on what specific

also us generates gross go The momentum although we the margins and our important, program because it's line for this that dial account and what good the an Shipping. has EIS, on for it strategically costs forward, it you up on for about depending as way we of ability the gives to thing International charges eBay great it bottom the impact incur

On structure a margin expect business. the program longer-term get as core accretive year, overall for quarter, overall for And approach of will the fourth to year. this profit at end the basis, the it our we be we to to the

Jamie Iannone

luxury expand in QX jewelry. QX. did live then Yeah. we few hosting some experimenting something with into it is handbags and last We year, a And QX on with commerce, for with and events pilots of began throughout experimenting this it

commerce over XX eBay discovery to central specific We events of or events. point about live receive and and collectibles and luxuries. hosted subscribe across a with $XXX,XXX now we of updates in-event notifications QX, means which upcoming channel also entry This in can for created GMV Live year, users our events hub a

and at we from with we're handbags and started to these for technology, exciting and so And collectibles. great thus initial results We're the and learn but this seeing hosting XX,XXX In auctions, end of are March, like getting first going X,XXX general, seconds to engagement that our think experiment XX continue far. buyers. standpoint pilot short

Operator

from comes MoffettNathanson. the question of next line Your Michael with Morton

Your line now is open.

Michael Morton

and a Thank forward? in going business bit seeing we And to you. starting the buyers? also could the improvement investing active you question. dig color the on the the deeper grow for I clearly maybe could level us the if Thank inflecting, the maybe into could you little it be was rate buckets for how wondering any you're returns And spend you're buyer feeding on there. give and decline

the Anything And in. all there's who behavior new trade around in question seeing Thank you're have macro that would new? products, then Any living purchased down, environment is, around might your just we're be great. coming you. changes this luxury buyers second

Stephen Priest

off and the perhaps. here. then I'll second up the the can Thank pick you one, Mike, Jamie question, for Steve first Michael. kick with one

identifying the then and turning and it's regards Specifically with where would to the you approach investments products want them them delight expect, are to full customers building going, to about what terms funnel marketing. that in our as of

forward eBay. investments products the that we're on tremendous taking so really is developing And

really parts couple full Think prepared the we're we've last seen fact in growth on about the comments refurbished Jamie's around accessories. pivoted we're to of fruits rates market double-digit of that the to quarter second at the the our and In We're business result labor. spend of you've for making. the growing investments as that high seeing marketing funnel. our And a balance regards years, with

reactivation of them they're the result and buyers at reactivated we that we're terms categories again, or buyers we're levels going forward. as what going the platform as our But forward a to eBay, the a or we're coming the our frequency terms obviously with buyers of the enthusiast and with in spend There's that of, between is call correlation eBay new focused seeing NORBs with back of in coming to good where of investments what our delighted we're making. our

on pick Jamie, you up perhaps question. the luxury

Jamie Iannone

Yeah.

focused on luxury Just and and with our line general, categories our business fashion in aggregate accelerated in overall.

We continue to et cetera. expand brand coverage on the platform,

of for little platform. we’re the really last kind which quarter, a made that what volume to some, bit up about seeing pressure ASP of I by on the think So said very is similar

resilient can that are platform because this shift much to they standpoint. In And helped make environment ones has us the focus general, on more people values. us our that really for from that and looking non-new-in-season in get our

Michael Morton

you. Thank

Operator

with line Your Mathivanan Wolfe next of Deepak Research. question from the comes

line Your open. now is

Deepak Mathivanan

taking Thanks Great. the for questions.

on investments few first the support program accounting profitability implications quarters? How EIS, this that's margins, the elaborate driving on from about kind can you this think understand of initiative? improvement on do So we the you over but to next long-term what's the required

was to And growth. It these on and basis Thank categories should how so launched that the then maybe quarters? provide or about the you the categories maybe to for of sales where can then same-store the how total that nice back much. watches initiatives earlier nicely so like P&A handbags, on? few wanted sneakers, can of some currently kind strength in sort focused next see you categories. we so trending color a of see to the of outperform we on sustainability But some certain you think luxury the go And

Stephen Priest

No Deepak. problem,

benefits both of So really benefits. eBay got Shipping, financial sort strategic also but of great good in terms International

of take a XX% are on trade. take sales the the we for the back, X.X cross-border eBay. if for that trade, global So platform Shipping which about International I program, came eBay step available on And think place about about our listings billion our into as of accounts XX% only

inventory certainly the eBay? lens global so eBay And international buyers of we on increase Shipping we the level do to how the of through And looked facilitates that.

The much over gone an from overall us beauty It process. of a greater principal. the program is gives control the to that have agent we

So contracts in also with scale of through through and it to the enables of and terms much greater shipping forward. it eBay, cost levels us, shippers. our pass trust, for of in leverage us And the enables any program better sales increases us the It drive enables to size to the sellers. to particularly that go

wider comments, that principal And and net provides prepared there's it's previously, change eBay, revenue expect -- to good revenue. would the so to and over as accounting Jamie, our for good you. it dollars it an recognize we in point. a the said quarter the But earnings profile it both was because as And mirror said, by relationship growth to of for business the at gross we we of where cost. margin you agent fourth the the

Jamie Iannone

Yeah.

about for already Just stable than really motors, kind us. was I'd the focused happening growth on luxury growth the I percentage kind is we us about categories couple already One strategy. for being accessories hitting sooner vector outperformed rest and the points, but definitely seeing it, parts talked X a business couple focused of of we've rates things. market we're of of so the thought. of is, talked impact categories, overall, say of a of by one, standouts A

for refurbished. the maybe highlight is just one you then And I'd other

to focused backing continuing two with easier new think One Our proposition to Cyber. Refurbished the And with off that's healthy that a provide refurbished trust of is business where in grew That's up category in for small guarantee. businesses and that products QX quarter. bringing had largest coming and in we're two-fold. we we with really great a our the is brands, double I Refurbished compelling. come their And making digits value the week it pretty process we're on invest ever is

said actually the kind a than a trust really that lot we're that perspective the launched in We about accessories, growth good these there, the take movement impact And really great a seeing just just from that months equation, parts but really and we happening to I'd even thought. we're rates we few on have On of always things changing Fit already. seeing consumer Guaranteed the couple I've of probably quarters ago. of feel sooner say

New the on buyers are marketplace. the digits than buyers about talked growing platform double in and overall P&A, that faster I in So reactivated the category

buyer that eBay. So parts it on like makes We'll new in innovations excited the P&A. do done to in of to roll going And me categories, not really for future really continue relevant what accessory investing. we're are we're just other out for that and

Deepak Mathivanan

much. you Thank so Great.

Operator

of from Your Barclays. next question comes the with line Young Trevor

open. now is line Your

Trevor Young

Thanks. Great.

of on on questions First, just one the dovetailing luxury. earlier

that and versus category? might that two to some bigger eBay trying are competitor luxe things understand what Just are picture, focused smaller the like buyers to or the three like eBay what on win. of that sellers bring helps platforms Just

platform And Is it's X then on different over a garden, think but of top that into the hasn't category, and next home opportunity migrated the focused. I five really the still on an drive those out more within, inventory to two enthusiast curated category a is years really pockets carve or selection some that just therefore unique to buyers? of broad to some and too maybe three

Jamie Iannone

Yeah.

of say is the one scale. I'd the benefits eBay, So first just on

in plus markets to that XXX luxury coming with the different XXX standpoint. products million eBay, they're from around buyers available when So on world

So that's a massive advantage.

of have authenticity table we off amazing makes guarantee trust our items. destination eBay an the takes across basically that buy handbags, to those Now it and

I'd say really fees third competitive is, The we that standpoint. thing have from

products, this with So and we something buyer to live to like just it's to of a really if who our that. bring I you're commerce was looking attractive. very in talking that one event demand the quarter handbags results by was to able those excited sell the and sellers did were past us

have benefit eBay on is across unique The categories. that other we

other and categories but from handbag in So just we're buyers across buyers bringing on bringing platform buyers handbags. them into the not

handbag buys us categories other on to the $X,XXX they're for going end a business, then platform, platform. handbag So in in handbags, average our in but advantage spend the unique and for over really $X,XXX that's going spending $XXX, who the buyer they're up a to

your of P&A. at questions garden, which of being to what Day, billion, that XX terms Investor I home over said go another, being five on fashion and back and categories garden I'd them, one is In are we have home

we date results. over to every can and we said the have, time I've taken we've was mean, on category P&A the to largest that every category we seen so really -- apply we've And the I playbook one that And believe platform. good on that focused

get what announcing largest seeing to competitive ahead is and, in where our we're in we're even categories. going believe like don't is fact, we for applicable But we this to of playbook P&A So reasons.

Trevor Young

That’s helpful. Thank you, Jamie.

Operator

Your line next Stanley. Schenk Morgan comes from question of Lauren with the

is line Your open. now

Lauren Schenk

Great. Thanks. if And can. I two,

base And your Is side. thought that very just slight us consistent portion. there growth U.S. encouraging is up. expense if specific expense a the that would small percentage to of not imply dollars? relatively what could way the a it's think that with given secondly, I in you and much. And on categories? then reactivated that be it about in is so, one decline that I in Just help see Thanks buyers, last customer Is mean, isolated just But is does new quarter, as denominated any well? churn?

Stephen Priest

our probably out out triangulate we the half disclose question. that. specifically refer that sort business of fact about to can go We our the overall to the the point. of shape I'd don't mix you back the International a generated We the don't first obviously global disclose the up the Jamie, Hi, and half dynamics and impacts roughly business, Lauren. talk currencies. from about overall of into. on overall of pick currency of U.S. think I'll perspective is the business you of of But of the which

Jamie Iannone

is to now. macro way buyers I and several say we’re Lauren, metric, is Yeah. I’ve the would about that near-term the we’re would in the right our in been would what expected seeing here exactly that we see buyer pressure for we talking acquiring count we it thought we stabilization active that be. I some on based where see exactly but thought quarters that’s environment,

XX% the platform. We’re them GMV enthusiast the and into building are of buying buyers, on and turning enthusiast buyers our

more that excited stabilization. we’re saw we kind of so change And a in modest

I seeing what And P&A new it platform. on we’re to see with buyers talked actually buyers that about want encouraging reactivated and because invest, when also we the really shows we stats the with is

we update you, what’s So as the standpoint, to happening buying great things we’ll change but continue on about from actually side. that feel really

Lauren Schenk

Great. Thank you.

Operator

Ju Stephen Your Suisse. Credit next the question from line comes with of

now Your is open. line

Stephen Ju

Thank Okay. so much. you

a talked you tool. are to a about profit think use the out of the But year. there there promotional the that center for Shipping case companies end of I as lot by be International hand, So shipping a other savings the on

incremental So of run do do way or to opportunities shipping you seller costs come maybe the some to to you up to discounts think an are eBay? these on there as for to the same promote tools underwrite aid their Thanks. with listings

Jamie Iannone

pass them we've variable, to considered through standpoint. the Look, give we we can of is shipping so as that those Yeah. the always expenses scale. benefits What seller from

to So scale when advantages what through discount eBay's walked at your label versus you're When do you work that getting your able and you an things in in you good a shipments to those able look as buy you own. and eBay tried to on manage just with being pay very efficiently. would from providers standpoint if example, being

And so to benefits our this. scale like to bring we're to going continue

This one opening that is up inventory. really about

seller to be shipping that almost to wanted invisible in they're we So geography the internationally. the based

I in sitting to but shipping we of example it I care I'm if to Manhattan, take a ship about that's Spain, actually the can feel because everything product So Albany in talked will I'm going background. product is, a like the

in cross-border. do really of that we So XX% about that it's GMV

our worldwide frankly, really we casual platform, it's, up such inventory XXX weapons As Steve is for in of even is unlock. demand because you creating seller this countries. said, available about less one the on to borders. than the And open powerful And across scale a is of massive half eBay that as go of different

about similar benefit of of scale ads sellers. to the It's us kind think EIS our payments. or So for our leveraging the

Stephen Ju

Thank you.

Operator

Bank. Deutsche line question Lee next the of Your from comes Horowitz with

line is Your now open.

Lee Horowitz

Great. Thanks. one maybe ads on on if I could. the One macro,

either sort have all, international U.S. you recent markets, more in or been reaction less the versus wake shift of crisis? that would consumer in there's So patterns I at any the banking different guess if how, the And pronounced seen of if be helpful.

forward guess CPC-enabled say, from across of were maybe quarter. would far as out how the the CPC how here, driver of you runway the place the I do differently, Advanced think able for growth platform? to terms on you in you services of Listings Jim, about here? a ads you in Promoted side And advertising When into more from ad ads growing you entire about the talked the which eBay number see the business. then load are of said CPC-enabled much in path journey, you rolling

Stephen Priest

our the talked the Hi, for guide the the pick we've first macro I'll the of extensively about up second. earnings, question. macro on perspectives impacts of quarter Obviously, Lee.

the in the because macro any geographical awful and you dynamic seen of change started quarter underlying events end we Europe and last get Ukraine, year first haven't in of as the impacted the came the to We as recall, into environment. in war a caused energy change perspective, discernible than From the through the overall and Obviously, pressure. and XXXX. through U.S., to go sooner the of spend start behaviors. environment. no discretionary particularly the macro some consumer prices that's gone levels discernible of But differential in lapping underlying We've

Jamie Iannone

on business Lee, of higher quality QX, And I'd it data. site. is, Yeah. our us more on [indiscernible] impressions CPC-based the the same PL our present model, That GMV on training we what impressions the helped in updated CPC-specific for Advanced number and or say

to CPA. results, available to previously ad expanded of second placements which the CPC row only was search within We also

excited early innovations. So still We're about development. these it's in CPC our

evaluation think in innovation that that at that numbers targets. quarter-after-quarter also drive we're Product and of to to Advanced CPC. track technologies with a happy Listings of But continued CPA built Investor this well We us product the real-time the is of component terms we Day. some And big is the we between would and those say new towards outlined on products helped I do that new what quarter better kind

John Egbert

last do Operator, can we one question, please?

Operator

Certainly, question Arounian from comes line with the of Citigroup. your Ygal last

now Your open. line is

Ygal Arounian

for Thanks I'll then more on One in. guys. just and squeezing ask the Hey, maybe me about advertising side buybacks.

buybacks, the we've nicely on. coming the legacy But being Is changed? forward outlook pulled some has products macro just opportunity our and So drive of it So like there? And are spending advertising then how any extent, try it? to advertising any the there. environment of moving for of It guys kind Just your or on in expectations. of other newer use on a leading expectations And coming of certain about ahead on nicely the obviously, really is needle products ahead to GMV. to color incremental the rest the more maybe year, to more sales? thinking looks got it's color the on you sellers accelerated what's

Jamie Iannone

in Yeah. product optimizing Look, once products. by listings we're more XX advertising driven again points, standard and what volume both outpaced our advanced by percentage across doing

that's have long of I'd nice ahead and point continue One to we advertising. things. products, we growth Listings think in Express advertising couple runway new see to for a continue a Advanced. External is, quarter-over-quarter us of And We our to Promoted

say set we're seeing sellers. we I'd sellers thing And is good ROAS second our that where The rates. variable for a can have their model really

they they're seeing, our they start once that spend industry ad products, on eBay, it's more return importantly, And the increase. you when standards. their basically to seeing the at at that ad on relative attractive are using look we a get when So very look ROAS sales can double-digit

incredibly and out. to keeping to before, buying So towards job doing like we strong making we healthy executing just business. the of as continuing goals feel like the we're I that product on ads conversion a easier use. feel and while finally, nice track our balancing laid and the drive experience we're that And said we're We

make our built continue sellers. quick products. built product new to product a So build quarter-after-quarter, a we've new setup, use. reporting up easier we to we've Most to CPC-based recently, for for advertising that tools our And

where potential and by So excited that's we're we ahead. are the

Steve, take the to part? do want next you

Stephen Priest

say flow build, do is the I because and ability because framework as free [indiscernible] of our of our us see financial and returns capital. partner model that best of investing strength for business as that say the the of the the drive of cash both to long-term would business eBay first invest the terms growth is shareholders. we in long-term opportunities Hi, that model priority, Yeah. the Ygal. in return to we and gives is The always we What in through strong the to the beauty buy,

know, through dividend. returned addition first to buybacks $X.XX in you million investors As in the to quarter we $XXX the

but of We be capital approach. guided to rest we about haven't year, continue our balanced and returns will the the the thoughtful for

we'll we'll both in and have and then the to any We beyond returns. that, opportunistic of that committed continue to further magnitude dilution capital timing through do offset be And year. the

Ygal Arounian

you. Thank

Operator

call. conference Thank today's concludes you This attending. for

now may disconnect. You

eBay (EBAY) 26 Apr 232023 Q1 Earnings call transcript