EBAY INC Q4 FY2024 earnings call

• Full-year highlights: Ended 2024 with three consecutive quarters of positive GMV growth despite global economic challenges, full-year GMV over $75B; focus category volume grew 5% in 2024 and accelerated in Q4; C2C experience in U.K. overhauled with improved GMV trends in Q4. - Innovation: Enhanced core AI platform launched first proprietary large language models, boosted productivity in key areas, improved search; majority of sellers using Gen AI tools, and exciting AI-powered experiences for buyers like Explore and Shop the Look. - Advertising and Payments: First-party advertising grew 16% in Q4, ad revenue near $445M; global strategic partnership with Klarna for BNPL solutions in Europe. - Sustainability: Set 2045 net zero carbon emissions target validated by Science Based Targets Initiative; 2024 sourced 100% of energy for eBay - controlled offices and data centers from renewable sources. - 2025 strategic priorities: In relevant experiences, continue innovating in existing focused categories and extend to new categories; in scalable solutions, drive growth in advertising, add new payment options, scale seller capital offering; in magical innovations, build on core AI foundations, train and deploy larger and more sophisticated models.

For the full year, GMV grew by more than 1% to $75 billion. In Q4, GMV grew by more than 2% to $19.3 billion. Focus category volume grew 5% in 2024 and accelerated in Q4 to over 6% GMV growth. Trading cards volume accelerated to healthy double-digit growth, being a large contributor to GMV growth in Q4. P&A was a significant driver of focus category growth, with Q4 GMV trends consistent with prior 2024 quarters, and global P&A inventory grew double digits in Q4 with over 700 million live P&A listings. Advertising: Total advertising revenue grew nearly 12% to $445 million in Q4, with first-party advertising growth accelerating to 16%. Payments and Financial services: Announced global strategic partnership with Klarna to offer Buy Now Pay Later solutions in the U.K. and several new European markets, with early results showing average order values roughly 3 - 4 times higher than the average basket size in these markets.

• Q1: Expect GMV between $18.3 billion and $18.6 billion, revenue between $2.52 billion and $2.56 billion, non-GAAP operating margin between 29% and 29.4%. - Full-year: Expect low-single-digit GMV growth on an FX-neutral basis, revenue growth modestly higher than GMV on an FX-neutral basis, non-GAAP operating income growth relatively in line with revenue on an FX-neutral basis, considering risks like tariffs, calendar considerations, etc.

• Macro-economic challenges in the global economy. - Potential impact of tariffs. - Calendar considerations such as lapping the extra leap day in 2024. - Continued macroeconomic challenges in the U.K. and Germany.

Q: Size eBay's position and exposure to changes in de minimis shipping and specifically to China.

A: China makes up approximately 5% of total GMV for eBay, overall China is a little less than 10% of GMV, three-quarters of Greater China volume is forward deployed, and about half of the remaining is managed through Speedback to help sellers navigate complexity of tariffs.

Q: Thoughts on the big picture of e-commerce discovery funnel with the chat GPT operator.

A: Were one of the first to collaborate with OpenAI, focusing on having differentiated inventory and allowing sellers greater exposure to diverse buyers, seen in preview with OpenAI and partnership with Facebook Marketplace.

Q: Break down focus category growth in 2025.

A: See continued momentum in focus categories, core categories have gotten stronger, will continue to invest in existing and new categories, non-new in-season will grow faster than new in-season.

Q: Details on Facebook Marketplace partnership.

A: Partnership great for eBay seller community, brings broad array of unique eBay listings, excited by potential but not commenting on specific economics, still early days.

Q: Take on the overall health of the consumer.

A: Demand in U.S. more resilient, U.K. and Germany relatively weaker, more affluent customers' businesses perform well, less affluent consumer pressured; momentum in Focus Categories built on strengths and plans for 2025.

Q: Quantify benefit from AI, top-line or margins.

A: Models in 2024 100 times larger than 2023, over 10 million unique sellers used Gen AI features, created well over 100 million listings, 90% customer satisfaction on selling side, 30% improved accuracy on core ecommerce tests at smaller model size and lower latency.

Q: Features or initiatives working well in U.K. and roll out more broadly.

A: Magical Listing working well globally; C2C approach in U.K. performing better than expectations, managed shipping in U.K. focused on creating easy experience for sellers and buyers, hope to perfect it over time.

Q: Advertising and longer-term attach rate opportunity.

A: 1P ad growth strong in Q4, Promoted Listings General was largest driver, see lot of runway with optimization and new ad products, AI-first dashboard helps sellers navigate advertising.

Q: Impact of Magical Listing tools on trading card selection and volumes.

A: Great for trading card category with seamless integration, better integrations with partners like PSA, making it easier to list and research cards, seeing strong quarter for collectible card games, expect similar tailwind as other categories adopt.

Q: U.K. C2C growth acceleration and take rate.

A: Similar to Germany, strong momentum expected to continue; bioprotection fees and managed shipping phasing creating temporary headwind for take rate, expecting take rate expansion in 2025 overall with advertising as biggest driver.

Q: eBay's position in e-commerce with investments and against competitors.

A: Focus categories growing at ecommerce rates, picked up share in 2024, core categories growing too, continuing to invest in new areas and verticals, unlocking bigger TAM opportunity in U.K. C2C, feel good about building on momentum in macro environment.

Q: Opportunity with Klarna partnership.

A: Partnership helps consumers lean into higher ASP products, drives incremental GMV, eBay balance example shows synergies with strategy, helps drive more buying behavior.