eBay Reports Strong Q1 2025 Earnings, Outperforming Estimates
eBay Inc. (EBAY) announced its first-quarter 2025 non-GAAP earnings of $1.38 per share, surpassing the Zacks Consensus Estimate by 2.99%. This marks a 10% increase year over year.
Net revenues reached $2.58 billion, exceeding the Zacks Consensus Estimate by 1.49%. This figure represents a 1% rise from the same quarter last year, and a 2% increase on an FX-neutral basis.
eBay’s first-party advertising products generated revenues of $418 million, up 13% on a reported basis and 14% on an FX-neutral basis. The total advertising offerings resulted in revenues of $442 million, accounting for 2.4% of gross merchandise volume (GMV).
Year-to-date, eBay’s stock has gained 10%, contrasting with a 6.4% decline in the Internet – Commerce sector.
The total number of active buyers stood at 134 million at the end of the first quarter, reflecting a 1% increase from the previous year, although this fell 0.10% short of consensus expectations.
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Performance
eBay reported a total GMV of $18.8 billion, reflecting a year-over-year growth of 1% on a reported basis and 2% on an FX-neutral basis. This GMV exceeded the Zacks Consensus Estimate of $18.5 billion.
The GMV is divided into two segments: U.S. GMV totalled $9.06 billion, representing 48.3% of the total, and rose by 1% year over year. International GMV was $9.68 billion, making up 51.7% of total GMV, with no year-over-year change.
Operating Expenses and Margin
Operating expenses were $1.24 billion, up 1.71% from the previous year. As a percentage of net revenues, operating expenses decreased by 30 basis points (bps) year over year to 48.2%.
The non-GAAP operating margin stood at 29.8% in Q1 2025, a decrease of 50 bps compared to the prior year.
Balance Sheet and Cash Flow
As of March 31, 2025, cash equivalents and short-term investments amounted to $4.79 billion, down from $5.89 billion on December 31, 2024.
Long-term debt remained steady at $5.75 billion compared to the previous quarter.
Cash generated from operating activities reached $787 million, up from $677 million in the previous quarter. Free cash flow for the quarter was reported at $644 million.
During the quarter, eBay repurchased $625 million worth of its shares and paid dividends totaling $134 million. As of March 31, 2025, $2.7 billion remained under the share buyback authorization.
Outlook for Q2 2025
For the second quarter of 2025, eBay anticipates revenues between $2.59 billion and $2.66 billion. On an FX-neutral basis, revenue growth is projected to be between (1)% and 2%. The Zacks Consensus Estimate for revenues is currently set at $2.59 billion.
The projected non-GAAP operating margin for Q2 2025 is expected to range from 27% to 27.8%. GMV for the second quarter is estimated to fall between $18.6 billion and $19.1 billion. Non-GAAP earnings per share are anticipated between $1.24 and $1.31, with the Zacks Consensus Estimate at $1.26.
Market Position and Comparisons
Currently, eBay holds a Zacks Rank #3 (Hold). Notably, several other stocks in the sector are ranked higher, including Carvana (CVNA), Alibaba (BABA), and Canada Goose (GOOS), all carrying a Zacks Rank #2 (Buy).
Carvana’s shares have increased by 20.1% year to date, with earnings expected to be reported on May 7. Alibaba’s shares have surged 40.9% year to date, and it is also set to release its Q1 results soon. Meanwhile, Canada Goose has seen a decline of 16.7% year to date, with its fourth-quarter fiscal 2025 results anticipated in the near future.
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein represent those of the author and do not necessarily reflect those of Nasdaq, Inc.
