eBay (EBAY) 27 Feb 242023 Q4 Earnings call transcript

Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the eBay Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to John Egbert, Vice President of Investor Relations. John, you may begin your conference.

afternoon. Good for eBay's all Earnings Quarter us Call. Conference joining you Fourth for XXXX Thank

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

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

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

Additionally, our per FX-neutral share reflect rates share, all earnings earnings year-over-year reflect otherwise. growth diluted per noted prepared remarks amounts all unless in comparisons and indicated will

the and largely our end of fully we As October total QX have growth at organic rates converged. for lapped the acquisition FX-neutral XXXX, TCGplayer

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

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

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

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

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

returning today. long-term I'm of against our of growth. Good John. eBay of proud our you future reinventing afternoon, all Thanks, incredibly of sustainable enthusiasts e-commerce the everyone, us and progress to and joining in vision we for goal the for made XXXX thank

the Let's full go from few over year. a highlights

X% during organic growth on major for across pressure the our Focus XXXX, GMV roughly year. GMV markets, spending improve we of year-over-year saw category First, quarter in down resulting despite full growth significant macro and GMV each remainder we XX% enthusiast exited We stabilized business X XXXX of active by outpacing by improved our penetration. acquisition, and year-over-year. as grew our reactivation roughly approaching at X%, retention the buyer nearly counts points and discretionary

establishing including making for organically in leader over demonstrated billion, launch X% made offerings path support as and meaningful a expansion grew more pillars, Shipping. momentum and right strategic $XX tech, revenue of by continued resilient International we strides in strategy driven e-commerce. a towards to which us generative put have eBay investments eBay talent results AI has advertising, we in Our to the And of to our that have marketing on a significant our financial the building company. services first-party stronger, These

our better scale and accelerate last In it removing organizational to I'm and to begin execution we value service approximately that better contracts. order our shareholders. while involved This necessary reduce of simplifying delivering with significant workforce the growth This the to decision the aligns difficult back by but of goal, confident customers. innovation to long-term will our month, us for restructuring of announced changes layers needs X,XXX roles on expenses meet our workforce alternative in focused our business enable and

prior billion versus grew $XX.X volume gross generated We flat of in quarter. fourth the to QX, year. $X.X turning to nearly the Now merchandise billion. X% Revenue

the earnings XX.X% EPS Our non-GAAP of delivered of we resulting full margin in per non-GAAP share, $X.XX and operating $X.XX for was year.

of category X% growing category our Focus driver the focus points, third outpaced quarter. roughly by during significant GMV Our remained QX. X strategy growth underlying for approximately of a straight marketplace remainder the

steady as Motors, Parts continued mid-single momentum in growth the digits. Our the in held P&A, volume or in Accessories, & quarter,

P&A benefited Fit incremental Guaranteed programs eBay Our driving trust and and within last across retention buyer the have Germany, U.K. U.S., year. GMV

to in eBay our shipping measurable driven warehouses, for BXC multi-warehouse via accurate with millions uplift enables APIs, sellers sellers can these estimated some has sellers of to out purchasing dates from largest buyers multiple optimization a P&A adopters. of activate when rolling listings. manage conversion tools delivery more began U.S. that which early see and we QX, this During collectively

In delivery estimates eBay XXXX, broadly. to we plan across to tighten technology utilize and in more other onboard sellers categories this

in vehicles My being million led position has in to of more P&A section by than established Garage customers. Our XXX the active eBay saved

more addition In experiences, utility we are fitment our better providing to valuable customers. to drive for data finding leverage this ways to

mind introduced Features part auto offers For a like example, stay mileage. this top predictive AI-driven looking last quarter, auto help great value. for parts vehicle's based at on of we that for recommendations customers eBay a maintenance

key level done first momentum cross-border QX, work in on eighth our category trust driver launched Tokyo, Authenticity raising we've we center The focused the eBay focus the a trade. our in on In our the authentication also of and of Japan, primarily been has center program Guarantee marketplace.

Our high and wealth buyers fastest-growing confidence. of markets largest with center inventory from to categories a luxury is to most handbags into Tokyo world, is luxury and will currently global one tap in the goods exclusive enabling ASP expand brands our authenticating the world's Japan complete time. over of the other personal for

gemstones. with Earlier cover existing our this from program This Guarantee authentication expanded loose Authenticity month, product our X decades. coverage the Gemological authority partner, extends over a we of further within the America, for Institute to also trusted fine jewelry

in return to last similar largest vertical categories, We demand. approach a addition third as In our of made search, experience. consumers. pickup and needs of to by a our to to These overhaul playbook local and and we unique shipping country complete investment SEO the changes focus Germany, included year, measured language the a address adopted expanding label improvements significant recommendations, improvements German enhancements,

initiative map-based initial and by items based on trending intuitive an to points interface or up satisfaction versus introducing discovery services our XX through local recently-listed our easy what's our previous we We've NPS baselines. nearby and pick more in both and up. browsing Overall, January, seller In improved a new observed Germany has outperformed CXC customer further which experience, Germany in expectations.

growth positive launch. the sell NPS to Our digits as initiative buyer also following returned by double increased who buyers

items have relative QR CXC our reduce resilient trajectory. has millions quarters. local prior business made for challenging importantly, In has GMV environment in investments And These in XX% than more addition, dollars by of resulting to in our been made positive to returned enhancements in code Germany macro more growth hundreds unpaid volume pickups. helped technology significantly of e-commerce to negative incremental overall to the recent of where Germany, our growth

eBay language to our a buying, laid During our commerce using XXXX, commercial we groundwork immediately year, we capabilities became to we embed to further artificial fine-tuning After first the last accelerate experience and also improve from customer advertising others the AI companies open-source months, own LLMs proprietary selling, leverage on OpenAI the experience generative our began AI organization. marketing. technology the like Within large intelligence available data throughout eBay's and across found models few in ways infrastructure. and and

found These scale. number when smaller to capacity also of But LLMs cases, dimensions even generating last the expect our include listing better, we map could commercial well, operating year. commercial and fine-tuned such models certain cases perform parameters thus we more by of versus than of an operated and ambitious as across support To a end than some the descriptions. doubled QX, as or use road end GPU for at efficiently have AI LLMs and faster cost these LLMs more in XXXX,

This our allows LLMs pre-trained our capacity, nearly us existing of Importantly, of falls added scratch range combined worth GPU X this using from infrastructure, of within CapEx X% to develop budget decades' e-commerce investment historical with revenue. data. eBay's to X%

XXXX, more LLMs continue both be in services AI to powered a and leveraging on LMs, we'll internal to open-source take approach, magical. expect by While and hybrid selling eBay buying helping faster we and commercial more simpler, generative make

even e-commerce terms it most features, In X we healthy. used one of continue millions of AI English-speaking in listing the out we countries, currently experience of to by by widely date. The content of experience at CXC expanded and gen magical AI have tested to remain and descriptions is used already recognition rollout. to phase aspects satisfaction our through on item and being makes more photos XX% in product be remain to iterate categories to listing has titles, an seamless, to rolled image other basis. using on X% as AI suggest alone. acceptance technology our high markets. outside This features been rates levels, experience next which or magical the continues is top opt-in we've of sellers full of believe generative that Adoption above up users prefill sellers, our Customer it of customer-facing as our leverages Generative XXX% trends

rollout we removal remove create AI in reviews of products of this photos it tool available encouraging. completed our potential rave in make on on to has revamped the to significant sellers early -- AI feedback our our our leverages experience to their listing also a Last to We been cleaner, eBay. which excited conversion global across incredibly as from users beta received benefits sellers images on listing has background professional more quarter, background more This impact have marketplace, high-quality product noise the billions and see has pleased images. tool product enabled flows, the to from effortlessly images QX our can can I'm from customers. have tools are as

backgrounds. top a feature products of of show our images using product leveraging allows this, background This sellers' to on more make sellers swap alongside variety to even Building tool. now we're compelling AI-generated AI new generative their wide

on display a preowned For basketball you a example, of hardwood atop court hiking sneakers or picturesque Air boots your Jordan a could mountain summit. showcase pair

devices beta conversion. sellers currently feature and sellers tools in images testing I'm are of this these to X% leveraging with see their We excited and drive to product enhance more on iOS

our while Total XX% outpaced to revenue $XXX turning advertising strong advertising delivered another by million, ads points. volume XX grew to Now business, which first-party quarter.

advertising revenue single XX% million million product more Promoted currently over we Listings. XXX our sellers $X.X XXXX. adopted than have over roughly revenue, ad double during year or in QX of year, a live we billion full and the ad For total up for Over the generated X.X

remained the our product standard largest contributor in to per QX. largest acquisition ads cost-per-click advertising Advanced, was Listings unit, Our Promoted growth growth. notably, contributor to the But sequential cost year-over-year

campaigns overall for they as from to condition. brand and range, of advertiser revenue allows promote automatically benefited launch rule-based listings on category, CPC which or Our set new rules price QX, sellers count such in based the inclusion,

our 'Top sellers. top-selling sellers. have launched far, search, during provides for from we highest-ranked been these ads, Listings of Thus Picks' our Promoted buyers comprised added ads of with hyper-relevant velocity providing highly items curated Carousel Additionally, set QX, for which a engaged a

kept starting like these our year, sustainability to marketplace share milestones for value a during and sellers to $X.X nearly continues positive of around typically tons million efforts to goods times. X.X that be sale approximately our from buyers pre-loved nearly uncertain I'd helped avoid Next, In XXXX, into in last of in metric economic tons landfills. with due activity goods. XX,XXX would metric going recommerce. generated and This waste emissions of Recommerce billion producing impact few used and refurbished significant carbon provide new

Additionally, more eBay on remains green enabling to U.S. electricity energy grid. the committed

these of agreements renewable we over the have energy part entered ambitions, As offsite for into projects past X years. X

centers of now roughly XX% this Our green and target with fully at Combined of our XXXX. track and center XX% sources our controlled we incredibly renewable to produced reaching will latest overall other portion is proud Lake covers over global energy on our energy remain we And energy data Salt consumption. the consumption energy from green to over annual our by our City. projects, for operational data usage of electricity I'm the the and eBay be project source XXX% in that offices equivalent renewable X

amazed supports Now more the $XXX let's than $XX for and the nearly the eBay The be of tremendous by gift-matching granted I'm our sellers million company and always impact. XXXX year. million world. that entrepreneurs million and purpose-driven to historically to support eBay I'm buyers eBay around in than Foundation a generosity enabled honored full more community. through for to in raise program. the excluded turn $XX Charity employee QX to communities

America's a in our change, amid challenges Most in also JUST and American efforts CNBC's again as I'd included life year wellness. bringing climate the our measures the and global was support in and North eBay DE&I in to community was such economy. Sustainability for tireless Jones JUST opportunity fifth strategy once performance incredible and list to Companies, thank in areas the worldwide our their row, corporate eBay which Dow like Capital World Indices. in For of to included take employee in ongoing and employees this their work

In a environment, closing, map to incredibly about our road navigate I'm we continue optimistic for while operating dynamic XXXX.

us AI across decisions organized The the foundational power well-positioned we capabilities XXXX. and on the company year to better of in customer are us and teams for eBay Our data developed be experience last allowing drive speed, unlock to efficiency our make fundamentally make nimble more quickly. critical change assets, the

to year. like while We categories in in will improving did focus existing invest experiences we new continue also country-specific and Germany last

expect And from position advertising, expand growth outstanding strong the We high are first-party shareholders earnings in customers. robust XXXX, while offerings continued standpoint, a initiatives lapping drive the capital we sustainable ROI in for we despite on financial in our grow in prior a deliver in to to margins, momentum returns investing year, and still service to growth keep GMV growth. healthy while path towards us financial

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

begin the you Jamie, financial today. you, of highlights with Thank us joining earnings and thank I'll section our all presentation. for

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

quarter closing on comments reflect year the before year-over-year unless basis, full FX-neutral begin an we and I'll first the otherwise. thoughts Q&A. our Finally, My outlook some I note comparisons provide and for will

pleased share to financial nearly quarter. $XX.X repurchases $X.X XX.X%. was million despite to by billion. a or our per margin in I'm volume merchandise softer flat points. over volume dividends. X and of that observing $XXX Revenue nearly Gross exceeded part grew through expectations was shareholders met the metrics of non-GAAP delivered We across outpacing operating early the we environment Non-GAAP returned $X.XX we key at during QX X% and billion, earnings demand

a while of closer roughly a of growth. financial exchange was was the points during fourth year-over-year, our flat look Gross billion take quarter. merchandise GMV to tailwind foreign X reported volume at nearly Let's $XX.X performance

promotional our meet demand As we holidays to softer as observed markets. Shoppers were QX goods as in discussed quarter, adapted the key elevated beginning of dealt with discerning last discretionary during and inflation the for we interest their we their approached the more purchase consumers and higher expectations. in behavior environment rates

stretch November, business budgets. our towards holiday value the see looking to improve end their started consumers in for we U.S., to However, by the of particularly driven limited

we modestly believe changes faster QX of shipping made delivery our recent These accuracy to benefited times. listings better holiday include our product highlight shopping. Additionally, improved improvements we product and in participation an estimated last-minute in with dates

and in the to business, X Luxury growing quarter. continue than underlying X categories to during our drive our improved like Focus quarter Refurbished of benefit momentum programs were in and P&A, the GMV growth to growth ] focus customer of [ coverage categories. another shipment ground P&A GMV the contributors roughly remainder overall continued points marketplace faster top mid-single-digit from delivered experience. as trust Guaranteed the Fit

Next, in to even and goods. with market was down buyer was cross-border include due benchmarks. on basis. resilient I'll stronger demand notably walk consumer consistent results a geographic relative growth nearly to sequentially. underlying point through international our improvement U.S. on our when was The nearly we GMV largest an was reported QX, X FX-neutral GMV markets, International U.S. on basis flat X% more as of X% U.S. FX an spending tailwinds. up

has CXC, our e-commerce value the to environment within helped to the While remain The in improve and over we market and holidays, tough In to made challenged. the where growth gap the U.K. these been persistently seller GMV we in experiences, particularly holidays. saw Germany growth Germany U.K., a for countries mitigate narrowed resilient as negative. e-commerce demand market buyer progress the the in during consumers look continued growth

in benefited QX also Mail the We impacted from of of the strike Royal that lapping results XXXX.

of for annually remained at a recent despite XX-month on post-COVID the continued year, enthusiasts XXX XX million. Enthusiast Moving of stable was quarter-over-quarter to our trend major rationalization at geographies. active discretionary period continuing of in spending pressure buyers. the years. approximately around stabilization Spend across $X,XXX after were in buyers Trailing XXXX, million buyers end last

billion outpacing Turning fourth X%, We revenue over volume to generated of X by revenue. $X.X during the quarter, up points.

of over Foreign reported point exchange a year-over-year headwind revenue was X to growth.

and offset take was roughly our flat rate despite take seasonal by tailwind basis, down year-over-year partly a primarily modest of XX XX.X%, rate was in business decline by mix, continued in The driven QX advertising quarter-over-quarter. approximately FX our was sequential nearly On FX. category Our a and momentum headwind. points points from roughly X.X basis product

million penetration grew to and revenue X.X% GMV. $XXX advertising Total of reached XX%

than First-party or faster XX ads points grew XX% million volume. $XXX to

As driven and recent robust Jamie Promoted campaigns. adoption we Listings in smart innovations discussed earlier, saw rules-based Advanced of QX, seller like targeting by

Non-GAAP to operating down XX margin Moving and quarter, X sequentially profitability. during improving points was year-over-year. XX.X% the basis points roughly

compared largely The Foreign to to exchange a remainder recent the was in of a QX development points ago. impact M&A. margins headwind approximately is XXX attributable investment continued and margin in of product basis year to

in weighed on As year-over-year, QX. drag expected, program But revenue. gross our margins costs International cost a as primarily margins no was within operating its fall longer eBay on of Shipping modestly this

XX eIS efficiencies expense, as offset GAAP of a by as down our related of year-over-year margin payments. G&A $XX gross were modest $XX recent Within from headwinds Overall charge pending basis legal in well recognized accrual was cost about of million the organizational changes to QX to in partly relating points restructuring as matters. we million GAAP

will adjustments reconciliations in be non-GAAP the details will upcoming appendix of to matters You XX-K. presentation, earnings on more while our the our on in information GAAP provided legal the find in additional

in of share per earnings We for the a flat charge. share basis, was portfolio. GAAP offset QX, by These earnings by aforementioned gains stock-based On GAAP on the in partly $X.XX generated our non-GAAP driven quarter, our were equity $X.XX unrealized per gains compensation investment year-over-year. roughly restructuring

allocation. sheet and balance capital our to Turning

We million in California's of disaster of investments cash $X.X for had with the ended program consistent billion relief annual $XXX XXXX the million eBay the of and Our QX, delayed our remaining and $XX with as quarter. during nonequity $X.X guidance October. at QX tax price repurchased free our debt billion tax We for at of $X.X our of majority gross cash negative in an payments free was flow, flow $X minimis shares until cash year buyback authorization average cash approximately and end the of billion. de

quarterly we $X.X dividends, free the addition, dividend Since beginning a have In shareholders of that cumulative share. we repurchase returned of nearly period. roughly flow or over cash of cash $XXX billion per in paid December or XXX% through and $X.XX million XXXX, to

Turning to our investment portfolio.

and of at the billion Our were at valued investments end warrants over QX. $X equity

announced by close in QX. Our X, rate. and nearly to expected continue as February with November accepting Adevinta. which $X.X consortium clearances. billion, and led consortium regulatory Adevinta On offer versus proceeding on achieve XX, offer nearly public is up Blackstone the offer, remaining we at This The stake the requirement of valued at expired expect $X.X offer the understand a billion We is and period to to was Permira QX. acquire XX% least an XX% satisfied to shareholders working expeditiously of that approvals it the acceptance

Adyen Our $XXX of million at end at valued warrants QX. were the over

assumptions, the several on price based calculated probability share Adyen is including of value warrant vesting. Our and

outlook. Moving to our

uneven with incorporated the environment point the to across the U.K. U.S. than sales weaker into boost We retail major of as have year well expected leap started The operating year extra from relatively our has day. GMV in [indiscernible] our the and nature been dynamic outlook with GDP demand January. X growth growth as markets, a GMV

an decline $XX.X expect flat. of billion billion we decline X% quarter, between X% of first a to the and GMV year-over-year spot For or FX-neutral GMV, to flat of $XX.X representing

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

between the X headwind by FX-neutral year-over-year We outpace non-GAAP will QX volume forecast at an both growth. XX.X% marking and X-point points to a operating Our basis, a midpoint. spot on close revenue FX sequential forecast revenue XX%, represents margin improvement to while and over implies

between XX% first in growth between to $X.XX FX headwind earnings representing $X.XX X-point growth year-over-year represent non-GAAP At and EPS expect would We the quarter, and year-over-year. a in rates, X% share current to generate per QX. EPS

let share on me year. some Now thoughts the full

turn the this QX in expect year. rate macroeconomic Assuming of year, QX or positive we FX-neutral growth change GMV no in fundamental our to this environment

an We on expect growth basis. X revenue outpace points about to GMV by FX-neutral

take healthy We ads. headwinds to We expansion growth along due XXXX, although growth. acceleration in in headwind face expect to in our be advertising FX comps within quarter, driven year-over-year rate throughout starting a spot primarily represent anticipate to do by X-point third-party with our secular revenue we continued continued close the XXXX, our elevated to to second revenue

year, talent non-GAAP margin XXX expect to We and productivity marketing operating gains in cost balance our XX savings by basis with tech, we continued as from ongoing organizational expand for to points investments and structural full efficiencies, the program.

includes the points outlook center of useful XX approximately a Our benefit the life is by equipment. associated change which accounting non-GAAP data year-over-year, margin driven in with of a primarily estimate extension of operating net basis

from Following to networking equipment an assessment it extend of we to determined X our appropriate accounting useful servers life was December, years. and the years in X

XX-K in more this find can You change information our on policy filing.

benefit of is meaningful is lapped year-over-year operating sizable margin operating in point This XXXX. points headwind approximately in exchange on foreign this the FX we we we XX Offsetting even an as XX more due lapped hedging hedging basis as to basis roughly gains year-over-year experienced XXXX. headwind margin in XXXX gains top of

expenditures XXXX at of non-GAAP X% between expected capital X% should to unchanged rate for be while stable, remain revenue, Our and tax XX.X%. our are

billion repatriation million tax and XXXX, We $XXX of from million charges payments. headwinds $X contemplates of expect just $XX in free cash restructuring which flow under in

presentation. will final section of is cash flow X-year an through on repatriation payments a repayment As the remain tax tax these are to of a payments reminder, XXXX, our temporary these schedule. free earnings the Details headwind year appendix which in

billion. our authorization our I'm we per out recently increased to total by raised share QX, announce pleased remaining have For dividend $X.XX in to purchase be And approximately by billion, our to that $X.XX $X.X to bringing quarterly $X paid our share authorization March. Board

of pacing least year, at though quarter-to-quarter. for repurchases the may are the from fluctuate We $X share targeting billion

XXX% dividends of of of XXXX our XXXX, target We original and end to free since representing expect flow the cash period. for with repurchases above XXX% beginning cumulative approximately the

XX% per X% outlook to and return share in margin we forecast growth healthy top year-over-year Given non-GAAP assumptions, earnings our capital XXXX. line of expectations,

incredibly of a in challenging proud very during X% earnings momentum saw Despite underlying our GMV year. share trends $X.XX, the I'm up improved delivered of macro and we per we execution environment, as our year through the team's for full gradually XXXX. closing, business non-GAAP In

we environment to we our and macro business the around in remain are confident be for will plan While planning the assumption strategy XXXX. challenging, our continue incredibly that our

in Assuming site-wide expect we and degradation categories, in generative QX QX GMV environment, positive CXC AI year. in turn no market our investments the further and focus of improvements, to other this local growth initiatives, or

continue will strategic to points we lean into and to to we invest pillars, in right efficiencies our drive Although and XXXX. are between basis balance XXX continue operating cost committed growth to to the in expenses striking margin XX of expansion revenue

leading sheet pleased the of from cash our non-GAAP balance dividends our this plan flow fortress to demonstrating business. to allows earnings And buybacks power to approximately XXX% extremely shareholders EPS to to cumulative and XXXX year-over-year, between total us year, of us free increase enabled financial of Our growth XXXX. XX% X% this of return capital I'm to target

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

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

helpful. on or growth would to And of be that on potential positive a into your anchored wanted margins back growth. on should Is product context GMV accelerate ask as the Could more on for had certain growth? well. I provide your then the half I bit timing follow-up a Anything initiatives GMV you QX? that in about the visibility QX

looks that investments down to But wondering it would due so coming see XX%. just full XX.X%, if for outlook the you XX% that delta is the close or year, QX to Anything be seasonality Your anticipating some you're to like discretionary there quite line? strong, helpful. is

to Thanks, I'll then about Yes. GMV Nikhil. I'll and Steve cover ask margins. one the talk

about impact. start looked some weather the we talked year we of when the having So here, at January

from other well folks since that heard as then. improvements of kind You and

outperform the retail we for on. the about You that year, sales business. have we a to you of January feel at the is plan saw But look rest strategy they continue that overall showed we focus When executing bit really at categories, the when look we're consumer the the stretched. good

FY feel a what in about business or the it to we road saw in Germany about business. good of outlined. or For in drive investments of growth was the the 'XX, in that ahead growth and front X of Steve year-over-year map X% QX like that in points We the we us as made terms QX, we have really

we growth, technical we market. in what's think we of importantly, a I of business have recession, and to But that's health U.K. the now, business, we there. about. underlying really growth to from drive being the still negative core, kind Germany in feel still the those underlying confident able about do want so have e-commerce us margins? under and when what right good territory, impacts just the is in the And look at makes happening GMV talk as outlined Steve, you we

Yes, indeed. Good afternoon, Nikhil.

we reminder, that we why? cost driving been we've policy You're that remarks. number based dynamics of savings the prepared accounting actions, discussed been that correct. driving been the through the of Seasonally, recent Because Well, changes A margin. have operating seasonality. also we QX the and has our strongest that in quarter of on for a saw

change in the points call. which improvement, to macroeconomic basis that overall is to a continuing in of earlier laid through. of pleased position I And long-term the and no margin we've the we're in into that between leaning to, while with invest The term, XX be environment, gone efficiencies based short teams growth in on cost diligence growth we amount am pleased earnings to are sustainable really the for of we the the out XXX to drive eBay. continue fuel

Your line from comes Sebastian from the Baird. next of question Colin

going over changes past Good of the to and Obviously, the are in in of start players. marketplace e-commerce there's performance see acquisition customer lot costs global the at competition couple QX. a the from lot of of market A the end more years. up

see way hoping, to the related that, category So Jamie, as you be maybe those changes talk any and to if you and and impact and eBay, some maybe from to tools? quantify of it perspective, evolution on testing engagement in buyers of the across That some strategy? about sort or tests, from leads AI I listing helpful. velocity that focus of magical was those if the there And with the of or sellers could of modifications or the you maybe e-commerce the volume a revenue is gen with impact might of platform not levels the innovations, any

Yes.

me of let the e-commerce first, talk piece. kind about So

Specifically acquisition a this unique in where eBay is advantage. customer has costs,

of first, a ebay.com, is which benefit. the to So our People coming app organic. or eBay vast majority is typing the vast, traffic in key

across us. to ability monetize our is second acquire users multiple win that is for huge we The categories a

in someone look into in other in when acquisition. up shopping coming usually site, at that category, buy a they more they categories from single So end you initial categories the X than across focus

ability to the and kind we scale based the of than of CAC much different our is, others, I have. that's and what on just CLTV So manage think, the

and for drive we've I the and marketplace, trust season on unique, think non-new and focus is us. our authentication put the is differentiator Refurb, on a very our towards real Luxury

example, quarter in now seen we've For the Luxury fourth straight of business. our growth

Refurbished growth, challenging a business environment. maintained macro in double-digit all Our somewhat

unique. that's So

more love the because hard it. AI, They of days. look we the having get it with boards perspectives, features the the about early allows message launching, generative how which but some just I'm give they it's I I feel go the still that on can to speed day, these consumers them about they're read early at a love As you inventory when site.

closet their their and in listing is more garage, because up hear the process. we're allot speeding their to things we what they're going And of

XX, have is each process, already So in our to very of satisfaction release score it's the get has of it their actually the a and and It and used that sellers, of version a over first by product brand-new content been the millions customers take XX% high which for of magical on continues listing. day. listing include we today, better

beautiful And years. picture that you the products employee for then to moves we're for background able quality your and out. even being pictures things I've this our to take around able appealing why and a like unmade like on beta now now had desktop to that be the on There's put rug on we've a out we bed, on been it features about, other excited product get a view like product larger XX I It's in more percentage or the single item, pictures our marketplace. our of look and on background of customers, the and have make enhanced point now talked business sale, that your to better that take nothing but

tell So seeing that we'll can the and we're AI helpful update the innovation continue really what The progress, is I exciting. quantitative you is to the but good. pace feedback around numbers on of of anecdotal is you

Ken Gawrelski Your next the from Wells Fargo. of question from line comes

Could there side, Could you seeing the customer in that or that still talked you the trends you're was about you little relative macro even continue Europe. about be if about might a you've could maybe I better bit especially talk the, and to see you -- in hoping categories -- seen weakness improving trends talk or some are under certain segments those pressure? to of

X both Germany, and at experiencing you GDP if look Yes. U.K. a decline. would say What both they're largest of markets, our I is

So entered U.K., technical second-largest a our which is recession. market,

If you obviously standpoint. there, experiencing cost from challenge. challenges look are German happening And been that's still living and the of growth in that been negative over the a e-commerce that business recession at has is

the of But we values the that values great on one marketplace. eBay offer is unique of

I business even business, value the times, So our is is our is that on strong, for that strong, so think Luxury in are looking example, Refurbished for people challenging the reason marketplace. so

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of Bank question line from from Justin Post America. next comes Your the of

I'll buyers. ask about I guess

your getting give within churn as we with you talked encouragement about now? the You buyers? see seeing And What to new are GMV far or what activations as growth. right you back metrics will that

Yes.

about a really $XX see flat enthusiast [ go buyer we our off and of what expected we we buyers buyers, that you we which would seeing. exactly When stabilization them be. where Our quarter-over-quarter retention, after, We've are the COVID at track in roughly we're is our to coming and said It ]. time what especially period, healthy was buyer driving (sic) and million million that's been XX exactly categories. acquisition think focus

you spends are which when is over membership $X,XXX, buyers about it. think essentially enthusiast spending Our level like

reactivation is is is year-over-year. acquisition year-over-year, healthier year-over-year our our healthier churn our down and So

we're call and capabilities the advancements And with the maintenance pleased side. I to in things on out My what vehicles this we're called lead it's So using change million element and One we're seeing to say for on XXX to with now car. we're like predictive buyers. new we stored time over Garage continuing your have for in is buyer

parts eBay They're Guaranteed that exactly. on it the by Here's Fit. backed fit

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

follow AI. up I to want on Jamie, just generative

Steve, Your comments models advantages GPUs you seeing? of better. then interesting large as you're through talk hoping some bit that 'XX, bucket saw on that, just was and were a line? pretty should bit language your are the a working we I about year the the more last doubling scratch of you're little that about from we there, And how that on maybe on could little talk development deleverage the how think about context in you impact product that can

grown XX some us the close I'm in case, that our we've us listings environment extremely a allowed importantly, e-commerce and and is which in makes structure things sense, commercial really efficient a with excited built, another a any building the take our large way. LLMs, cloud, being some able of to more impacting in that private massively our L&Ms, But in benefit that cases, of cost source in has manner, really an hybrid meaningful without one with by combine to data LLMs cases, we having years in in we've those really on cost of hybrid open rich model to now infrastructure do billion X to to the Doug, even had able marketplace. Yes, this as manage of of

getting the of Also having been quality back good latency coming of back has from inference and in what's fine-tune important it being an the of to for data terms also able us.

So out and open better. that's them we've used internal across well models been And models, some models. and the those cases, with as started, then gotten us. refine some different moved for source or board really in working We've all we commercial to

and are Like the question listing, of feedback of The you And what's the the models scale of just the with Steve, ease and get we're said to how working well. team amount single we day terms that cost? great to are AI every use. iterates far, better. with, happening of managing what's us earlier when that positive sure cover the from listings quality hitting I to it. And them week thus look want of really make volume about incredible have maybe magical we making the each at what consumers millions we and an that in is

speak Yes, Jamie. good of to to course, you. Doug,

the which quarter, a in of going our efficiencies and eBay we're said, further excited is first lot across give AI GPU Jamie doubling about really capabilities. We're productivity drive improve capacity to to us the the technology. As expanded to opportunity

to costs, the in historical associated out, in guide. contemplated range, much which and acts with pretty costs contemplated with year our averages. in are our line the All ] guidance full including are OpEx gen [ Specifically costs AI, regarding we it's our laid CapEx GPU

fair infrastructure to think is advantage investment. eBay sort distinct say our scale size I it's of a to when comes this additional it and at

I refers pushing would how drive organization. productivity we're across organization, internally the it last with in the using also very we're the is say to thing to Doug, say I'd aggressively that, lot that a our consumers.

So self-service engineers been with productivity. and it as change engagement development; do whether Copilot we tools customers over that all X million really queries the we've have centers, the week, there, there. customer now summarize when in you call make from of that can support we we contacts service to helpful employees of all of is to our incredibly things our success AI of they where about our be a it in using the responses, AI initial the summarize perspective, think a customers customer using I scale easier, level our do,

using of organization. in are productivity X those the across So the how it board examples we're just drive to

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

that on year? some focus total. point how shields maybe introduction is this about and some into this talking the over enthusiasts presumably has the perhaps So the the your intense your categories to leaning maybe competitors. players vertical the grown to evolved U.S. incremental enthusiast some low-priced time and increasingly spend of update This e-commerce of of competition? last has categories Chinese obviously growth competition return of set key you face business in And with you from of than strategy your any happening holistically at is competition in has and U.S. stabilized sooner Can how

Yes.

if significant our our them a business. we're differentiated doing price, on with seen low focus what really machine, Specifically impact a you're have We haven't on to the from really referring moved our like the on the we with Temu strategy we for for from categories and And business. items low-ASP, marketplace, season hasn't us focus a going after non-new many low-quality been the that for years away and now. really ago, years and

differentiation think out. that's the call So first key I I'd

The or traffic standpoint a we just ebay.com. that, of second in is part the have. comes of from is vast obviously, either of directly lot the marketplace. vast amount organic benefits the types of a the competition some of of The great traffic our spending money app the to But eBay one in marketing is

on from reliant less we're So that perspective. paid

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those have really go-forward in really or sell basis the why differentiators overall are feel landscape. finally, equation. in into opportunity the with marketplace them that in on us to then for turn And who buyers business sellers e-commerce a also to helps well-positioned And we the key and

Your next question Sandler. comes of from Tom from Piper the line Champion

does more mean that been a think you do a initiative presumably, you maybe U.K.? you challenged wondering it's know it the geographies? next? the I X port little How other this then I what's if in you Germany? And in in expanding could geography? I'm Jamie, about to the take the it crack while. do that for bit code where features to allowed about And X there key talk CXC or

And business. great segment. the focused we're us. And Tom, in what for exactly really leaning that's our which focus on driving that we Yes. NPS in the think in category segment the of around on greater was in applied XX-point our to seeing, a we level, kind designing It's essentially of really Germany, about improvement business that When of really buyer. CXC business, to area, strategy is a the to our you an is specific than whole double-digit important CSAT certain of needs what

and around market. needs specifically language So SEO improvements search in that's that

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do we'll really good business and that and look we and a everything and e-commerce basis. the we marketplace. of look up, what's despite to Germany the overall, that metrics strong the putting that what growth at in numbers in health do, we the that markets successful, with do go-forward other But take seeing continue So feel on we to we're about that negative we're at

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

Two, if I could.

in There's run market you on that you large a Just big SKU offerings sophisticated campaigns opportunities following allows AI. for platforms. view like up the around it when have more e-commerce the to

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just of there that sustainability the moving and So the in about XXXX? wondering parts

of marketplace our launching after is expansiveness Yes. features. AI Look, allows the what gen to us go compelling really

fit, we these magical relevant are innovations, maintenance like Accessories, and things to finding things et for for Parts like will use in AI background example, of categories specifically So cetera. things majority enhancers, what it expand but vehicles really part a fitment we're & things for now the listings, capabilities horizontal like like The predictive using of that. vast

uses uses advertising search So AI. AI,

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question from Sachs. comes the next from Your Goldman of Steiger line Alexandra

some your to do want comments. on follow I up of macro

working customers should function like that's we making buyer buyers kind do what extent the it drive about that on And period trading certain context? per given in is initiatives revenue a how platform? or of the So markets? of if purchase are time? what less over key you're on to Or think see GMV buyer case, of in more To of the frequency you purchases down -- a

Yes.

when talk we is consumer of you So the U.K. values lean look it when into the in the challenges, where overall, et the stretched like tend something or to on cetera, more Germany, marketplace. cost at and living you about deals

So Refurbished, used.

as the us, so with buying. not it's so the more of terms they're much really in where their overall and impacting business categories -- And

pressured but some see bit flat and is So environment moved digits. probably say, the like is proposition the for buyers I'd has example. those macro in resonating value means quarter-on-quarter, why that double Refurbished that the with good little of really eBay Refurbished talked number the this pleased is a it up past customers. we a That's to we're mid-value enthusiast the stability in spend because buyers. growth enthusiast We've

like of In all programs whole level. seller to so we use ability put terms internal stores been much way we new is now those the of where out that the that that's able combined the experience a or generative at combination to driving have whether saved build LLMs customers, XX-plus that data things the or years, coming marketing compelling our richer. with we to The that over about what's happening and to our to have, frequency, the marketing we're really X we're it's to customers, looking AI make

you million about about drive about number with. being unique the exciting the us transacted Garage, And people have on at And for work at that when there. think a data we platform. we're you for think stages lot apparel, consumers have and sizing given saved ability of My is we the early platform to the think canvas frequency have XXX when with seller of gives the vehicles have in Alexandra, that of you I that what's just eBay think seller, the that what's possible it a to on When the

we please? do can X Operator, last question,

no your may our you participation And conference in you Thank further queue conclude at for with questions does today's now We and this time. have that, call. that disconnect.