Online marketplace eBay (NASDAQ: EBAY) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 6.1% year on year to $2.73 billion. Guidance for next quarter’s revenue was optimistic at $2.72 billion at the midpoint, 2.2% above analysts’ estimates. Its non-GAAP profit of $1.37 per share was 5.6% above analysts’ consensus estimates.

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StockStory’s Take

eBay’s Q2 results were met with a strongly positive market reaction, reflecting both revenue and profit performance that exceeded Wall Street expectations. Management attributed this outcome to robust growth in focus categories such as collectibles and parts and accessories, as well as the successful expansion of partnerships like Klarna’s buy-now-pay-later service in the U.S. CEO Jamie Iannone highlighted the company’s ability to navigate recent tariff pressures, noting, “Our marketplace has proven resilient to recent uncertainty brought on by tariffs and trade policy changes.” The company also leveraged generative AI to enhance marketing efficiency and improve customer engagement.

Looking ahead, eBay’s guidance is shaped by continued investments in strategic growth areas, particularly focus categories and geographic initiatives in markets like the U.K. Management believes that enhancements to the consumer-to-consumer experience, the scaling of eBay Live, and expanded use of AI to personalize buyer interactions will underpin future growth. CFO Peggy Alford stated the company will “reinvest a portion of further top line upside and strategic initiatives aimed at driving long-term value for shareholders.” Management acknowledges potential headwinds, including tougher year-over-year comparisons in Q4 and evolving trade policy impacts, but expects durable strength in core and focus categories.

Key Insights from Management’s Remarks

Management pointed to strong execution in key focus categories, expanding partnerships, and technology-driven improvements as the main contributors to Q2’s performance and the outlook for the rest of the year.

• Focus categories momentum: Collectibles, especially trading cards and sports memorabilia, continued to outperform, with trading cards growing at double-digit rates year-over-year and the TCGplayer subsidiary setting a new record during its Mayhem event. The company noted surging demand for items like Pokémon cards and Magic: The Gathering, supported by new product releases and partnerships.
• AI-driven marketing and personalization: eBay expanded its use of generative AI to optimize listing titles and images, leading to higher quality scores and increased engagement. AI-generated personalized CRM emails in the U.S. and U.K. drove a more than 40% increase in quality visits, while new AI tools helped streamline the listing process and boost total listings.
• Enhanced buyer experience and partnerships: The rollout of Klarna’s buy-now-pay-later option in the U.S. attracted a younger demographic, improved conversion on high-ticket items, and resulted in average order values three times higher than the marketplace average. Managed shipping, authentication programs, and expanded luxury and streetwear offerings also contributed to buyer growth.
• Advertising growth and product innovation: First-party advertising revenue rose 17%, driven by increased adoption of promoted listings and the launch of new ad formats. eBay continues to use AI and proprietary models to improve ad relevance, which has led to better performance and increased GMV from advertising.
• Geographic and C2C initiatives: Strategic investments in the U.K. improved consumer-to-consumer (C2C) experience, including managed shipping and package collection services. These changes have led to stronger GMV growth in the region, despite broader macroeconomic challenges in Europe.

Drivers of Future Performance

Management expects that ongoing investment in focus categories, AI enhancements, and new buyer experiences will drive growth, though margin pressures and macro uncertainties remain key watchpoints.

• Continued focus category expansion: Management believes that growth in areas like collectibles, parts and accessories, and fashion will remain central, with further investment planned in both newly launched and established focus categories. The company sees additional upside from expanding initiatives such as authentication and live commerce.
• AI and personalization investments: eBay is prioritizing the expansion of AI-driven personalization and automation across the marketplace, including tools for listing creation, marketing, and search optimization. Management expects these efforts to enhance buyer engagement and drive incremental GMV, but notes that increased investment may pressure operating margins.
• Trade policy and global market risks: While eBay has so far managed impacts from tariffs and changes to de minimis import exemptions, management cautions that further trade policy shifts could create disruptions. The company is monitoring potential headwinds in international markets, particularly Europe, where consumer sentiment and GDP growth remain weak.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will monitor (1) the pace of adoption and monetization of eBay Live and its influence on engagement, (2) the durability of focus category growth, particularly as product release cycles shift, and (3) the impact of expanded AI-driven personalization on buyer retention and conversion. We will also track the effects of evolving trade policies and further development of the U.K. C2C initiative as indicators of eBay’s execution against strategy.

eBay currently trades at $97, up from $77.42 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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