eBay’s third quarter was marked by solid revenue growth but a negative market reaction, as investors focused on margin compression and rising costs. Management attributed revenue gains to strength in focus categories such as trading cards, motor parts, and luxury fashion, as well as the continued rollout of AI-driven seller tools. CEO Jamie Iannone highlighted that “focus category GMV growth accelerated to over 15%,” with collectibles and trading cards delivering standout performance. However, operating margins declined due to increased investment in strategic initiatives and higher transaction losses, particularly from the ramp-up of managed shipping and consumer protection programs.
Is now the time to buy EBAY? Find out in our full research report (it’s free for active Edge members).
eBay (EBAY) Q3 CY2025 Highlights:
- Revenue: $2.82 billion vs analyst estimates of $2.73 billion (9.5% year-on-year growth, 3.1% beat)
- Adjusted EPS: $1.36 vs analyst estimates of $1.33 (1.9% beat)
- Adjusted EBITDA: $870 million vs analyst estimates of $829.2 million (30.9% margin, 4.9% beat)
- Revenue Guidance for Q4 CY2025 is $2.86 billion at the midpoint, above analyst estimates of $2.80 billion
- Adjusted EPS guidance for the full year is $5.45 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 20.4%, down from 23.1% in the same quarter last year
- Active Buyers: 134 million, in line with the same quarter last year
- Market Capitalization: $36.92 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From eBay’s Q3 Earnings Call
- Scott Devitt (Wedbush Securities) asked how AI will change eBay’s buyer and seller connections and advertising. CEO Jamie Iannone described AI as “becoming more embedded throughout our experience” and highlighted ongoing improvements in listing and search.
- Nikhil Devnani (Bernstein Research) questioned why margin gains were not flowing through despite revenue growth. CFO Peggy Alford explained that increased product development spending was a strategic choice to accelerate growth initiatives such as eBay Live, shipping, and vehicles.
- Nathaniel Feather (Morgan Stanley) asked about the durability of recent growth and what could drive sustained improvement. Iannone emphasized broad-based strength but acknowledged that some transitory factors contributed to performance, while most gains were considered durable.
- Michael Morton (MoffettNathanson) inquired about the vehicles business and its impact on take rates. Management indicated that, while early results are promising, the near-term revenue contribution is immaterial, and the effective take rate will likely be in the low to mid-single digits.
- Andrew Boone (Citizens) sought clarity on the narrowing gap between GMV and revenue growth. Alford noted that growth in emerging businesses like vehicles and live commerce, which have lower take rates, as well as cross-border trade pressures, would drive this trend.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be monitoring (1) the pace of adoption and monetization for eBay Live and agentic commerce features, (2) the effectiveness of cross-border shipping initiatives in mitigating regulatory headwinds, and (3) the sustainability of growth in focus categories, particularly as trading card releases and collectibles face tougher comparisons. Continued investment in AI and product development will also be key markers of execution.
eBay currently trades at $82.10, down from $99.56 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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