eBay Q1 2025 Earnings: Exec Shakeup As GMV, Active Buyers & Innovation Fall Flat
eBay has released Q1 2025 results, announcing executive changes as GMV, Active Buyers, and technical innovation continue to fall flat.
Important stats from the press release:
- Revenue of $2.6 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis
- Gross Merchandise Volume ("GMV") of $18.8 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis
- Returned $759 million to stockholders in Q1, including $625 million of share repurchases and $134 million paid in cash dividends
The big news is Chief Financial Officer Steve Priest and Chief Product Officer Eddie Garcia will both be stepping down effective May 11.
Ex-Paypal EVP Global Sales Peggy Alford will be taking over the CFO role and the CPO function will be consolidated and split between Jordan Sweetnam, who will be taking on a new role as SVP Chief Commercial Officer, and Mazen Rawashdeh who will keep his current title of Chief Technology Officer but will take on additional engineering responsibilities.
Liz Morton
Putting even more control and responsibility on Rawashdeh's plate is an interesting choice, especially since in 9 years at the company he has failed to fix the day to day technical functions of the site which still experiences all too frequent business impacting technical glitches 6+ years after Elliott Management famously cited those problems as one of the reasons they launched an activist campaign calling for changes at the company in 2019.
Total Active Buyers were reported at 134 Million, which represents minor year over year growth of 1% and flat when compared to last quarter.
It's important to note that CEO Jamie Iannone had to resort to legacy discounting tactics to achieve that 1% Active Buyer growth, which he has also continued into Q2.
Also important to note that despite the minor year over year growth, this is now the 12th consecutive quarter where eBay had less Active Buyers than in Q1 2018.
Note: eBay changed the definition of GMV and Active Buyers at the end of 2021 and restated both figures going back to 2018 (chart reflects restated figures per eBay's amended reports.)
And that 1% GMV growth doesn't look so impressive when you realize $18.8B is about where eBay's restated GMV was in 2018-2019.
Once again, eBay declined to provide specific Active Seller figures, which were last reported at 17 Million in Q4 2021, but they did reveal in the Q&A segment that they have seen an increase in Active Sellers over the last 12 months.
However, without exact numbers to compare, that statement doesn't carry much weight and it's also not surprising that eBay would have increased sellers in the last 12 months with the consumer to consumer (C2C) initiatives offering fee-free selling for private sellers in the UK.
"Enthusiast Buyers" - those with at least 6 purchase days, at least $800 spent in the last 12 months and/or buyers who also sell - are still stuck at 16M, which is where they've been since Q4 2022, though Priest did say the average annual spend per enthusiast buyer did rise ever so slightly from "over $3,000" to "over $3,100."
That means the steep ~30-40% discounts eBay has been pumping out in both Q1 and Q2 specifically targeted at turning casual sellers into enthusiast buyers still aren't significantly moving the needle.
Liz Morton
Both Iannone and Priest were proud of pulling off 1% GMV growth in what they say continues to be a difficult macroeconomic environment with growing tariff uncertainty, but that number is likely not nearly as impressive as eBay would like us to think.
Remember that eBay defines Gross Merchandise Volume as "the total value of all paid transactions between users on our Marketplace platforms during the applicable period inclusive of shipping fees and taxes."
That means when shipping prices go up (like they did in January for USPS, UPS and FedEx) eBay gets an automatic GMV bump from the increased prices without actually having to increase sales on the platform.
If you subtract discounts and shipping increases and account for inflation, it's likely real GMV was negative.
Promoted Listings Ads
To the surprise of absolutely nobody, ads continue to be where eBay pins their revenue hopes with first party ads (all of the various seller paid Promoted Listing ad products including cost per sale, cost per click, store display ads, and offsite ads) contributing $418M in revenue in Q1.
That represents 14% year over year growth but notably is down from $434M in Q4, which could indicate that changes eBay made to ratchet up minimum rates for Promoted Listings General Dynamic ads and Priority Cost Per Click ads have slowed adoption rates and caused sellers to pull back on advertising as it continues to eat further into their profit margins.
Liz Morton
Interestingly, eBay made a change to the Ad Revenue chart in their earnings presentation, adding a new metric for "Off-Platform Ads" and a note that says:
In Q1'25 we began reporting off-platform ads revenue as part of total ads revenue. Prior periods have not been recast, and we are including the baseline in the chart above to illustrate total ads revenue and the associated growth rates for all periods."
- 1P = First-party advertising revenue, including Promoted Listings products and first-party display advertisements;
- 3P = Third-party advertising revenue;
- Off-Platform = Advertising revenue from eBay’s off-platform businesses
Many sellers would likely assume Off-Platform might refer to eBay's Offsite Ads program, however the reference to "off-platform businesses" doesn't exactly fit that definition.
Priest provided more detail about what this new metric will actually be measuring, saying it represents advertising revenue from the company's other businesses outside of the main eBay platform, such as trading card subsidiary TCGPlayer and their Qoo10 marketplace in Japan.
In Q1, we included ad revenue generated by off-platform marketplaces like Qoo10 and TCGPlayer in our total reported advertising revenue for the first time. We've included details on the prior year base-line for comparability.
My take: adding this information in now for "comparability" means eBay is increasingly hitting a wall with ad adoption on the main platform (with some categories already at 70%+ penetration), so their next solution will be to deploy the same playbook to ratchet up ad revenue on their other marketplaces.
If you're a seller on Qoo10 or TCGPlayer - get ready for "new and exciting" opportunities to spend more on advertising!
And while it didn't get mentioned in this earnings call, eBay made changes to ad attribution in Germany in late February that have skyrocketed the number of sales which incur ad fees - another strategy that could expand to other markets in the near future if eBay thinks they can get away with it.
Liz Morton
Tariffs
The big topic in the Q&A was of course tariffs, with analysts looking to gain any sense of how ongoing trade war and the end of the de minimis exemption will impact eBay.
Unfortunately, neither Steve nor Jamie offered anything truly illuminating on the subject, either giving vague answers about the fact that much of the China inventory on eBay is forward deployed and already subject to tariffs (while ignoring the fact that replenishing that inventory is going to be ~145% more expensive) or ducking the topic all together.
Liz Morton
UK C2c Initiatives, Buyer Fees & Simple Delivery
Steve and Jamie both also managed to escape acknowledging any of the seller and buyer backlash to C2C initiatives in the UK that have delayed private seller payouts, introduced a Buyer Protection Fee that users immediately began trying to find ways to circumvent, and upended shipping with not ready for prime time mandated use of Simple Delivery.
Liz Morton
However, this slide showing Q2 2025 guidance shows eBay is not likely to back down on any of those changes as they've clearly set expectations that the Buyer Protection Fee and Simple Delivery will meaningfully contribute to achieving 1-3% Revenue growth.
And while neither Steve nor Jamie has hinted at the possibility of bringing Buyer Fees to the US, I have to wonder if Etsy's Q1 report showing Depop delivered strong performance and growth particularly in the US after introducing buyer fees last year might challenge eBay's previous belief that the US market wouldn't tolerate that kind of fee structure and influence their strategy going forward.
The rest of the call was mostly uneventful and non-material - Jamie continues to talk about focus vertical initiatives that are not actually new, like integration of PSA data into eBay's listing and item pages, a bulk "magical" AI listing tool that was introduced in July 2024 and still has significant limitations, and AI discovery tools like Shop The Look and Explore which were introduced in early 2024 and may have been slightly tweaked but haven't seen any really significant improvements in the last year.
Interestingly, he didn't spend much time talking about the Magical AI listing tool which has finally rolled out to private/personal sellers in the US, UK and Germany after a year and a half delay - but that's probably because it completely fails to live up to his previous "just take a picture and let AI do the rest" promise.
Liz Morton
Final Thoughts
Not much new was said in this earnings call, but what went unsaid may still be illuminating.
Both Iannone and Priest struck a more serious tone than in past calls, with multiple references to positioning the company to be "lean" and "agile" in the coming quarters.
That, taken along with the executive changes announced today, could signal Iannone is feeling increased pressure from the board to finally start showing some results after 5 years leading the company, or else.
If new CFO Peggy Alford is being brought in to crack the whip, that may not bode well for Jamie or other execs' futures at the company as quarter after quarter has proven they simply have no clue how to create sustainable growth for eBay outside of taking a larger piece of every transaction through ratcheting up ad rates and turning to legacy discounting tactics which were rightly criticized by investors during the previous CEO's tenure.
While today's announcement will likely buy some time with a necessary transition period, if eBay's 2H'25 performance doesn't deliver, these executive departures likely won't be the last before the end of year.
