eBay Inc. (NASDAQ:EBAY) has once again delivered a solid earnings report, surpassing analyst expectations and reinforcing its growth trajectory. The company’s fourth-quarter 2024 results highlight its ability to adapt to evolving e-commerce trends, leveraging advertising, financial services, and AI-driven logistics. As eBay refines its marketplace strategy, investors are closely watching its expansion into high-margin revenue streams.

Strong Financial Performance in Q4

eBay’s Q4 earnings per share (EPS) came in at $1.25, beating the Zacks Consensus Estimate by 4.17%. This marks a 16% year-over-year (YoY) increase, demonstrating the company’s resilience amid macroeconomic uncertainties.

Revenue for the quarter reached $2.57 billion, growing 1% YoY on both a reported and foreign exchange (FX)-neutral basis. Although this narrowly missed estimates by 0.02%, the overall growth trajectory remains positive, fueled by strategic investments in AI-powered product discovery and seamless shipping solutions.

Advertising & Financial Services Drive Growth

One of the standout areas in eBay’s earnings report was its advertising and financial services segment. eBay’s first-party advertising revenue hit $434 million, reflecting an 18% YoY increase. Total advertising offerings, including third-party ads, generated $445 million, accounting for 2.3% of Gross Merchandise Volume (GMV).

The financial services segment, including payment processing and shipping enhancements, continues to gain traction, reinforcing eBay’s strategy of diversifying beyond traditional marketplace revenues.

Gross Merchandise Volume Shows Steady Growth

eBay’s GMV, which represents the total value of goods sold on its platform, reached $19.3 billion in Q4, marking a 4% YoY increase on a reported basis. The growth was driven by robust consumer demand, particularly during the holiday season, and improvements in AI-driven delivery estimates and product visibility.

Breaking down the numbers:

U.S. GMV totaled $9.04 billion, accounting for 46.8% of the total and growing 2% YoY.

International GMV came in at $10.27 billion, representing 53.2% of total GMV and growing 6% YoY.

The expansion in international markets underscores eBay’s success in attracting buyers globally, supported by AI-powered language translation and localization efforts.

Profitability & Margin Expansion

eBay’s gross margin remained steady at 72.16%, reflecting efficiency improvements in cost of payments, authentication services, and depreciation. Meanwhile, operating expenses decreased 8.6% YoY, leading to a 27% non-GAAP operating margin, which expanded by 30 basis points.

This margin growth was fueled by cost reductions, operational efficiencies, and lower transaction losses, though partially offset by investments in marketing and AI-driven search capabilities.

Strong Balance Sheet & Shareholder Returns

eBay ended the quarter with $5.89 billion in cash and short-term investments, reflecting strong liquidity. The company also reduced its long-term debt from $6.17 billion in Q3 to $5.75 billion in Q4, strengthening its balance sheet.

Shareholders benefited from eBay’s aggressive capital return program, including:

$900 million in stock buybacks during the quarter.

$128 million in dividends paid to investors.

$3.3 billion remaining in its repurchase authorization, signaling continued confidence in its financial position.

Q1 2025 Guidance: What’s Next for eBay?

For the first quarter of 2025, eBay expects:

Revenue between $2.52 billion and $2.56 billion (YoY growth of -1% to 1%).

GMV between $18.3 billion and $18.6 billion, reflecting a slight seasonal decline.

Non-GAAP EPS between $1.32 and $1.36, aligning with analyst estimates.

Non-GAAP operating margin between 29% and 29.4%, driven by growth in advertising, financial services, and buyer protection fees.

Should Investors Buy eBay Stock?

eBay’s strong Q4 earnings and improving profitability metrics signal that the company remains well-positioned in the evolving e-commerce landscape. While revenue growth remains modest, the company’s focus on AI, advertising, and financial services is driving higher-margin expansion.

With eBay’s stock up 11.6% year-to-date, outperforming the industry’s 8.4% growth, analysts remain cautiously optimistic. The company’s capital returns, strong balance sheet, and ongoing AI innovations make it an attractive long-term investment, despite near-term revenue fluctuations.

For investors seeking steady growth, strong margins, and shareholder-friendly policies, eBay remains a compelling buy, especially on pullbacks.

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