Q3 2023 eBay Inc Earnings Call

November 7, 2023

<unk> earnings call.

At this time all lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session.

If you'd like to ask a question. During this time simply press the star followed by the number one on your telephone keypad.

If you'd like to withdraw your question. Please press the star followed by the one once again.

Thank you I will now hand, the call over to Mr. John Egbert, Vice President of Investor Relations you May begin your conference.

Good afternoon. Thank you all for joining us for ebay third quarter 2023 earnings Conference call. Joining me today on the call are Jamie <unk>, Our Chief Executive Officer, and Steve priest, our Chief Financial Officer.

We're providing a slide presentation to accompany our commentary during the call which is available through the Investor Relations section of the ebay website at investors <unk> ebay, Inc. Dot com before.

Before we begin I'll remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance you can find a reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation.

Ladies and gentlemen, thank you for standing by my name is Bonefish and I'll be your conference operator today at this time I would like to welcome everyone to the ebay Q3 2023 earnings call.

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

At this time all lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session.

If you'd like to ask a question. During this time simply press the star followed by the number one on your telephone keypad.

During this conference call management will make forward looking statements, including without limitation statements regarding our future performance and expected financial results.

If you'd like to withdraw your question. Please press the star followed by the one once again.

Thank you I will now hand, the call over to Mr. John Egbert, Vice President of Investor Relations you May begin your conference.

These forward looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons you can find more information about risks uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K Form 10-Q, and our earnings release from earlier today.

Yeah.

Good afternoon. Thank you all for joining us for E. Bay's third quarter 2023 earnings Conference call. Joining me today on the call are Jamie Tony Our Chief Executive Officer, and Steve Priest, our Chief Financial Officer.

You should not rely on any forward looking statements all information in this presentation is as of November 7th 2023, we do not intend and undertake no duty to update this information with that I'll turn the call over to Jamie.

Four we begin I'll remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance you can find a reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation.

Thanks, John Good afternoon, everyone and thank you all for joining us today.

Our teams delivered solid results during the third quarter, we generated gross merchandise volume of approximately $18 billion.

While revenue grew 4% to $2 5 billion, we delivered non-GAAP earnings per share of $1 <unk>.

Up 3%, while returning over $780 million of capital to shareholders.

During this conference call management will make forward looking statements, including without limitation statements regarding our future performance and expected financial results.

We achieved these results. Despite continued challenges in the global macro environment inflationary pressures and rising interest rates continue to weigh on consumer confidence and pressure demand for discretionary goods.

As Steve will discuss in greater detail, we've observed softening consumer trends to date in Q4 in particular challenges in Europe, suggesting we may see a more muted seasonal uptick over the holidays. We are focused on controlling what we can control being prudent about our cost lenient operational efficiencies and continuing to drive innovation.

And for our customers.

Last quarter I discussed our vision of re inventing the future of E. Commerce for enthusiasts, which is focused on three strategic pillars relevant experiences scalable solutions and magical innovation.

Thanks, John Good afternoon, everyone and thank you all for joining us today.

And I am pleased that we made meaningful progress against each of these pillars during Q3, which I'll discuss in greater detail.

Our teams delivered solid results during the third quarter, we generated gross merchandise volume of approximately $18 billion. While revenue grew 4% to $2 5 billion, we delivered non-GAAP earnings per share of $1 <unk>.

I'll start with our first pillar relevant experiences.

Our relevance and focused categories continued to drive underlying growth in our business and we've observed a meaningful improvement in our growth relative to the market and every category we've invested to date.

Up 3%, while returning over $780 million of capital to shareholders.

Its categories grew roughly seven points faster than the remainder of our marketplace in Q3 year to date, our focus categories have grown at approximately 4% year over year for context, we estimate market rates of growth in those same categories. We're in the low single digits on average during the first half of 2023 at <unk>.

All of these categories are comprised of highly discretionary goods, which had been more acutely impacted by the challenging macro environment.

We continue to push the envelope of innovation and motor parts and accessories or PMA by developing features that enhance our customer value proposition.

And for our customers.

These investments have fueled mid single digit GMB growth for P&A for three consecutive quarters, which is in line with industry growth for this segment of e-commerce and our largest market.

And I am pleased that we made meaningful progress against each of these pillars during Q3, which I'll discuss in greater detail.

The ebay guaranteed fit program has contributed to this momentum by delivering a game changing level of trust. This program enables tens of millions of P&I shoppers to buy with confidence knowing their auto parts will fit or that receive their money back which is the other day measurable uplift in conversion.

I'll start with our first pillar relevant experiences.

Our relevance and focus categories continues to drive underlying growth in our business and we've observed a meaningful improvement in our growth relative to the market and every category we've invested to date.

Additionally, we have not observed a material impact on product returns as our fitment checks have reduced the likelihood of buyers receiving a part that does not fit their vehicle.

Given the success of this program has had in the U S. We were incredibly excited to roll out similar programs in the UK and Germany during Q3, where our unaided awareness among P&A shoppers is significantly higher than it is in the U S.

All of these categories are comprised of highly discretionary goods, which had been more acutely impacted by the challenging macro environment.

The guaranteed fit program is underpinned by multiple years of investment and PMA technology, including our acquisition of my fitment, we've been steadily onboarding sellers into the my fitment toolkit to enhance their P&L listings with more robust fitment data, which improves find ability for parts and protect buyers from unnecessary returns.

We continue to push the envelope of innovation and motor parts and accessories or PMA by developing features that enhance our customer value proposition.

These investments have fueled mid single digit GMB growth for P&A for three consecutive quarters, which is in line with industry growth for this segment of e-commerce and our largest market.

By the end of Q3, roughly two thirds of large U S. PNA sellers have adapted the toolkit.

The ebay guaranteed their program has contributed to this momentum by delivering a game changing level of trust. This program enables tens of millions of P&I shoppers to buy with confidence knowing their auto parts will fit or that receive their money back which is the other day measurable uplift in conversion.

On average sellers are observing conversion uplift of double digits or higher for listing is enhanced by this toolkit driving incremental GMB for ebay in early October we reached a major milestone with 2 billion pieces, a fitment data added to live listings using my Fitments technology.

Additionally, we have not observed a material impact on product returns as our fitment checks have reduced the likelihood of buyers receiving a part that does not fit their vehicle.

While this is outstanding progress, we continue to invest in simplifying the onboarding process, making it faster to import listings and identify more vehicle matches for our more than $550 million light PNA listings.

During Q3, we continued to deliver relevant experiences for the collectibles category across a number of areas, we generated over $10 billion in GSV from collectibles over the last 12 months and more than one in four ebay buyers purchased at least one collectibles items over the past year.

These buyers curious some of the highest conversion repurchase and retention rates on ebay.

And they are also among the heaviest cross category shoppers on our platform, which supports our other categories.

By the end of Q3, roughly two thirds of large U S. PNA sellers have adapted the toolkit.

Our goal is to remain the world's most loved destination for passionate collectibles enthusiasts, providing access to the most compelling assortment of inventory across multiple categories and a high trust environment.

In service of that vision. During Q3, we launched direct submissions to the ebay bought this enables any U S resident to send and trading cards valued at $250 or higher from their personal collections to the vault, even if they were not purchased on ebay.

In July to coincide with the National Sports collectors convention the industry's biggest event, we announced vault enhanced submission, which now enables us to gather large amounts of high ASP cards in person at 10 pole events attended by top collectors.

During one weekend at the National alone, we added tens of millions of dollars of assets under management at the ebay vault, including assigned Jackie Robinson card valued at approximately $1 million.

These buyers curious some of the highest conversion repurchase and retention rates on ebay.

During Q3, we also wrote out a revamped condition grading system for trading cards, which greatly improves transparency for collectibles in this category.

And they are also among the heaviest cross category shoppers on our platform, which supports our other categories.

New listings now carrying more precise details, including with our card has been professionally graded and the numerical grade or one of several predefined card condition.

<unk> listings will be also migrated to the new standard over the coming months sellers had been asking us for this feature for some time and we believe it will drive improved trust for buyers better and more consistent price realization for sellers as well as more robust data and insights around individual card values for ebay.

In response to our growing community of collectors and enthusiasts last year, we introduced ebay live and interactive live shopping experience within the ebay app.

This feature Mary's ebay's unique scale with and engaging shopping experience that we believe enthusiasts across the collectibles luxury and fashion categories are increasingly seeking.

During one weekend at the National alone, we added tens of millions of dollars of assets under management at ebay bought including assigned Jackie Robinson card valued at approximately $1 million.

<unk> can interact with influential sellers and checkout in real time without leaving the stream.

Sellers have loved this tool as they can move items at scale and increase their sales velocity, while listing items as fixed price or as extended auctions.

During Q3, we also wrote out a revamped condition grading system for trading cards, which greatly improves transparency for collectibles in this category.

And live is currently in beta, but we continued to expand its availability to more sellers and categories. While we've been thoughtful about the pace of on boarding as we fine tune. The beta experience Q3 marked an inflection point as we hosted over 1000 live events saw our millionth fire tune in and grew GMB from ebay lie.

New listings now carrying more precise details, including with our card has been professionally graded and the numerical grade or one of several predefined card condition.

By Forex quarter over quarter.

Now, let me turn to the second pillar of our evolved strategy scalable solutions. We're.

We're pleased with the progress, we're making with our ebay international shipping Okay.

In response to our growing community of collectors and enthusiasm last year, we introduced ebay live and interactive live shopping experience within the ebay app.

Or ice, which makes cross border trade more seamless and cost effective for sellers and buyers.

We continued to scale Eas during Q3, and now have over 400 million live listings from U S sellers shippable to international buyers and more than 190 countries sellers have had an overwhelmingly positive reaction to the new program with customer satisfaction rates, approximately 30 points higher than the previous global shipping.

This feature Mary's ebay's unique scale with and engaging shopping experience that we believe enthusiasts across the collectibles luxury and fashion categories are increasingly seeking.

<unk> can interact with influential sellers and checkout in real time without leaving the stream.

Sellers have loved this tool as they can move items at scale and increase their sales velocity, while listing items as fixed price or as extended auctions.

Program that replaced in.

In October we launched combined shipping for ice, which allows buyers to order multiple items from an international seller and pay one consolidated shipping space.

<unk> is currently in beta, but we continued to expand its availability to more sellers and categories. While we've been thoughtful about the pace of Onboarding as we fine tune. The beta experienced Q3 marked an inflection point as we hosted over 1000 live events saw our millions of fire tune in and grew GMB from ebay live.

Q3 also marked another strong quarter for our advertising business.

Total advertising revenue grew 24% to $366 million.

First party ads grew 36% to $345 million or.

Or <unk> 36 points faster than FX neutral GMB growth.

By Forex quarter over quarter.

Now, let me turn to the second pillar of our evolved strategy scalable solutions. We're.

Two 3 million sellers adopted a single AD product during Q3, and we currently have over 850 million live promoted listings.

We're pleased with the progress, we're making with our ebay international shipping.

Or ice, which makes cross border trade more seamless and cost effective for sellers and buyers.

Promoted listing standard our cost per acquisition AD unit was once again the largest contributor to growth in Q3, driven by continued optimization of placements AD rate improvements and the recurring benefit of the Halo attribution change we discussed last quarter.

We continued to scale Eas during Q3, and now have over 400 million live listings from U S sellers civil bolt international buyers in more than 190 countries sellers have had an overwhelmingly positive reaction to the new program with customer satisfaction rates, approximately 30 points higher than the previous global shipping.

Promoted listings advanced our cost per click product was the fastest growing product in our ads portfolio on a year over year basis.

<unk> advanced continues to benefit from the simplifying and automating of core elements of the campaign setup and management processes.

Program that replaced in.

In October we launched combined shipping for ice, which allows buyers to order multiple items from an international seller and pay one consolidated shipping state.

In September we launched smart targeting for PL advance, which makes creating and managing CPC campaigns easier than ever.

Q3 also marked another strong quarter for our advertising business.

Obviously these campaigns took a lot of time to set up and manage as sellers have to manually site keywords and manage campaigns individually.

Total advertising revenue grew 24% to $366 million.

First party ads grew 36% to $345 million or.

Now through smart targeting ebay uses AI to manage keywords on behalf of sellers and optimize campaigns dynamically all with just a few clicks to setup.

Or <unk> 36 points faster than FX neutral GMB growth.

Two 3 million sellers adopted a single AD product during Q3, and we currently have over 850 million live promoted listings.

As part of the smart targeting launch we've also extended CPC ads to the similar items recommendations module when users are viewing and other items using fully automated targeting and bidding technology.

Moving to our third pillar magical innovations.

Last quarter, we discussed our magical listing experience, which represent the biggest transformation of ebay listing process in our 28 year history.

Promoted listings advanced our cost per click product was the fastest growing product in our ads portfolio on a year over year basis.

For over two decades, two of our biggest focus is we're at odds with each other making it a simple and fast as possible to listen item and ensuring listings are rich and comprehensive to maximize sales.

<unk> advanced continues to benefit from the simplifying and automating of core elements of the campaign setup and management processes.

In September we launched smart targeting for PL advance, which makes creating and managing CPC campaigns easier than ever.

Now generative AI allows us to leverage our treasure trove of images and listing data to quickly create compelling listings.

Previously these campaigns took a lot of time to set up and manage as sellers have to manually site keywords and manage campaigns individually.

Early users have told US these capabilities will unlock more of the inventory in their closets, and garages, which could ultimately keep more products out of landfills.

Now through smart targeting ebay uses AI to manage keywords on behalf of sellers and optimize campaigns dynamically all with just a few clicks to setup.

The first phase of our magical listing experienced leverages generative AI to instantly populate the item description within the listing flow based on a product's title category and other aspects.

This feature rollout to 100% of mobile App users in the U S UK and Germany during Q3.

In October we extended the generative AI descriptions to 50% of desktop users in these countries.

Moving to our third pillar magical innovations.

The first phase of the magical listing experience has been incredibly well received by sellers as usage adoption customer satisfaction and content acceptance rates have all been higher than expected.

Last quarter, we discussed our magical listing experience, which represent the biggest transformation of ebay listing process in our 28 year history.

For over two decades, two of our biggest focus is we're at odds with each other.

As much as sellers have enjoyed the first phase of magical listing we believe the next generation will be so simple and easy to use that all of our sellers will love it.

It is simple and fast as possible to listen item and ensuring listings are rich and comprehensive to maximize sales.

This experience will enable sellers to point their camera at an item take a photo and EBIT does the rest.

Now generative AI allows us to leverage our treasure trove of images and listing data to quickly create compelling listings.

This means we have powered this experience with our proprietary computer vision technology and generative AI to seamlessly populate the description category and any other item aspects.

Early users have told us these capabilities small mark more of the inventory in their closets, and garages, which could ultimately keep more products out of landfills.

Our camera based magical listing experience has been an employee beta for several months and is currently in a limited beta with a number of large sellers.

The first phase of our magical listing experienced leverages generative AI to instantly populate the item description within the listing flow based on a product's title category and other aspects.

Back from our beta sellers has been extremely positive as they found the new experience intuitive and easier to use we are incredibly excited to bring this experience to more sellers over the coming months.

This feature rollout to 100% of mobile App users in the U S UK and Germany during Q3.

In October we extended the generative AI descriptions to 50% of desktop users in these countries.

As part of our magical listing initiatives. We also rolled out a vastly improved background removal tool powered by AI. During Q3 sellers have told us that simpler cleaner images of their products have a significant impact on conversion are enhanced tool has now rolled out to all users in the core listing flow and sellers have told us they are.

The first phase of the magical listing experience has been incredibly well received by sellers as usage adoption customer satisfaction and content acceptance rates have all been higher than expected.

As much as sellers have enjoyed the first phase of magical listing we believe the next generation will be so simple and easy to use that all of our sellers will love it.

Already noticing significant quality and performance improvements from the revamped tool versus our prior version.

Overall I'm incredibly pleased by the progress we are making across all three pillars of our strategy. It is particularly encouraging to see how recent advancements in AI and machine learning can help us address more longstanding pinpoints for sellers and buyers on ebay and efficient and scalable ways.

This experience will enable sellers to point their camera at an item take a photo and EBIT does the rest.

Find the themes we have powered this experience with our proprietary computer vision technology and generative AI to seamlessly populate the description category and any other item aspects.

Next I'd like to highlight the impact we're having on the communities we serve.

Our camera based magical listing experience has been an employee beta for several months and is currently in a limited beta with a number of large sellers.

In Q3, we released our second annual small business report, which examines the sentiment of our global sellers. Despite macroeconomic uncertainty ebay sellers are confident they can build their businesses and give back to their communities.

In fact more than half of ebay sellers expect their overall business to grow in the next 12 months and over two thirds expect their businesses on ebay to increase over the next five years.

We also recently announced the winners of our up and running grants.

This program is currently in its fourth year and provides entrepreneurs with capital to invest in their businesses, along with training and mentorship to help them grow and thrive.

Already noticing significant quality and performance improvements from the revamped tool versus our prior version.

The third quarter also marked the 20th anniversary of ebay for charity program created as a way for people to give back during times of crisis.

It has evolved to a global platform supporting countless organizations and causes and raised more than one $3 billion for nonprofits to date.

In Q3 alone the ebay community raised $40 million up 16% year over year.

Next I'd like to highlight the impact we're having on the communities we serve.

All of these efforts demonstrate our purpose driven community and we are honored to be recognized for our progress. We're proud to be ranked on the U S News and World reports inaugural list of best companies to work for ebay.

EBIT was also recognized as a top corporate philanthropist by the Silicon Valley business Journal and San Francisco business Times.

In fact more than half of ebay sellers expect their overall business to grow in the next 12 months and over two thirds expect their businesses on ebay to increase over the next five years.

In closing I'd like to thank our extraordinary ebay team for delivering another solid quarter and continuing to innovate for our customers. We made significant progress against our long term objectives during Q3.

We also recently announced the winners of our up and running grants.

This program is currently in its fourth year and provides entrepreneurs with capital to invest in their businesses, along with training and mentorship to help them grow and thrive.

Our accelerating pace of innovation is fundamentally changing the ebay experience driving higher customer satisfaction and paving the way for new growth and revenue opportunities as the macro environment remains uncertain, we will be balanced in how we invest in the future prioritizing our highest ROI investments in order to generate.

The third quarter also marked the 20th anniversary of ebay for charity program created as a way for people to give back during times of crisis.

It has evolved to a global platform supporting countless organizations and causes and raised more than one $3 billion for nonprofits to date.

Long term shareholder value.

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

In Q3 alone the ebay community raised $40 million up 16% year over year.

Thank you Jamie and thank you all for joining us today I'll begin with highlights from the third quarter on slide 11 of our earnings presentation.

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

Now I'll provide our outlook for the fourth quarter and some closing thoughts before we begin Q&A.

EBIT was also recognized as a top corporate philanthropist by the Silicon Valley business Journal and San Francisco business Times.

As usual my comments will reflect year over year comparisons on an organic FX neutral basis, unless I note otherwise.

Q3 was another solid quarter for ebay as we met or exceeded expectations across all of our key financial metrics. Despite ongoing uncertainty in the global economy.

Merchandise volume was down 1% to $18 billion.

Revenue grew 4% three 5 billion.

<unk> volume by five points.

non-GAAP operating margin was 26, 4% we.

We delivered $1 <unk> of non-GAAP earnings per share and we generated $777 million of free cash flow, while returning $793 million.

<unk> term shareholder value.

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

To shareholders through repurchases and dividends.

Thank you Jamie and thank you all for joining us today I'll begin with highlights from the third quarter on slide 11 of our earnings presentation.

Let's take a closer look at our financial performance during the third quarter.

Gross merchandise volume was down 1% organically to approximately $18 billion.

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

The flat year over year on a total FX neutral basis.

I'll provide our outlook for the fourth quarter and some closing thoughts before we begin Q&A.

Foreign exchange represented nearly two points headwind to reported GMB growth.

As usual my comments will reflect year over year comparisons on an organic FX neutral basis, unless I note otherwise.

However, the U S dollar appreciation during the quarter created a <unk> headwind of more than $100 million versus rates implied in our Q3 outlook.

Q3 was another solid quarter for ebay as we met or exceeded expectations across all of our key financial metrics. Despite ongoing uncertainty in the global economy.

Focused categories continue to drive underlying momentum in our business growing roughly seven points faster than the remainder of our marketplace.

Merchandise volume was down 1% to $18 billion.

<unk> was once again, the largest contributor to growth and maintained mid single digit GMB growth for the third straight quarter in line with market rates of growth for this segment of E Commerce.

Revenue grew 4% three 5 billion.

<unk> volume by five points.

non-GAAP operating margin was 26, 4% we.

Ebay refurbished with the fastest growing focus category on a percentage basis, while GMB growth in our luxury focused categories was positive for the third straight quarter of a combination of value and quality to serve customers well and the current economic environment.

We delivered $1 <unk> of non-GAAP earnings per share and we generated $777 million of free cash flow, while returning $793 million.

To shareholders through repurchases and dividends.

Let's take a closer look at our financial performance during the third quarter.

Next I'll walk through our results on a geographic basis U.

Gross merchandise volume was down 1% organically to approximately $18 billion.

<unk> was down 2% organically in Q3, an improvement of over two points sequentially.

The flat year over year on a total FX neutral basis.

On a total FX neutral basis, <unk> was down 1%.

Foreign exchange represented a nearly two points headwind to reported GMB growth. However, the U S. Dollar appreciation during the quarter created a <unk> headwind of more than $100 million versus.

Although the U S economy has been more resilient than our other markets.

Months of discretionary goods continues to be impacted by the cumulative burden of elevated inflation and the highest interest rates observed in over a decade.

Versus rates implied in our Q3 outlook.

Focused categories continue to drive underlying momentum in our business growing roughly seven points faster than the remainder of our marketplace. P&I was once again the largest contributor to growth and maintained mid single digit GMB growth for the third straight quarter in line with market rates of growth for this segment of <unk>.

U S consumers are increasingly seeking value, which has shifted some demand to inventory offered by our CVT salad.

International JMP was roughly flat on an FX neutral basis and up nearly 4% as reported.

International markets continued to experience more severe macroeconomic pressure than the U S.

Thomas.

Refurbished with the fastest growing focus category on a percentage basis, while GMB growth in our luxury focused categories was positive for the third straight quarter of <unk>.

The UK seeing consistently negative e-commerce growth.

Early 2022, while Germany has not faced multiple quarters of economic contraction.

Combination of value and quality to serve customers well and the current economic environment.

This pressure has been mitigated by continued strength in cross border trade, which offset fall weaker trends in Europe.

Next I'll walk through our results on a geographic basis.

<unk> was down 2% organically in Q3, an improvement of over two points sequentially.

Moving to bias.

Trailing 12 month active buyers was stable quarter over quarter at $132 million I.

On a total FX neutral basis, <unk> was down 1%.

On an organic basis occupiers remains approximately 131 million for the third straight quarter.

Although the U S economy has been more resilient than our other markets.

<unk> also flat sequentially at $16 million.

Months of discretionary goods continues to be impacted by the cumulative burden of elevated inflation and the highest interest rates observed in over a decade.

Spine potency adjustments stable quarter over quarter, but around $3000 annually, but modestly year over year.

U S consumers are increasingly seeking value, which has shifted some demand to inventory offered by our CVT salad.

Turning to revenue, we generated revenue of $2 $5 billion during the third quarter up 4% organically.

International JMP was roughly flat on an FX neutral basis and up nearly 4% as reported.

<unk> volume by five points.

Total FX neutral revenue growth inclusive of MNI was 5% while currency had a de minimis impact to reported growth.

International markets continued to experience more severe macroeconomic pressure in the U S.

Our take rate was 13, 9%.

The UK seeing consistently negative e-commerce growth.

The quarter over quarter, but up nearly 50 basis points year over year.

Early 2022, while Germany has not faced multiple quarters of economic contraction.

The combination of FX on the ads revenue recognition change in Q2 represented a sequential headwind of over 10 basis points in Q3.

This pressure is being mitigated by continued strength in cross border trade, which offset fall weaker trends in Europe.

Advertising was again, the largest tailwind to our take rate on a year over year basis, and also quarter over quarter. After adjusting for the Q2 accounts in China.

Moving to buyers.

Trailing 12 month active buyers was stable quarter over quarter at 132.

Ebay International shipping and recent M&A in aggregate added five basis points to our tight right sequentially.

Total advertising revenue grew 24% to $366 million.

Reached just over 2% penetration of DMV.

First party ads grew 36% to $345 million, while roughly 36 points faster than FX neutral volume.

As noted last quarter the revenue deferral release for CPC ads in Q2 created a sequential headwind of $9 million. The first party AD revenue growth in Q3.

While we are pleased with the continued robust growth in promoted listings year over year growth decelerated slightly as we lapped the notable acceleration during the prior year period, which was driven by a series of performance optimizations.

Our legacy third party display ads, which have been impacted by a combination of secular and macro headwinds in recent quarters.

Celebrated further during Q3.

In recent months, we have activity deprecated.

If you add in certain circumstances to improve the user experience.

First party ads remain our primary focus as we continue to invest in scaling optimizing and automating our promoted listing portfolio.

Financial services had a modestly positive impact on our take rates sequentially.

Our in house payments capabilities have advanced in recent quarters, we have identified more opportunities for DMV revenue and cost optimization.

Adient continues to be an incredibly strategic partner for us in financial services. During Q3, we expanded our usage of adient as merchant acquiring services to cover additional forms of payment.

This development has positive implications for adding one probability which I will discuss shortly.

Moving to profitability.

non-GAAP operating margin was 26, 4% during the quarter, so roughly two five points year over year.

Roughly one one points of this delta was driven by the combination of recent M&A on the ebay International shipping program.

Foreign exchange also represents the year over year headwind of approximately 40 basis points.

The remainder of the margin variance was driven by investments in our business.

And modest volume deleverage.

Gross margin was down nearly 90 basis points year over year, primarily from the ramp of <unk> International shipping.

Within our operating expenses, we observed the one point increase in product development expense.

As we invested in product and engineering talent to drive innovation across EBA.

Sales and marketing was down modestly as a percentage of revenue year over year in Q3, as our investments in full funnel marketing initiatives were offset by cost efficiencies.

<unk> lower spend on coupons and incentives.

During the quarter, we also accrued an additional $50 million.

G&A expense on a GAAP basis related to pending legal matters.

This adjustment is reflected in our non-GAAP reconciliations while additional details on the accrual will be provided in our 10-Q filing.

We continue to focus on driving expenses out of the business, which is a crucial part of our path to long term sustainable growth on.

And while we do choose to invest were able to partially offset that with opex savings driven by our structural cost program.

Turning to our balance sheet and capital allocation.

We generated free cash flow of $777 million in Q3 up 23%.

Our balance sheet position remains robust as we ended the quarter with cash and non equity investments of $5 $4 billion and gross debt of $7 7 billion.

We repurchased over $650 million.

<unk> shares at an average price of approximately $44 during Q3 and had $1 7 billion remaining under our current buyback authorization at quarter end.

We paid a quarterly cash dividend of $132 million in September of <unk> 25 per share.

Since the beginning of 2022, we have returned nearly $5 2 billion to shareholders through repurchases and dividends or roughly 125% cumulative free cash flow over that period.

We generated non-GAAP earnings per share of $1 <unk> in Q3 up 3% year over year benefiting from a nearly 4% reduction in share count from our repurchases we.

We delivered GAAP earnings per share of $2 46.

With the Delta driven by unrealized gains on our equity investment portfolio.

Generally from other rental.

Our investment portfolio is detailed on slide 21 of our earnings presentation.

Major equity investments and warrants with valleys over $4 5 billion at.

At the end of Q3.

404 million other venture shares were valued at roughly $4 billion.

More than $1 billion versus the prior quarter.

As we disclosed in late September we have expressed support for the proposal made by the consortium of investors to other venta under which we would return a portion of our current holdings.

These discussions are ongoing we are not in a position to provide any further comments on this transaction or the implications of such a transaction to EBIT Tibet.

I Didnt volumes provided nearly $200 million at the end of the quarter.

As a reminder, our value is calculated based on several assumptions, including adding share price on the <unk>.

Profitability of our remaining warrant tranches vesting.

During Q3, the probability of investing was positively impacted by an evolution of our usage of audience products and services.

The three remaining warrant tranches norcal public policies, ranging between zero and 95%.

However, the increasing probability was more than offset by a price decline in audience shares during the third quarter.

Moving on to our outlook.

Although our third quarter volume trends were slightly better than expected. We did at the softening consumer demand in September that carried through October.

This macro softness was most pronounced in Europe, particularly in the UK and Germany.

Second and third largest markets respectively.

We have also seen tapering demand in the U S market quarter to date.

Given these trends our base case expectation is that continued pressure on discretionary demand.

Due to a relatively muted seasonal uptick in volumes during the holiday season.

For the fourth quarter, we expect to generate between $17 nine an $18 $3 billion of DMV represents organic FX neutral decline of between four and 2% year over year, while spot growth between negative 2%.

Flat.

The strengthening U S. Dollar also creates an incremental FX headwind the fourth quarter GM V of roughly $400 million.

Versus our prior guidance on a spot basis.

This is on top of more than $100 million FX headwind to Q3 <unk>.

On a sequential basis, we estimate FX will represent over a one point headwind to GMB growth and nearly one point of pressure to revenue growth.

We anticipate Q4 revenue between $2 47 to $5 3 billion.

Represents the organic FX neutral growth between negative one and positive 2% year over year.

This implies revenue will outpace volume by three to four points on an organic FX neutral basis in Q4.

As a reminder, our cotai right is typically down sequentially by 10 to 15 basis points in Q4 due to seasonal ISP in Catholic remix. Although this trend has occasionally been masked by payments and ads growth in the recent past.

Given our tempered outlook for Q4 volume and continued uncertainty in the global economy. We believe it is prudent to leaning more heavily into cost efficiencies to protect margins and earnings in this environment.

We forecast non-GAAP operating margin between $26, one and 26, 7% during Q4, which would yield margins into the high end of our prior guidance range for the full year.

We forecast non-GAAP earnings per share between $1 and $1 five.

Representing EPS growth between negative six and negative 2% year over year.

Current rates FX would represents a four point headwind to year over year EPS growth in Q4, as we lap meaningful hedging gains in the prior year period.

Our outlook for free cash flow of just under $2 billion. This year remains unchanged.

As I noted last quarter, we expect de Minimis free cash flow in Q4 due to the delayed timing of cash tax payments in 2023.

Our capital expenditures for the full year are expected between 4% and 5%, while our non-GAAP tax rate should remain unchanged of 16, 5%.

In relation to 2024, it is premature to offer specific commentary as we are in the midst of our planning process. We remain committed to finding the appropriate balance between growth and profitability to ensure we are positioned to dual financial returns in the years ahead.

As such we plan to grow expenses more slowly than revenue next year as we scale and leverage the investments we've made over the last few years.

We will remain good stewards of capital as we continue to target returning 125% with cumulative free cash flow to shareholders through repurchases and dividends through 2024.

We will target a certain level of capital returns.

Water to quarter, while maintaining the flexibility to opportunistically when appropriate.

In closing our Q3 results highlight the resilience of our marketplace business model amid continued challenges in the global economy.

Our fortress balance sheet and operational discipline.

With us to adapt to rapidly evolving demand environment, while continuing to invest for the future protecting earnings and delivering meaningful capital returns to shareholders IMAX.

I am extremely proud of our team's sustained focus on our strategic pillars amid this uncertainty and further laying the groundwork for long term sustainable growth.

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

Thank you at this time I would like to remind our teleconference participants in order to ask a teleconference question. Please press the star followed by the number one on your telephone keypad.

You can also submit your questions via the Q&A too on the webcast.

Our first question comes from the line of Colin Sebastian from Baird. Please go ahead with your question.

Thanks, Good afternoon I appreciate the questions I guess first off Jamie there is some discussion of that solar conference a few weeks back about extending focus categories to more verticals I think home and electronics were.

A couple of those into discussion I wonder how quickly we should see focus coverage grow in proportion to total listings.

That's true is that something that could drive volume growth.

Through 2024.

And then Steve I just wanted to go back to some of the macro factors you reviewed in and you mentioned I think a shift towards CBT and just hoping you could discuss some of the implications of that shift on on revenues and margins. Thank you.

Yes, Colin Thanks for the question. So as you know with focus categories. We don't pre announce the next categories that we are going into for competitive reasons et cetera, We do continue to rollout new areas as well as invest back into areas of the business. So I would look at this quarter, we launched UK authentication for jewelry.

In our UK business, we're actually opening up a authentication center in Japan to allow for cross border trade out of Japan, which is great.

We launched our expanded and PNA are guaranteed fit program. So that had launched just in the U S. We've seen great results by creating a game changing level of trust in that category and we've expanded that now to UK and Germany. This quarter and we're excited to see the impact of that on those markets.

Our.

Other categories like refurbished continue to do well, we have seen double digit growth from that perspective, we launched a new enhancements and trading cards.

This quarter with the new.

Classification system that we've put in place and new direct submission and evolve. So we're going to continue to balance new focus category opportunities expansion to other categories like we did with jewelry in the U K and like we did recently with street wear as well as investing back in the focused categories and whats working because we like the.

ROI of those investments.

Steve you want to take the second part of that definitely hey, good afternoon Collin So.

In terms of the negative one organic FX loan growth that we saw from a <unk> standpoint, there's a number of macro impacts that we're looking at so the first one let's say in September we observed some softening of consumer demand, which is carried through to October.

Imply the guide that we went forward with this has been most pronounced in Europe.

<unk> markets UK as the second largest market and has continued to experience negative ecommerce growth since early 'twenty, two Germany third largest market does not face multiple quarters of economic contraction and the U S.

As I said, we're starting to see some softness and we would expect the holidays period to be a little bit more muted. So when I look back on the third quarter and the dynamics are at play.

<unk> declined 2% on an FX organic basis.

In international was roughly flat the European softness.

<unk> has been helped by some of the CBT trade that we've seen that as being resilient think about consumers looking for value.

Cross border trade coming out of this.

The far east has been more resilient and as a reminder for invest.

Investor community that <unk> is measured where the seller is domiciled I'm sorry, you got softness in Europe with lapping through some of that dynamic for the strengths and CBT.

The international dynamic in Q3.

Great. Thank you I appreciate that.

Thank you.

Our next question comes from the line of Ross Sandler from Barclays. Please go ahead with your question.

Hey, Steve just a follow up on the macro comment.

As you guys look across different discretionary categories and price points do you think it's just mostly like the macro conditions. You described with the consumer weakening around GDP et cetera or are any of these new competitors like <unk> and she is having an impact at the low end of some of your peers are.

And then the second question.

Pleasantly surprised and happy to hear about the operating margin increase next year. So can you just flush that out a little bit for us is that a function of.

While being some of the international shipping investments.

And kind of discrete R&D investment what other factors might draw.

Drive that op margin increase next year. Thank you.

Thanks, Ross I'll kick off the macro one and then Jeremy can add and then I'll cover the margin question. So from a macro basis just to reiterate we did see at a macro level softening in September saying that continued through October.

We describe Europe is.

In softer from an overall perspective based on the macro data that we will see.

The U S. We have continued to see some softness across the board and it's really a function of discretionary spend as consumers consumer sentiment is down inflation.

Inflation's up and obviously the impact of interest rates, the JV might be Russia, yes, I don't think its in particular any specific other competitive thing Youre question on team and we have not seen a significant impact from team and we are seeing on our business. When we look at our cross border trade as Steve talked about it continues to remain healthy we believe that's because of our DIFM.

<unk> stated strategy and our approach if you remember we've been talking about this for a while we've been strategically moving away from low quality low ASP items and that hasnt been a focus for us for years I think the other big difference for our platform Ross is that where a vast vast majority of our traffic is organic so I think as others are implicated.

By kind of the paid search or other marketing spend out there in the market were less so in more resilient just because so much of our traffic is driven organically on the platform.

And then with regards to your question Ross on 24, obviously there'll be a number of puts and takes that will impact 'twenty four we're in the middle of planning at the moment. The thing I would say is we will continue to be very disciplined and get the balance right between growth and profitability.

Making investments over the last few years, which we will continue to leverage and scale as we get into 2024, we're looking at every area of our cost structure.

Obviously in terms of external spending with suppliers we've been very.

Measured in terms of our approach to the structural cost program. This year with the influx of AI that will really help us sort of leaning in to support the operation next year and use the benefits of Dallas regard fraud, and we can control our cost structure.

Operating in a rather dynamic macro environment and so we will lean in as we've said and make sure that.

Costs growing more slowly than revenue in 2024.

Thank you. Our next question comes from the line of Nicole <unk> from Bernstein. Please go ahead with your question.

Hey, guys. Thank you for taking the question I had a couple please.

Just following up on that operating leverage theme as you think about prioritizing kind of the highest ROI investments next year.

What initiatives are really making that top of that list and which ones are you may be more willing to push out a little bit if times get tougher.

And then on the focused categories, it's kind of nice to hear the market share stability. When you observe what's changed pre and post your improvements is this a function of conversion rates functionally improving or are you also now able to kind of drive better traffic to those focused categories.

Yeah. So first on the initiatives, we're still obviously in planning for next year, but I'd say a couple of things Steve talked about the cost structure one of the things. We're looking at is how do we leverage AI and technologies.

That our costs don't grow as our as our volume growth. So I gave an example of one of the areas. We've been investing a lot in is as our customer support and so if you look at like our <unk> expenses, our customer support expenses, we've been rolling out conversational help thoughts over the course of the last few quarters really advancing what we're doing there so that we can focus on.

Lot of our efforts into handling more calls in greater volume with higher customer satisfaction. As an example, we just launched that as a trial in Germany. We've had that live in some of our English markets. An example of some of the initiatives that we're going to do next year to manage the business and make sure that as Steve said, we're going after the growth opportunities in the business.

While being prudent about our expense structure when you think about.

Our focus categories and what's driving the success there I would say it's a couple of things one is that you know if.

If I look at like for P&A. For example, this is our third quarter of seeing mid single digit growth, which is in line with markets and we're just now launching guaranteed fit which is one of the big value proposition for us in that category to our markets, our second and third largest markets in the UK and Germany, where we do have a leading.

Marketing position from that standpoint, and what we're seeing is that the new work that we've been doing in fitment for example.

It's really been helpful. I talked about 2 billion, new fitment combinations based on my Fitments and that our sellers are seeing double digit increases in their conversion.

So to your point I think we're doing a better job with our full funnel marketing in each category acquiring <unk> into those categories and then when we bring them on we're having a better experience for them and converting them into sales and converting them into repeat buyers because of the changes we've made and trust because of the changes we've made in experience.

Think about like our luxury category. This is a third quarter, where we're seeing positive growth in luxury even in this market and youre seeing kind of what's happening and what others are saying and it's because of the customer value proposition that we're bringing to these categories that we're seeing those results. So we're going to continue to innovate and push forward on our strategy.

<unk> because we like the results that we're seeing in and the consumers responding and then we're enhancing the focused category work with a lot of site wide investments in those statewide investments not only help us in focus categories, but they help us in our other core categories in the business. So I would use. The example of magical less thing it certainly helps sell a sneak.

<unk> faster or trading card or watch or a handbag, but it also helps sell our musical instrument faster or board game or a book or all the things that people sell on ebay because we're taking so much time out of home listing process that we're looking to unlock more of what's in People's Closets garages, and basements with this technology and we.

Those investments will help both focused categories and our other core categories on the business. Thanks, Jamie. Thank you and our next question comes from the line is Thomas Jenkins from Piper Sandler. Please go ahead with your question Hi, Good afternoon.

Jamie or Steve I'm wondering if you could just talk a little bit about.

Yes, and how that is performing relative to your expectations around.

Transactions or inventory and how the.

The cost drag is is performing and whether youre, making progress there and then.

Maybe.

Steve specifically for you.

Noticed the buyback uptick this quarter can you just.

Walk us through that.

The thought process behind that thank you.

Yeah. Thanks, Thomas So look on the on Eas, We love the success, we're seeing in the program, it's making cross border trade much easier on the program ebay handles everything for the seller of the costumes that duty forms of buyers, we intermediate the returns and.

And we protect sellers from from item not received complaints. So we continue to ramp the program over time half of our big three inventory.

Not available we shipped internationally. So we're excited about the goal of this program, which is basically make it super easy for sellers. So they don't have to think and we handle all of that cross border trade for them. We continue to scale. It. During Q3, we now have over 400 million live listings, we launched some new features with the program for example, the ability to combined shipping.

So for example, I was with a seller or buyer of collectible buyer in Japan of trading cards, who's buying trading cards out of the U S. Now he can buy multiple trading cards, we can combine them in a single shipping invoice just making the whole ice program a lot better. The last thing I'd say is that when I look at the program overall for sellers.

It has a 30 point higher customer satisfaction than the previous program that we've had so all of the work that we did to bring things in house last year, Steve talked about the financial implications.

Being that in <unk> and sellers and we're seeing them react in terms of what's available internationally did you want to handle the second part, yes, and just to start Tom with regard to <unk> really pleased with the momentum largely inline with our expectations from a financial architecture standpoint.

We said, we expect this pregnancy accretive to operating profit for this year and by the year end it will be in line with that.

Co margins on that on the platform. So pleased with what we're seeing specifically with regards to your question on capital returns.

But the beauty of the ebay franchises, where we generated just under $2 billion of free cash flow a year gives us the ability to invest in the business, but continue to drive healthy returns for shareholders.

We laid out a path to a 125% of free cash flow to shareholders through stock buybacks and dividends.

Relatively between 'twenty, two and 'twenty four since the beginning of 2022, we've returned nearly $5 2 billion to shareholders.

Roughly 125% so we're right on track with the commitments that we mined.

Thank you guys.

Our next question comes from the line of Lee Horowitz from Deutsche Bank. Please go ahead with your question.

Great. Thanks, so much Jim if I could so the macro environment is obviously massive challenge for the business at the moment, but as we look out to next year can you maybe help us better understand what levers do you think you have at your disposal to perhaps get volumes back to even modest growth if the macro environment proves to be persistently weak in the medium term.

And then just to contextualize some of the comments around slower cost growth into next year relative to revenue.

Investors will be pleased to hear it but does this more cautious stance on investment.

Impact in any way the pace at which you think you can roll focus category coverage out over the next 12 months to 24 months or are those investments are already fully baked and the patient would be impacted in any way. Thanks. So much.

Yeah. So I would say a couple of things one is we're not going to get ahead of ourselves on 2024 and talk about that on this call. We've laid out the strategy that we have for expanding focus categories for the statewide investments that we're making and we feel really good about what we're driving in the underlying changes in the business on the expenses side I wouldn't think of.

That is pulling back in areas that we think will drive growth in the business, but more what I talked about earlier, which is finding opportunities to create leverage out of the model. When you think of things like cost of payments. When you think of things like how we're going to use AI to enable our the efficiency of the organization.

The whole motto here is control, we can control and.

That's why we think we've planned for the architecture that Steve laid out and we're really not going to get ahead of ourselves on anything more from 2024, but our main goal and we've been doing this through the structure cost program is to drive efficiency in the organization without driving the key layers the key levers and the innovations that have <unk>.

Driven growth on the platform.

Helpful. Thank you.

Thank you. Our next question comes from the line of Michael Morton from Moffett Nathanson. Please go ahead with your question.

Thank you.

Great question.

If we could start maybe with authentication.

For a few quarters now you've highlighted as a headwind.

Gross margins makes sense.

I'd Love to note. This is a line item that we should expect to see some leverage on as we go forward in the future.

Just tricky to think about.

Marketplace analysts right.

High incremental margins, but when youre doing something like authenticating, Mike if you double the amount of shoes, you're authenticating people cutting government boxes inventory. So any thoughts there on how we should think about that line item going forward. The next 12 to 24 months, you don't need to get too detailed but just for Rob.

<unk> aspect and then.

Just talking about.

Leverage that you saw in sales and marketing I understand and appreciate that you have a lot of direct traffic, but so do some other marketplaces that have seen a lot of increased competition across social and search. So it's impressive to see that leverage and would love to and I know you guys have invested in.

<unk> funnel advertising over the last 12 months to really get your improved product out there. So just to help us understand how you're seeing that leverage when other marketplaces are having such a challenging environment would be great as well. Thank you.

Hi, Michael I'll pick up the first and so we've been really pleased with the levels of trust that we are continuing to build on ebay, particularly focused around our focus categories and so the first thing I would say is thinking about authentication as a trust metric, that's really driving <unk> and so it's a great return on investment because its not.

Just about the cash you get that one shops in but also it's about the cross category shopping that goes away from that so every consumer that spends about $400 of sneakers on the average bar spent $2000 elsewhere on the platform and it's really the fact that get attracted to it.

You should be thinking about this as a as an investment that we're making on the requisite return on investment. The second thing I would say is it's not just about with education, because some people looking to everybody I think it's all about as an indication fitment as to P&I and warranties us salary furbished certified refurbished which was transportation is watches sneakers on her.

And so we're continuing to get scale as we supposed to driving this city overall platform, but also getting the benefits of trust and the benefits of cross category shopping as we got that fluid. So.

<unk> to be relatively de Minimis, but I would think of it as I overall.

Turn on investment Jeremy do you want to pick up the question with regards to the traffic Yeah look we've shifted our marketing strategy as we've talked about and we're telling our story in new and different ways, rather focus on large brand campaigns, we have been doing really targeted marketing spend to enthusiasts.

Our focus categories to this full funnel approach using.

A real full funnel mid lower up are and all of that full funnel makes our lower funnel work harder and we've been doing partnerships with influencers, leveraging social social media in better ways and so the whole shifted our marketing strategy is not to just go after kind of active buyers in a big brand campaign, but really market the value of <unk>.

Composition that we have on the platform.

With a really targeted approach to go after enthusiasts in that category and that's why I think youre seeing the results that we've talked about in P&A, which as you know our third quarter of an end market lines of growth in the mid single digits is because of the effect of the marketing programs do anything I would add is just the size and scale of it.

On the general operational efficiencies, we get with this to Jamie's point on full funnel marketing, we got to a point, where we've got paid owned and earned marketing.

Cross the board, which really brings additional consumers to ebay and continues to drive that level of trust on the platform so well some of the.

Drive the underlying GM V momentum.

Thank you. Our next question comes from the line of Eric Sheridan from Goldman Sachs. Please go ahead with your question.

Thanks, so much for taking the questions maybe two if I could go back to the comments on the broader softening of the.

E Commerce environment, how does that typically show up in your model. When you think about what you've seen in the UK or Germany is it slower buyer growth is it less <unk>.

Velocity or repeat behavior on the shopping levels at basket size, how should we be thinking about the signals you are watching for.

Four elements of the softening versus what might be a recovery as we move through Q4 and into next year that'd be number one and then when you look about the seller services side of the equation I know you've made a lot of progress on ads and payments and shipping what do you think the biggest friction points still are too continues will inspire the seller services side of the equation for the market.

Place, especially if the macro environment does become a little more uncertain and sellers are looking for assistance for marketplaces. Thanks.

Hi, Good afternoon, Eric I'll take the first one it generally shows up in traffic as you would imagine when you think about ebay and consumers looking at discretionary spend on the wallet stand it got a little pressured.

That's really where it tends to show up if I if I reflect on our business. So that's not forgot half of ebay's GMB is generated outside the U S. And if you think about Europe, you think about the likes of the UK and Germany.

Our second and third largest markets. When you look at the data in terms of e-commerce, excluding growth today.

You kind of is shrinking at three.

Three points.

In September in Germany, with minus seven and so we're seeing quite a precipitous decline in some of that.

E Commerce growth out of those couple of key markets and invariably as consumers continue to get pressured.

In their wallets that has the ultimate impact on traffic and discretionary spend Jeremy in terms of the overarching yeah on seller services, Eric It's really been across the board. If you think about our <unk> sellers. It's been a key focus for us for over three years now we started with ebay stores and a lot of innovation that we did when I first got back to ebay. Since then we've been building.

The AD portfolio as we've been talking about each quarter, we continue to enhance our shipping profile in our shipping services. So one example is like in our P&A category. We now have the ability for a BDC seller to say I have multiple warehouses that I can ship out of and we will ship out of the one closest to the buyer to get it faster to the buyer in our German business, we judge.

Launched a more expedited returns process, which help sellers manage returns and easier ways.

<unk> is helping them get more global scale demand payments is giving them more payment choices. So when you think about it I was just with a seller in Australia, who sells tires and he's like I love. The integration that you guys did with after pay because in this economy a lot of people buying a new set of tires are using the buy now pay later solutions. So I would say it is.

A combination of all of the things that we've done that are really being great services for <unk> at the same time, we are investing a lot in the sea to sea experience with things like the magical listings really letting them list with a whole lot more eased.

As I've talked about last quarter, the customer satisfaction for a brand new product. There is amongst the highest I've ever seen and what casual sellers are telling US is this is going to allow them to unlock more inventory because of how easy we're making it and that's now scaled out to 100% of our business across the U S. UK and D. So we continue to invest a lot in.

Our sellers, we continue to grow the number of live listings on the platform and we continue to raise the customer value proposition that we're giving them on ebay.

Operator can we do one last question please.

Absolutely.

Our final question comes from the line of Deepak Murphy Fannon from Wolfe Research. Please go ahead with your question Greg.

Great. Thanks for taking the questions Jamie given that consumers are increasingly looking at BH shopping during this holiday season.

Due to macro pressures in inflationary environment. Some of the other ecommerce platforms like SCR kind of incentivizing sellers to step up discounts that are also doing promos on their own to drive volume is that something that EBIT can do deal buyers will react to this and do you see opportunities to maybe mitigate some of these macro pressures with product initiatives at this point.

Persist for a while next year and then maybe one quick one for Steve Steve can you help quantify the cash outflow due to the taxes in <unk> is that.

Trained to kind of stay on your buyback cadence for <unk> or any additional color you can provide that would be great. Thank you. So much guys.

Yes, Deepak the only real couponing and promotional stuff, we do we do it in conjunction with our sellers, where they are kind of funding those coupons and that does work and that's in partnership with our sellers. We sometimes also do that with the R. Externally promoted listings product that we've been talking about one of our new AD products, but we really moved away from the couponing that was.

Unhealthy that we did back in 2019, and we have no plans to reintroduce that type of couponing, because it wasn't driving the type of ROI that we wanted the bigger point for ebay overall has been a shift in strategy to focus on used non new in season and refurbished because when when customers face. These inflationary environments, they're continuing to look at.

E Bay for better value.

Our refurbished business is up double digits, because people are getting like new products for 40% off.

<unk> business is growing faster than our new business because of the demand that people see in the values that they can get on ebay. So we just did a survey and we found that 90% of consumers that responded to the survey said that they purchased preloved goods on ebay in the past year. So our play on value is really the new strategy of.

What we're going after are driving those businesses and that's what's resonating with our customers. Steve do you want to talk about the cash implications of taxes. Yeah. Obviously, we talked about the free cash flow dynamics and the timing of the cash payments of 23 impacted by the California State disaster tax relief, which has shifted.

Our cash tax payments to up type of US has been paid during Q2 Q3, and that's really the reference when we were talking about without getting into sort of forecasting.

Buybacks sort of quarter to quarter basis.

Really pleased with the continued momentum we've gone that although I had 125% and that suite in average over the cycle that we talked about but we're back on track and happy with where we are.

Ladies and gentlemen, we will conclude today's conference call. Thank you for participating you may now disconnect.

Q3 2023 eBay Inc Earnings Call

Request a DemoDemo

EBAY

eBay

Earnings