Q4 2024 eBay Inc Earnings Call
Thank you for standing by and welcome to the ebay fourth quarter 2024 earnings Conference call. 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 star followed by the number one on your telephone keypad.
To withdraw your question again prestige start one.
Speaker Change: I'd now like to turn the call over to John Egbert, Vice President of Investor Relations you may begin.
John Egbert: Good afternoon. Thank you all for joining us for Ebay's fourth quarter 2024 earnings conference call.
Speaker Change: Joining me today on the call are Jamie Tony Our Chief Executive Officer, and Steve Priest, our Chief Financial Officer.
Speaker Change: 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 that ebay, Inc. Dot com.
Speaker Change: 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 the reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. Additionally.
Speaker Change: Additionally, all growth rates noted in our prepared remarks will reflect organic FX neutral year over year comparisons and all earnings per share amounts reflect earnings per diluted share unless indicated otherwise. During this conference call management will make forward looking statements, including without limitation statements regarding our future performance and expected finance.
Speaker Change: Results.
Speaker Change: 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.
Speaker Change: Earlier today, you should not rely on any forward looking statements. All information in this presentation is as of February 26, 2025, we do not intend and undertake no duty to update this information with that I'll turn the call over to Jamie. Thanks, John Good afternoon, and thank you all for joining us today.
Jamie: Our strong Q4 results capped off a transformative year for ebay, we executed our 2024 plan with precision and took significant steps towards our vision of reinventing the future of e-commerce for enthusiasts.
Speaker Change: Begin with some highlights from the full year.
Speaker Change: We ended 2024 with three consecutive quarters of positive growth and gross merchandise volume. Despite continued challenges in the global economy.
Speaker Change: For the full year GMB grew by more than 1% to 75 billion.
Our focus category volume grew 5% in 2024 and accelerated gradually over the course of the year, despite increasingly difficult comps the rest of our marketplace for our core categories also stabilized and were nearly flat year over year in 2024 benefiting from our horizontal and geos.
Speaker Change: Specific investments.
Speaker Change: Building on our success in Germany in 2023, we executed a significant overhaul of our CVC experience in the U K, leading to a notable improvement in <unk> trends in Q4.
Speaker Change: 2024 was also a transformative year from an innovation standpoint, as our enhanced core AI platform enabled us to launch our first proprietary large language models boost productivity in key areas like engineering and customer service and improve the efficacy of search the majority of our sellers are now using <unk>.
Speaker Change: <unk> tools like magical listing AI enhanced product backgrounds, and automated social media postings.
Speaker Change: We also brought out exciting AI powered experiences for buyers such as explore and shop, the look that enhanced discovery, particularly for long tail inventory.
Speaker Change: We balanced the disciplined investments and long term growth initiatives with continued operational efficiency, enabling us to grow non-GAAP operating income by over 4% year over year, while expanding non-GAAP operating margin by 70 basis points Lastly.
Speaker Change: Lastly, we created significant shareholder value by growing non-GAAP earnings per share by 15% to $4 88.
Speaker Change: While returning nearly $3 7 billion of capital through repurchases and dividends.
Speaker Change: I'm proud of our teams for achieving these results and laying the groundwork for us to further accelerate innovation for customers in 2025, while remaining on the path towards sustainable long term growth.
Speaker Change: Now I'll discuss some of the key highlights from Q4 before providing insights into our strategic priorities for 2025.
Speaker Change: We saw continued top line growth in Q4, as GMB grew by more than 2% to $19 3 billion in.
Speaker Change: An acceleration of over one one point sequentially.
Speaker Change: These results were driven by strong execution against our Q4 roadmap and solid consumer demand during the shortened holiday shopping season.
Speaker Change: Focus categories remained a key driver of overall growth as they accelerated to over 6% GNP growth. In Q4. This was nearly six points faster than our core categories, which were modestly positive in Q4 after accelerating by one point versus Q3.
Speaker Change: Trading cards volume accelerated to healthy double digit growth, making this category the largest contributor to <unk> growth in Q4.
Speaker Change: We drove significant innovation for trading card enthusiasts in the past year, including rolling out magical bulk lifting expanding our authentication and grading partnerships scaling up ebay live and improving our catalog data across multiple sports and genre.
Speaker Change: We also added consignment through PSA as its customers can start auction in fixed price lift things with just a few clicks.
Speaker Change: Overall, these enhancements position ebay well to capitalize on resurgent demand for trading cards throughout 2024.
Speaker Change: Motors parts and accessories or P&A was also a significant driver of focus category growth as Q4, <unk> trends were consistent with prior quarters of 2024.
Speaker Change: Our growth benefited from continued investment in building, our assortment, including connecting with professional sellers in the UK and Germany.
Speaker Change: Horsing more certified green parts in the U S and expanding our access to private label inventory overseas.
Speaker Change: On a global basis, our P&A inventory grew by double digits. During Q4, and we now have over 700 million live listings on ebay.
Speaker Change: 2024 marked our second consecutive year of mid single digit GNP growth in P&A, our largest focus category.
Speaker Change: A major driver of this turnaround was reestablishing ebay as a trusted place to shop for auto parts.
Speaker Change: Earlier this month, we further enhanced the trustee equation for millions of auto enthusiasts on ebay with our acquisition of caramel, which enables a secure end to end online vehicle purchase experience across all 50 U S States.
Speaker Change: Terminals technology simplifies complexities of a vehicle sale, including identity entitled verification ownership transfer financing insurance warranty and transportation.
Speaker Change: <unk> in Q1 U S sellers will be able to list cars trucks and motorcycles on ebay with caramel secure end to end checkout solution.
Speaker Change: We're excited to welcome the <unk> team to ebay as we transform the level of trust for vehicle purchases on our platform, we believe EBIT scaled audience of auto enthusiasts.
Speaker Change: With Caramels innovative technology enables us to better tap into the estimated $75 billion Tam for collectible cars in the U S.
Speaker Change: We also expect an improved vehicle transaction experience to drive synergies within other categories as our average vehicle buyer also spend thousands of dollars annually on P&A and non motives items across the ebay marketplace.
Speaker Change: A key lever for driving awareness in consideration with enthusiasts has been telling the ebay story in new and different ways.
Speaker Change: In Q4, we began partnering with a cast of Influencers across industries to reinforce <unk> position as the trusted marketplace for things people love, including Youtuber, Emma Chamberlain Olympic Gold medalist, Chloe Kim fashion designer Margherita Missoni and many more.
Speaker Change: As passionate EBIT customers themselves. These cast members are curating personalized storefront highlighting their favorite ebay products.
Speaker Change: Throughout 2025, you will see this cast amplify our value proposition to their audiences across various forms of media.
Speaker Change: In October we made a significant investment in our second largest market through an overhaul of our CDC value proposition in the U K.
Speaker Change: We are confident that with these changes we will capture more of the total addressable market and re commerce.
Speaker Change: While it's still early I am extremely encouraged by the results. We've observed to date in Q4, we saw a double digit improvement in CDC GMT growth versus our prelaunch baseline in the UK alongside 20, plus point improvement and see to see first generation Listers, new and reactivated sellers and <unk>.
Speaker Change: Local pickup GMB.
Speaker Change: Notably sales within focused categories and other mid to high ASP items, where the biggest beneficiaries of these changes lifting our UK CVC asps overall in Q4.
Speaker Change: Following the removal of seller fees for CVC listings across most categories. In October we introduced the buyer protection fee for UK CTC transactions earlier this month.
Speaker Change: This allows us to offer the same protection to buyers that they received when purchasing from business sellers.
Speaker Change: We rolled out buyer fees progressively over roughly two weeks in February listening closely to our community to ensure our fees were transparent and well understood.
Speaker Change: While we expected some level of elasticity. Following the addition of buyer protection fees Encouragingly. The early results were slightly better than our expectations.
Speaker Change: In Q4, we also launched the EBIT balanced feature to millions of <unk> sellers in the U K, which enables them to use their earnings to purchase products on ebay cover selling needs like shipping labels and promoted listings or withdraw their funds.
Speaker Change: EBIT balance has been well received thus far and adoption rates have exceeded our expectations.
Speaker Change: The majority of sellers with an open balance have applied it to their EBIT purchases, which is also beneficial to our marketplace as a carrier zero cost of payments.
Speaker Change: During Q4, we also begin to gradually ramp up our managed shipping program for UK <unk> sellers, which is live on an opt out basis with Royal Mail and every as our initial carriers.
Speaker Change: Minutes shipping, which has shown the UK customers as simple delivery offer simplicity lower cost improved transparency and greater protection against loss or damage, while generating incremental revenue and operating income for ebay.
Speaker Change: We've been listening to our seller feedback during the ramp phase and are launching multiple enhancements to make this program value proposition even stronger in the coming months for instance, we recently gave sellers the ability to select which carriers they are comfortable shipping with we.
Speaker Change: We will soon add a free shipping option with the cost of prepaid labels automatically deducted from sellers earnings. We are in the process of adding new carriers that support bulky and heavier items and we plan to introduce out of home pickup and drop off capabilities, which many UK customers value during due to their convenience lower cost.
Speaker Change: Privacy security and environmental benefits.
Speaker Change: We will continue to ramp managed shipping throughout Q1, as we add features and fine tune the program and plan to begin mandating it for UK CDC sellers during Q2.
Speaker Change: As we look at our UK initiative overall based on the results and behaviors. We're seeing so far we are even more confident the changes we're making across key parts of the CDC experience will allow us to unlock the sizable market opportunity from the vast array of unique inventory sitting in U K consumers homes.
Speaker Change: In 2024, we upgraded our gen AI capabilities by increasing our GPU capacity deploying our first supercomputer improving our hardware utilization and developing architectures optimized for <unk>, our enhanced AI platform enabled us to build and run models approximately.
Speaker Change: 100 times larger than the prior year with.
Speaker Change: We leveraged our decades of e-commerce data to build our proprietary Lillian models from scratch to accomplish specialized E Commerce task.
Speaker Change: Greater levels of efficiency.
Speaker Change: We also pre trained leading open source model on our dataset to improve their accuracy on specific EBIT use cases by the end of the year. We have launched dozens of customer facing features powered by LMS across the buyer and seller experiences search payments marketing and specific focus categories.
In addition to innovating on platform, we've been increasingly focused on meeting customers, where they are to drive greater awareness of the breadth and depth of quality inventory on ebay.
Speaker Change: In January we became one of the first companies to collaborate with open AI, operator, which can directly users to ebay for many of their shopping needs.
Speaker Change: It's a <unk> approach to commerce could create an entirely new channel for discovery and shopping online.
Speaker Change: Although it's early days, we anticipate this collaboration could expand the reach of our sellers, giving more buyers exposure to ebay's unique and differentiated inventory.
Speaker Change: Last month, we also launched the test with meta in the U S, Germany, and France that enabled Facebook marketplace users to browse and purchase ebay listings without leaving the app.
Speaker Change: Ebay sellers should benefit as they get exposure to Facebook scaled audience, while marketplace shoppers can discover a broader array of listings from the ebay community.
Speaker Change: The checkout experience and post transaction services are powered by ebay fully leveraging the on platform capabilities, we've built including protections like authenticity guarantee.
Speaker Change: The test initially started with a small percentage of users in a subset of our inventory in these three markets as our company is focused on optimizing the experience within this new surface for third party listings.
Speaker Change: As the e-commerce landscape undergoes swift transformation due to rapidly advancing technology, we are focused on positioning ebay at the forefront of emerging shopping paradigms like these we continue to focus on reducing friction and maximizing the global reach of our sellers' inventory connecting them with more enthusiast.
Speaker Change: Myers around the world.
Speaker Change: Turning next to advertising.
Speaker Change: During Q4 first party advertising accelerated to 16% while AD revenue grew nearly 12% to $445 million.
Speaker Change: Eclipsing two 3% of GMB.
Speaker Change: Approximately $3 4 million sellers adopted a single AD product during the quarter and we ended Q4 with more than $1 1 billion lie promoted listings out of nearly $2 3 billion total listings on ebay.
Speaker Change: First party advertising growth was broad based across products. During Q4 promoted listings general ads were the largest contributor to year over year growth in Q4 on the back of continued AD rate algorithm and placements optimization.
Speaker Change: Adoption of promoted listings priority and promoted offset units also increased as we introduced enhanced capabilities for campaign and budget management.
Speaker Change: In payments and financial services, we continue to focus on adding new and locally relevant ways to pay on ebay to expand by our choice drive conversion and optimize our payment mix.
Speaker Change: During Q4, we announced a global strategic partnership with <unk> to offer buy now pay to pay later solutions in the U K and several new European markets expanding on our successful launch in Germany. We've been extremely pleased with the early results as we've observed average order values on client transactions to be roughly <unk>.
Speaker Change: Three to four times higher than the average basket size in these markets.
Speaker Change: As the pioneer of re commerce sustainability continues to be a core part of our purpose as a company I am pleased to announce that ebay has set a 2045 net zero carbon emissions target that has been recently validated by the science based targets initiative.
Speaker Change: I'm also proud that in 2024, we sourced 100% of our energy consumption for ebay controlled offices and data centers from renewable sources, reaching our 2025 renewable energy target one year early.
Speaker Change: Looking forward our investments across our strategic pillars in 2024 latest strong foundation for us to build upon in 2025 as we continue to work toward reinventing the future of e-commerce for enthusiasts.
Speaker Change: In support of the first pillar of our strategy relevant experiences we will continue to innovate with an existing focus categories and extend our playbook to new categories and collectibles. We plan to continue innovating on behalf of the hobby by developing new experiences with PSA realizing more synergies with TCG.
Speaker Change: Player and Gordon and meaningfully scaling our ebay live business as we optimize the experience for enthusiasts.
Speaker Change: In P&A were focused on automating the application of fitment data on new and existing listings developing more experiences for do it for me buyers and expanding our access to well priced supply in key areas like Houston Green parts.
Speaker Change: We will also invest in our enhanced transaction process for vehicles through caramel to tap into the significant Tam within collectible cars and drive synergies across our marketplace.
Speaker Change: In fashion, we plan to leverage AI to better showcase emerging trends innovate unexplored and shop, the look and improved merchandising to highlight our sellers vast amount of desirable fashion inventory.
Speaker Change: We're also focused on improving trust through enhanced condition grading standards and leveraging our global footprint to tap into new sources of luxury supply.
Speaker Change: From a geographic perspective, we will continue optimizing the CDC experience in the UK and Germany, while also investing in significant enhancements to our global buying hub, which serves millions more buyers around the world.
Speaker Change: Within our second pillar scalable solutions.
Speaker Change: We aim to continue driving healthy growth in advertising by increasing seller adoption of promoted listings priority and promoted off site. We plan to continue optimizing promoted listings general placements and recommendations will add new capabilities to promoted stores and allow brands to fund these ads.
Speaker Change: For third party sellers to promote re commerce.
Speaker Change: Within financial services will continue to add more locally relevant payment options streamlined the checkout experience and optimize our cost of payments. We also plan to scale up our seller capital offering to serve the needs of more small and medium sized businesses, which make up the majority of volume on ebay.
Speaker Change: And as it pertains to our third pillar magical innovation.
Speaker Change: In 2025, we will build on our core AI foundations to train and deploy models significantly larger and more sophisticated than what we operated in 2024, including visual and multimodal models will also conduct pre training and instruction tuning of existing models since it's still there.
Speaker Change: To smaller sizes.
Speaker Change: <unk> for specific tasks, driving improved accuracy reduce latency and lower compute costs.
Speaker Change: I'm excited to see how our enhanced AI capabilities will continue to improve experiences like magical listing shop, the look and explore in 2025.
Speaker Change: We'll also leverage these models to touch more parts of the consumer experience this year to make it more modern and seamless.
Speaker Change: Also energized by how much our company has embraced this new technology to change how we work and execute as a company. This year. We are empowering every employee to leverage Gen AI tools to fundamentally change the experience on ebay and deliver value to customers.
Speaker Change: And importantly, we expect these strategic pillars to support continued GMB growth healthy operating income trends and robust growth in earnings per share in 2025 to ensure our roadmap continues to drive significant value for shareholders.
Speaker Change: With that I'll turn the call over to Steve to provide more details on our financial performance Steve over to you.
Steve: Thank you Jeremy and thank you all for joining us today I'll.
Speaker Change: I'll begin with the financial highlights section of our earnings presentation.
Steve: Next I'll discuss our key financial and operating metrics in greater detail.
Steve: Finally, I'll provide our guidance for the first quarter, our preliminary outlook for the rest of the year before we begin Q&A.
Steve: My comments will reflect year over year comparisons on an organic FX neutral basis, unless I note otherwise.
Steve: <unk> delivered strong results in the fourth quarter, as we met or exceeded expectations across our key financial metrics.
Steve: GMB grew over 2% to $19 3 billion.
Steve: Revenue grew 1% to $2 5 billion.
Steve: non-GAAP operating income grew approximately 2% to $698 million.
Steve: We delivered $1 25 of non-GAAP earnings per share up over 16%.
Steve: And we returned more than $1 billion to shareholders.
Steve: Persons evidence.
Steve: Now, let's take a closer look at our financial performance during the fourth quarter.
Steve: Merchandise volume grew over 2% to $19 3 billion.
On an organic FX neutral basis.
Steve: Added about 30 basis points to total FX neutral volume growth.
Steve: Foreign exchange was 130 basis points tailwind to spots GMB growth.
Steve: Our strategic initiatives are instrumental to our GMB growth acceleration throughout 2024.
Steve: So that's an unexpected shopping activity lights in the holiday season, as we benefited from improved AI models with the delivery date estimates and greater visibility of items with fast shipping.
Steve: Focused category GM V grew over 6% in Q4, and our price per passengers by nearly six points.
Steve: We saw positive growth contributions across trading cards, P&I luxury and refurbished.
Steve: <unk> growth across the remainder of our marketplace was modestly positive in the quarter driven by our horizontal innovation Geo specific investments.
Steve: Patrick with shopping on a sell to buy flywheel.
Speaker Change: Shifting to our geographic trends.
Speaker Change: <unk> grew by 1% from Q4, driven by improved traffic trends and strong late season holiday demand.
Speaker Change: Trading cards had another strong quarter posting the fastest quarterly GMB growth observed since 2021.
Speaker Change: International Gms grew over 3% on an FX neutral basis in the quarter, while FX was a tailwind to spot GMB growth of 250 basis points.
Speaker Change: Although underlying macro trends in the UK and Germany remain challenged we saw resilient demand over the holiday season.
Speaker Change: As Jeremy discussed earlier, the successful launch of our U K initiative.
Speaker Change: As an incremental boost to both our CTC and overall volumes.
Speaker Change: International JMP growth also benefited from strong trends in cross border trade, especially from greater China and Japan.
Speaker Change: Moving on to our trailing 12 month biometrics.
Speaker Change: Occupiers grew over 1% to nearly 134 million in Q4.
Speaker Change: Our second straight quarter of sequential occupied growth was driven by steady growth in new and reactivated buyers and improved retention.
Speaker Change: Excuse us pause remained stable at roughly $16 million and spend per enthusiast buyer grew slightly year over year to more than $3100.
Speaker Change: So those types of opposed to look at revenue.
Speaker Change: We grew revenue by nearly 1% to $2 5 billion in Q4.
Speaker Change: Spot revenue growth was nearly 30 basis points lower due to foreign exchange headwinds.
Speaker Change: Our take rate was 13, 3% in the fourth quarter.
Speaker Change: 40 basis points lower year over year.
Speaker Change: Our UK seats of finished goods was a headwind of approximately 50 basis points as we eliminate some final value fees for <unk> in October.
Speaker Change: <unk> also represented another 20 basis points impact.
Speaker Change: Rates in the quarter.
Speaker Change: These headwinds were partly offset by a tailwind from first party advertising financial services and shifting.
Total advertising revenue grew nearly 12% to $445 million in the quarter <unk> penetration increased to two 3%.
Speaker Change: First party ads growth accelerated to 16% to $434 million.
Speaker Change: We further deprecated third party display ads with revenue declining 54% in Q4 less than $12 million.
Speaker Change: Now turning to profitability.
Speaker Change: non-GAAP gross margin was approximately flat year over year as a reduction in cost of payments authentication related costs and lower depreciation expenses.
Speaker Change: Actually offset by traffic acquisition costs foreign exchange headwinds on tax related matters.
Speaker Change: non-GAAP operating margin expanded by over 30 basis points year over year to 27% in the quarter driven by operational efficiencies and lower transaction losses, partly offset by a full funnel marketing and a foreign exchange headwind of 70 basis points.
Speaker Change: Our non-GAAP operating income grew approximately 2% in Q4, our non-GAAP earnings per share grew over 16% to $1 25.
Speaker Change: On a GAAP basis earnings per share was $1 40, a higher GAAP earnings were primarily due to a onetime tax credits, partly offset by stock based compensation expense.
Speaker Change: Next I'll discuss our balance sheet and capital allocation.
Speaker Change: We generated free cash flow of $560 million in the quarter and nearly $2 billion for the year consistent with our guidance.
Speaker Change: At the end of 2024, we had cash and non equity investments seven $2 billion and gross debt of $7 4 billion.
Speaker Change: We repurchased $900 million of EBIT shares during Q4 at an average price of nearly $64.
Speaker Change: In December our board authorized an incremental 3 billion under our stock repurchase plan, bringing our total authorization to roughly $3 3 billion at the end of the year.
Speaker Change: In addition, we paid a quarterly cash dividend of $128 million in December.
Speaker Change: <unk> 27 per share.
Speaker Change: Next I'll give an update on our investment portfolio.
Speaker Change: Equity investments awards valued at over $1 billion at the end of the quarter.
Speaker Change: The majority of this probably is in Iberia with our approximately 8% ownership.
Speaker Change: Nearly $900 million.
Speaker Change: This is our remaining stake after the consortium led by <unk> and Blackstone exercise its option in Q4 to purchase roughly 10% of our ownership stake to just over $1 billion.
Speaker Change: In Q4, we exited our equity investment in adient, realizing roughly $600 million.
Speaker Change: Gross cash proceeds we no longer hold any warrants an audience of two remaining tranches expired at the end of January 2025.
Speaker Change: On December 17, we sold our nearly 20% stake in Apollo Korea.
Speaker Change: G market and generated $320 million in gross cash proceeds from the transaction.
Speaker Change: Moving on to our outlook.
Speaker Change: For the first quarter, we expect GM vary between $18 three an $18 6 billion.
Speaker Change: Representing FX neutral growth between flat and 1% year over year.
Speaker Change: This includes an expected contribution of approximately 30 basis points from Goldman.
Speaker Change: Providing exchange rates, we expect FX to be nearly 140 basis points of headwind to <unk> growth in Q1.
Speaker Change: Our guidance assumes continued momentum focused categories positive contributions from horizontal innovations and continued benefits from our U K initiative.
Speaker Change: However, our outlook is tempered by continued macroeconomic challenges in the UK and Germany, the potential impact of tariffs.
Speaker Change: Linda considerations.
Speaker Change: We are contemplating a range of outcomes with tariffs and that guidance based on what we can see and forecast.
Speaker Change: We also face a net headwind of 50 basis points due to lapping the extra leap day.
Speaker Change: 2024, partly offset by Easter falling in April this year as opposed to March last year.
Speaker Change: The Easter timing is a benefit this year as we typically see less shopping activity during the holiday.
Speaker Change: We expect to generate revenue between $2 five two to $5 $6 billion in the first quarter.
Speaker Change: <unk> negative one to positive 1% FX neutral growth.
Speaker Change: Most of my FX would represent roughly 60 basis points of headwind spot revenue growth at current rates.
Speaker Change: The UK Citrus initiative will weigh on our Q1 take rate on a year over year basis as broad protection fees were rolled out midway through the quarter.
Speaker Change: Additionally, we plan to begin mandating manage shifting in the UK during Q2 as we implement the enhancements the secrecy sellers that Jamie discussed.
We forecast non-GAAP operating margin between 29, and 29, 4% in the first quarter.
Speaker Change: On a year over year basis, we expect us in financial services to contribute to margins along with a modest contribution from bio protection space.
Speaker Change: These tail winds are more than offset by a 70 basis point increase in depreciation expenses from 20 basis points of M&A related expenses.
Speaker Change: As a reminder, we extended the useful life of our servers and networking equipment from three to four years in 2020 for this.
Speaker Change: This change benefited our margins last year, but created a headwind for 2025.
Speaker Change: Based on these assumptions, we forecast non-GAAP earnings per share between $1 32.
Speaker Change: And $1.36 in the first quarter, representing a year over year growth between six 9%.
Speaker Change: Next I'll share some updated thoughts on the full year.
Speaker Change: We expect to generate low single digit GMB growth in 2025 on an FX neutral basis.
Speaker Change: Based on current exchange rates.
Speaker Change: <unk> will be over one point of headwind a fully a spot growth.
Speaker Change: This outlook is balanced against the risks and uncertainties surrounding tariffs and how they could change demand due to consumer elasticity.
Speaker Change: Our outlook includes a modest volume contribution from vehicles. Following the <unk> acquisition, although we expect the impact to be immaterial in Q1 and gradually ramp throughout the year.
Speaker Change: The existing vehicles business on ebay Motors does not included in reported <unk> for many years since we did not charge transaction fees. However, we will start reporting janvey for vehicle sales executed through telehealth and service.
Speaker Change: For the full year, we expect revenue growth modestly higher than <unk> on an FX neutral basis.
Speaker Change: With FX, creating a 40 basis point headwind to spot growth.
Speaker Change: Advertising shipping and financial services are all key drivers of revenue and take rate this year.
Speaker Change: Once managed shipping was fully ramp we would expect our UK <unk> take rate to be slightly higher than our run rate parts of Q4 2024.
We expect non-GAAP operating income growth relatively in line with revenue on an FX neutral basis.
Speaker Change: We estimate FX would represent roughly 50 basis points of tailwind despite operating income growth at current rates.
Speaker Change: Several headwinds embedded in this outlook that we expect to impact full year operating margins.
Speaker Change: The servers and networking equipment depreciation dynamics I called out for Q1 will be a half point headwind for full year gross and operating margins.
Speaker Change: Second based on our updated ramp schedule you came on its shipping should negatively impact operating margins.
Speaker Change: This 30 basis points due to gross revenue recognition.
Speaker Change: We continue to expect positive operating income dollar contribution from this program in 2025.
Speaker Change: Third we estimate nearly 20 basis points of M&A related headwinds.
Speaker Change: These headwinds are partly offset by an estimated 30 basis point tailwind from FX based on current rates.
Speaker Change: We forecast capital expenditures to be between four and 5% of revenue for the full year.
Speaker Change: We are significantly increasing our GPU capacity again in 2025.
Speaker Change: Pleased to be able to do so within our historical average budget.
Speaker Change: We expect our non-GAAP tax rate to remain stable at 16, 5%.
Speaker Change: As it pertains to free cash flow, we have a number of unique tax considerations in 2025.
Speaker Change: In addition to our standard tax payments.
Speaker Change: In Q2 of 2025, we expect to probably net cash taxes.
Speaker Change: Nearly $650 million related to our other venture Amelia idea and Jean Marc with transactions in 2024.
Speaker Change: We will also probably the final year of our repatriation tax obligation for $292 million in Q2.
Speaker Change: Additionally, changes to the tax treatment of R&D expenses represents a headwind of over $100 million in 2025.
Speaker Change: While these unique items were while reported free cash flow. This year. Excluding these impacts normalized free cash flow is expected to be comfortably north of $2 billion.
Speaker Change: None of these impacts are expected to repeat in 2026 with the exception of the R&D headwind, which will be less material as we have built a 45 year history of capitalized R&D assets.
Speaker Change: On the capital allocation front, we are targeting share repurchases of at least $2 billion in 2025.
Speaker Change: Board also declared a quarterly dividend of <unk> 29 per share for Q1 of 2025 to be paid in March an increase of two cents.
Speaker Change: From a quarterly dividends pay that in 2024.
Speaker Change: Based on these assumptions, we still expect non-GAAP earnings per share growth in the high single digits for 2025.
Speaker Change: In closing <unk> delivered strong financial results in 2020 for improving <unk> operating income and EPS growth year over year.
Speaker Change: We've created a solid foundation for 2025, and our outlook reflects our confidence in anybody's initiatives. Despite tariff on macro uncertainties and demonstrates our ability to generate sustainable long term growth and deliver healthy capital returns and robust earnings for shareholders.
Speaker Change: With that Jamie and I will now take your questions.
Speaker Change: Yeah.
Speaker Change: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad you raise your hand, who joined the queue. If you would like to withdraw your question simply press Star. One again, we ask that you. Please limit yourself to one question and one follow up your first question comes from the line of Michael Martin from Moffett Nathanson Your line.
Speaker Change: <unk> is open.
Speaker Change: Yeah.
Speaker Change: Hi, there. Thank you for the question.
Speaker Change: I'll start with one I would love if you could size ebay's position and exposure to changes in de Minimis shipping and maybe just specifically to China I know theres a lot of moving parts with that but from what we see it appears that most of your large category offerings are already sitting in U S warehouses.
Speaker Change: We mustn't shipping times, so that would suggest they've gone through proper channels and tariffs is that a reasonable assumption and then I have a follow up after this.
Speaker Change: Michael Yes, yes. It is so if you look at the China to U S quarter that makes up approximately 5% of total GMB for ebay, China overall is a little less than 10% of GMB, but approximately three quarters of our greater China volume is forward deployed so as you said, it's already subject to tariffs.
Speaker Change: The remainder about half of that is we manage that directly through a program. We have called speed back, which obviously can help sellers handle the complexity of Paris as cost is not the only challenge. So overall, we're planning to do all we can to help sellers and buyers navigate these changes with as little disruption as possible and we feel confident in our.
Speaker Change: Our diversified global marketplace can help them adapt to.
Speaker Change: To changes in tariff policies.
That's great. Thank you and then another question.
Speaker Change: Sure would be chat GPT operator in the presentation.
Speaker Change: There's a few there's a lot of changes coming to the E. Commerce discovery funnel with some retailers are treating this differently. They went to wall off the agents or assistance and others want to open up to them would love to know ebay, you've obviously indicated one thing so far but how youre thinking about this big picture over the long term.
Every behavior could be shifting.
Speaker Change: Yeah look we were one of the first companies to collaborate with open AI on their on their research preview here.
Speaker Change: And our feeling is that we're obviously building a lot of great a gentex technology on ebay.
Speaker Change: Whether that's in how products are sold with magical listing or how their bond with sharper look explore but we've really focused on having a differentiated set of inventory over $2 3 billion listings and see an opportunity to allow our sellers to get greater exposure to more sets of diverse buyers.
Speaker Change: It's why you see us doing the preview with open AI, you'll see the partnership that we've created with Facebook around marketplace is really about opening up that inventory and if you think about what we've been doing for decades in buying Google placement ads or on the SEC SCO work that we've doing that we've done those have been good.
Speaker Change: Sources for us to acquire new buyers into.
Speaker Change: In the ebay. So we've been we've been looking at it as another channel another opportunity, but we've continued to build out all of our own agents and run our own pilots internally as well to just continually improve the shopping experience on ebay.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Lee Horowitz from Deutsche Bank. Your line is open.
Speaker Change: Alright. Thanks, so much for the question, maybe as we look out to 2025 and sort of gross FX neutral growth, that's maybe no better than where you're exiting 2024 can you, perhaps break things down a little bit more in terms of what your what are you thinking about in terms of focus category growth next year should that continue to improve anything as it relates to expected focus category expansion.
Speaker Change: Or perhaps maybe a step back in the core business around the macro any help on those moving pieces would be it would be great.
Speaker Change: Yeah, No. We can see continued momentum in the work that we're doing and focus categories. So.
Speaker Change: If you look back over the last two years, we've had really healthy growth there, 6% last quarter, 5% over the course of the year and our largest category and PMA. We've had mid single digit growth now for two years.
Speaker Change: So we feel really good about the momentum in the business and what we're seeing and the continued pace of innovation, we're going to continue to invest in existing categories as well as the new categories. You see our core categories have gotten stronger as well over the course of 'twenty four we had a roughly one point growth in our core category business.
Speaker Change: And we see a lot of opportunities and additional work in our focus categories. So in fashion, we have the opportunity to go much deeper I talked about some of that on the call.
Speaker Change: Added U K fashion to our focus categories et cetera. So we still have five categories that are over $10 billion of opportunity. We see a lot of growth. We actually think the non new in season will grow faster than new in season, and that's what we've been seeing on our platform, which is really great and healthy.
Speaker Change: For us for the long term growth of the business.
Okay, and then maybe one follow up on the Facebook marketplace partnership any more details you can provide as it relates to just the specifics of how it works any limiters as to how many listings you guys can maybe show on their marketplace anything as it relates to sort of revenue share I know youre not going to give the details exactly but sort of how the economics may work in earnest.
Speaker Change: Youre seeing early or you expect to see in terms of relative to ASP of what you may sell to that marketplace versus sort of asps that you get sort of your core ebay platform.
Speaker Change: Yeah look we think the partnership is great for the ebay seller community as they can benefit from Facebook scaled audience and in the large demand that they have in <unk>.
Speaker Change: Similar to what I talked about with open AI, where we see it as meeting customers, where they are and helping our sellers broaden their reach so.
Speaker Change: We will continue to bring a broader array of unique ebay listings. There we feel like it's great because we get all the benefits of the trust for the buyers there they've got the authenticity they guarantee the checkout process and the post transaction services.
Speaker Change: On economics, we usually don't comment on specifics of partnerships, but we're excited by the potential I'd say, it's not we're not just simply buying ads on marketplace and it's not an ebay offsite ad product but.
Speaker Change: But I'd also say look it's still early days. So we're encouraged by the early learning, but we are gradually scaling up the test in each company is working to optimize the experience.
Speaker Change: Great. Thanks, so much.
Speaker Change: Your next question comes from the line of Eric Sheridan from Goldman Sachs. Your line is open.
Speaker Change: Thanks, so much for taking the question maybe two if I could first curious for your take on the overall health of the consumer seems to be a bit of a renewed debate among investors on how to interpret.
Speaker Change: The state of the consumer based on sort of income levels of discretionary versus non discretionary spend we wanted to get a sense of what you guys are seeing across the platform, but across some of your geographies and then.
Speaker Change: Our focus categories the momentum that you built coming out of 2024.
Speaker Change: You want folks to think about the potential for that momentum to continue and what are the building blocks of sustained focus category growth that you're most focused on executing on deeper into 2025. Thanks. So much.
Speaker Change: Yeah, I'd say look the macro environment continues to be dynamic as it was through 'twenty four I would say demand in the U S has been more resilient with trends in the UK and Germany still relatively weaker amid lower consumer confidence and lower GDP growth there and I. Just note that we've made significant progress last year. Despite these trends.
Speaker Change: And then 2025, we're going to continue to remain nimble I would say the the more affluent customers are luxury businesses continued to perform well handbag I talked about collectibles being double digit growth right now.
Speaker Change: So I think it's more of the you know the less affluent consumer who is pressured in this environment.
Speaker Change: When you think about the momentum in 2024, our focus categories, we see US building on a lot of strengths that we've created and the momentum that we have in 2024 building off of non new in season. So you know I talked about collectibles right. We are just getting started and how we're working with PSA how we're working with.
Speaker Change: TCG player to take advantage of the opportunities in collectibles and build on our focus strategy that we.
Speaker Change: Have they are I'd say ditto for ebay live and the growth that we're seeing in the new.
Speaker Change: <unk> based features we've launched there like case breaks and buy spot et cetera, we've been recently, increasing the exposure of what we've done in ebay live on the homepage.
Speaker Change: And on our live hub I.
Speaker Change: I talked about the work in P&A and we see vehicles, there's not another another opportunity to drive growth in the business, but another opportunity to drive synergies with our parts and accessories.
Speaker Change: Business, which is one of our largest focus categories. As you know and then when I look at fashion, Eric we do over $10 billion in fashion and in my opinion ebay is just starting to innovate on this focus category right. It wasn't until two quarters ago that you could even savior size on ebay, which is a pretty simple feature and now we're using.
Speaker Change: To do things like shop, the look and explore in both great discovery and what that does is it really shows off the amazing inventory and you can tell by the size of the category that we have amazing inventory on the platform and that's what we hear from buyers and so being able to put our playbook against that category is exciting.
Speaker Change: I'd just say you know I feel really good about the momentum and focus categories, what were seeing and the roadmap and the plans that we have for 25 to two to keep that going.
Speaker Change: Yeah.
Speaker Change: Your next question comes from the line of El Gallo Runion from Citi. Your line is open.
Speaker Change: Hey, Thanks, guys.
Speaker Change: Maybe just on the <unk> outlook.
Speaker Change: From <unk> and the full year, Steve I think you hit on some of the components like autos GMB coming in but.
Speaker Change: Maybe a little bit more color to help.
Speaker Change: Just whats happening in the deceleration between <unk> and <unk>.
What are you seeing there and then as we work our way through the year.
Speaker Change: There is an implied acceleration in <unk> okay.
Speaker Change: Okay, and I know you gave some some of the puts and takes around auto is it mostly around autos is there a contribution in your guidance from the Facebook marketplace coming.
Speaker Change: Coming through just how do we think about all the puts and takes between now and the end of the year.
Speaker Change: Hey, I'll pick this one up good to speak to you as Jamey alluded to earlier, we are continuing to operate in quite a challenged macro environment, particularly in Europe and now more recently, we are facing the uncertainty around U S tariffs and de minimus changes, there's three factors I would call out with regards to the Q4 to Q.
Speaker Change: So first of all I'd say, we did have a particularly strong uptick in demand lights in Q4 during the holiday season, which we're coming off the back of secondly, we are as I mentioned continuing to operate in this environment and then we're looking at a number of scenarios and we've implied some of that in our first quarter Guide and then thirdly.
Speaker Change: There's some calendar timing dynamics.
Speaker Change: Yeah in 2024 creates roughly a point of headwind for DMV growth for Q1, partly offset by the beneficial timing of Easter in terms of offsetting some of those headwinds. We obviously continue to drive momentum across focused categories across the Gi specific investments, particularly the likes of the UK.
Speaker Change: On the horizontal innovation that is driving greater trust across the platform our momentum for the rest of the year. Jamie has talked a lot about you know the focus category momentum. We're excited about the investments we continue to make in 2025 that sequentially will improve GM V. As we go through the year and gave us the confidence.
Speaker Change: Talk about the positives JMP momentum for 2025, Yeah, and I'd just add we don't.
Speaker Change: Don't see it as the caramel vehicles is what's driving the growth in Q1, that's going to be relatively immaterial and in the full year, that's going to be very modest and I would say the same about Facebook marketplace. We're excited by the tests, but we're not baking in.
Speaker Change: Material contributions to the low single digit color that we put out there it's really the strength in underlying momentum of the business that makes us feel good about the rest of the year and what we're doing.
Speaker Change: Steve talked about some of the onetime impacts in the calendar et cetera in Q1, and overall, we feel like really good momentum off the off the backs of the strategy that we've laid out and the plans that we have for 25.
Speaker Change: Okay. Thanks, that's.
Speaker Change: That's really helpful.
Speaker Change: A follow up maybe back to AI and AR.
Jamie: Criteria <unk>, Jamie that you called out.
Jamie: Sounds like we're seeing benefits both here on obviously the platform improvements.
Jamie: And then also on the cost side, you called out engineering customer service.
Jamie: And any way to quantify it.
Jamie: Are you able to you guys even do that.
Jamie: The benefit that Youre seeing from AI, whether it's on the top line or on the margins and what the particularly.
Jamie: Particularly on the margins, maybe what the longer term opportunity as some cost efficiencies that you could drive here. Thanks.
Jamie: Look I mean, the the level of change, we're seeing kind of quarter. After quarter is pretty significant is as I mentioned the models in 2024 100 times larger than the ones that we're using for 'twenty three in terms of quantifying the size of how our consumers are using this over 10 million unique sellers have used our gen. II features to date.
Jamie: And they've created well over 100 million listings and that generates several billion dollars of GMB.
Jamie: And it's a product that has 90% customer satisfaction rates.
Jamie: In terms of just the selling side on the buying side, we continued to rollout new features and enhanced things like shop the look.
Jamie: And explore you know as you think about productivity of our models.
Jamie: In 2024, we achieved a 30% improved accuracy on five of our kind of core E. Commerce task at an eight times smaller model size 10 times lower latency. So we've not only.
Jamie: <unk> been putting more features to change the experience out there, but we've been doing it in a much smarter way with kind of how we're consuming it et cetera. So we're really excited by the consumer facing features we're excited by how our employees are embracing this across all the areas that you've mentioned and I think we're going to see another step level.
Jamie: Change in how we leverage AI, both for our consumers and internally next year in 'twenty five.
Jamie: Thank you.
Speaker Change: Your next question comes from the line of Nathan Feather from Morgan Stanley. Your line is open.
Nathan Feather: Hey, everyone. Thanks for the question.
Nathan Feather: A lot of interesting feature enhancements in the U K, which seem to be driving some strong early traction are there any features or initiatives that are working well, which you could rollout more broadly and thinking in particular.
Nathan Feather: Managing thank you.
Nathan Feather: Yeah look the feature that we've rolled out globally, that's working well as magical listing you know across all of our markets. What we're seeing is really great performance from sellers really good satisfaction et cetera, you know as it relates to the <unk> approach in the U K, we feel really good about about what we're doing there we rolled out the buyer fee.
Nathan Feather: And that's been performing better than our expectations as I talked about although it's still early days and with many shipping we're really focused on how do we create an experience where we're making a lot easier for sellers because they don't have to go through kind of the choice of of what services do I want to use and what do I have to choose from et cetera.
Nathan Feather: And for buyers, we get better tracking.
Nathan Feather: And the early work on this I mean, it's very early days, we're just ramping up this business in the in the U K.
Nathan Feather: But what I would say is that you know we hope to perfect. It over time really get sees that and every market is different as it relates to shipping is very different dynamics and theres. Some unique dynamics in the U K that make it specifically attractive to have managed shipping in that market. So that's really where we're focused on growing that and really how it ties into the.
Nathan Feather: Overall <unk> value proposition that we put together, which so far is working great. Our U K C to C business is growing double digits faster than it was before these changes and so we're pleased with the results.
Nathan Feather: Okay. Thank you.
Your next question comes from the line of Colin Sebastian from Baird. Your line is open.
Colin Sebastian: Thanks, guys good afternoon.
Speaker Change: First off on advertising as a follow up and the uptick in the penetration rate is that some of the newer AD formats, driving that and I guess, how are you thinking about the longer term attach rate opportunity.
Speaker Change: Yeah look we were really pleased with the growth we had 16% <unk> growth in our AD business in Q4 and 17% overall.
Speaker Change: No it's still the strength of the core platforms. So our CPA business promoted listings general was the largest driver in growth in the quarter and we still think that has a lot of runway and opportunity with optimization with more seller using it et cetera.
Speaker Change: We continue to see nice growth in our in our CPC business.
Speaker Change: And our newest products are launching but they're still they're still not the workhorse that the CPA is and we continue to put new features out there I'd probably call out the AI first dashboard that we launched last year is really helping sellers navigate advertising and I would think about the same way as listings right, which is what we are.
Speaker Change: Gearing is using AI and other technologies to make it really easy to adopt to manage for example, CPC based campaigns on our platform et cetera, and that's what's been performing well. So we continue to see a lot of runway a lot of opportunity with advertising and an excited both by the existing formats and the optimization and the new.
Speaker Change: New AD products that we've launched.
Speaker Change: Okay, and if I could just ask one quick follow up on the magical with these tools that have a material impact on trading card selection and volumes and if it did I guess would you expect to see a similar tailwind as other categories start to start to adopt that.
Speaker Change: Yeah look it's really great for that category, because it's kind of a seamless and if you had been.
Speaker Change: Paying close attention, it's not just that we've done magical listing in that category, which is great, but we've been doing better integrations with our partners like PSA for example, so now if I last day graded card will actually bring over all the data from PSA about kind of the history of that card into right into the view item page on ebay.
Speaker Change: A couple of weeks ago, we made it easier to kind of copy and do more research et cetera around those cards.
Speaker Change: We've launched better integrations between PSA and ebay so that I can now launch auction in fixed price listings right as I've had them graded onto the ebay platform.
Speaker Change: So I would say in general what we're seeing is it was a strong quarter for collectible card games et cetera, but it really leveraged all of the innovations that we had been driving in trading cards to make that successful but.
Speaker Change: But yeah, we feel bullish that as we as we have expected in that category. We're rolling out continued enhancements to magical listing, which just make it easier and easier to lift and the way I think about it is the average household has $3000 of items that they could sell online and less than 20% of that is online.
Speaker Change: And if we make that incredibly easy through magical listing we can bring on so much attractive inventory onto the platform and when we get those buyers to turn into sellers. They become two to two five times more valuable as buyers on the platform and they bring really unique inventory to the platform you know think about all the stuff that's.
Speaker Change: Used sitting in People's houses garages et cetera to bring online and so that's why we're really I'm really excited by the continued advancements that we're making and the progress the satisfaction that we're getting from customers and then just a reception in general from the seller base.
Jim: Thanks, Jim.
Speaker Change: Your next question comes from the line of Ross Sandler from Barclays. Your line is open.
Jim: Great.
Jim: One on the UK and then one on the operating margins.
Jim: So the U K.
Jim: CVC growth acceleration, how does that map to what you saw in Germany in the first few months.
Jim: The double digit improvement is that kind of now at a new equilibrium or should we.
Jim: Greece further potentially and then on the revenue side over there does that fully catch up to <unk>. Once we have like a full quarter in <unk> any color on that.
Speaker Change: From next yeah, I'll take the first part and then Steve can talk about what we're seeing on the take rate. So yeah. We're really pleased with the improvement that we've seen in the business and it's similar to what we saw in Germany. You remember that we launched there I talked about a 20 point improvement in <unk> and we're seeing here 20 point improvement in CDC first Gen <unk>.
Jim: <unk> in new and reactivated sellers.
Jim: In local pickup GMB, so exactly what we intend to see your question on fully ramped.
Jim: What we saw in Germany was even a year post launching we continue to see that strong momentum in the business and that's what I expect to see in the U K. We've got a strong sees that it's really resonating with customers, etc. Steve maybe you want to talk about the overall take rate, yes, so with regards to the buyer protection phase of releasing.
Jim: We put those into the UK and we're still ramping managed shipping as we go through the quarter.
Jim: This phasing is creating a temporary headwind for take rate, which obviously is mostly offset by us in financial services in the guide that we've given as it pertains to your question about getting back to normalized levels in the full year, we are expecting.
Jim: Tight rights expansion in 2025 overall, we would expect advertising to the biggest driver of that but there's been no. Two stars we got the full ramp out of the UK initiative with a buyer fees on the managed shipping goes through we expect our U K C to C tight right to reach a run rate slightly higher than the level products with.
Jim: Did you kind of initiative.
Jim: Got it Okay and then on the.
Jim: Op margin guidance for full year Steve.
Jim: I think the slides so good op, Inc will grow in line with revenue, but it was also like a 100 bps sort of like it was kind of a headwind items around depreciation and a few other things offset by FX.
Jim: The question is our op margins non-GAAP op margins.
Jim: Going up.
Jim: Or are they flat.
Jim: A little confused as to what.
Jim: We're saying on slide.
Jim: Yeah. So we continue to target the optimal combination of GMB growth and operating margin to maximize operating income dollar growth. That's the key thing for us that's our north star in terms of generating operating income dollar growth and we're obviously pleased with the progress made in 2024.
Jim: You stated that actually starts in the outlook.
Jim: Our expectations is the operating income dollar growth were modestly ahead of our low single digit GMB growth for 2025, but it implies operating margins relatively flat despite headwinds of around 70 basis points net.
Jim: Which I outlined earlier, the depreciation of about 50 basis points.
Manav: Hi, Manav shipping because we are recognizing that growth about 30 basis points. So amendment I pressure of 20, Bips offset by some FX goodness of 30 basis points. We will continue to get the balance right. We're going to continue to reinvest in the business drive long term sustainable growth, while continuing to deliver robust earnings.
Jim: In 2025.
Jim: Thank you.
Speaker Change: Your next question comes from the line of Nick Jones from citizens. Your line is open.
Nick Jones: Great. Thanks for taking the questions I guess, if I could ask maybe a bigger picture question.
Nick Jones: As we look at all of these kind of great innovations and investments, you're making around products and focused categories.
Nick Jones: And kind of.
Nick Jones: Tie that to kind of.
Jim the growth expectations and then.
Nick Jones: And then maybe a step further weighing that against kind of the broader backdrop, where E. Commerce continues to grow retail.
Nick Jones: Lord difficult retail, it's kind of hanging in there and I guess.
Nick Jones: Philosophically how are you thinking about EBIT position in a world where kind of wallet shares kind of consolidating to the Amazon. The walmarts of the World and then shopify is enabling a bunch of kind of single product branded companies to come.
Nick Jones: I guess, how do you view e-commerce from here as Youre, making these investments and where our marketplaces like ebay.
Nick Jones: Yeah, Yeah. Good question. So when you look at let's start with our focus categories.
Nick Jones: The whole thesis that we laid out was getting focused categories to grow it at ecommerce rates of growth.
Nick Jones: And they have been so our focus categories are growing 5% in 2024 in aggregate, we actually think we picked up share in 24 in our focus categories by a bit and so we're seeing exactly what we intended to see when you look at the overall ecommerce numbers to your question.
Nick Jones: It's important to take into consideration that UK and Germany are second and third largest markets and when you look at those ecommerce growth rates over the course of last year, they've been kind of hovering around zero percent range and Thats overall ecommerce. So that includes consumable e-commerce.
Nick Jones: As you know like grocery pickup et cetera is all in those numbers, which has been which has been growing especially with inflation and.
Nick Jones: And we play more in the discretionary ecommerce so from a relative perspective in this macro environment, we feel really great about the performance that we're seeing the you know the past three quarters, we've seen positive GMB growth, but where we're only partway through the strategic work that we're doing and as we get to new focused categories.
Nick Jones: We've made improvements in the horizontal experience leveraging gen AI, we've got and we've gone to the point, where our core categories are growing as well.
Nick Jones: And then we're continuing to invest it really around this non new in season.
Nick Jones: Area, where we see market share growing potentially been faster than than new in season over time.
Nick Jones: We're going to continue to launch new areas and new verticals, new categories like I talked about with vehicles and ebay live we're unlocking a much bigger tam opportunity in the UK with what we're doing in <unk> and we feel good about building off the momentum that we have even in even in this macro environment.
Speaker Change: Hey, operator can we do one last question. Please.
Speaker Change: Your final question comes from the line of Stephen Ju from UBS. Your line is open.
Stephen Ju: Hey, Thank you so Jamie.
Stephen Ju: The slide in your deck about corner was interesting.
Stephen Ju: Just wondering if there is an opportunity for you to capture some share with the economics that they might be generating because presumably youre, hoping you are helping them source loans.
Speaker Change: From the activity on ebay or should we just view this as a potential accelerant.
Stephen Ju: Through the GOP growth yes.
Stephen Ju: We don't ever comment on specific economics of specific partners, what I would tell you is the key.
Stephen Ju: <unk> is actually it's a partnership that we announced in Q4 to expand that most of our countries in Europe and what you know what's nice about it is it's really helping consumers lean into higher ASP products. So when we see the average order value on Claro is three to four times higher.
Stephen Ju: Then the market average.
Stephen Ju: And it's a continuation of what we've been doing which is.
Stephen Ju: Providing more choice to customers more forms of payment et cetera, and it's driving it is helping us drive incremental <unk> on the platform.
Stephen Ju: If I take a step back you know when I look at what's happening in financial services. It's not just about kind of the the economics that we've created by bringing payments under the platform, but it's the synergies that we've created with our strategy. So one that I would call out recently is ebay balance so by bringing payments in house.
Stephen Ju: That's enabled us on our <unk> strategy to basically help those buyers who turned into casual sellers by more on the platform and what we're seeing is that it actually stimulates the flywheel for us It helps drive more buying behavior. The majority of them are using their ebay balance to purchase back on ebay and <unk>.
Stephen Ju: That example, you know we ended up with a cost of payments of zero and so it does help us on the expense side as well and it's another example of how we're leveraging our financial solutions product.
Stephen Ju: And probably with seller capital. Another example of what it does is it helps sellers get loans in a few minutes and grow their business on ebay and I was talking to angi who's one of our sellers. He runs a store called Green go surplus.
Stephen Ju: And around the elections her business was a little soft and she had to buy a truck for her business and she filled out we work with a partner called Labor S. She sells out this form and a couple of minutes and then relatively quickly has that load and she was like this helped me get through that tough time period in my business I've already paid off a third of alone here.
Stephen Ju: They quickly.
Speaker Change: And it's another example of how we're kind of supporting small business on the platform. So excited for the client a deal but also just excited.
Speaker Change: More broadly with the work that's happening with our financial services team. Thanks for the question Stephen.
Speaker Change: Okay.
Speaker Change: And this concludes E Bay's fourth quarter 2024 earnings conference call. Thank you for your participation you may now disconnect.
Speaker Change: Okay.
Speaker Change:
Speaker Change: