John Egbert: Good afternoon. Thank you all for joining us for eBay's third quarter 2026 earnings conference call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer, and Peggy Alford, our Chief Financial Officer. We are 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.ebayinc.com. Before we begin, I will remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance.
John Egbert: You can find the reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. All growth rates noted in our prepared remarks will reflect organic, FX-Neutral, year-over-year comparisons. All earnings per share amounts reflect earnings per diluted share unless indicated otherwise. Additionally, all year-over-year growth rates versus 2025 are also based on recast financials reflecting our adoption of the new internally developed software accounting guidance in 2026.
John Egbert: All Depop comparisons will be pro forma, FX-Neutral, year-over-year comparisons unless noted otherwise. During this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecasts for a variety of reasons.
John Egbert: 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. You should not rely on any forward-looking statements. All information in this presentation is as of 28 October 2026. We do not intend and undertake no duty to update this information. With that, I will turn the call over to Jamie.
Jamie Iannone: Thanks, John. Good afternoon, and thank you all for joining us today. We delivered strong results in Q3 as our key financial measures exceeded consensus expectations and the high end of our respective guidance ranges. Gross merchandise volume grew by 13% to more than $23 billion. Revenue grew 11% to $3.2 billion. We also delivered 11% year-over-year growth in non-GAAP operating income and nearly 12% growth in non-GAAP earnings per share, even as we continue to invest behind our highest priority growth opportunities.
Jamie Iannone: Our outperformance was once again broad-based across categories, geographies, and customer segments. Our key strategic priorities, including focused categories, consumer-to-consumer or C2C, and recommerce, grew GMV by approximately 20% in aggregate and now represent 72% of our total GMV excluding Depop.
Jamie Iannone: eBay's results also benefited from the continued scaling of emerging growth vectors like eBay Live and Vehicles, which are contributing more meaningfully each quarter, as well as Depop, which accelerated materially and contributed to total FX-Neutral GMV growth of nearly 16% year-over-year in Q3. Focus category GMV grew 24% in Q3, led by collectibles, eBay Motors, fashion, and refurbished goods. Our continued momentum reflects years of strategic investment in category-specific innovation, trust, selection, community, and tailored selling and buying experiences for our customers.
Jamie Iannone: Starting with collectibles, trading cards maintained strong GMV growth even as we lapped increasingly difficult year-over-year comparisons. Pokémon's 30th anniversary releases supported continued growth in collectible card games, while major summer events and the fall sports calendar drove healthy demand for sports trading cards. Excitement for eBay collectibles was on full display at the National Sports Collectors Convention in Chicago, which drove record usage of our AI-powered card scanning tool.
Jamie Iannone: The tool has now surpassed 130 million scans, and in Q3, we expanded card scanning to the UK and began adding proprietary transaction data from TCGplayer and Goldin to the tool's price guide, giving collectors a broader view of market pricing. In Q3, we expanded Authenticity Guarantee to lower price trading cards in the US and UK. In the US, the change increased the number of sold items eligible for Authenticity Guarantee by more than 20%, and also made those items eligible for grading add-on and vault storage services offered through our partnership with PSA.
Jamie Iannone: In August, we launched Authenticity Guarantee for collectible coins in the US, in partnership with Professional Coin Grading Service. This program covers eligible graded coins from around the world, and raw US coins priced at $500 or more at no additional cost to buyers or sellers. Authenticity Guarantee surpassed 20 million cumulative items inspected across categories in July, reinforcing our commitment to building trust and confidence across our marketplace.
Jamie Iannone: Our off-platform collectibles marketplaces also continued to thrive. TCGplayer surpassed $1 billion in trailing 12-month GMV for the first time, and opened seller registration in the UK and Canada, extending the reach of its specialized collectible card game marketplace. Our Goldin subsidiary had another record GMV quarter, and continues to attract some of the world's rarest and most valuable collectibles. In Q3, Goldin hosted an auction commemorating the United States 250th anniversary, highlighted by a rare copy of the Declaration of Independence that sold for over $3.6 million.
Jamie Iannone: By bringing together the core eBay marketplace, eBay Live, TCGplayer, and Goldin, we are serving enthusiasts across all major categories, price points, and transaction formats. Turning to eBay Motors, which remained a material contributor to GMV growth across parts and accessories and vehicles. In P&A, we launched easy and free returns in Germany in Q3, following successful rollouts in the US and UK that drove increased conversion and incremental GMV with stable return rates.
Jamie Iannone: We also introduced certified recycled badging in the US, helping buyers identify high-quality recycled OEM parts from qualified sellers. In vehicles, we continue to simplify the end-to-end transaction experience and expand the range of customers and vehicles we can serve. In Q3, we launched Secure Purchase Express to provide a streamlined path to checkout for C2C sellers who do not require our full suite of services.
Jamie Iannone: We onboarded hundreds of independent dealers to our new trusted dealer program, allowing them to use secure purchase within their existing workflows. We increased vehicle purchase protection coverage to $500,000 to support more high-value transactions. These protections and our differentiated buyer reach supported several vehicle sales above $1 million in Q3, including a 2005 Porsche Carrera GT that sold for $5 million from a trusted dealer in Arkansas to a buyer located in Texas.
Jamie Iannone: eBay's fashion business continues to be a source of growth, led by luxury, which delivered another quarter of healthy double-digit GMV growth. In Q3, we significantly expanded Authenticity Guarantee across Europe, enabling buyers in 23 European Union countries to shop for authenticated luxury fashion inventory from sellers in Germany, France, and Italy. In Australia, we launched Authenticity Guarantee for watches and continued broadening eligible brands across apparel, footwear, and accessories.
Jamie Iannone: This trust infrastructure has helped make eBay the leading online marketplace for secondhand luxury fashion sales in the US and UK. Depop complements eBay's broader fashion business and expands our reach with younger consumers through its discovery-led experience optimized for desirable, affordable secondhand fashion. Q3 was Depop's first quarter as part of eBay, and its results reinforced the strength of the business and gave us even more conviction in the opportunity ahead.
Jamie Iannone: Depop's GMV growth outperformed our expectations in Q3, including US GMV, monthly active users, and sold items more than doubling year over year on a pro forma basis. The quality of that growth is encouraging. New cohorts are buying and selling more than prior cohorts, while repurchase, relist, and resell rates all improved year over year. Customers who both buy and sell remain several times more valuable than one-sided users, demonstrating the strength of Depop's C2C flywheel.
Jamie Iannone: Depop continued to improve its product experience in Q3 as it enabled faster personalized discovery on the homepage, simplified its AI-assisted listing flow, and deployed new AI models to prioritize the visibility of higher quality listings. We also introduced new Depop balance features in Q3, allowing customers to keep their sales proceeds in the app and use them for future purchases. This makes it easier for sellers to become buyers as well, encouraging the two-sided engagement we see among Depop's most valuable customers.
Jamie Iannone: Marketing and shipping play complementary roles in Depop's growth model. Full funnel marketing has proven effective at raising awareness and bringing more customers into the marketplace. Our investments in lower shipping costs have made lower priced items economical, increased purchase frequency, and improved seller velocity. Access to eBay's preferred carrier rates has lowered average parcel cost, making shipping investments more efficient.
Jamie Iannone: We are also increasingly targeting those investments toward customer moments we believe are most predictive of long-term value. Beyond shipping, we continue to explore supply and demand synergies between eBay and Depop. In Q3, we tested a dedicated module of relevant Depop listings adjacent to eBay search results for select fashion queries. We are currently testing the next phase of our inventory integration by exploring how users respond to individual Depop listings directly in eBay search results for relevant queries.
Jamie Iannone: Over time, we believe eBay's scaled demand and shopping intent signals can connect more fashion consumers with relevant Depop listings and drive incremental GMV and velocity for Depop sellers. Overall, we are managing eBay and Depop as a portfolio, preserving each brand's distinct experience and allocating investment toward opportunities that generate the strongest long-term returns for the combined company.
Jamie Iannone: Depop's growth builds upon the strong consumer selling momentum on eBay, where global C2C GMV grew by more than 20% in Q3, including healthy double-digit growth across the US, UK, and Australia. Artificial intelligence has an outsized impact on our C2C business as it reduces friction that prevents consumers from listing and selling successfully. We continue to see strong results from the latest generation of our AI-powered Magical Listing experience, which is now available to all new and reactivated listers across 6 major markets.
Jamie Iannone: We've also rolled out Magical Listing to all non-professional sellers in Australia, France, and Italy, and we are in the midst of ramping to active seller groups in the US, UK, and Germany. In Australia, active sellers are creating more than one-third more listings per attempter with Magical Listing, while their average listing time has been reduced by approximately one-third, which is similar to the benefits we've observed with new sellers.
Jamie Iannone: As we begin ramping active seller groups, we upgraded Magical Listing's pricing guidance, including an improved user experience and new AI models with smarter price recommendations, driving measurable improvements in conversion and sell-through. In September, we launched comprehensive improvements to the C2C value proposition in France and Italy, bringing together free selling, buyer protection, Magical Listing, enhanced local discovery, eBay Balance, and simplified shipping.
Jamie Iannone: These launches have driven meaningful uplift in leading indicators such as new and reactivated listers and lay the foundation for a more connected European marketplace overall. We are also giving sellers new ways to connect directly with buyers and grow their businesses, which brings me to eBay Live. EBay Live delivered another record quarter and is generating GMV at a multibillion-dollar annualized run rate. GMV growth remained well into the triple digits year over year, similar to recent quarters, as sellers, buyers, content hours, and viewership continue to expand across all 7 markets.
Jamie Iannone: In Q3, we expanded self-service onboarding to more markets and broadened eligibility beyond established eBay sellers, creating a more scalable path for sellers to join Live. We also launched multi-streaming through Live Studio, which allows sellers to broadcast simultaneously to YouTube, Facebook, Instagram, and Twitch, drawing buyers to eBay from their existing social audiences. For buyers, we redesigned the live hub with updated search, filters, personalized recommendations, and a feed-based experience while integrating Live more prominently into services across eBay.
Jamie Iannone: This should make relevant events, inventory, and communities easier to discover as Live scales. Trust remains foundational to eBay Live. During Q3, we launched AI-powered moderation across chat, audio, and video, added pre-event screening, and strengthened host controls for moderation. We also deployed real-time multimodal AI agents to extract structured item details directly from video streams. These agents will initially focus on trust and over time, support automated listing creation tools and more intelligent item discovery.
Jamie Iannone: Taken as a whole, these advances are expanding seller access and reach, strengthening buyer discovery, and embedding AI and trust throughout the experience, helping us scale eBay Live as a differentiated commerce platform. In shipping, we are using eBay's scale and carrier relationships to lower cost and simplify fulfillment, helping sellers reach more buyers and making more inventory economical to transact. In Q3, we launched eBay International Shipping in both the UK and Germany.
Jamie Iannone: Sellers will now be able to ship domestically to an eBay hub and seamlessly tap into buyer demand in more than 190 markets while eBay handles transportation, customs, returns, and post-purchase support. Customer feedback has been extremely positive, and the cost savings from these programs are significant. For instance, in the UK, we estimate EIS can be up to 30% cheaper for customers than our previous global shipping program.
Jamie Iannone: In Q3, we also deployed an improved AI delivery date model across six major export markets, expanding the inventory we can show with a fast delivery promise while maintaining reliability. During the quarter, we completed the nationwide rollout of US-managed shipping to all new and reactivated listers. Within the Magical Listing flow, eBay now estimates the package size and weight with AI, generates a prepaid label, and provides tracking. Sellers are automatically protected against loss or damage.
Jamie Iannone: Early results show a double-digit percentage reduction in listing time and strong customer satisfaction. In the UK, we are making pickup and drop-off, or PUDO services more visible and economical across more than 50,000 carrier options at lockers and parcel shops, with approximately 95% of UK buyers living within 1 mile of a PUDO location. We are simplifying the experience and using targeted promotions to build adoption, giving sellers convenient drop-off options, and buyers a lower cost alternative to home delivery, which can increase velocity for lower priced inventory.
Jamie Iannone: In Q4, we are beginning a limited seller drop-off test in several large US metropolitan areas. Our objective is to learn whether greater shipping choice and structurally lower cost delivery options can improve listing activity, conversion, and transaction velocity. We are assessing customer adoption, service quality, and unit economics throughout the test. Before closing, I'd like to share a few highlights from eBay's 2026 Recommerce Report, which we published earlier this month.
Jamie Iannone: The report points to a secular shift in recommerce, as 47% of consumers surveyed now buy secondhand, at least monthly, up from 35% last year, and 89% expect to spend the same or more on secondhand goods in 2027. It also highlights seller economics. Roughly 85% of sellers source secondhand inventory from their own belongings, and nearly 30% say selling secondhand helps them earn extra income. Younger consumers are accelerating this shift. 53% of 18 to 29-year-olds expect to buy more secondhand in 2027.
Jamie Iannone: That reinforces the long-term opportunity for eBay as secondhand becomes a larger part of how people shop. In closing, we are building on strong marketplace momentum with strategic investments that improve the customer experience and strengthen eBay for the long term. Collectibles remained our largest growth contributor. eBay Motors and Fashion also contributed materially, and eBay Live delivered another record quarter.
Jamie Iannone: Depop's first quarter with eBay reinforced its strategic fit as US GMV more than doubled year over year on a pro forma basis, with healthy new cohorts and growing engagement from customers who both buy and sell. Shipping is becoming a more strategic portfolio capability as we expand our domestic and cross-border services and extend eBay's carrier scale and infrastructure to Depop, lowering costs, reducing friction, and increasing velocity. AI is delivering measurable gains in listing productivity and conversion while improving discovery, trust, and reliability across the marketplace.
Jamie Iannone: We deliver all of this progress while growing non-GAAP operating income and earnings per share at double digits year over year, demonstrating our ability to invest behind long-term growth and still deliver significant value for shareholders. With that, I will turn the call over to Peggy to provide more details on our financial performance and outlook. Peggy, over to you.
Peggy Alford: Thank you, Jamie, and hello, everyone. In the Q3, we once again exceeded expectation across all of our key financial metrics. GMV grew by nearly 16% year over year to $23.2 billion on an FX-Neutral basis or 13% organically. Revenue grew 13% year over year to $3.21 billion on an FX-Neutral basis or 11% organically. Non-GAAP operating income grew 11% year over year to $843 million. Non-GAAP earnings per share grew nearly 12% year over year to $1.51. We returned nearly $830 million of capital to shareholders through repurchases and cash dividends in Q3.
Peggy Alford: Now let us take a closer look at the drivers of our strong performance. GMV grew nearly 16% to $23.2 billion on a total FXN basis, and increased 13% on an organic FXN basis as Depop added nearly 3 points of growth. Foreign exchange was a headwind of 30 basis points to spot GMV growth. We saw broad-based momentum across our established strategic priorities as focused categories, C2C, and recommerce each grew GMV by more than 20%, while eBay Live and Vehicles each grew well into the triple digits in the quarter.
Peggy Alford: Focused category GMV grew 24%, outpacing the remainder of our marketplace by 19 percentage points, with Collectibles, Motors, Fashion, and Refurbished all contributing materially to growth. Moving on to our major geographies. Our US GMV grew 22% on an organic basis, with positive growth contributions from all of our major categories. Collectibles GMV growth remains strong in the US, but decelerated moderately as we lapped last year's robust growth.
Peggy Alford: Growth in our trading cards business remained broad-based across multiple sports and collectible card game genres. Beyond trading cards, we also saw healthy growth across collectible coins, comics, and sports memorabilia. Electronics became a larger contributor to US growth in Q3, driven by strong demand for computer hardware, consoles, and video games.
Peggy Alford: The growth in these subcategories was also fueled by a combination of transactions and ASP increases, which reinforces eBay's strength as a leading destination for pre-owned and refurbished products at more accessible price points. eBay's fashion GMV in the US was healthy, with continued strength in luxury. Depop added to our momentum in fashion as its US GMV more than doubled year over year on a pro forma basis.
Peggy Alford: Combined, eBay and Depop generated approximately $9 billion in fashion GMV over the trailing 12 months in the US alone, growing in the mid 20% range year over year on a pro forma basis. International GMV grew nearly 4% year over year in Q3 on an organic FXN basis, with foreign exchange representing a 60 basis point headwind to spot growth. Our investments in strategic priorities continue to yield attractive returns in these markets, despite a challenging macro backdrop.
Peggy Alford: Specifically, focused category and C2C GMV each grew double digits in the UK, and each drove high single-digit growth in Germany. Furthermore, our organic year over year growth also improved sequentially in Canada, Australia, France, and Italy. Shifting to our buyer metrics. Trailing 12 month active buyers grew 4% to 147 million on a pro forma basis, which includes buyers from recently acquired Depop and Tise. Excluding Depop and Tise, global active buyers grew by over 1%. US active buyer growth remains strong at 6% year over year organically, or 13% on a pro forma basis, including Depop.
Peggy Alford: Our 16 million enthusiast buyers, who are our most loyal customers, visit the core eBay marketplace more than once a day on average and contribute over 70% of the GMV on our marketplace. Our investments in key strategic priorities continue to drive higher engagement and spending, helping grow trailing 12-month enthusiast buyers by over 2% year over year in Q3. In the US, enthusiast buyer growth was especially strong, up 9% year over year. Global spend per enthusiast buyer continues to show strong growth, increasing to approximately $3,700 on a trailing 12-month basis.
Peggy Alford: Next, let's take a look at our income statement. Revenue grew 13% to $3.21 billion on a total FXN basis, and increased 11% on an organic FXN basis, as Depop contributed nearly two points of growth in the quarter. Foreign exchange was a 70 basis point tailwind to spot revenue growth. Our overall take rate declined by 20 basis points year over year, reflecting faster growth in eBay Live and C2C, ongoing category and ASP mix shifts, and the inclusion of Depop.
Peggy Alford: As a reminder, Depop's revenue contribution is lower than GMV, primarily because a significant portion of our velocity-driving shipping investments are recognized as contra revenue. These pressures were partially offset by tailwinds from shipping, advertising, and financial services. Next, I'll discuss highlights within our value-added services portfolio, which continues to benefit our marketplace by strengthening trust, reducing transactional friction, and driving sales velocity. Total advertising revenue was $607 million in the third quarter, growing 16% year over year.
Peggy Alford: Excluding Depop, ads revenue was nearly 2.7% of GMV. First-party ads grew 16% to $575 million. Promoted Listings comprised nearly $1.3 billion of the nearly $2.7 billion total listings on eBay, excluding Depop, and 6 million sellers adopted at least one Promoted Listing product during the quarter. We delivered several key product innovations during the quarter to strengthen our performance ads engine. We introduced an AI-powered placement engine that uses machine learning to dynamically optimize ad density and search based on shopper context and expected value.
Peggy Alford: We also expanded our video ad formats across Promoted Listings and Promoted Stores. Video ads create a much more dynamic, engaging discovery experience for buyers while giving sellers a powerful new tool to showcase their items. Additionally, we rolled out new personalized ad prompts for C2C sellers that are more relevant and efficient. Financial services was a modest contributor to our take rate as we continue to expand our buyer and seller products to reduce friction on our marketplace.
Peggy Alford: Following a successful UK launch, we recently expanded Pay by Bank to Germany and France, which offers more choice for customers and attractive economics for eBay. Similar to the UK, Pay by Bank transactions in Germany generate high average order values and carry lower processing costs than other forms of payment. Moving on to our profitability and earnings. Non-GAAP gross margin was 73.1% in the Q3, up 60 basis points year over year. Our non-GAAP operating income grew 11% year over year to $843 million.
Peggy Alford: Sales and marketing expense increased in the Q3, driven by targeted investments in our strategic priorities, including Depop, based on the strong results we are seeing. Given the upside in our overall performance this quarter, we were able to create more capacity to invest in these areas. In addition, marketing efficiencies in the core eBay marketplace enabled us to redeploy more resources to capitalize on Depop's extraordinary momentum and expand our reach with a younger customer demographic.
Peggy Alford: Transaction losses as a percentage of revenue decreased for a second straight quarter in Q3, as expected, and was roughly in line with the year-ago period, as teams delivered on multiple initiatives to optimize our shipping programs and customer experiences. We delivered non-GAAP earnings per share of $1.51, up nearly 12% year over year, and GAAP earnings per share of $1.11. Turning to our balance sheet and capital allocation.
Peggy Alford: In the Q3, we generated free cash flow of $749 million and ended the period with cash and fixed income investments of $3.3 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments were valued at $800 million. We repurchased approximately $690 million of eBay shares in Q3 at an average price of roughly $106, and we paid a quarterly cash dividend of $138 million in September, or $0.31 per share. Now I will share some thoughts on our outlook, starting with the Q4.
Peggy Alford: Please reference the earnings presentation accompanying our release for our outlook in spot growth terms and foreign exchange implications. For Q4, we expect consolidated GMV between $23.7 billion and $24.1 billion, including Depop, which represents total FXN growth between 12% and 14% year over year, or organic growth between approximately 8% and 10%. Our guidance implies Depop would contribute 4 percentage points to total FXN GMV growth.
Peggy Alford: This guidance contemplates strong, broad-based momentum across the core eBay marketplace, driven by our strategic priorities and eBay Live, partially offset by lapping dynamics from a very robust Q4 last year, due in part to trading cards and bullion strength. Furthermore, we are forecasting another quarter of extraordinary growth from Depop, with Q4 year-over-year growth similar to Q3 on a pro forma basis, driven by effective customer acquisition and engagement.
Peggy Alford: We forecast consolidated revenue to be between $3.19 billion and $3.24 billion in Q4, which represents total FXN growth between 7% and 9% year-over-year, or organic growth between 5% and 7%, with Depop contributing 2 percentage points to total FXN revenue growth. We expect GMV growth to outpace revenue growth in Q4 due to a few factors, some of which are temporary. First, Depop is operating at a lower take rate than our core marketplace, and its year-over-year take rate pressure is elevated until we lap the acquisition date.
Peggy Alford: Second, the transition of UK managed shipping from a gross to net revenue model has impacted our take rate in 2026 and is more significant in Q4 as we lap the completed rollout in the prior year. Third, ongoing business ASP and category mix shifts continue to apply pressure to our take rate, though we are pleased with the incremental GMV, revenue, and operating income contributions from these transactions. We expect consolidated non-GAAP operating income growth to be between 6% and 10% year-over-year in Q4, which implies non-GAAP operating margin between 25.7% and 26.2%.
Peggy Alford: Our better-than-expected top-line growth in the first three quarters of this year has generated the capacity to further invest behind our strategic priorities, even as we anticipate strong full-year operating income growth well ahead of our initial expectations. As we have consistently noted, our goal is to strike the optimal balance between funding long-term growth and delivering healthy flow-through to the bottom line. Our strategy is clearly working.
Peggy Alford: We see tremendous runway ahead across numerous initiatives, including eBay Live, C2C, as well as Depop, which are significantly expanding our addressable market. At the same time, we remain disciplined on costs and continue to drive operational efficiency across the business. With this in mind, last week, we announced a difficult decision to reduce our workforce by approximately 9% to better align our talent and resources, streamline our operations, and help create the capacity required to invest in our highest growth initiatives.
Peggy Alford: We recognize the significant impact this decision has on our colleagues and their families, and we are deeply grateful for their contributions to eBay. For the Q4, we expect consolidated non-GAAP earnings per share between $1.48 and $1.53, which implies year-over-year growth between approximately 5% and 9%. In addition, we continue to target roughly $2 billion of stock repurchases for the full year, and our board declared a quarterly cash dividend of $0.31 per share for the Q4 to be paid in December.
Peggy Alford: Finally, I'd like to share our preliminary views on 2027. While we are still in the midst of our annual budgeting process, we are planning our business around healthy, consolidated year-over-year growth across GMV, revenue, non-GAAP operating income, and non-GAAP earnings per share. We anticipate continued broad-based GMV growth across our strategic initiatives, including focused categories, eBay Live, C2C, and Depop.
Peggy Alford: While we expect the performance of our trading cards business to remain strong, our planning assumes growth will naturally moderate as we lap the extraordinary levels we experienced in 2026. With regard to profitability, we will continue to strike a balance between funding prudent investments in long-term growth and ensuring healthy flow-through from top-line growth to earnings in 2027. Our take rate and margin trends in any given quarter will depend on the mix of our portfolio of businesses, lapping considerations, as well as the timing of various business initiatives.
Peggy Alford: Below the operating income line, we forecast modest headwinds to net interest income on a year-over-year basis, given our lower cash balance and interest rate assumptions. We expect our non-GAAP tax rate to remain relatively stable. Our long-term capital return framework remains unchanged. In a normal year, we plan to target repurchases and cash dividends totaling between 90% to 100% of normalized free cash flow, absent organic or inorganic needs for that capital. In closing, we delivered another set of strong results in Q3, with double-digit top and bottom line growth.
Peggy Alford: Our sustained marketplace momentum and disciplined operating efficiencies enabled us to drive strong earnings, all while funding compelling long-term opportunities like eBay Live and Depop. Looking ahead, our conviction in eBay's long-term trajectory has never been stronger. We see tremendous runway to expand our total addressable market and drive durable growth, creating compounding multiyear value for our shareholders. With that, Jamie and I will now take your questions.
Operator: We will now begin Q&A. For today's session, we will be utilizing the raise hand feature. If you would like to ask a question, simply click on the raise hand button at the bottom of your screen. Once you have been called on, please unmute yourself and begin to ask your question. Please limit to one question and one follow-up before jumping back in the queue. Thank you. We will now pause a moment to assemble the queue. Your first question comes from the line of Michael Morton with MoffettNathanson. Please unmute your line and ask your question.
Michael Morton: Hi. Good evening. Thanks for the question. My first one would be following up on what Peggy just spoke about. Sorry to kind of hammer this point home, but there is a lot of moving parts in the business right now. You have Live Commerce, Depop, and Autos are all growing at significantly faster rates than the core business. As you have mentioned, they come in at lower take rates, and in theory, require higher incremental investments than in the core business.
Michael Morton: So I fully appreciate you are not guiding to 2027, but how should investors think about your ability to reinvest, but then also just the competing forces within the P&L of these businesses that are doing so well. Is the restructuring, does that give you enough capacity to do it without a noticeable impact to margins longer term? Thank you, and I have a follow-up.
Peggy Alford: Great. Thank you so much for your question. First of all, we are very focused on pursuing opportunities overall that can add GMV and operating income dollars, even if they carry a lower percentage take rate. You mentioned that. The vehicles business is a perfect example. We have high-value transactions growing at triple-digit growth, and it taps into a very large addressable market that complements P&A.
Peggy Alford: When we look at picking which strategic priorities we think are going to drive the best balance between top line and bottom line, we really evaluate the opportunities, and the earnings overall that they can generate. Not really looking at optimizing for take rate, because we really believe that investing in a variety of businesses both provides durability overall to the business, and also enables us to really drive top-line and bottom-line growth.
Michael Morton: That is really helpful. Then maybe a quick one for Jamie. The live commerce opening up to more sellers during the summertime. I would love your big picture thoughts on the addressable categories for live commerce. There is a perception that it is highly targeted towards things like pack breaking, but when you talk to industry participants, it seems to be effective in categories we might not have expected. Can you talk about your long-term ambitions to see live commerce touch a lot of aspects of eBay's offering?
Jamie Iannone: Yeah, we believe eBay Live has a broad appeal across a lot of different categories and segments. When you look at it is definitely strong in collectibles, but that is because trading cards, coins, et cetera. We see a lot of strength from a lot of other areas. Fashion, handbag, watches, home and garden. I think just going onto the Live hub, you can see kind of the breadth of things that are on the platform. As it gets more popular and more mainstream, you see kind of even more different types of sellers coming onto the platform to drive live because they really feel like it can drive velocity.
Jamie Iannone: Over time, what we are excited by is that we see the Live business and our core business as highly synergistic. If I look over the trailing 12 months, eBay Live sellers generated roughly twice as much GMV on the core marketplace as they sold in Live events. We are also seeing higher engagement and spending among Live buyers, and much of that is incremental outside of Live events. Overall, we think it has obviously a large and rapidly growing addressable market, and we do not think it is bound by categories.
Jamie Iannone: We are seeing it continue to expand into new categories as more of our core sellers realize what Live can do. It helps them build a better reputation. It helps them build community. It helps introduce buyers into their product. That is why you are seeing more and more categories of sellers adopt Live.
Operator: Your next question comes from the line of Nathan Feather with Morgan Stanley. Please unmute your line and ask your question.
Nathan Feather: Hey, everyone. Thanks for taking the question, and congrats on the strong results here. One follow-up on Live there. Exciting to see the incremental traction. How do you think, what are the major gating factors that you see today in order to unlock additional growth in that category? Is there any way to think about or quantifying some of the relationship between core GMV growth and Live growth? Thank you.
Jamie Iannone: Thanks for the question. We are excited. Live had another record quarter, and it is at a multi-billion dollar annualized GMV run rate with growth well into the triple digits, similar to recent quarters. I think self-service is a big part of that. Previously, it had been gated by how we were bringing on sellers. Now we are able to really open Live up to more sellers and bring them onto the marketplace. We have been driving demand in new and compelling ways. We have launched multi-streaming. That allows sellers to leverage their social audiences to bring into their Lives on eBay.
Jamie Iannone: We have redesigned the Live hub to help buyers find more. We continue to expand in terms of countries and categories that we are going after. I would say every week or two, we are adding new features at the request of sellers. This quarter, we added flash deals, which has been well-received. We built new AI-powered moderation tools for hosts, and that gives more protection and more trust in the platform, which has been important for us.
Jamie Iannone: Overall, what we see is that we see this halo effect with core, and it makes a lot of sense. Which is that if I find you during Live, that is going to help accelerate the core business. If I am already a core seller and you are doing Live or a core buyer and doing Live, you see that synergy. That is why I was saying, when you look over the trailing 12 months, our Live sellers did twice as much GMV on core as they did on Live events.
Jamie Iannone: I talked last quarter about what we were seeing from buyers, which is buyers are spending 70% more when they get involved with eBay Live versus comparable buyers. So it really is kind of this halo effect of core and eBay Live working together that is exciting for our sellers and exciting for the growth potential of eBay Live.
Nathan Feather: Great. That is really helpful. Then on Depop, help us think through how you are determining the appropriate level of marketing spend to allocate to that business and any metrics you are keenly watching as it goes through that hypergrowth phase.
Jamie Iannone: Yeah, look, we are feeling great about the strong Q3 results. We saw US GMV, monthly active users, and sold items more than double year over year on a pro forma basis. Our trailing 12-month active buyers reached 11 million in Q3, which is up from 9 million, and they also reached 5 million active sellers. So really good kind of traction across the base. I think the other thing that we are seeing is that the quality of the buyers that are coming onto the marketplace are very strong.
Jamie Iannone: The new cohorts that we are seeing are buying and selling more than prior cohorts, and the repurchase, the relist, and the resell rates are all improved year over year. So across the board, we are seeing the metrics that we want to see. Peggy, anything you want to add on that?
Peggy Alford: Yeah, I would just add that the investments that we are making in marketing and shipping and affordability are really supported by the strong customer engagement that we are seeing. We are managing these investments across eBay and Depop, allocating resources towards the opportunities with the strongest returns, while also continuing to drive efficiencies across both businesses. Then we are increasingly leveraging synergies between eBay and Depop, particularly in areas like shipping.
Peggy Alford: So the distinction between the investments we are making in each one is starting to become a little more blurred because we are really seeing the complementary nature of the two platforms together.
Nathan Feather: Very helpful. Thank you.
Operator: Your next question comes from the line of Deepak Mathivanan with Cantor Fitzgerald. Please unmute your line and ask your question.
Deepak Mathivanan: Great. Thanks for taking the question. Jamie, when ChatGPT was growing fast, you made it a priority to improve AI capabilities at eBay, both in terms of user experience, seller tools, and also in several other places. Now with Muse, how are you thinking about the product priorities for the agentic era on eBay for buyers and sellers? Maybe also talk a little bit related to it specifically on recommerce. Now it seems like with agentic tools like Muse growing, the friction in inventory cataloging, listing, transacting can be eliminated meaningfully.
Deepak Mathivanan: Do you see this already in consumer behavior at this time in these categories, and how is eBay planning to tap into this opportunity? Thanks so much.
Jamie Iannone: Yeah. Thanks for the question. I would start by saying that, I agree, AI is meaningfully contributing even to the growth we're seeing today on the marketplace. You talked about listing and cataloging. Part of the reason why we're expanding Magical Listing, I talked about, we're now in six major markets. We're expanding into seller cohorts in US, UK, and in Germany, is because of the results of what we're seeing. I talked about Australia seeing 30% more listings per attempter and reduced listing time.
Jamie Iannone: We're seeing the same type of thing with our own internal tests as agentic as relates to search and discovery and buying behavior. We think, as a leading destination of e-commerce, we're uniquely positioned to be one of the biggest beneficiaries of AI because it's really helping us reduce that transactional friction in a scalable way. Especially because we're primarily a non-new and seasoned inventory marketplace, very different than inventory that's generally out there. As it pertains to third-party experiences, we're continuing to test and learn.
Jamie Iannone: We're open to approaches that improve discovery of our unmatched inventory while preserving the trusted end-to-end experience that customers have come to expect from eBay.
Operator: Your next question comes from the line of Ken Gawrelski with Wells Fargo. Please unmute your line and ask your question.
Ken Gawrelski: Thank you very much. Two, if I may please. First, could you talk about your Live distribution strategy? You talked about allowing or enabling your sellers to market their offerings elsewhere, but is there any thought about, if you think about Live, it's not just a commerce experience, but it's an entertainment experience as well. Are there opportunities to syndicate your listings and still capture a lot of the economics and really benefit some of your sellers across other properties that are more known for short-form entertainment?
Ken Gawrelski: That's question one. Question two, could you just talk about early learnings from the consumer to consumer side, what you've seen out of Depop? Could you talk about the competitive environment in the US? Vinted has continued to be quite aggressive in the market, and it seemingly is growing quite nicely, but Depop as well. Could you just talk about what you see there, what you learned in the next quarter, and how that informs your view over the, say, next maybe 12 to 15 months. Thank you very much.
Jamie Iannone: Yeah, sure. Great. It is one of the things that we are excited by with Live distribution is the ability to put it out there, both having our sellers do so and to do it in cooperation with our sellers. You may see across Facebook or Instagram, our sellers highlighting upcoming streams to targeted audiences. That is work we are doing together with them. The reason we launched the multi-streaming capability was it was a highly requested feature from our sellers.
Jamie Iannone: A lot of them have large followings across TikTok or Instagram or Twitch or other platforms, and they want to be able to drive as much demand to it. To be able to not only highlight their upcoming shows on eBay Live, but to multi-stream them. That is great for us because that brings new buyers to eBay from all of those areas. We are going to continue to look at more services and more avenues. What has been great is as we have done self-service, we have opened up a lot more streaming hours.
Jamie Iannone: As you talk about the entertainment factor of eBay Live has been important, and so we are excited by what that growth has just done to the overall kind of streaming hours and number of lives on the platform. As it relates to your question on C2C, we have really strengthened our competitive position over the last several years by sharpening our focus and scale in a really beneficial way. You have seen us do that with the multi-year growth that we have in focus categories.
Jamie Iannone: Similarly, we see US C2C fashion as a large and under-penetrated market, and one that is not a winner take all. We are really building from a position of strength with two well-established brands between Depop and eBay. In Q3, eBay's US C2C GMV grew faster than overall US eBay GMV. As we talked about, Depop's US GMV more than doubled.
Jamie Iannone: I think what is interesting, Ken, is when you look at them together, which is how we look at it, eBay and Depop generated approximately $9 billion of fashion GMV in the US alone over the trailing 12 months, and that is growing in the mid 20% range year over year on a pro forma basis. We are really focused on building on that momentum and investing where we see the strongest returns. As Peggy talked about, we are building on Depop's strong foundation with eBay's demand, our carrier relationships, our technology, and our marketplace expertise.
Ken Gawrelski: Thank you very much.
Operator: Your next question comes from the line of Colin Sebastian with Baird. Please unmute your line and ask your question.
Colin Sebastian: Great. Thank you. Maybe a couple from me covering other parts of the business. First off, on advertising, curious if you are seeing any change in seller demand there or how you would frame the opportunity to increase adoption or penetration rate over time, if that has changed at all. Secondly, on international, I was hoping maybe you could separate the macro pressures on GMV from the progress you are making through C2C and focus categories in those markets, maybe to help us understand that dynamic a little bit better. Thank you.
Peggy Alford: Sure. I can take those. Nice to talk to you, Colin. On advertising delivered really healthy growth in Q3. Total revenue increased 16% year-over-year, or 15% on a pro forma basis, despite tougher year-over-year comps. In Q3, we began lapping last year's attribution changes across several international markets. Marketplace mix is also a factor with some of the faster growth in areas that have lower advertising penetration.
Peggy Alford: We do continue to see a lot of growth opportunities through broader seller adoption, increased listing penetration, and even the expansion of Promoted Offsite and other products. Our confidence in the long-term opportunity remains very strong. We are really focused on improving returns for sellers and growing advertising in a way that supports sustainable revenue and operating income growth across the entire marketplace.
Jamie Iannone: I would say, as it relates to your question on the macro, it is definitely uneven between US and international at this point. In Europe, though, we have seen some improvement in consumer sentiment, particularly in the UK, but customers, I would say, remain selective. I think Germany continues to face a more challenging spending environment. I think the positive thing is, despite these macro pressures, our strategic initiatives continue to perform well. Our differentiated selection, our value proposition almost become a little bit more relevant in this environment.
Jamie Iannone: So when you look at pre-loved or refurbished or other non-new and seasoned inventory, it is really giving customers more ways to find what they want at attractive prices. It is why you have seen us continue to expand more things into our European businesses. We expanded EIS that we talked about recently. Obviously, we are there with Live. We brought some new C2C capabilities to Italy and France this quarter, ones that we had done in Australia. We are seeing really healthy double-digit growth in our C2C business, for example, in the UK.
Jamie Iannone: So that makes us confident that as the macro environment improves, the strategy that we have that is working will really continue to drive growth in that market.
Colin Sebastian: Thank you.
Operator: Your next question comes from the line of Bernard McTernan with Needham. Please unmute your line and ask your question.
Bernard McTernan: Great. Thanks for taking the question. Maybe just to start, coins became a focus category in the US. Can you talk about this market a little bit, maybe early uptake about Authenticity Guarantee, and maybe how it differs from the trading card market?
Jamie Iannone: Yeah. It's another one of these huge enthusiast categories on the platform where these coins enthusiasts, what's important to them is the same type of thing, which is they want to have Authenticity Guarantee. So we launched that in August of this year, through a partnership with PCGS. We introduced the program at the ANA's World's Fair of Money, and then we completed the rollout to all sellers in September. A fun stat is the first coin authenticated was a 2026 Cook Islands Thunder Dragon silver coin for $900.
Jamie Iannone: I'd say the best way to learn about this industry is actually just go on eBay Live and watch the coin sellers. You'll see in the commentary, et cetera, there's just a lot of enthusiasm for this as another collectible area. I would just say coins is the next of what are many interesting areas in collectibles that we can continue to drive the playbook on, and where we're seeing excitement across both the core platform and across Live.
Bernard McTernan: Understood. Thank you. Just to follow up on all the commentary or discussion on Depop so far, I thought the Recommerce Report had a really interesting stat in terms of the jump in monthly purchasing from 35% last year to 47% this year. That's a really significant jump. Anything in terms of why you think this is happening right now in the US? I know it's a couple of years at least behind Europe, but why it's happening now in the US?
Jamie Iannone: Yeah, look, I think I am seeing this with my own kids and their friends, that increasing behavior. I think it is a secular shift. I think, when you look at it, the younger generation specifically is much more focused on sustainability and driving recommerce. I think initiatives like what Depop is doing is really unlocking stuff that is sitting in the closets. I like to say that the average household has $4,000 of stuff that could be online, and less than 20% of it is online. If you talk to Gen Zs, they will tell you everything that you ever want already exists in this world.
Jamie Iannone: What we are doing through Magical Listing and Depop is really unlocking that, creating less friction, and driving that kind of secondhand. I guess the last thing I would say is that, I think all the work that we have done in AG has helped build trust in secondhand, specifically in categories like watches and handbags and that type of thing. The last is value. We are seeing strength in our electronics business right now. I find it hard to not buy a refurbished product on eBay because it is coming at a value, it is coming with a 2-year warranty, et cetera.
Jamie Iannone: I would say the last factor of that increase is just people are realizing the value that they can get from secondhand.
Operator: Your next question comes from the line of Brian Pitz with BMO Capital Markets. Please unmute your line and ask your question.
Brian Pitz: Thanks so much. Maybe starting with active buyers, up to 147 million, 10% growth. If you actually exclude Depop and Tise acquisitions, I think growth was closer to 1%. Can you talk about the plans to really accelerate organic buyer acquisition for the core marketplace beyond these inorganic additions? Then maybe a quick one on Depop.
Brian Pitz: I know you are going to operate it as a separate business, but given the size of the investment, can you maybe talk about specific back-end synergies you may realize in search or AI or payments that could be realized without compromising the social-forward brand experience for the Gen Z audience? Thanks.
Peggy Alford: Great. Thanks so much for your question. I will start and answer your question on the buyers. We have been encouraged by both the growth of our buyer base as well as the quality of the engagement across the marketplace. On a pro forma basis, the trailing 12-month active buyers grew 4% to 147 million, including Depop and Tise. If you exclude those businesses, to your point, active buyers grew by over 1%. That is led by 6% organic growth in the US. Partially offset by softer trends in international markets.
Peggy Alford: That is one factor I would point out with regard to the difference between US and outside of the US. On the core eBay marketplace, we had trailing 12-month enthusiast buyers that grew by over 2%, with US enthusiast buyers up 9%. We also focus a lot on the spend per buyer, and we saw enthusiast buyers increasing to approximately $3,700. It has been increasing quarter over quarter for the last several years.
Peggy Alford: We are really focused on our C2C initiatives, better listing tools and discovery, eBay Live, which Jamie talked a lot about, and targeted marketing, all helping us attract customers and giving them more reasons to return to buy more frequently and to deepen their relationship with eBay. I would also just remind that the active buyers is a trailing 12-month metric, so it takes time for the stronger GMV momentum that we are seeing to fully translate into buyer growth.
Jamie Iannone: Yeah, on your question on Depop and leveraging kind of core parts of eBay, I think we are already seeing the benefits of having these businesses together. I would start with shipping. Access to eBay's carrier rates has already lowered Depop's shipping and parcel rates, making shipping investments more efficient, and there is a lot more work for us to do there.
Jamie Iannone: We have also been leveraging eBay's traffic and testing a dedicated module of relevant Depop listings in eBay Search for select fashion queries, which is really connecting our existing shopping demand with Depop's inventory. I think all the ones that you mentioned, Brian, are areas that over time, we will be able to leverage eBay's capability with Depop. Things like our regulatory compliance, all the work we have done in Authenticity Guarantee, our payment solutions, and frankly, all the work that we have done with AI to make listings easier to bring onto the marketplace.
Jamie Iannone: We think all of those over time are opportunities, and we have a really robust roadmap, and we are excited to continue to unlock more of the potential through those synergies in Q4, in 2027, and beyond.
John Egbert: Operator, could we do one last question, please?
Operator: Yes. Your final question comes from the line of Mark Mahaney with Evercore ISI. Please unmute your line and ask your question.
Mark Mahaney: Hey, thanks. I will just ask one question on agentic. We have had a couple of interesting public data points on how big commerce activities are underlying some of these consumer agents, the Instinct and Muse. How do you view the rise of these? I assume there is going to be more in kind of in the freemium model space. I think Google hinted at that in its earnings call tonight. How do you think about those as kind of additional platforms, more opportunities to acquire customers? Anything that suggests to you that it makes it more challenging or less challenging to acquire, retain customers? Thanks a lot.
Jamie Iannone: Yeah, we believe that this traffic will be largely incremental to eBay. While I would say it is very small today, it does bring over new and reactivated buyers at a higher rate than other similar channels on the platform. I think what is great about eBay is we have a very strong and loyal base of buyers on the platform. 85% of our traffic is organic. Enthusiast buyers represent over 70% of our GMV. They visit us more than once a day, and as Peggy talked about, they spend $3,700.
Jamie Iannone: But we have got a track record of using other channels to bring new buyers to eBay and then turn them into enthusiast buyers on the platform. Importantly, even though the traffic is small today, we are seeing that roughly half of the new buyers from those referrals come directly to eBay for their subsequent purchases. So we are open to ways to find opportunities to bring new traffic in, convert them to enthusiast buyers.
Jamie Iannone: As I have said up front, what is really, I think, important is that the AI, what we have already seen is the AI that our sellers are using, and the AI tools that we are giving to buyers are really having a big impact on the business today through Magical Listing, through other tests that we are doing, et cetera. So we are excited to keep kind of leveraging those. We think it is going to be a big structural tailwind for eBay.
Mark Mahaney: Thank you, Jamie.
Operator: Thank you for joining. This concludes today's call. You may now disconnect.
