eBay (EBAY) Stock Slides Despite Strong Q1 Beat — Here’s Why

Key Takeaways

• First quarter adjusted earnings per share reached $1.66, representing a 21% increase and surpassing the $1.25 consensus
• Quarterly revenue totaled $3.1 billion, climbing 19% and exceeding the $3.04 billion projection
• Gross merchandise volume reached $22.2 billion, up 18%, outperforming the $21.7 billion forecast
• Second quarter revenue outlook of $2.97B–$3.03B aligned with expectations, though GMV projections fell below first quarter performance
• The e-commerce giant announced plans to acquire Depop for $1.2 billion while eliminating 6.5% of staff positions

eBay delivered impressive first quarter results across virtually all major financial metrics, yet shares still declined in after-hours trading. Welcome to the paradox of quarterly earnings reports.

The e-commerce marketplace reported adjusted earnings of $1.66 per share for the three months ending March 31, marking a 21% year-over-year increase. Wall Street analysts had projected $1.25. Quarterly revenue reached $3.1 billion, representing 19% growth and surpassing the $3.04 billion consensus.

Gross merchandise volume — representing the aggregate dollar value of transactions completed through the platform — increased 18% to $22.2 billion, exceeding Wall Street’s $21.7 billion projection.

eBay Inc., EBAY

The platform’s active buyer count stood at 136 million, marginally above the anticipated 135.2 million.

Chief Executive Jamie Iannone characterized the performance as “a strong start to the year,” highlighting momentum in Focus Categories, the consumer-to-consumer segment, and the pre-owned and refurbished merchandise sectors.

The company’s artificial intelligence-driven “Magical Listings” feature contributed to a greater than 50% surge in new listing velocity across the marketplace. Additionally, eBay recorded over 30 million scans through its AI-powered card valuation tool during the three-month period.

The collectibles category delivered particularly robust results. eBay’s Goldin division achieved a first quarter GMV milestone, highlighted by a $16.5 million transaction for a PSA 10 Pikachu Illustrator card — establishing a new benchmark for individual sales.

Second Quarter Projections Fall Short

For the current quarter, eBay projected GMV between $21.3 billion and $21.7 billion — representing 8% to 10% year-over-year growth, yet trailing the $22.2 billion achieved in the preceding quarter. This sequential decline appeared to trigger investor concern.

Second quarter revenue projections of $2.97 billion to $3.03 billion came in approximately aligned with the $2.97 billion analyst consensus. Adjusted earnings per share guidance ranged from $1.46 to $1.51.

Shares dropped approximately 7% in extended trading Wednesday before recovering to roughly 1.5% losses in Thursday’s premarket session. As of Wednesday’s closing bell, the stock had appreciated 19% year-to-date and 52% over the trailing twelve months.

Depop Acquisition and Workforce Reduction

On February 19, eBay disclosed plans to purchase Depop from Etsy for $1.2 billion in cash. The pre-owned fashion marketplace boasts 7 million active purchasers and 3 million active vendors, with the majority under age 34. The transaction is anticipated to finalize by the conclusion of the third quarter, pending regulatory clearance.

One week following the Depop announcement, eBay revealed plans to reduce approximately 6.5% of its global headcount — affecting roughly 800 employees — as part of organizational restructuring efforts.

CEO Iannone observed that while American consumers continue showing resilience, European markets face greater challenges, with increased economic headwinds constraining consumer expenditure. He indicated that more platform users are gravitating toward previously owned and refurbished merchandise.

The company distributed $639 million to shareholders during the first quarter — comprising $500 million through share repurchases and $139 million via dividend payments. A second quarter cash dividend of 31 cents per share was authorized, payable June 12 to stockholders of record as of May 29.

In the first quarter of 2025, eBay had delivered adjusted EPS of $1.38 on revenue of $2.59 billion.

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