eBay Stock Drops After Beating Estimates — What Spooked Investors?

TLDR

• eBay reported Q1 adjusted EPS of $1.66, up 21%, beating the $1.25 estimate
• Revenue came in at $3.1 billion, up 19%, topping the $3.04 billion forecast
• Gross merchandise volume hit $22.2 billion, up 18%, above the $21.7 billion estimate
• Q2 revenue guidance of $2.97B–$3.03B met estimates, but GMV outlook came in below Q1 levels
• eBay announced a $1.2 billion acquisition of Depop and cut 6.5% of its workforce

eBay beat Wall Street on nearly every key metric in Q1, then watched its stock drop anyway. That’s earnings season for you.

The company posted adjusted earnings of $1.66 a share for the quarter ended March 31, up 21% year over year. Analysts had expected $1.25. Revenue came in at $3.1 billion, up 19%, against an estimate of $3.04 billion.

Gross merchandise volume — the total value of goods sold on the platform — rose 18% to $22.2 billion, beating the $21.7 billion Wall Street had pencilled in.

eBay Inc., EBAY

Active buyers came in at 136 million, slightly above the 135.2 million expected.

CEO Jamie Iannone described the results as “a strong start to the year,” pointing to strength across its Focus Categories, consumer-to-consumer business, and the secondhand and refurbished market.

eBay’s AI-powered “Magical Listings” tool helped drive a more than 50% increase in the rate of new listings on the platform. The company also logged more than 30 million scans of its AI card-pricing feature during the quarter.

Collectibles had a strong quarter. eBay’s Goldin unit set an all-time Q1 GMV record, including a $16.5 million sale of a PSA 10 Pikachu Illustrator card — a record for a single transaction.

Q2 Guidance Disappoints

For Q2, eBay guided GMV of $21.3 billion to $21.7 billion — up 8% to 10% year over year, but below the $22.2 billion posted in Q1. That sequential step-down appeared to weigh on the stock.

Q2 revenue guidance of $2.97 billion to $3.03 billion was roughly in line with the $2.97 billion analyst estimate. Adjusted EPS guidance came in at $1.46 to $1.51.

The stock fell around 7% in after-hours trading on Wednesday before trimming losses to about 1.5% in Thursday premarket trading. Through Wednesday’s close, the stock had gained 19% year to date and 52% over the past 12 months.

Depop Deal and Layoffs

On Feb. 19, eBay announced it would acquire Depop from Etsy for $1.2 billion in cash. The secondhand fashion platform has 7 million active buyers and 3 million active sellers, most of them under 34. The deal is expected to close by the end of Q3, subject to regulatory approvals.

A week after the Depop announcement, eBay said it was cutting roughly 6.5% of its global workforce — around 800 employees — as part of a restructuring.

CEO Iannone noted that while U.S. consumers remain resilient, the picture in Europe is tougher, with more economic pressure weighing on spending there. He said more eBay customers are turning to pre-owned and refurbished goods.

The company returned $639 million to stockholders in Q1 — $500 million in buybacks and $139 million in dividends. A Q2 cash dividend of 31 cents per share was declared, payable June 12 to shareholders of record as of May 29.

In Q1 2025, eBay had reported adjusted EPS of $1.38 on revenue of $2.59 billion.

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