eBay Inc. (EBAY) Q4 2025 Earnings Report, Transcript and Summary

Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to the eBay Fourth Quarter 2025 Earnings Call. [Operator Instructions]. At this time, I would like to turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's Fourth Quarter 2025 Earnings Conference Call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer; and Peggy Alford, our Chief Financial Officer. We're providing a slide presentation to accompany our commentary during the call which is available through the Investor Relations section of the eBay website at investors.ebayinc.com. Before we begin, I'll remind you that during this conference call, we may 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, 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 financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons. You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K, Form 10-Q and our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of February 18, 2026. 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 for joining us today. We finished 2025 with incredible momentum as we delivered Q4 results that meaningfully exceeded our expectations. Before I get into the details of the quarter, I'll start with some highlights for the full year. Gross merchandise volume grew by nearly 6% to approximately $80 billion globally in 2025, and while U.S. GMV grew by nearly 10%. Importantly, our growth was broad-based across all of our most established strategic priorities. First, focus category GMV growth accelerated over 12%. In addition, multiple years of investment in our consumer-to-consumer or C2C experience have reduced transactional friction and reinvigorated growth in this segment which makes up roughly 1/4 of our total GMV. Alongside these efforts, we've made significant investments in accelerating re-commerce on eBay, which we define as the sale of preowned and refurbished goods. We've invested in full funnel marketing to drive awareness and consideration of eBay for consumers shopping pre-loved. Innovations like magical listings have unlocked consumers closets, basements and garages to increase the supply of preowned goods on eBay. We have also introduced direct recommerce collaborations with iconic brands and strategically expanded inventory in key areas like certified recycled auto parts. This work has fueled the circular economy. And as a result, recommerce made up over 40% of GMV on the eBay platform in 2025. In aggregate, these strategic priorities, focus categories, C2C and recommerce comprised approximately 2/3 of our business in 2025 or more than $50 billion of unique GMV. This GMV grew by approximately 10% and accelerated throughout the course of the year, reinforcing the broad-based impact of our strategy on overall GMV growth. We saw equally compelling results on monetization front as we continue to scale our suite of eBay services. Revenue increased by nearly 7% to $11.1 billion, outpacing GMV by over 1 point, primarily driven by growth in advertising, which reached approximately $2 billion in annual revenue. We expanded our financial services footprint, driving incremental GMV through improved risk modeling and flexible payment options like Klarna, while working with partners to deploy working capital to trusted sellers. We also scaled managed shipping in the U.K. and accelerated our product road map for cross-border solutions to help our sellers navigate new tariffs and trade policy changes. Our top line outperformance throughout 2025 enabled us to accelerate investments in areas like eBay Live, vehicles and full funnel marketing to support key categories and geographies. We balance these investments in strategic growth vectors with operational discipline, which enabled us to grow non-GAAP operating income by roughly 7% to nearly $3.1 billion. Lastly, we created significant shareholder value by growing non-GAAP earnings per share by 13% to $5.52 while returning approximately $3 billion of capital to shareholders through repurchases and dividends. These results meaningfully outperformed our expectations entering the year, highlighting our ability to navigate a dynamic macro environment and an increasingly complex global trade landscape. We also shared some exciting news today alongside our fourth quarter results. EBay has entered into a definitive agreement to acquire Depop for approximately $1.2 billion in cash. This acquisition further strengthens our C2C value proposition, augmenting our organic momentum with a leading circular fashion marketplace that brings complementary strengths and demographic reach. I'll share more on this transaction shortly, and Peggy will discuss some of the financial details and forward-looking implications. But first, I'll discuss the key drivers of our strong Q4 performance. The collectibles category had another standout quarter and was the largest contributor to GMV growth in Q4, driven by continued strength in trading cards, growing contributions from our off-platform marketplaces, TCGplayer and Goldin and a notable acceleration in other subcategories like bullion and collectible coins amid unique demand for precious metals in recent months. Within trading cards, we continue to leverage AI to extend our industry-leading value proposition. In Q4, we launched early access to a new AI-powered card scanning experience powered by a set of proprietary models trained on over 40 million card samples. Now users can scan a single photo to instantly detect their exact card in parallel, while also servicing historical prices, PSA population data and other valuable insights. This eliminates time-consuming manual research and helps collectors decide when to buy, sell or grade valuable trading cards. Since we launched this beta feature in November, feedback has been overwhelmingly positive, and trading card enthusiasts have already scanned over 15 million cards to instantly identify and value their assets. We also continue to drive synergies with our off-platform collectibles marketplaces to better serve enthusiasts across every price point. In Q4, we launched a new search experience that services unique inventory from Goldin directly within eBay search results. This integration addresses an inventory gap for rare high ASP items, while giving Goldin sellers access to eBay's scaled global demand. In December, Season 3 of King of Collectibles: The Goldin Touch debuted on Netflix and ranked in the top 10 shows in 7 countries, including the U.S., U.K., Australia and Canada. This season featured Goldin's first on-the-ground collaboration with eBay in Japan, highlighting how our teams are working together to connect global Collectors with high-value inventory. Motors, Parts and Accessories, or P&A, also finished the year strong, contributing over 1 point of GMV growth for our overall marketplace in Q4. We are seeing a repair-over-replace trend among consumers maintaining aging vehicles. And with more than 800 million live P&A listings globally, our inventory depth uniquely positions us to meet this demand. In the U.S., we scaled our automated fitment capabilities, enhancing millions of domestic listings with billions of compatibility attributes in Q4. By leveraging our proprietary data to automatically populate these details on behalf of sellers, we are reducing friction while expanding the inventory backed by our guaranteed fit protection. Our easy and free returns program also continues to drive conversion lift while return rates remain stable, demonstrating that reduced friction builds confidence for auto enthusiasts. Fashion was also one of the leading contributors to growth in Q4, led by our luxury and pre-loved apparel-focused categories. Fashion overall generated well north of $10 billion in GMV globally in 2025. Similar to what we've done in collectibles, we've increasingly leveraged every aspect of our build-buy-partner strategy to improve our value proposition for fashion enthusiasts and accelerate GMV growth. On the build side, we've completely reimagined the selling experience through multiple iterations of our magical listing technology. We modernized the fashion shopping journey by expanding our AI-powered discovery platform from the U.K. into the U.S., Germany, Australia, Italy and France. We invested in technology and talent to broaden the Authenticity Guarantee program to cover more categories, brands and price points, including optional authentication to enhance trust for lower ASP goods, and eBay Live has been particularly impactful for fashion as the ability to story-tell and showcase inventory in real time enables sellers to build immediate trust with their community and ultimately drive greater sales velocity for the stores. Our work with key partners also contributed to notable improvement in consideration of eBay in fashion throughout the course of 2025. We partnerships with Love Island, Conde Nast and Vogue Vintage market helped elevate the perception of eBay as a trusted place to shop. Passionate eBay advocates like Chaperone and Emma Chamberlain, have raised awareness of eBay's fashion offering during some of the biggest cultural moments for enthusiasts like the Met Gala. Our collaboration with Marks & Spencer one of the U.K.'s most iconic retailers, enables consumers to drop off apparel at hundreds of store locations to be resold on eBay and our Certified by Brand and Pre-loved Partner programs have enabled many more of the world's leading brands and trusted resellers to increase the breadth and depth of fashion inventory on our marketplace. Our momentum in fashion has meaningfully benefited organic growth in our marketplace. With fashion serving as the second largest contributor to our U.S. GMV growth in Q4 with particular strength in C2C. We complemented this organic momentum with the recent acquisition of Tise, a leading C2C marketplace in Nordics, which further extends our value proposition globally. And now we're excited to further expand our total addressable market in C2C with the acquisition of Depop, which a natural strategic and cultural fit with our company, offering clear opportunities for synergies between our respective market places. Depop has established itself as a leading C2C marketplace that currently serves the base of approximately 7 million active buyers and 3 million active sellers with most of its audience under the age of 34. Depop facilitated approximately $1 billion in gross merchandise sales in 2025 and with nearly 60% year-over-year growth in the U.S. market. This acquisition is compelling on a number of fronts. Recommerce is one of the fastest-growing segments in global retail, led by Gen Z and millennial consumers who prioritize sustainability, individuality and value. These consumers are accelerating the shift towards circular fashion through social-driven shopping behaviors. Depop's mobile-first social forward experience has cultivated an extremely engaged user base that complements eBay's global scale. For instance, over 1/3 of Depop buyers listed 1 or more products on the marketplace in 2025. And this engagement fuels a sell-to-buy flywheel that drives sales velocity across a broad array of brands and price points. I'm confident this acquisition will drive meaningful benefits for users across both eBay and Depop. Depop seller and buyer communities will gain access to eBay's suite of value-added services, including financial services, shipping and cross-border trade solutions as well as trusted experiences like Authenticity Guarantee. Depop strengthens eBay's leadership in C2C, broadens our demographic reach and expand the presence in fashion and adjacent lifestyle categories. Similar to how we've demonstrated the power of cross-listing inventory with Goldin and collectibles, we see a clear opportunity to replicate that success with Depop, given its complementary range of brands and price points. Integrating Depop in the eBay's portfolio should further reinforce our customer proposition in a rapidly evolving recommerce environment and ultimately drive long-term value for shareholders. Another emerging growth vector we're excited about in 2026 is the momentum we're seeing in eBay Live. eBay Live is rapidly evolving into a multi-category shopping destination as we diversify our inventory and programming beyond collectibles. Fashion is becoming a more significant growth driver particularly in luxury watches. During the holiday season, we achieved a single day record for eBay Live GMV on Black Friday, including approximately $2 million of sales in a single event. In recent weeks, eBay Live GMV is tracking at an annualized run rate roughly 7x higher year-over-year, led by rapid growth in the U.S. market. In Q4, we expanded our global footprint by launching eBay Live in Germany and Australia, followed by recent additional launches in France, Italy and Canada in Q1. 2025 was also a watershed year for horizontal innovation, as our proprietary AI infrastructure enabled us to transition from generative AI pilots to scalable agentic experiences that actively do more of the hard work for our sellers and buyers. In Q4, we began rolling out the next generation of our magical listing experience, a true breakthrough that move beyond AI-assisted tools to a fully AI-native architecture. Unlike prior iterations where we integrated generative AI technology into legacy workflows, this new experience leverages AI agents from the start to autonomously build listings from images alone. Now any smartphone camera can act as an AI agent that guides you on which photos to take for your specific product to increase the likelihood of a sale. In the background, AI agents create the title, category and item specifics by leveraging advanced models and our product knowledge graph. AI also provides intelligent pricing recommendations based on real-time transaction data, helping sellers balance velocity and price realization to optimize their cash flow. The early results have been powerful. After making this the default listing experience for all new and reactivated listers on iOS and Android in the U.S., we have seen a more than 1/4 decrease in average listing time and greater than 50% increase in new listing creation rate, double-digit percentage increases in sold items and GMV per lister and customer satisfaction exceeding 95%. We are continuing to fine-tune the experience and are excited to bring this game-changing capability to more countries and seller cohorts over the coming months for unlocking our total addressable market in recommerce. For buyers, we are redefining discovery through a agentic search, which we started rolling out to a subset of our U.S. mobile traffic in December. This technology allows buyers to shop using natural language in a back and fourth dialogue, just like they would with a knowledgeable sales associate that understands their style, preferences and shopping history. As a result, new buyers are able to seamlessly filter results and more easily discover the amazing breadth and depth of inventory on eBay just like enthusiasts have been able to, do for many years. As this technology is built into the core search experience rather than off to the side, it's important that it's scalable. We've powered this experience using a set of lightweight proprietary models that leverage a query agent to classify intent, which enables us to effectively balance the trade-offs between latency, compute costs and query optimization quality. We plan to scale agentic search to more users throughout 2026, laying the groundwork for an even more personalized shopping journey for our customers. In October, we launched eBay International Shipping or EIS, in Canada, our third largest quarter for U.S. imports. This rollout brings the benefits of our U.S. program to Canadian sellers, including delivery duties paid functionality and the automated application of country of origin data. Our Canadian seller ramp has progressed ahead of schedule and we'll continue to expand seller and listing eligibility in 2026 as we refine our offering. In Q4, we also enabled business sellers in Germany to access SpeedPAK, our end-to-end cross-border shipping solution enabled through a joint venture, which was already offered in Greater China and Japan. SpeedPAK automates customs documentation and tariff calculations, simplifying compliance for small businesses that lack the resources to manage these changes independently. In Japan, where SpeedPAK has seen strong adoption, SpeedPak is now utilized for the majority of direct shipments to the U.S., ensuring a reliable transparent experience for buyers. Importantly, between EIS and SpeedPAK, we now have cross-border solutions in place for our largest corridors, importing goods to the U.S., and we'll continue to ramp shipping solutions to additional corridors throughout 2026. I'm also pleased to share that we closed out 2025 by exceeding our ambitious 5-year impact goals. From 2021 to 2025, we set out to drive $22 billion in positive economic impact from the sale of pre-loved and refurbished goods on our platform. Based on our outperformance in recommerce, we estimate we achieved a cumulative positive impact of close to $25 billion. We also helped prevent nearly 8.2 million metric tons of carbon emissions from entering the atmosphere above our target of 8 million. Lastly, we estimate over 360,000 metric tons of waste were diverted from landfills from recommerce on eBay, exceeding our target of 350,000. These results demonstrate how promoting the circular economy delivers tangible environmental benefits while creating meaningful economic value for our global community. In closing, 2025 was a milestone year for eBay. We accelerated GMV growth to nearly 6%, with 8% growth in the second half of the year. Roughly 2/3 of our GMV was driven by our most established strategic priorities: focus categories, C2C and recommerce. This GMV grew 10% in 2025 and exited the year growing even faster. I'm incredibly proud to see years of investment and execution reflected in the strength and momentum in our business. At the same time, I'm even more excited about the road map for 2026. In addition to scaling our established strategic priorities this year, we plan to accelerate emerging growth vectors like our secure, fully digital transaction solution for vehicles. which serves as a powerful multiplier for our broader eBay Motors offering. Each enthusiast vehicles sold on eBay unlocks further customer lifetime value, driving recurring demand for our P&A business as buyers return to maintain, modify or restore their newly purchased vehicle. We also have ambitious plans for eBay Live, which has evolved from a fast-growing U.S. pilot at the start of 2025, to a rapidly scaling commerce engine that's available in 7 countries today. By integrating live shopping directly into our core experience, we are building a new flywheel that allows enthusiasts to discover, interact and transact in real time across many of our strongest categories. Lastly, I've never been more optimistic about our AI road map as we start 2026, as we build upon the robust technical infrastructure and the foundry of proprietary models that we've developed over the past year. This foundation enables us to further raise the bar for innovation, unlock our decades of proprietary data and deliver hyperpersonalized agentic experiences that anticipate our customers' needs and drive tangible value for our business. I want to thank our employees for their incredible execution this year and our community of sellers and buyers for their continued partnership. With that, I'll turn the call over to Peggy to provide more details on our financial performance. Peggy, over to you.

Thank you, Jamie. I'll start with our financial highlights for the fourth quarter. GMV grew over 8% to $21.2 billion. Revenue grew over 13% to $2.96 billion. Our non-GAAP operating income grew over 11% year-over-year to $775 million. Non-GAAP earnings per share grew nearly 13% year-over-year to $1.41 and we returned $756 million to shareholders through repurchases and cash dividends, demonstrating our continued commitment to capital returns. Now let's go deeper into the key drivers behind our strong Q4 performance. GMV grew over 8% to $21.2 billion on an organic FX-neutral basis. Foreign exchange provided a tailwind of approximately 150 basis points to spot GMV growth. Focus category GMV grew over 16% in Q4, outpacing the remainder of our marketplace by roughly 12 percentage points. Consistent with recent quarters, strength was broad-based across our business and was most pronounced in the areas where we have been actively investing. All focus categories contributed positively to GMV growth in the quarter, led by collectibles, P&A, luxury, refurbished apparel and sneakers. Within trading cards, while Pokemon decelerated as expected due to tougher year-over-year comparisons, GMV from the rest of collectible card games still posted strong growth and sports trading cards growth accelerated. Outside of focus categories, we also saw strong GMV growth in other collectibles like bullion, coins, action figures, comics and other toys. Looking at our business by geography. Our U.S. GMV growth was particularly strong, while our international performance was pressured by the relatively softer macro environment in Europe, and continued pressure on U.S. imports driven by recent trade policy changes. U.S. GMV grew nearly 19%, accelerating by nearly 6 points sequentially due to several factors. Our U.S. volume saw a disproportionate benefit from the strength in collectibles because of its higher mix in this category. Our U.S. business also benefited from strong growth in luxury and pre-loved apparel and an uptick in demand in certain electronics categories. Growing contributions from our emerging growth vectors, notably live and vehicles also benefited our U.S. growth as well as a favorable lower funnel marketing environment and continued strength from our Klarna partnership. International GMV declined nearly 1% on an organic FX-neutral basis with foreign exchange providing a tailwind of 290 basis points to spot GMV growth. International performance was impacted by challenging macroeconomic conditions in the U.K. and Germany and a deceleration in our cross-border volume growth due to U.S. trade policies, including the removal of de minimis exemption for all countries at the end of August. However, our focus categories continued to perform well internationally in Q4, reinforcing the resilience of our marketplace. Moving on to our buyer metrics. Our trailing 12-month active buyers totaled roughly 135 million in Q4. Excluding buyers from recently acquired Tise, active buyers were over 134 million up nearly 1% year-over-year organically. Enthusiast buyers were stable at roughly 16 million while spend per enthusiast buyer grew year-over-year to over $3,300 on a trailing 12-month basis. Our buyer metrics also reflected the divergence in our geographical performance. In the U.S., both active and enthusiast buyer growth accelerated in 2025, exiting the year at mid-single-digit growth. However, our enthusiast buyer count in international markets has been pressured by persistent macro headwinds as some buyers fell below the volume or frequency thresholds. Next, let's take a closer look at our income statement. We generated revenue of $2.96 billion in the fourth quarter, up over 13% on an organic FX-neutral basis with foreign exchange providing a tailwind of 160 basis points to spot growth. Our take rate was 14%, up 60 basis points year-over-year primarily due to the shipping, U.K. buyer protection fee, and advertising revenue growth. As a reminder, we eliminated final value fees for U.K. C2C sellers as a part of our C2C initiative in October of 2024, then progressively scaled our remonetization throughout 2025. By Q4, we had effectively completed our C2C remonetization efforts through our buyer protection fee and manage shipping mandate on eligible items. Trade policy changes and mix shifts in our business continue to apply some pressure on our take rate year-over-year. Last quarter, we noted returned and canceled orders had emerged as a headwind to our take rate in recent months. Encouragingly, we did see return in cancellation rates stabilize sequentially in Q4 as sellers and buyers adjusted to U.S. trade policies. Total advertising revenue was $544 million, representing GMV penetration of nearly 2.6%. Within the eBay platform, first-party ads grew over 17% to $517 million. Promoted listings comprised nearly 1.2 billion of the roughly 2.5 billion total listings on eBay while 4.8 million sellers adopted at least 1 promoted listing product during the quarter. We continue to deprecate legacy third-party display ads, which declined by 41% to $7 million. Off-platform advertising revenue was $21 million. Non-GAAP gross margin was 72.1% in Q4, declining by nearly 80 basis points year-over-year as tax-related tailwinds and cost of payment efficiencies were offset by managed shipping traffic acquisition costs related to promoted off-site ads and Authenticity Guarantee program costs. While these programs pressure gross margins as they scale, they provide meaningful strategic benefits to our marketplace by reducing transactional friction, driving sales velocity and enhancing trust. Our non-GAAP operating margin was 26.1% as marketing efficiencies were more than offset by product development expenses and transaction losses. The losses were primarily attributable to our recently launched shipping programs, which significantly improved the seller and buyer experience. Losses with these types of programs are typically higher initially and we expect them to decline over time as we gather data and optimize these programs. Overall, while we continue to reinvest a portion of our top line upside in strategic initiatives, we flowed through more incremental revenue to operating income in Q4 compared to the prior 2 quarters, resulting in 11% year-over-year operating income growth ahead of our guidance. Non-GAAP earnings per share was $1.41, up nearly 13% and GAAP earnings per share from continuing operations was $1.14. Moving on to our balance sheet and capital allocation. We generated free cash flow of $478 million in Q4 and ended the year with cash and fixed income investments of $4.8 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments were valued at over $900 million. We repurchased $625 million of eBay shares in Q4 at an average price of nearly $86, and paid a quarterly cash dividend of $131 million in December or $0.29 per share. Before I discuss our outlook, I'd like to point out 2 accounting policy changes we are making, starting on January 1, 2026. First, we are adopting a new accounting standard for internal use software, and as a result, we will expense all product development costs starting this year, reducing the amount of capitalization. We are providing a recast of the 2024 and 2025 income statements in the appendix of our earnings presentation, which offers a comparable baseline to the financials we'll report starting with Q1. My upcoming comments on Q1 and 2026 growth rates are based on the recast financials. Second, since we first launched our U.K. managed shipping program over a year ago, we have expanded our partnerships with carriers and provided sellers with more choice and control over which shipping services buyers can select. Given the increased flexibility for sellers, we are switching our accounting treatment for this program from gross to net revenue recognition, which will modestly pressure our take rate in 2026. Now I'll share some thoughts on 2026 and starting with our outlook for the first quarter. We expect GMV between $21.5 billion and $21.9 billion for Q1, representing total FX-neutral growth between 10% and 12% year-over-year. Based on current exchange rates, we estimate FX would represent a roughly 450 basis point tailwind to spot GMV growth in Q1. Our guidance assumes continued strength from our strategic priorities, driven by focus categories, C2C and recommerce. Our year-over-year GMV growth is also expected to benefit from continued efficiency in lower funnel marketing and our corner partnership, which each emerged as more noticeable growth drivers in Q2 of last year. In addition, we do expect increased growth contributions from what we perceive as less durable growth drivers, including bullion and collectible coins. We forecast revenue to be between $3 million and $3.05 billion, implying total FX-neutral growth of 13% to 15% year-over-year. Based on current exchange rates, we estimate FX would represent roughly 310 basis points of tailwind to spot revenue growth. Our guidance implies a roughly 3-point delta between FX-neutral revenue and GMV growth year-over-year in Q1. Continued healthy growth in advertising is expected to be a contributor to this delta. A portion of this delta is also related to the lapping of our phased remonetization of U.K. C2C volume last year, but this component will no longer be a tailwind in Q2 as managed shipping revenue faces lapping pressure from the aforementioned accounting change. We expect non-GAAP operating income growth between 11% and 16% year-over-year in Q1, implying non-GAAP operating margin between 28.3% and 29.2%. Our strong operating income growth reflects disciplined reinvestments in strategic priorities and healthy flow-through to the bottom line. We forecast non-GAAP earnings per share between $1.53 and $1.59 in Q1, representing year-over-year growth between 12% and 16%. Our EPS guidance implies the net interest and other line item is roughly neutral in Q1 due to onetime items. Next, I'll share our preliminary views on the full year excluding the potential impact of the pending Depop acquisition, which I will outline separately. For 2026, we are planning our business around the assumption that year-over-year GMV growth is similar to 2025 on an FX-neutral basis, reflecting the continued momentum we're seeing from our established strategic priorities and increased contributions from emerging growth vectors this year. We expect this strong GMV growth despite the incremental impact of tariffs and other lapping considerations we identified last quarter. These impacts are not expected to be linear from quarter-to-quarter influencing year-over-year growth rates in 2026. However, on a 2-year stack basis, our commentary suggests GMV growth is relatively consistent between Q2 and Q4, implying strong underlying growth trends. We are planning for revenue growth to be in line to slightly ahead of GMV for the full year on an FX-neutral basis as healthy growth in advertising revenue is expected to be partially offset by mix shifts in our business, including higher growth contributions from live and vehicles. We believe these emerging growth vectors will contribute long-term top and bottom line growth and improve the health of our marketplace. We expect non-GAAP operating income growth between 8% and 10% year-over-year in 2026, as we balance reinvestments in our strategic priorities and emerging growth vectors with strong flow-through to the bottom line. Importantly, we will continue to be disciplined in our investments and drive operational efficiencies in our business whenever possible. We expect non-GAAP earnings growth to be relatively in line with non-GAAP operating income in 2026, due to below-the-line items that are expected to roughly offset the EPS accretion from our share repurchases. We anticipate our lower cash balance and higher interest expense would pressure the net interest and other line item year-over-year after Q1. Additionally, as we alluded to last quarter, we are increasing our non-GAAP tax rate assumption in 2026 to 17.5% to reflect the impact of global tax policies and our geographical business mix. Next, let me share a few thoughts on capital allocation. We forecast capital expenditures to be between 4% and 5% of revenue for the full year. As we outlined last quarter, we plan to target repurchases and cash dividends totaling between 90% to 100% of free cash flow in a normal year. For 2026, we are targeting roughly $2 billion of share repurchases, which is squarely within that range despite our planned acquisition of Depop, underscoring our ability to balance inorganic investments with strong capital returns to shareholders. In February, our Board authorized an incremental $2 billion under our stock repurchase plan in addition to our remaining authorization of roughly $800 million at the end of 2025. Our Board also declared a quarterly cash dividend of $0.31 per share for the first quarter to be paid in March, which is an increase of $0.02 from the quarterly dividends paid out in 2025. Now I would like to take a few minutes to walk through the financial implications of our pending acquisition of Depop. We have entered into a definitive agreement to acquire Depop from Etsy for approximately $1.2 billion in cash subject to certain purchase price adjustments. We currently expect this acquisition to close in Q2 of 2026, subject to the satisfaction of customary closing conditions and regulatory approvals. As Jamie noted, Depop is a great strategic fit and builds upon the significant organic momentum in our business, driven by years of investment in C2C and growing value proposition in fashion. Overall, Fashion is one of our largest categories, generating more than $10 billion in GMV for eBay annually. And in 2025, our U.S. market alone added over $500 million of incremental fashion GMV year-over-year, the majority of which came from C2C sellers. Our acquisition of Depop would add a business generating approximately $1 billion of annual gross merchandise sales, primarily in the U.S. market, where it grew by nearly 60% year-over-year in 2025. Upon completion of this transaction, we expect Depop would contribute 1 to 2 percentage points to total FX-neutral GMV growth year-over-year in 2026, assuming the deal closes as expected in Q2. Given the immense potential we see for this marketplace within eBay's portfolio, we plan to invest in Depop to support future growth and synergies between our respective marketplaces. Our current assumption is that the acquisition would represent a low single-digit headwind to the 8% to 10% operating income growth we forecast for the core eBay marketplace. This estimate reflects not only the current operating profile of Depop, but also integration costs and planned investments. We would also expect the acquisition to dilute our non-GAAP earnings per share growth by low single digits, with the EPS impact modestly higher than operating income dilution due to foregone interest income from the cash used for this transaction. Over the long term, we are highly confident this acquisition will be meaningfully accretive to operating income and EPS growth and drive significant value for shareholders. On a consolidated basis, including synergies, we expect the acquisition of Depop to become accretive to non-GAAP operating income in 2028. In closing, our Q4 results capped off a tremendous year for eBay. In 2025, we accelerated GMV growth to nearly 6%, increased non-GAAP operating income by roughly 7% year-over-year and grew non-GAAP earnings per share by nearly 13% year-over-year, marking our second consecutive year of double-digit earnings growth. We demonstrated our ability to accelerate growth invest in our strategic priorities and transform the eBay experience through AI, all while delivering strong bottom line results and healthy capital returns to shareholders. Despite a full year of impact from trade policy changes and the lapping considerations we've laid out, our outlook for 2026 implies another strong year of balanced top and bottom line growth with our investments supporting an exciting innovation road map for our customers. With that, Jamie and I will now take your questions.

[Operator Instructions] Our first question will come from Nikhil Devnani with Bernstein Research.

Jamie, it's pretty staggering to see numbers like 10% to 12% consolidated growth given where things were only a few quarters ago. I know you've acknowledged already some of the shorter-term benefits in a few categories. But when you look beyond that, it seems like there's been some sustained acceleration just generally for you in the U.S. So my core question here is, I guess, what's changed? Are you seeing -- have you seen step-ups in conversion rates? Have you seen influx of new customers to some of those other core categories? Like what's driven this improvement across the board in the domestic market?

Yes. Look, thanks for the question, Nikhil. What I feel great about regarding Q4 is the broad brand strength that we're seeing. The underlying health of the business is the strongest it's been since I've joined the company 6 years ago. And I think what you're seeing is that years of investment that we've made are paying off, and that's really evident across our strategic priorities. Focus categories, C2C and recommerce, each of these areas grew in the high single to low double digits in '25. And collectively, they drive a significant majority of our GMV. So we've been transparent and Peggy has talked about some of the unique tailwinds in recent periods. And we've been prudent about our go-forward assumption in those areas. But overall, I'd say we're really pleased with our performance in Q4, the broad-based nature of our growth and how that momentum is translating into early 2026. We had some specific commentary about bullion and collectible coin specific to Q1. But other than calling that out -- potentially less durable, we see that as less durable. Overall, we see the broad-based nature of our growth and that momentum really carrying through to 2026.

And maybe a follow-on, sticking with GMV. For the guide for this year, how much contribution are you embedding from some of the newer emerging vectors like Caramel and eBay Live?

Yes. Look, we're excited by the new growth vectors in the business. But I would say the majority of what we're excited by is just the strength of the core business. When you look at our focus categories and the growth that we saw in Q4 and what we're seeing in Q1, that continues to perform -- those continue to perform really well. I'm excited by some of our newest categories that we have in -- or newest areas that we have with both eBay Live and with Vehicles. we're seeing a nice run rate in eBay Live, a 7x run rate for year-over-year. But I would say, in general, our strategic priorities around focus categories, C2C and recommerce are going to be consistent and strong drivers for us in 2026.

Our next question will come from Colin Sebastian with Baird.

Great. Congratulations on the quarter and the year. I guess, first, on the International segment, I know the macro factors continue to weigh on growth, but also curious if you're seeing, Jamie, any changes in the competitive environment in key markets? And then likewise, are you seeing benefits from focus categories and AI tools or other platform initiatives as they do roll out in Europe?

Yes. Yes. Thanks for the question. Clearly, it's a dynamic macro environment and a clear divergence between the U.S. and our international markets in Q4. In the U.S., while we faced uncertainty relative to trade policy, consumer demand has been resilient, and we saw broad-based strength across categories in Q4. I would say in contrast, Europe has been more challenged as consumer confidence remains low and retail sales trends are subdued there. But what I would tell you is the focus category stuff that we've rolled out internationally has been performing well. The C2C initiatives that we've been driving continue to perform well in that market. We recently expanded eBay Live to a number of our other markets across Germany, France, Italy and Canada. And so overall, we feel like we're well positioned and the things that are working in the U.S. are working as well internationally. It's just a very different macro environment from what we're seeing in the U.S.

Got it. Okay. And then maybe my follow-up is on the agentic side. I know it's really early. But at a higher level, what sort of user behavior changes are you expecting as this rolls out on the buyer side? Does this impact your advertising business and also maybe the architecture for how you're building this out to connect with partners like OpenAI?

Yes. Look, we feel really well positioned to bring a differentiated experience to agentic commerce which makes us really confident we'll be a long-term beneficiary of this trend. The first thing I'd hit on is the experiences that we're building on eBay, leveraging this technology. Our next generation of magical listing is really a game changer. It's an AI-native solution that leverages our product knowledge graph that leverages 30 years of data and build this amazing experience where we essentially do everything for you in the background. I've been doing this for a long time in decades. And having a new product rollout with 95% customer satisfaction shows you the strength of what we're building using these tools. I would say the same thing with agentic search and what we're seeing as people pilot that and the ability to use natural language against our inventory. But the other thing I would tell you is that the other reason we feel well positioned is our inventory is really different from most marketplaces. Roughly 90% of our GMV is not new in season and 2/3 of that intersects with focus categories, recommerce or with C2C. So these are highly considered purchases of unique items, think used, refurbished, collectable or luxury items where conditions, scarcity and the human judgment matter. The last thing I'd say is that all the work that we've done in our experiences with trust, plays a huge differentiator for us and a real structural advantage. You think about seller feedback, Authenticity Guarantee and the post-transaction Protections that we provide, that's hard to replicate along with financial services and global shipping solutions really do kind of reduce the transactional friction for buyers and sellers. So all of these factors, I think, put us in an incredibly strong position to thrive in an agentic AI world. and I'm really excited by the investments that we're making and the customer responses to how we're using that technology on the eBay experience.

Your next question will come from Ross Sandler with Barclays.

Great. Hopefully, you can hear me.

Yes, we can hear you, Ross.

Excellence. Okay. So just 2 questions. One on the full year '26 guide, you guys have talked about how we're going to lap some of these like nondurable things in the second half of '26. Could you just talk about how you're thinking about like the growth cadence throughout the year and some of the like durable versus nondurable as we get into the second half? And then on Depop, so those guys have done a great job in their U.S. side of the business. And I think the international has trailed the U.S. performance. So how is like combining eBay and Depop potentially going to advance the cause on like U.K. and Australia and frankly, just the overall fashion segment at eBay in general? Just curious to your comments on that.

Peggy will take the first one and I'll take the second.

Sure. Thanks for your question, Ross. So we feel really good about the broad-based strength that we're seeing. As Jamie mentioned, they're really focused on our strategic priority areas, focus categories, C2C, recommerce. Our commentary reflects the continuation of the strength as well as we're really excited about the contribution that we're expecting from our emerging growth vectors like live and vehicles. In terms specifically on -- in terms of specifically on lapping, a couple of things to keep in mind. So we are expecting a deceleration in Pokemon growth in '26 just given the triple-digit growth that we saw in '25, although I will point out that we expect healthy overall growth in trading cards. We started seeing a little bit of the deceleration in Q4 of '25 and the comps get a bit tougher as we move throughout the year. Jamie mentioned bullion, we are expecting a significant amount of the acceleration that we saw from Q4 to Q1 was related to just the bulion and collectible uptick. And so we are planning for that to moderate during the year after Q1. We're lapping our U.S. Klarna partnership starting in Q2 of '26. And then we talked last year -- in '25 about our marketing efficiency gains in paid search, we'll be lapping those from a favorable competitive dynamic starting in Q2 of '26. So overall, I'd say we believe that the majority of the growth is durable and we remain very confident in the strength of our business. Just want to point out a few of those factors.

Yes. And then regarding your questions on Depop, Look, I'm really excited by the acquisition. I think it's really going to supercharge our C2C strategy in several ways, and it's building on strong growth that we're seeing today, particularly in the U.S. Our U.S. C2C business grew in the mid-teens year-over-year in 2025 with growth accelerating in '24. And our learnings across the globe have really helped drive that. We're also doing this acquisition from a real position of strength. We're seeing strong growth in Fashion, its an over $10 billion GMV category for us on eBay and we've been increasing our investments there. I've been talking about that over recent quarters. In 2025, U.S. fashion grew 10%, with even faster growth in C2C. So if you look at it, we added over $500 million of GMV in the U.S. in fashion alone. Depop as really prioritized the U.S. market in a world with limited investments. They've been really leaning in, and they've seen really great growth. They've seen 60% growth in the U.S. market, which is obviously great with the strength that we're seeing in the overall business. The last thing I'd say is that Depop brings a younger consumer base and they're amongst the fastest-growing demographic, especially in this sustainability, recommerce and fashion piece. And so we see it as a great strategic fit for eBay. It builds on the strong growth we're already seeing in C2C in fashion, and I'm excited about the strong growth potential for both marketplaces go forward.

Your next question will come from Nathan Feather with Morgan Stanley.

Congrats on the quarter. I guess, first, just to follow up on Depop a little bit. Interested to hear how do you think about the revenue synergies that are available through the Depop deal, and what is that opportunity to drive across the listing from both Depop to eBay and eBay to Depop? And then just a clarification, Peggy. You said that coins and bullion was the majority of the acceleration from 4Q to 1Q. So just to clarify, that means GMV is still accelerating even excluding the coins and bullion impact?

Yes. So let me talk first on what excites me about the Depop from that side and the integration. So first is, we'll keep Depop as a stand-alone brand experience, et cetera. It's resonating great with consumers. It's growing well as I talked about, et cetera. But we do see the opportunity to help support that growth and drive it even further, by bringing assets from eBay that we've developed over the last couple of years. So think about the Authenticity Guarantee work that we've done, the shipping and cross-border trade, payments and financial services in recent years, we've turned more of our back-end resources into services to really help grow not only core eBay Marketplace but other stand-alone platforms. And I'd probably draw a parallel here for you, Nathan, to what we've done in Collectibles. Years ago, we bought TCGplayer and Goldin Auctions, and you see us now integrating Goldin Auctions with a single sign-on experience. We've integrated Goldin Listings onto the platform. And I'm really glad we did those acquisitions because they're really helping accelerate the strategy of what we're doing in collectibles, and I'm similarly excited for that opportunity with what Depop has done with fashion of the ability to take the marketplace to the next level and drive synergies across a number of those areas. Peggy, do you want to take the second piece?

Sure. Just a quick clarification. So as I mentioned, due to the increases in precious metals, we did see an acceleration in the demand for bulion and coins in Q4, and that continued into Q1. This -- what I meant to say was that, the bullions accounts for a significant portion of the sequential acceleration, not all of it. We continue to see broad-based strength going into Q1 and looking beyond some of the near-term unique dynamics that we called out, we feel very good about this broad-based and durable nature of the GMV growth that we're seeing.

Your next question will come from Shweta Khajuria with Wolfe Research.

Let me try 2, please. First is on earnings growth. So when we think about EPS growth, could you please talk about the puts and takes? So how would -- what would drive the potential upside and how you're thinking about buybacks? And then the second is a follow-up to a prior question on agentic commerce I guess, how do you think -- when we think about long term in terms of your position in agentic commerce, how do you see it evolve? And perhaps, is there -- what is your view on eBay's position in agentic commerce as it relates to shoppers perhaps potentially moving to these AI platforms. Is that a positive for you or negative? And are you compelled to partner with them?

Yes. Look, what you've seen from us with partnerships is we've always been open to making our unique inventory available on scaled third-party channels. We've done that with Google Shopping. We've done that with Facebook Marketplaces, which are 2 great examples. We're also thoughtful about where and how we do so, and we're taking the same approach here with agentic commerce. My first priority has been to build the agentic in-house capability. That's why I talked about agentic search. When I talked about the newest version of magical listing, and we've got an exciting road map coming up. But in regard with partnering with other platforms, we built a unified agentic commerce platform that enables us to plug into third-party agents and test different type of experiences to see what works best for our marketplace. For instance, we recently signed on to be an early participant in the OpenAI Ads Pilot Program to test that out. But when I take a step back, yes, we believe we're in a strong position to be a beneficiary of agentic commerce. And it's a lot because of what I talked about earlier. Our inventory is fundamentally different from most marketplaces. It's 90% non-new in season, and we've built a lot of trust and other things around it. When you think about our 70,000 -- sorry, our 16 million enthusiast buyers that we have on the platform that buy 70% of the they're really driving sales in this used, refurbished, collectible, luxury or more considered purchases. So we're going to be very thoughtful about how we do it, and I'm really proud of the technology that we've built to enable us to do so. And we'll continue to develop our platform to create more opportunities that promote discovery of our sellers' unique inventory while we continue to invest internally in loading the leading AI experiences for our enthusiast customers.

In terms of your question on EPS and operating income growth, we are expecting strong non-GAAP operating income growth in Q1 and the full year, and we're expecting that the majority what's driving the EPS growth. In terms of our buyback policy and our capital allocation plan. It remains the same. We first -- our first priority is organic investment in the business because we believe that, that is ultimately what's going to drive EPS growth. When it comes to excess capital, we have a strong track record of returning cash to shareholders. In a normal year, we plan to target repurchases and dividends totaling between 90% and 100% of free cash flow. For 2026 specifically, we're targeting roughly $2 billion of share repurchase, which is within the range for a normal year, and that's despite our planned acquisition of Depop. This is reflecting our business performance. We have a healthy balance sheet and strong cash flow generation. And so we feel really good about this balance we've been able to achieve between investing in future growth and returning shareholder cash.

Your next question will come from Tom Champion with Piper Sandler.

Jamie, can you talk a little bit about eBay Live. Maybe give us the update there and your plans for this year? And curious what the long-term benefit is going to be there. Is that dollar volume of transactions? Is it a new customer demographic or is it engagement on the platform? Just curious any additional comments there. And maybe just relatedly, any update to the Facebook partnership?

Yes, Tom, thanks for the question. And it's really what's exciting about this opportunity, it's really all of the above on the things you mentioned. We see it as a really exciting opportunity, and I'm really encouraged by the traction we're seeing as we expanded into new markets and categories. It's really a natural extension of our marketplace, and it's already contributing to the double-digit growth that we're seeing in focus categories. And what we've been doing is investing and making Live more discoverable across the site, integrating into streams at relative points in the buyer journey. In Q4, we actually expanded Live into Australia and Germany, and we've since expanded it into France, Italy and Canada. We've been hosting high profile activations at the world's kind of biggest football game. We had Christian McCaffrey, Gronkowski, Jerry Rice raising awareness of what we're doing there. And to your question, we're seeing that it helps sellers because it builds this great new capability, right? You put it out there and you watch what sellers do with it, and it's pretty exciting, but it's also helping them grow their core business because they're building trust back in their core business with what they're doing with Live on the platform. It's helping us attract new buyers into the platform and drive more engagement out of our buyers because of the live streams and what we're seeing there, and that's why we've been scaling it up more geographically over time. I was excited to see that we did a single event. We did over $2 million of sales in a single live event that kind of shows you the scale of what's possible for our sellers to really drive GMV. And our scale, our global buyer base and our high bar for trust really differentiate eBay and live commerce. And while it's still early in our growth phase, we believe eBay Live can be a meaningful growth vector over time and an increasingly important part of how enthusiasts shop on our platform. To your question on the Facebook Marketplace, we continue to make progress on our partnership there. In Q1, we expanded our eBay inventory into Search, which is a new platform for us in the partnership or a new surface, if you will, that reflects higher intent user engagement earlier in the shopping journey. We're also expanding the volume and the categories of inventory shared on Facebook Marketplace, which benefits our existing presence in the marketplace feed. So we believe this partnership is great for the eBay seller community as we expose their listings to Facebook scaled audience, and it's great for Facebook Marketplace users as they discover our breadth and depth of unique trusted inventory. So I think both teams are encouraged by the continued progress and the learnings to date, including the new learnings that we're seeing with the new surface in search.

Your final question will come from Michael Morton with MoffettNathanson.

My first one, I love the commentary on the trading card business, you've done some incredible things there. An investor question we frequently get is on the sustainability of that business. I know that there are some tough comps. But big picture, could you maybe talk about or quantify how you've grown the user base of people who sell trading cards on the website to help people appreciate that it's not just price appreciation. That would be my first question. And my second question, Jamie, I wanted to follow up on Colin's question a bit on Shweta's question. But on agentic and just trying to be really explicit on what we're looking for here, are you seeing any change in behavior from users who are sent from AI search platforms to eBay's website. You do have, exactly what you said, it's high consideration goods, are you seeing higher conversion rates when they come from these platforms because they're coming in with more intent? And does it change the amount of products they click on.

So what I would say first on the trading cards is, look, we continue to see a long runway for secular growth in trading cards, and we attribute much of the recent growth to the innovation that we are driving, which has fueled renewed excitement amongst hobbyists. If you look at the Q4 strength, Mike, it was really broad-based across sports, trading cards and collectible card games, Pokemon trains remained extremely strong despite GMV decelerating year-over-year due to tougher comps, but sports trading cards accelerated with the strong growth across the 3 major U.S. sports. And while emerging collectible card games, like there's this new one called One Piece, which is exciting now are starting to gain traction. To your question specifically though, encouragingly, we're seeing GMV growth driven by a balance of new buyers, sold items and ASP, and much of the ASP has been driven from a mix shift towards higher priced items. So stepping back, if you look at the innovation, whether it's live, the new AI card scanning thing that I talked about upfront, which we're seeing great momentum from consumers, we're really excited to see kind of the renewed energy based on the years of investment that we've had. And we believe most of the growth is broad-based and secular in nature. Our scale and our value proposition have really positioned us as a leader in this space. And I remain very optimistic about the multiyear growth opportunity ahead in collectibles. To your question on AI, I'd tell you right now that the traffic is very small. And it's not just for us, like in general, there's not a lot of traffic being driven. The traffic that is being driven is high intent. And so we are seeing kind of high conversion on that in terms of the traffic that's there. The other thing I would tell you is that what we're seeing in our own experiences on our platform with the agentic commerce -- or the agentic search that we're running there is that our enthusiast buyers, especially that are part of the pilot are really loving the ability to have this back and forth conversation. The ability to kind of refine and filter their items using agentic search and get to the things that they want, and it's really resonating on the platform. And then I would say the same thing about magical listing. I talked about the customer satisfaction of that being at 95%. But I think even more important, when you look at the stats of new listings that are coming on to the platform, it's achieving the goal that we've been working on for years now, which is the whole idea of having people say, well, if it's that easy to list it on eBay, let me start selling this, this and this. The average household has $4,000 of stuff that could be sold on the platform, and less than 20% of that is online. So we're really excited to bring that new capability and unlock all that inventory and really drive the significant TAM and recommerce. And we also think Depop is going to help us do that in a big way, too. So thanks for the questions.

Thank you for joining. This concludes today's call. You may now disconnect.