eBay's (NASDAQ:EBAY) Q2 Sales Beat Estimates, Stock Jumps 10.1%

Online marketplace eBay (NASDAQ:EBAY) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 6.1% year on year to $2.73 billion. Guidance for next quarter’s revenue was optimistic at $2.72 billion at the midpoint, 2.2% above analysts’ estimates. Its non-GAAP profit of $1.37 per share was 5.6% above analysts’ consensus estimates.

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Company Overview

Originally known as the first online auction site, eBay (NASDAQ:EBAY) is one of the world’s largest online marketplaces.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, eBay’s sales grew at a weak 1.5% compounded annual growth rate over the last three years. This was below our standards and is a rough starting point for our analysis.

This quarter, eBay reported year-on-year revenue growth of 6.1%, and its $2.73 billion of revenue exceeded Wall Street’s estimates by 3.1%. Company management is currently guiding for a 5.4% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 4% over the next 12 months. Although this projection suggests its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Active Buyers

Buyer Growth

As an online marketplace, eBay generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.

eBay struggled with new customer acquisition over the last two years as its active buyers were flat at 134 million. This performance isn't ideal because internet usage is secular, meaning there are typically unaddressed market opportunities. If eBay wants to accelerate growth, it likely needs to enhance the appeal of its current offerings or innovate with new products.

Luckily, eBay added 2 million active buyers in Q2, leading to 1.5% year-on-year growth. The quarterly print was higher than its two-year result, suggesting its new initiatives are accelerating buyer growth.

Revenue Per Buyer

Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the company earns in transaction fees from each buyer. ARPB also gives us unique insights into a user’s average order size and eBay’s take rate, or "cut", on each order.

eBay’s ARPB growth has been subpar over the last two years, averaging 2.6%. This raises questions about its platform’s health when paired with its flat active buyers. If eBay wants to grow its buyers, it must either develop new features or lower its monetization of existing ones.

This quarter, eBay’s ARPB clocked in at $20.37. It grew by 4.6% year on year, faster than its active buyers.

Key Takeaways from eBay’s Q2 Results

It was encouraging to see eBay’s revenue guidance for next quarter beat analysts’ expectations. We were also happy its revenue outperformed Wall Street’s estimates. Profitability also beat, leading to EPS ahead of Wall Street Consensus. Looking ahead, EPS guidance for next quarter was also solid and beat. Zooming out, we think this was a solid quarter. The stock traded up 10.1% to $85.22 immediately after reporting.

Is eBay an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.