EBAY Q4 Deep Dive: Focus Category, C2C, and AI Drive Momentum, Depop Acquisition Expands Reach

Online marketplace eBay (NASDAQ:EBAY) announced better-than-expected revenue in Q4 CY2025, with sales up 15% year on year to $2.97 billion. On top of that, next quarter’s revenue guidance ($3.03 billion at the midpoint) was surprisingly good and 8.5% above what analysts were expecting. Its non-GAAP profit of $1.41 per share was 4.4% above analysts’ consensus estimates.

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StockStory’s Take

eBay’s fourth quarter results were marked by broad-based growth across its strategic focus categories, consumer-to-consumer (C2C) segment, and recommerce initiatives. The management highlighted that investments in reducing transactional friction and advancing the platform’s AI-powered tools, such as the updated magical listing experience, contributed to higher engagement and increased supply of preowned goods. CEO Jamie Iannone emphasized, “Recommerce made up over 40% of GMV on the eBay platform in 2025,” crediting the company’s strategy for accelerating growth in established and emerging categories, such as collectibles and fashion.

Looking ahead, eBay’s forward guidance is grounded in continued momentum from its core priorities—focus categories, C2C, and recommerce—as well as emerging growth vectors like vehicles and eBay Live. Management sees incremental contributions from the pending Depop acquisition, which is expected to broaden eBay’s demographic reach and reinforce its leadership in circular fashion. CFO Peggy Alford noted that investments in AI-powered experiences and international expansion would support durable growth, while acknowledging potential headwinds from tariff changes and accounting policy shifts.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to robust demand in collectibles, a successful rollout of AI-powered seller tools, and strong U.S. growth, while international markets faced macroeconomic headwinds.

• Collectibles and Trading Cards Surge: The collectibles category, especially trading cards, was the largest contributor to GMV growth. Management cited the launch of an AI-powered card scanning tool, which saw 15 million cards scanned since November, as a key factor driving engagement and transaction volume among hobbyists.
• C2C and Recommerce Expansion: eBay’s ongoing investment in its consumer-to-consumer experience and recommerce initiatives led to a notable increase in preowned and refurbished goods sold on the platform. Recommerce now accounts for over 40% of GMV, with technology enhancements making it easier for individuals to list and sell items.
• AI-Powered Seller Tools: The new magical listing experience, which uses AI to automate product listings from images, reduced average listing time by over 25% and increased new listing creation rate by more than 50%. Customer satisfaction for this feature exceeded 95%, underscoring its value for sellers.
• U.S. Market Strength: U.S. GMV grew nearly 19%, driven by collectibles, luxury fashion, and vehicles. The domestic performance benefited from increased demand for preowned goods and improvements in marketing efficiency, while international growth was held back by weaker consumer confidence in Europe and changes in U.S. trade policy.
• Depop Acquisition Adds Strategic Depth: The agreement to acquire Depop, a leading C2C fashion marketplace, is expected to supercharge eBay’s presence among younger consumers and enhance synergies in circular fashion. The acquisition is anticipated to add 1–2 percentage points to GMV growth in 2026 and diversify the platform’s demographic and product mix.

Drivers of Future Performance

eBay expects durable growth in 2026, driven by continued strength in focus categories, AI-powered product enhancements, and incremental gains from new business lines and acquisitions.

• Emerging Growth Vectors: Management highlighted that eBay Live and vehicles are set to become more significant contributors to overall growth, with eBay Live’s annualized run rate up 7x year-over-year and expansion into multiple new countries. These segments are expected to support both revenue and user engagement.
• Depop Integration and Circular Fashion: The Depop acquisition is expected to broaden eBay’s reach among Gen Z and millennial consumers who value sustainability. Management anticipates revenue synergies through cross-listing, shared value-added services (such as authentication and shipping), and expanded brand collaborations. However, integration costs and short-term dilution to operating income and EPS are expected in the initial years.
• Risks and Headwinds: eBay acknowledged potential headwinds from trade policy changes, tariffs, and tougher year-over-year comparisons in categories like bullion and collectible coins. The company is also making accounting changes that could modestly impact reported take rates and margins, and international performance may remain pressured by macroeconomic uncertainty.

Catalysts in Upcoming Quarters

Going forward, the StockStory team will be watching (1) how effectively eBay integrates Depop and leverages cross-listing and value-added services, (2) the adoption and scaling of AI-powered experiences like magical listing and agentic search for both buyers and sellers, and (3) whether eBay Live and vehicle transaction solutions gain further traction in new markets. The pace of recommerce growth and international recovery will also be key to tracking overall momentum.

eBay currently trades at $86.11, up from $82.48 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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