eBay Inc. EBAY reported fourth-quarter 2024 non-GAAP earnings of $1.25 per share, which beat the Zacks Consensus Estimate by 4.17%. The bottom line increased 16% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net revenues of $2.57 billion missed the Zacks Consensus Estimate by 0.02%. The figure increased 1% from the year-ago quarter on a reported basis and an FX-neutral basis.

Strength in first-party advertising, financial services, and shipping were tailwinds.

eBay’s first-party advertising products generated revenues of $434 million, up 18% on an as-reported basis and up 16% on an FX-neutral basis.

Total advertising offerings yielded $445 million in revenues, representing 2.3% of gross merchandise volume (GMV).

EBAY has gained 11.6% on a year-to-date basis, outperforming the industry’s growth of 8.4%.

EBAY’s active buyer base, which stood at 134 million at the end of the fourth quarter, increased 1% year over year, beating the consensus mark by 0.51%.

GMV Details for EBAY

EBAY’s total GMV of $19.3 billion in the reported quarter exhibited year-over-year growth of 4% on a reported and 3% on an FX-neutral basis. This was driven by solid consumer demand during the shortened holiday shopping season. The company benefited from improved AI
models with delivery day estimates and greater visibility of items with fast shipping.

The reported GMV surpassed the Zacks Consensus Estimate of $19.05 billion.

The total GMV is categorized into two parts. U.S. GMV totaled $9.04 billion, accounting for 46.8% of the total GMV. The figure increased 2% year over year. International GMV was $10.27 billion, accounting for 53.2% of the total GMV. The figure grew 6% year over year.

EBAY’s Operating Details

In the fourth quarter, eBay’s gross margin was 72.16%, approximately flat year over year. The reduction in cost of payments, authentication-related costs, and lower depreciation expenses were offset by traffic acquisition costs, foreign exchange headwinds, and tax-related matters, which drove the gross margin.

Operating expenses of $1.32 billion fell 8.6% year over year. As a percentage of net revenues, the figure contracted 520 bps from the year-ago quarter to 51.1%.

The non-GAAP operating margin was 27% in the fourth quarter, expanding 30 bps year over year, which was driven by operational efficiencies and lower transaction losses, partially offset by full-funnel marketing and a foreign exchange headwind.

EBAY’s Balance Sheet & Cash Flow

As of Dec. 31, 2024, cash equivalents and short-term investments were $5.89 billion, up from $4.89 billion as of Sept. 30, 2024.

Long-term debt was $5.75 billion at the end of the fourth quarter, down from $6.17 billion at the end of the third quarter.

EBAY generated $677 million in cash from operating activities in the fourth quarter, down from $755 million in the previous quarter.

The company’s free cash flow was $560 million in the reported quarter.

eBay repurchased $900 million worth of shares and paid out dividends of $128 million in the reported quarter. The company had $3.3 billion remaining under its buyback authorization as of Dec. 31, 2024.

Guidance

For first-quarter 2025, eBay expects revenues in the range of $2.52-$2.56 billion. On an FX-neutral basis, revenue growth is anticipated to be (1)-1%. The Zacks Consensus Estimate for revenues is pegged at $2.6 billion.

The non-GAAP operating margin for the first quarter of 2025 is expected between 29% and 29.4%, which is likely to be contributed by ads and financial services, along with a modest contribution from buyer protection fees.

GMV for the first quarter is likely to be $18.3-$18.6 billion.

Non-GAAP earnings per share are anticipated between $1.32 and $1.36. The Zacks Consensus Estimate for the same is pegged at $1.36.

Zacks Rank and Stocks to Consider

Currently, ZM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader sector are a.k.a. Brands Holding Corp. AKA, Allbirds, Inc. BIRD and El Pollo Loco LOCO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

a.k.a. Brands Holding Corp, Allbirds and El Pollo Loco are scheduled to report their respective fourth-quarter 2024 results on March 6, 2025.

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This article originally published on Zacks Investment Research (zacks.com).

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