eBay Inc. (NASDAQ: EBAY) delivered second-quarter earnings and revenue above analyst expectations, though shares recorded only modest premarket gains following mixed third-quarter guidance.
The results represent the company’s first earnings release since it rejected an unsolicited multibillion-dollar takeover proposal from GameStop, led by Ryan Cohen.
Adjusted earnings per share came in at $1.60, beating the analysts’ consensus estimate of $1.51 by a comfortable margin.
Revenue climbed 15% year over year to $3.1 billion, surpassing Wall Street forecasts, while gross merchandise volume rose 15% on a reported basis to $22.4 billion.
For the third quarter, eBay guided for revenue of between $3.07 billion and $3.12 billion, with the midpoint of $3.095 billion exceeding the analyst consensus forecast of $2.99 billion.
However, the company’s adjusted EPS guidance range of $1.36 to $1.42, with a midpoint of $1.39, fell short of the analyst expectation of $1.44, tempering investor enthusiasm.
Analysts at Wolfe Research said, “Q3 guides assume continued broad based growth from core eBay marketplace as their strategic priorities continue to drive durable growth.”
Wolfe Research also flagged additional costs tied to eBay’s recent $1.4 billion acquisition of Depop, the consumer-to-consumer fashion marketplace focused on Gen Z and Millennial shoppers.
Despite the Depop-related cost pressures, eBay improved its adjusted operating margin to 28.5% in the second quarter, up from 28.3% in the same period last year.
The company distributed $448 million to shareholders during the quarter, comprising $310 million in share repurchases and $138 million in dividends, underscoring its ongoing capital return commitment.
First-party advertising products generated $570 million in revenue during the quarter, representing annual growth of 25% and highlighting a key area of expanding monetization.
Chief Executive Jamie Iannone said, “eBay’s second quarter delivered meaningful, broad-based momentum driven by continued innovation and focused execution against our strategic roadmap.”
Chief Financial Officer Peggy Alford added that the company is “increasing our full-year top- and bottom-line outlook” in response to continued business momentum.
The backdrop to the quarterly results includes eBay’s formal rejection in May of a $125-per-share takeover offer from GameStop, which the board described as “neither credible nor attractive.”
With the Depop acquisition now complete and advertising revenues accelerating, eBay enters the second half of the year with strengthened strategic assets despite the guidance-driven share price caution.
