Financial Data and Key Metrics - Gross merchandise volume (GMV) declined 5% year-over-year, improving nearly nine points sequentially [26] - Revenue was down 2% to approximately $2.4 billion, outpacing volume by nearly four points, primarily due to momentum in the advertising business [26] - Non-GAAP operating margin was 28.9%, up modestly quarter-over-quarter [27] - Non-GAAP EPS was $1 per share, up 11% year-over-year [27] - Free cash flow grew 26% to $633 million in Q3 [38] Business Line Performance - Focus categories, excluding trading cards, grew over seven points faster than the rest of the platform compared to last year [9] - Motors parts and accessories is nearing market rates of growth due to investments in marketing and fitment-based technologies [9][10] - Trading cards GMV trends remained steady at more than double pre-pandemic levels, driven by innovations like the eBay Vault [12] - Luxury categories, including watches, handbags, and sneakers, saw higher GMV growth due to authentication services [14] - Advertising revenue grew 27% year-over-year, driven by increased seller adoption and optimization of ad products [17] Market Performance - U.S. GMV grew 17% compared to Q3 2019, while international GMV was down 3% over the same period [30] - European markets faced significant headwinds, including energy price hikes and labor strikes, impacting consumer confidence [31] - Germany saw a temporary surge in demand for home energy products due to rising utility prices [32] Strategy and Industry Competition - The company's focus on non-new-in-season categories, such as pre-owned and refurbished goods, has made the platform more resilient during economic turbulence [28] - Investments in technology, including search algorithms and SEO improvements, have driven site-wide conversion improvements [15][16] - The acquisition of TCG Player and My Fitment aims to enhance capabilities in collectibles and parts & accessories categories [13][23] Management Commentary on Operating Environment and Outlook - Management highlighted a challenging macro environment, with inflation, higher energy costs, and rising interest rates impacting discretionary income [6] - Despite these challenges, the company's focus on value-oriented categories and technological investments has strengthened its competitive position [7] - For Q4, the company expects GMV between $17.5 billion and $18.1 billion, representing an FX-neutral decline between 9% and 6% [41] Other Important Information - The company raised over $33 million through eBay for Charity and issued grants to 50 nonprofit organizations supporting inclusive entrepreneurship [20] - eBay's inaugural small business report highlighted that 95% of sellers rely on eBay for their business, with nearly one-third stating their small business would not exist without eBay [21][22] Q&A Session Summary Question: Full funnel marketing results and buyback commentary [46] - The company has shifted to full funnel marketing, driving consideration and improving performance in focus categories like parts & accessories [48] - Share buybacks remain a core component of value creation, with $3.2 billion returned to shareholders year-to-date [50] Question: Macro environment impact on Q4 guidance and future investments [52] - The Q4 guidance reflects a dynamic macro environment, with consumer demand weakening in the U.S. and Europe facing energy and labor challenges [53] - The company will continue to invest in core business areas, including advertising and payments, while managing cost efficiency [54][55] Question: Cross-category shopping impact and U.S. market trends [57] - Cross-category shopping is driving significant multiplier effects, with focus category buyers spending substantially in other categories [58] - U.S. trends in October showed broad-based weakness, but focus categories continue to outperform non-focus categories [60] Question: Cross-border activity and currency impact [62] - Cross-border trade is benefiting from easing supply chain constraints and new payment capabilities, with 70% adoption of buyer FX for cross-currency transactions [63] - Currency volatility is expected to create a headwind of three points to GMV growth and five to six points to EPS if the U.S. dollar remains strong [71] Question: Advertising growth drivers [73] - Advertising growth was driven by optimization of Promoted Listings Standard and contributions from new ad products, with double-digit quarter-over-quarter growth [74] Question: Long-term targets and M&A strategy [77] - The company remains confident in its long-term targets, with focus categories, payments, and advertising driving growth [78] - M&A will continue to be a key part of the strategy, focusing on vertical expansion and enhancing core capabilities [80] Question: Enthusiast buyer trends and advertising outlook [82] - Enthusiast buyers remain resilient, with average spend up double-digits versus 2019, though macro pressures may cause migration between buyer groups [83] - Advertising growth is expected to continue, with new products driving momentum and healthy ROAS [84] Question: Non-new-in-season goods and advertising impact on GMV [86] - Non-new-in-season goods represent about 90% of GMV, with used and refurbished goods accounting for one-third of GMV [87] - Advertising investments directly tie to GMV growth, with CPA-based programs driving incremental sales [88] Question: GMV sensitivity and used/refurbished goods performance [90] - The company's focus on non-new-in-season and refurbished goods provides resilience, with 32% of GMV from used and refurbished goods growing faster than the rest of the site [91]

eBay Inc. (NASDAQ:EBAY) Goldman Sachs Communacopia + Technology Conference 2022 September 12, 2022 1:00 PM ET Company Participants Jamie Iannone - Chief Executive Officer Steve Priest - Chief Financial Officer Conference Call Participants Eric Sheridan - Goldman Sachs Eric Sheridan Can you hear me now? There we go. Okay. Welcome back everyone. I know everyone is still finding their seats, but in the interest of keeping things on time let's go on to our next fireside chat. So it's my pleasure to have the tea ...