EBAY INC

eBay Inc. is a global commerce leader that connects people and builds communities to create economic opportunity for all, operating in more than 190 markets around the world. The company's Marketplace platforms, including its online marketplace at www.ebay.com and its localized counterparts, off-platform marketplaces, and suite of mobile apps, together create one of the world's largest and most vibrant marketplaces for discovering great value and a unique selection. In 2025, eBay enabled nearly $80 billion of Gross Merchandise Volume (GMV). The company's business model is designed such that it is successful when its sellers are successful, earning revenue primarily through fees collected on paid transactions, first-party advertising, and shipping. eBay's strategy is centered on reinventing the future of ecommerce for enthusiasts by delivering trusted, engaging shopping experiences, leveraging its 30+ years of global commerce expertise and data with advanced technology, including the use of artificial intelligence (AI). The company's strategic focus is built around three foundational pillars: Relevant Experiences, Scalable Solutions, and Magical Innovations, each designed to advance its mission of empowering enthusiasts and strengthening the eBay marketplace ecosystem.

eBay encounters vigorous competition from numerous sources, including retailers, distributors, liquidators, import and export companies, auctioneers, catalog and mail-order companies, directories, search engines, commerce participants (consumer-to-consumer, business-to-consumer, and business-to-business), and shopping channels and networks. The company competes on the basis of numerous factors, including price, product selection, services, technology, and geographical reach. Some of its competitors, such as Alibaba, Alphabet (Google), Amazon, Apple, and Meta (Facebook and Instagram), are larger than eBay, have greater resources, have a dominant and secure position in other industries or certain significant markets, or offer other goods and services and product ecosystems that eBay does not offer. eBay's growth strategy has increasingly emphasized its Focus Categories, such as motor parts and accessories, collectibles, refurbished goods, and authenticated luxury items. At the end of 2025, eBay had 135 million active buyers and 2.5 billion live listings globally.

eBay generates net revenues through two activities: Marketplace activities, which primarily consist of commissions from the service of connecting buyers and sellers on its secure and trusted Marketplace platforms, and Advertising activities, which primarily consist of fees charged to sellers to promote their listings. The company's revenue is primarily derived from a take rate on the GMV of transactions paid on its Marketplace platforms. Marketplace revenues primarily consist of commissions related to the connection service including final value fees, listing fees, feature fees, and foreign exchange fees, as well as store subscription fees, shipping fees, and certain other fees, reduced by customer incentive programs including discounts, coupons, and rewards. Advertising revenues primarily consist of fees charged to sellers to promote their listings on eBay's Marketplace platforms, as well as third-party advertising fees. The company's business model is designed such that it is successful when its sellers are successful, and it provides a comprehensive suite of features and services designed to enhance the overall customer experience, leveraging innovation and trust-based programs to simplify commerce, improve efficiency, and strengthen engagement and consumer confidence across its global marketplaces.

eBay's Marketplace platforms enable buyers and sellers to benefit from its global scale and continued investments in technology, marketing, and customer service. For sellers, eBay continues to expand AI across the listing workflow, using Generative AI (Gen AI) to prefill item details, generate optimized titles and descriptions, and in some cases recognize product images enabling faster, more complete listings. The company also continues to expand its financial services offerings, including Seller Capital, which has helped its partners provide more than $1 billion in cumulative funding since inception to small businesses. For buyers, eBay continues to invest in technologies that enhance discovery, trust, and convenience across its Marketplace platforms, including AI-enhanced features and services that power dynamic product recommendation feeds and an AI shopping agent pilot. The company continues to expand its Focus Categories with enhancements designed for enthusiast buyers, including one-click card grading and resale for trading cards through its partnership with PSA, AI-enhanced discovery tools, and interactive live shopping experiences through eBay Live. eBay also launched Secure Purchase which enables end-to-end digital vehicle transactions covering financing, insurance, and title transfer for collectible and high-value automotive purchases. The eBay Money Back Guarantee program allows buyers to obtain a refund if an item does not arrive, is damaged or faulty, or differs materially from its description, and applies to most purchases completed through qualifying payment methods. The Authenticity Guarantee program continues to enhance trust and transparency by authenticating eligible luxury, collectible, and high-value items across major geographical markets.

In 2025, eBay for Charity partnered with the GLIDE Foundation, Make-A-Wish, The V Foundation for Cancer Research, GLAAD, and Homes for Our Troops, among others, and nearly $198 million was raised by buyers and sellers to support charities via eBay for Charity. During 2025, eBay Foundation granted over $17 million through strategic grantmaking and its employee gift-matching program, primarily to nonprofit organizations advancing inclusive entrepreneurship. To date, eBay Foundation has awarded over $150 million to more than 1,800 nonprofits worldwide. In 2025, eBay sourced 100% of its electricity consumption for eBay-controlled offices and data centers from renewable sources for the second straight year. eBay has also set emissions reduction targets, including near- and long-term science-based targets, and a 2045 net-zero target that have been validated by the Science Based Targets initiative. In 2025, eBay received a $225 million cash distribution related to its equity investment in Aurelia. The company issued $1.0 billion aggregate principal amount of senior notes consisting of $600 million aggregate principal amount of 4.250% fixed rate notes due 2029 and $400 million aggregate principal amount of 5.125% fixed rate notes due 2035. eBay redeemed the $425 million aggregate principal amount of its previously outstanding 5.900% senior notes due in November 2025 and repaid the $800 million aggregate principal amount of its previously outstanding 1.900% senior notes due 2025 on the date of maturity. The company issued $2.0 billion aggregate principal amount of commercial paper notes and repaid the $2.5 billion aggregate principal amount of the previously outstanding commercial paper notes on the dates of maturity. In February 2026, eBay entered into a definitive agreement to acquire Depop, Inc., a leading C2C fashion marketplace, for approximately $1.2 billion in cash, subject to certain purchase price adjustments.

Net revenues increased 8% to $11.1 billion compared to $10.3 billion in 2024. The increase in net revenues was primarily due to higher GMV, increased penetration of first party advertising, and the ramping of the U.K. shipping program, partially offset by lower fees in connection with the U.K. consumer-to-consumer initiative. Operating margin decreased to 20.5% compared to 22.5% in 2024 primarily due to higher non-recurring general and administrative expenses related to legal matters and restructuring and higher costs associated with shipping programs. The company generated cash flow from continuing operating activities of $2.0 billion in 2025 compared to $2.4 billion in 2024. eBay repurchased $2.5 billion of common stock and paid $531 million in cash dividends during 2025. Income from continuing operations was $1,996 million in 2025 compared to $1,981 million in 2024. Net income was $2,031 million in 2025 compared to $1,975 million in 2024. Diluted net income per share from continuing operations was $4.26 in 2025 compared to $3.95 in 2024.

In February 2026, eBay's Audit Committee declared a cash dividend of $0.31 per share of common stock to be paid on March 20, 2026 to stockholders of record as of March 6, 2026. In February 2026, the Audit Committee also authorized an incremental $2.0 billion under the company's stock repurchase program in addition to the $5.0 billion previously authorized in 2024. The company expects, subject to market conditions and other uncertainties, to continue making opportunistic and programmatic repurchases of its common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions, and management's determination as to the appropriate use of cash.

eBay's strategy is centered on reinventing the future of ecommerce for enthusiasts by delivering trusted, engaging shopping experiences. The company's approach leverages its 30+ years of global commerce expertise and data with advanced technology, including the use of artificial intelligence (AI), to enhance the marketplace experience, reduce transactional friction, and drive operational efficiency. The company's strategic focus is built around three foundational pillars: Relevant Experiences, Scalable Solutions, and Magical Innovations. Relevant Experiences focus on delivering personalized, intuitive, and trusted shopping journeys that inspire discovery and foster loyalty, particularly within Focus Categories such as motor vehicles parts and accessories, collectibles, refurbished items, apparel, luxury goods, and sneakers. Scalable Solutions empower sellers of all sizes with tools and infrastructure to grow efficiently on eBay's platform, including continued investment in AI-enhanced listing capabilities, advanced advertising solutions, global shipping improvements, and flexible payment options. Magical Innovations accelerate the pace of technological advancement to redefine how people buy and sell on eBay, with initiatives such as AI-enhanced listings, live commerce experiences, and next-generation personalization. The company continues to expand its Focus Categories with enhancements designed for enthusiast buyers, including one-click card grading and resale for trading cards through its partnership with PSA, AI-enhanced discovery tools, and interactive live shopping experiences through eBay Live. eBay also launched Secure Purchase which enables end-to-end digital vehicle transactions covering financing, insurance, and title transfer for collectible and high-value automotive purchases.

eBay continues to expand its financial services offerings, including Seller Capital, which has helped its partners provide more than $1 billion in cumulative funding since inception to small businesses, along with new payment partnerships that enhance flexibility and reliability across key markets. The company continues to enhance its first-party advertising solutions by introducing new dashboards and data-driven tools that help sellers increase visibility and optimize performance more efficiently. eBay also continues to broaden its shipping programs in conjunction with its partners to provide integrated shipping solutions that lower costs, improve delivery transparency, and address cross-border shipping challenges. For buyers, eBay continues to invest in technologies that enhance discovery, trust, and convenience across its Marketplace platforms, including AI-enhanced features and services that power dynamic product recommendation feeds within its enhanced discovery platform, as well as its AI shopping agent pilot that delivers personalized search results tailored to individual preferences. The company also expanded the Klarna buyer payment option, which contributed to GMV growth in the United States.

Operating margin decreased to 20.5% in 2025 compared to 22.5% in 2024 primarily due to higher non-recurring general and administrative expenses related to legal matters and restructuring and higher costs associated with shipping programs. The increase in cost of net revenues during 2025 compared to 2024 was primarily due to increases of $108 million in shipping costs, $61 million in cost of promoted listings products, $55 million in depreciation expense due to the prior year benefit related to the change in useful lives of servers and networking equipment, $37 million in customer support costs, $32 million in payment processing costs, and $11 million in authentication costs, partially offset by a $37 million benefit from the settlement of a multi-year contract and a $35 million decrease in indirect tax expense. The increase in general and administrative expenses during 2025 compared to 2024 was primarily due to $91 million of senior leader transitions and restructuring costs, $61 million of legal accruals recorded during 2025, $56 million in employee-related costs, and legal accrual releases in 2024 of $56 million.

eBay's technology infrastructure simplifies the storage and processing of large amounts of data, eases the deployment and operation of large-scale global products and services, and automates much of the administration of large-scale clusters of computers. The company has developed proprietary computing infrastructure, entered into strategic partnerships with leading technology providers, and established a private cloud environment. These investments are critical to supporting scalable, reliable operations and delivering high-quality customer experiences. eBay continues to balance the ongoing maintenance of a robust platform relied upon by its millions of users with investments designed to support the long-term evolution of the eBay marketplace over the coming decades. The company has been on a multi-year evolution to modernize its Marketplace platforms, using advanced technology such as AI and Gen AI to better anticipate the needs of buyers, sellers, and developers. As of December 31, 2025, eBay employed approximately 12,300 people globally, of which approximately 7,200 were located in the United States.

eBay's capital allocation strategy includes R&D spending, capital expenditures, share repurchases, and dividends. Capitalized platform development costs were $134 million and $108 million in 2025 and 2024, respectively. Purchases of property and equipment were $525 million in 2025 compared to $458 million in 2024. During 2025, eBay repurchased $2.5 billion of common stock under its stock repurchase program. As of December 31, 2025, a total of $0.8 billion remained available for future repurchases of common stock. In February 2026, the Audit Committee authorized an incremental $2.0 billion under the stock repurchase program in addition to the $5.0 billion previously authorized in 2024. eBay paid a total of $531 million and $533 million in cash dividends during the years ended December 31, 2025 and December 31, 2024, respectively. In February 2026, the Audit Committee declared a cash dividend of $0.31 per share of common stock to be paid on March 20, 2026 to stockholders of record as of March 6, 2026.

eBay faces significant headwinds from changes in global trade policies, which have undergone significant changes throughout 2025. The United States implemented tariffs and other trade restrictions on several countries, many of which responded by implementing their own tariffs and trade restrictions. The United States eliminated the $800 de minimis exemption from customs duties on imported goods, which has impacted certain eBay transactions that were previously able to use this exemption. The European Union has announced it will remove its EUR 150 de minimis exemption in July 2026 and require a EUR 3 fee per parcel, and the United Kingdom is expected to follow with eliminating its GBP 135 de minimis threshold for low-value imports. These developments fundamentally change how cross-border transactions are handled, increasing cost, complexity, and compliance burden for many cross-border sellers, which could lead to reduced cross-border volume or reconfiguration of supply-chain and fulfillment strategies. During 2025, eBay experienced an increase in canceled orders as buyers and sellers adapted to new U.S. trade policies. The company also faces headwinds from macroeconomic conditions, including inflationary pressure, foreign exchange rate volatility, elevated interest rates, and lower consumer confidence, which have impacted discretionary spending across its three largest markets.

eBay faces significant execution risks related to its ability to keep pace with technological changes, including emerging AI technologies, and with changes in consumer demands and expectations. The company is devoting significant capital and management time and resources to using AI technologies to improve its products, services, and controls, but may be slower and less efficient than certain competitors in developing its Gen AI capabilities. If AI technologies do not send referrals to eBay at the rate of traditional search engines, consumer traffic on its platforms could decrease. The company also faces risks from increasing levels of regulation in the areas of privacy, protection of user data, and cybersecurity, including compliance with the General Data Protection Regulation (GDPR) in the EU, the EU Digital Services Act (DSA), the UK Online Safety Act (OSA), and various U.S. state privacy laws. Noncompliance with the DSA could result in fines of up to 6% of annual global revenues. Additionally, the company faces risks from the extensive and increasing regulation and oversight affecting its business, including laws and regulations related to consumer protection, data privacy, intellectual property, and product safety.

eBay faces material risks from changes in global trade policies, as cross-border trade is an important source of revenue and profit. The elimination of the $800 de minimis exemption in the United States and the planned removal of the EUR 150 de minimis exemption in the European Union in July 2026, along with a EUR 3 fee per parcel, increase cost, complexity, and compliance burden for cross-border sellers, which could lead to reduced cross-border volume. The company also faces significant risk from its inability to keep pace with technological changes, including emerging AI technologies, as consumers increasingly search for products using chatbots and virtual assistants, and if AI technologies do not send referrals to eBay, consumer traffic could decrease. eBay is subject to extensive and increasing regulation, including the EU Digital Services Act (DSA), noncompliance with which could result in fines of up to 6% of annual global revenues. The company faces significant risk from cyberattacks and data security breaches, as it collects and stores significant amounts of confidential, personal, and sensitive information from its users and employees, including transaction, identity, biometric, health, payments, and financial information. Additionally, eBay faces intense competition from larger competitors such as Alibaba, Alphabet (Google), Amazon, Apple, and Meta, which have greater resources and can spend more on marketing and promotional campaigns, adopt more aggressive pricing policies, and devote more resources to systems development.

Management's message emphasizes eBay's strategy centered on reinventing the future of ecommerce for enthusiasts by delivering trusted, engaging shopping experiences. The company's approach leverages its 30+ years of global commerce expertise and data with advanced technology, including the use of artificial intelligence (AI), to enhance the marketplace experience, reduce transactional friction, and drive operational efficiency. The strategic focus is built around three foundational pillars: Relevant Experiences, Scalable Solutions, and Magical Innovations. Management highlights that GMV grew during 2025 as the company executed on its strategy, including across Focus Categories, country-specific investments, and horizontal initiatives, driven by cross-category shopping, horizontal innovation, country-specific initiatives, and growth in recommerce. The company's forward-looking statements include expectations regarding business strategies, focus categories, country-specific investments, horizontal initiatives, macroeconomic conditions, seasonal trends, new and updated products and initiatives, technology priorities, consumer confidence, demand and spending, geopolitical events, tariffs, cross-border trade, global trade policy, foreign exchange rate fluctuations and volatility, income taxes, elevated interest rates, the impact of new and changing regulations, and inflationary pressure on its business and operations. Key strategic priorities emphasized for the period ahead include continuing to invest in AI-enhanced listing capabilities, advanced advertising solutions, global shipping improvements, and flexible payment options, as well as expanding Focus Categories and enhancing buyer confidence and trust through programs like the eBay Money Back Guarantee and Authenticity Guarantee.