Jamie Iannone
President and Chief Executive Officer at eBay
Thanks, John. Good afternoon, and thank you all for joining us today.
Our strong Q4 results capped off a transformative year for eBay. We executed our 2024 plan with precision and took significant steps toward our vision of reinventing the future of e-commerce for enthusiasts.
I'll begin with some highlights from the full-year. We ended 2024 with three consecutive quarters of positive growth in gross merchandise volume despite continued challenges in the global economy. For the full-year, GMV grew by more than 1% to $75 billion. Our focus category volume grew 5% in 2024 and accelerated gradually over the course of the year, despite increasingly difficult comps. The rest of our marketplace or core categories also stabilized and were nearly flat year-over-year in 2024, benefiting from our horizontal and geo-specific investments. Building on our success in Germany in 2023, we executed a significant overhaul of our C2C experience in the UK, leading to a notable improvement in GMV trends in Q4.
2024 was also a transformative year from an innovation standpoint as our enhanced core AI platform enabled us to launch our first proprietary large language models, boost productivity in key areas like engineering and customer service and improve the efficacy of search. The majority of our sellers are now using Gen AI tools like magical listing, AI-enhanced product backgrounds and automated social media posting. We also wrote out exciting AI-powered experiences for buyers such as Explore and Look that enhance discovery, particularly for long-tail inventory. We balanced these disciplined investments in long-term growth initiatives with continued operational efficiency, enabling us to grow non-GAAP operating income by over 4% year-over-year while expanding non-GAAP operating margin by 70 basis-points. Lastly, we created significant shareholder value by growing non-GAAP earnings per share by 15% to $4.88, while returning nearly $3.7 billion of capital through repurchases and dividends.
I'm proud of our teams for achieving these results and laying the groundwork for us to further accelerate innovation for customers in 2025, while remaining on the path towards sustainable long-term growth.
Now I'll discuss some of the key highlights from Q4 before providing insights into our strategic priorities for 2025. We saw continued top-line growth in Q4 as GMV grew by more than 2% to $19.3 billion, an acceleration of over 1 point sequentially. These results were driven by strong execution against our Q4 roadmap and solid consumer demand during the shortened holiday shopping season. Focus categories remained a key driver of overall growth as they accelerated to over 6% GMV growth in Q4. This was nearly six points faster than our core categories, which were modestly positive in Q4 after accelerating by one point versus Q3.
Trading cards volume accelerated to healthy double-digit growth, making this category the largest contributor to GMV growth in Q4. We drove significant innovation for trading card enthusiasts in the past year, including rolling out magical bulk lifting, expanding our authentication and grading partnerships, scaling up eBay Live and improving our catalog data across multiple sports and genres. We also added consignment through PSA as its customers can start auction and fixed-price listings with just a few clicks. Overall, these enhancements positioned eBay well to capitalize on research and demand for trading cards throughout 2024.
Motors, Parts and Accessories or P&A was also a significant driver of focus category growth as Q4 GMV trends were consistent with prior quarters of 2024. Our growth benefited from continued investment in-building our assortment, including connecting with professional sellers in the UK and Germany, sourcing more certified green parks in the US and expanding our access to private-label inventory overseas. On a global basis, our P&A inventory grew by double-digits during Q4 and we now have over 700 million live P&A listings on eBay. 2024 marked our second consecutive year of mid-single-digit GMV growth in P&A, our largest focus category. A major driver of this turnaround was reestablishing eBay as a trusted place to shop for auto parts.
Earlier this month, we further enhanced the trust equation for millions of auto enthusiasts on eBay with our acquisition of Caramel, which enables a secure end-to-end online vehicle purchase experience across all 50 US states. Technology simplifies complexities of a vehicle sale, including identity and title verification, ownership transfer, financing, insurance, warranty and transportation. Starting in Q1, US sellers will be able to list cars, trucks and motorcycles on eBay with Caramel's secure end-to-end checkout solution. We're excited to welcome the Caramel team to eBay as we transform the level of trust for vehicle purchases on our platform. We believe eBay's scaled audience of auto enthusiasts, combined with Caramel's innovative technology enables us to better tap into the estimated $75 billion TAM for collectible cars in the US. We also expect an improved vehicle transaction experience to drive synergies within other categories as our average vehicle buyer also spends thousands of dollars annually on P&A and non-motors items across the eBay marketplace.
A key lever for driving awareness and consideration with enthusiasts has been telling the eBay story in new and different ways. In Q4, we began partnering with a cast of influencers across industries to reinforce eBay's position as the trusted marketplace for things people love, including YouTuber Emma Chamberlain, Olympic gold medalist Chloe Kim, fashion designer Margherita Missoni and many more. As passionate eBay customers themselves, these cast members are curating personalized storefronts highlighting their favorite eBay products. Throughout 2025, you'll see this cast amplify our value proposition to their audiences across various forms of media.
In October, we made a significant investment in our second-largest market through an overhaul of our C2C value proposition in the UK. We are confident that with these changes, we will capture more of the total addressable market in e-commerce. While it's still early, I'm extremely encouraged by the results we've observed to date. In Q4, we saw a double-digit improvement in C2C GMV growth versus our pre-launch baseline in the UK, alongside 20-plus point improvements in C2C first-generation listers, new and reactivated sellers and local pickup GMV. Notably, deals within focus categories and other mid to-high ASP items were the biggest beneficiaries of these changes, lifting our UK C2C ASP overall in Q4.
Following removal of seller fees for C2C listings across most categories in October, we introduced a buyer protection fee for UK C2C transactions earlier this month. This fee allows us to offer the same protection to buyers that they receive when purchasing from business sellers. We rolled-out buyer fees progressively over roughly two weeks in February, listening closely to our community to ensure our fees were transparent and well-understood. While we expected some level of elasticity following the addition of buyer protection fees, encouragingly, the early results were slightly better than our expectations. In Q4, we also launched the eBay balance feature to millions of C2C sellers in the UK, which enables them to use their earnings to purchase products on eBay, cover selling needs like shipping labels and promoted listings or withdraw their funds. eBay balance has been well-received thus far and adoption rates have exceeded our expectations. The majority of sellers with an open balance have applied it to their eBay purchases, which is also beneficial to our marketplace as it carries zero cost of payments. During Q4, we also began to gradually ramp-up our managed shipping program for UK C2C sellers, which is live on an opt-out basis with Royal Mail and Every as our initial carriers.
Managed shipping, which is shown to UK customers as simple delivery, offer simplicity, lower-cost, improved transparency and greater protection against loss or damage, while generating incremental revenue and operating income for eBay. We've been listening to our sellers feedback during the ramp phase and are launching multiple enhancements to make this program's value proposition even stronger in the coming months. For instance, we recently gave sellers the ability to select which carriers they are comfortable shipping with. We will soon add a free shipping option with the cost of prepaid labels automatically deducted from sellers' earnings.
We are in the process of adding new carriers that support bulky and heavier items, and we plan to introduce out-of-home pickup and drop-off capabilities, which many UK customers value during -- due to their convenience, lower-cost, privacy, security and environmental benefits. We will continue to manage shipping throughout Q1 as we add features and fine-tune the program and plan to begin mandating it for UK C2C sellers during Q2. As we look at our UK initiative overall, based on the results and behaviors we're seeing so-far, we are even more confident the changes we're making across key parts of the C2C experience will allow us to unlock the sizable market opportunity from the vast array of unique inventory sitting in UK consumers' homes. In 2024, we upgraded our Gen AI capabilities by increasing our GPU capacity, deploying our first supercomputer, improving our hardware utilization and developing architectures optimized for LLMs.
Our enhanced AI platform enabled us to build and run models approximately 100 times larger than the prior year. We leveraged our decades of e-commerce data to build our proprietary Lilium models from scratch to accomplish specialized e-commerce tasks at greater levels of efficiency. We also pre-trained leading open-source models on our dataset to improve their accuracy on specific eBay use cases. By the end-of-the year, we have launched dozens of customer-facing features powered by LLMs across the buyer and seller experiences, search, payments, marketing and specific focus categories.
In addition to innovating on platform, we've been increasingly focused on meeting customers where they are to drive greater awareness of the breadth and depth of quality inventory on eBay. In January, we became one of the first companies to collaborate with OpenAI's operator, which can direct users to eBay for many of their shopping needs. This agentic approach to commerce could create an entirely new channel for discovery and shopping online. Although it's early days, we anticipate this collaboration could expand the reach of our sellers, giving more buyers exposure to eBay's unique and differentiated inventory.
Last month, we also launched a test with Meta in the US, Germany and France that enabled Facebook marketplace users to browse and purchase eBay listings without leaving the app. eBay sellers should benefit as they gain exposure to Facebook's scaled audience, while marketplace shoppers can discover a broader array of listings from the eBay community. The checkout experience and post-transaction services are powered by eBay, fully leveraging the on-platform capabilities we've built, including protections like authenticity guarantee. The test initially started with a small percentage of users and a subset of our inventory in these three markets as our company's focus on optimizing the experience within this new surface for third-party listings.
As the e-commerce landscape undergoes swift transformation due to rapidly advancing technology, we are focused on positioning eBay at the forefront of emerging shopping paradigms like these. We continue to focus on reducing friction and maximizing the global reach of our sellers' inventory, connecting them with more enthusiast buyers around the world.
Turning next to advertising. During Q4, first-party advertising accelerated to 16%, while ad revenue grew nearly 12% to $445 million, eclipsing 2.3% of GMV. Approximately 3.4 million sellers adopted a single ad product during the quarter and we ended Q4 with more than 1.1 billion live promoted listings out of nearly 2.3 billion total listings on eBay. First-party advertising growth was broad-based across products during Q4. Promoted Listings general ads were the largest contributor to year-over-year growth in Q4 on the back of continued ad rate, algorithm and placements optimization. Adoption of promoted Listings priority and promoted offsite units also increased as we introduced enhanced capabilities for campaign and budget management.
In payments and financial services, we continue to focus on adding new and locally relevant ways to pay on eBay to expand buyer choice, drive conversion and optimize our payment mix. During Q4, we announced a global strategic partnership with to offer Buy Now Pay later solutions in the UK and several new European markets, expanding on our successful launch in Germany. We've been extremely pleased with the early results as we've observed average order values on transactions to be roughly three to four times higher than the average basket size in these markets.
As a pioneer of e-commerce, sustainability continues to be a core part of our purpose as a company. I am pleased to announce that eBay has set a 2045 net zero carbon emissions target that has been recently validated by the Science Based Targets Initiative. I'm also proud that in 2024, we sourced 100% of our energy consumption for eBay-controlled offices and data centers from renewable sources, reaching our 2025 renewable energy target one year early.
Looking-forward, our investments across our strategic pillars in 2024 laid a strong foundation for us to build upon in 2025 as we continue to work toward reinventing the future of e-commerce for enthusiasts. In support of the first pillar of our strategy, relevant experiences, we'll continue to innovate within existing focused categories and extend our playbook to new categories. In collectibles, we plan to continue innovating on behalf of the hobby by developing new experiences with PSA, realizing more synergies with TCG player and Golden and meaningfully scaling our eBay live business as we optimize the experience for enthusiasts.
In P&A, we are focused on automating the application of fitment data on new and existing listings, developing more experiences for do-it-for-me buyers and expanding our access to well-priced supply in key areas like used in green parts. We will also invest in our enhanced transaction process for vehicles through Caramel to tap into the significant TAM within collectible cars and drive synergies across our marketplace. In fashion, we plan to leverage AI to better showcase emerging trends, innovate on explore and shop the look and improve merchandising to highlight our sellers vast amount of desirable fashion inventory. We are also focused on improving trust through enhanced condition grading standards and leveraging our global footprint to tap into new sources of luxury supply.
From a geographic perspective, we'll continue optimizing the C2C experience in the UK and Germany, while also investing in significant enhancements to our global buying hub, which serves millions more buyers around the world. Within our second pillar, scalable solutions. We aim to continue driving healthy growth in advertising by increasing seller adoption of promoted Listings priority and promoted off-site. We plan to continue optimizing promoted Listing's general placements and recommendations. We will add new capabilities to promoted stores and allow brands to fund these ads for third-party sellers to promote e-commerce.
Within financial services, we'll continue to add more locally relevant payment options, streamline the checkout experience and optimize our cost of payments. We also plan to scale-up our seller capital offering to serve the needs of more small and medium-sized businesses, which make-up the majority of volume on eBay. And as it pertains to our third pillar, magical innovations, in 2025, we'll build-on our core AI foundations to train and deploy models significantly larger and more sophisticated than what we operated in 2024, including visual and multimodal models. We'll also conduct pre-training and instruction tuning of existing models to distill them to smaller sizes optimized for specific tasks, driving improved accuracy, reduced latency and lower compute costs. I'm excited to see how our enhanced AI capabilities will continue to improve experiences like magical listing, Shop the Look and Explore in 2025. We will also leverage these models to touch more parts of the consumer experience this year to make it more modern and seamless.
I'm also energized by how much our company has embraced this new technology to change how we work and execute as a company. This year, we are empowering every employee to leverage Gen AI tools to fundamentally change the experience on eBay and deliver value to customers. And importantly, we expect these strategic pillars to support continued GMV growth, healthy operating income trends and robust growth in earnings per share in 2025 to ensure our roadmap continues to drive significant value for shareholders.
With that, I'll turn the call over to Steve to provide more details on our financial performance. Steve, over to you.
