Jamie Iannone
President and Chief Executive Officer at eBay
Thanks, John. Good afternoon, everyone, and thank you all for joining us today. Q3 was another strong quarter for eBay as our gross merchandise volume grew by over 1% to $18.3 billion, marking our second straight quarter of positive GMV growth. Revenue increased by more than 3% to $2.58 billion. Non-GAAP operating income grew by 6% and we grew non-GAAP earnings per share by 16% to $1.19. Now let's turn to the key drivers of our Q3 results. Our focused categories continue to deliver relevant experiences to customers and drive growth for our overall marketplace. Focus category GMV grew by nearly 5% in Q3, outpacing the remainder of our marketplace by approximately five points. This growth was driven by broad-based momentum across motors, parts and accessories, collectibles, refurbished and our luxury fashion categories.
Collectibles had a particularly strong quarter as trading GMV accelerated to double-digit growth in Q3, driven by strength in sports trading cards and collectible card gains both on the eBay platform and through our subsidiary, TCGplayer. During Q3, we engaged with Collectibles enthusiasts at key industry trade shows including the National Sports Collectors Convention, GenCon and San Diego, Cometa. We expanded our high ASP inventory through monthly marquee auctions and consignment from trusted partners like TSA and ComC. And we continue to scale and evolve the eBay live experience, fueling particular momentum in areas like trading card case break. On top healthy organic momentum, our recent acquisition Goldin is opening up exciting opportunities in the collectibles world. Just last week, Ken Goldin and team completed a record sales for Shohei Ohtani's 50th homerun ball, which sold for nearly $4.4 million, making it the most valuable baseball ever sold.
Auctions for truly one-of-a-kind items like this can generate a lot of awareness for our platform where hobbyists can shop for everything ranging from low ASP ungraded trading cards to some of the world's most valuable collectible items. Fashion is also a critical entry point for us. As nearly one in five new sellers and buyers come to eBay through fashion category. During Q3, we launched a new creative campaign called Things People Love to raise awareness of eBay's value proposition in pre-love fashion. We focused on driving relevance with key audiences like GenZ by highlighting eBay's breadth and depth of quality pre-loved inventory backed by truck. Our full funnel marketing strategy has been instrumental in driving continued momentum in focused categories and healthier trends in active buyers, which grew nearly 1% to $133 million in Q3.
One of the key building blocks underpinning our return to positive GMV growth has been our geo-specific investment, where we leverage our innovation playbook from focused categories to better serve customer needs at the local level. While many of these product experience changes benefit all sellers and buyers, we are particularly focused on consumer-to-consumer or C2C sellers for several reasons. C2C sellers bring some of the most unique inventory to eBay and are typically less price sensitive than B2C sellers. C2C sellers accelerate e-commerce as roughly 60% of their GMV comes from used and refurbished items compared to 40% for our marketplace overall. Selling on eBay also creates a flywheel effect that stimulates incremental GMV as buyers who sell purchased roughly twice as much on eBay as non-sellers with most of their incremental spend supporting small businesses.
As a reminder, our first major geo-specific initiative launched in Germany in March of 2023, and more than 18 months later, we continue to see significantly higher customer satisfaction or CSAT and improved GMV trends for the overall German market. This past April, we rolled out significant enhancements in the UK for pre-owned apparel categories. These improvements included simplified tools for selling and new tools to drive demand through enhanced discovery like Explore and Shop the look. Since then, we have observed material improvements to key C2C metrics like CSAT and active sellers alongside a double-digit improvement in C2C GMV growth in pre-owned apparel versus our prior baseline.
The success of our Germany initiative over the last 1.5 years and similar results in the UK over the last six months gave us the confidence to move forward with a significant expansion of our UK initiative earlier this month. We introduced a suite of new capabilities to upgrade the overall C2C experience in UK, including a simplified native listing flow, managed shipping, which streamlines the domestic shipping experience and creates a new revenue stream for eBay, improved local pickup and discovery capabilities and eBay balance, which allows UK sellers to store their earnings or use them as spendable funds on eBay. We accompanied this future rollout with a full funnel marketing campaign in the UK, which highlights the ease of selling on eBay. We also eliminated final value fees and regulatory operating keys for UK C2C sellers across all categories, excluding motor vehicles. We made this change due to clear evidence that European consumers are more motivated to lift their items online when it's free to sell even when buyer fees are introduced.
We believe reducing the friction to sell will unlock a significantly larger total addressable market, or TAM, in C2C. We will initially monetize our UK C2C volume in several ways, including advertising, cross-border fees and our sell-to-buy flywheel. In Q4, we will begin to ramp our managed shipping initiative in the UK. We also plan introduce a buyer-facing fee on UK's C2C transactions during Q1 of 2025. Next, I'll walk through some of the major enhancements to the UK experience. One of the most significant changes we launched in October was the horizontal rollout of a simplified native listing flow for UK C2C sellers. This experience dramatically reduces the number of steps and decision points for sellers, offers intelligent pricing recommendations, seamlessly integrates AI-generated descriptions and photo enhancements and better highlights the benefits of advertising.
Since launch, the simplified flow has notably decreased time to list, improved listing completion rates, increased conversion, sold items and GMV per listing attempt and elevated adoption of promoted listings. With managed shipping, we are completely overhauling our shipping experience for C2C sellers in the UK in two phases. The first phase completed in early October, extended the simplified shipping experience we first rolled out in pre-owned apparel to all categories. Within the new native listing flow, UK C2C sellers now see a consolidated list of shipping options based on the estimated package size and weight. And since implementing this change, we have observed a significant reduction in time spent on shipping in a listing flow.
The second phase of managed shipping; radically simplifies the experience and creates a new revenue stream for eBay. Similar to managed payments and eBay international shipping, Managed shipping leverages our scale and expertise to create a better experience for customers while generating incremental revenue and operating income dollars. When listing eligible products sellers simply confirm the pre-selected package size and eBay handles the rest. Buyers received competitive shipping rates and sellers are fully protected against loss or damage. Managed shipping is currently live for C2C pre-owned apparel listing in the UK. In Q4, we plan to expand managed shipping horizontally on an opt-out basis, before mandating the program for eligible items listed by U.C2C sellers during Q1 of 2025.
In addition to shipping, we launched a number of enhancements to the local pickup experience in the UK. As these transactions make up a significant portion of our C2C TAM in this market, we increased local supply by defaulting new C2C listings to offer both pickup and shipping options. We created a new eBay local landing page and map view for optimal browsing of nearby inventory. We also enhance trust, improve post-sale education for shoppers and streamline the in-person payment process. Since launch, we've seen a significant uptick in locally enabled listings in the UK and a double-digit improvement in local C2C volume growth. Lastly, in mid-October, we added the eBay balance feature in the UK. This gives millions of C2C sellers the flexibility to use their earnings to shop on eBay, promote their listings, purchase shipping labels or withdrawal available funds whenever they wish. With eBay balance, we believe we can further stimulate the cell to buy flywheel and also reduce the cost of payments when sellers spend their earnings on eBay.
Taking a step back by making these changes, we believe we are addressing three of the longest-standing pain points for UK sellers on eBay. These delist the amount of time and effort it takes to create a listing and the complexities involved with shipping. During the first few weeks since the broader UK C2C initiative launch, we've seen more than 20-point increases in new and reactivated listers and sellers and material increases in C2C sold items and GMV. We are confident that these changes will not only be great for our community, but also our shareholders. Our strategic focus on C2C should open up a significantly larger TAM in e-commerce by unlocking consumers' closets, basements and garages. Our teams continue to leverage the power of artificial intelligence to deliver magical innovations for our customers. In recent months, eBay's core AI team released the second generation of our proprietary LiLiuM series of large language models, developed in-house using our high-performance supercomputer.
Notably, these models have outperformed public benchmarks in eBay specific tasks like description generation, title creation, aspect extraction and pricing predictions. Behind the scenes, these models have already been deployed to accelerate the transformation of selling and buying on eBay, including magical listing. The first phase of our magic listing experience generates high-quality listing descriptions with the push of a button. Approximately 10 million unique sellers have used this feature to date, creating over 100 million listings. GenAI enhanced listings have also generated several billion dollars of cumulative GMV on eBay.
Additionally, more than one-quarter of US mobile app users have access to the next iteration of magic listing and beta. After taking or uploading a photo, this experience leverages computer vision and generative AI to pre--fill or suggest the title, category, description and other item aspects for listing. This app for this beta remains extremely high at roughly 90% as we continue to optimize model performance and efficiency. We are also leveraging GenAI to enhance our tools for our B2C sellers, we recently introduced the magical bulk listing tool, which leverages our internal LLM to seamlessly create a large number of pre-populated listings at one. Sellers simply uploads photos in bulk and individual listings are created with category, title and item specifics pre-filled where possible. The magical bulk listing tool was launched for all B2C US trading card sellers in Q3 and early feedback has been extremely positive. In Q4, we've also begun to roll out this tool to sellers in other categories.
Turning next to advertising. During Q3, first-party advertising grew 14% and while total ad revenue grew 11% to $408 million and eclipse 2.2% penetration of GMV. Nearly 3.2 million sellers adopted a single ad product during the quarter, and we ended Q3 with over $1 billion live promoted listings out of more than $2.1 billion total live listings. Within the ads portfolio, Promoted Listings were the largest contributor to year-over-year growth led by cost per click ad unit. Promoted offsite ads were the fastest growing among our first-party ads. And during the quarter, we rolled out several performance optimizations and scaled our go-to-market efforts for these ads, raising awareness, adoption and retention amongst our seller base.
Promoted stores ads are the most nascent product in our portfolio. But during Q3, we began to gradually ramp these ads through contextually relevant placements at the top of search and on the new order details page. Next, I'd like to discuss our work in payments and financial services, where we continue to expand choice and flexibility for buyers, and offer new solutions for sellers to grow their businesses on eBay. In Germany, we are expanding our breadth of payment options through our partnership with Riverty, a German Fintech company offering solutions used by 28 million consumers. We are introducing a monthly invoice payment option through Riverty, enabling German buyers to pay for multiple purchases on eBay at a later date with no interest or fees if the payment is made on time.
According to an eBay consumer survey, more than three-quarter of online shoppers in Germany prefer to use invoicing as a payment method for online shopping. So we are pleased to offer another locally relevant payment option for our customers in this region. For small business sellers, we continue to expand the eBay seller capital program through trusted partners. In July, we launched Business Cash Advance, a revenue-based financing solution provided by Liberis. In October, we expanded our partnership with Liberis to offer flexible cash advances to US sellers. This program offers financing for sums of up to $2 million with the flexibility for sellers to tap into capital on demand and a lot more financing over time. I am pleased to share that through these programs with Liberis, we have already enabled thousands of small business seller's access to over $40 million of growth capital. And in aggregate, across all of our seller capital partnership, we've connected eBay sellers with over $100 million of working capital year-to-date.
Next, I'd like to share a few ways we're making an impact in our community. eBay for Charity raised more than $49 million in Q3, up 21% year-over-year. Additionally, the eBay Foundation awarded nearly $3 million to Grand Teas across the globe who are supporting entrepreneurship for historically excluded groups. I'm always amazed by the generosity of our buyers and sellers, and I'm proud we're able to support important causes around the world. In closing, Q3 was another strong quarter for eBay. We sustained positive GMV growth for the second straight quarter, amid a dynamic macro and operating environment, led by nearly 5% growth in our focus categories. The rest of our marketplace was nearly flat for the second consecutive quarter, supported by horizontal innovation and our C2C investments in key geographies.
We continue to see strong growth in our first-party ad products across portfolio and broaden our range of payments and financial service offerings for sellers and buyers. And importantly, we remain focused on operational discipline alongside our investments in long-term growth initiatives to ensure continued healthy growth in operating income and earnings per share.
With that, I'll turn the call over to Steve to provide more details on our financial performance. Steve, over you.
