Jamie Iannone
President and Chief Executive Officer at eBay
Thanks, John. Good afternoon, everyone, and thank you all for joining us today. Our teams delivered solid results during the third quarter. We generated gross merchandise volume of approximately $18 billion, while revenue grew 4% to $2.5 billion. We delivered non-GAAP earnings per share of $1.03, up 3%, while returning over $780 million of capital to shareholders. We achieved these results despite continued challenges in the global macro environment. Inflationary pressures and rising interest rates continue to weigh on consumer confidence and pressure demand for discretionary goods.
As Steve will discuss in greater detail, we've observed softening consumer trends to date in Q4 and particular challenges in Europe, suggesting we may see a more muted seasonal uptick over the holidays. We are focused on controlling what we can control, being prudent about our costs, leaning in operational efficiencies and continuing to drive innovation for our customers. Last quarter, I discussed our vision of reinventing the future of e-commerce for enthusiasts, which is focused on three strategic pillars: relevant experiences, scalable solutions and magical innovation.
And I'm pleased that we made meaningful progress against each of these pillars during Q3, which I'll discuss in greater detail. I'll start with our first pillar, relevant experiences. Our relevant and focus categories continues to drive underlying growth in our business, and we've observed a meaningful improvement in our growth relative to the market in every category we've invested to date. Focus categories grew roughly seven points faster than the remainder of our marketplace in Q3.
Year-to-date, our focus categories have grown at approximately 4% year-over-year. For context, we estimate market rates of growth in those same categories were in the low single digits on average during the first half of 2023 as several of these categories are comprised of highly discretionary goods, which have been more acutely impacted by a challenging macro environment. We continue to push the envelope of innovation in motors, parts and accessories, or P&A, by developing features that enhance our customer value proposition.
These investments have fueled mid-single-digit GMV growth for P&A for three consecutive quarters, which is in line with industry growth for this segment of e-commerce in our largest markets. The eBay Guaranteed Fit program has contributed to this momentum by delivering a game-changing level of trust. This program enables tens of millions of P&A shoppers to buy with confidence knowing their auto parts will fit or they'll receive their money back, which has yielded a measurable uplift in conversion.
Additionally, we have not observed a material impact on product returns as our fitment have reduced the likelihood of buyers receiving a part that does not fit their vehicle. Given the success this program has had in the U.S., we were incredibly excited to roll out similar programs in the U.K. and Germany during Q3, where our unaided awareness among P&A shoppers is significantly higher than it is in the U.S. The Guarantee Fit program is underpinned by multiple years of investment in P&A technology, including our acquisition of myFitment.
We have been steadily onboarding sellers into the fitment toolkit to enhance their P&A listings with more robust fitment data, which improves findability for parts and protects buyers from unnecessary returns. By the end of Q3, roughly 2/3 of large U.S. P&A sellers have adopted the toolkit. On average, sellers are observing conversion uplift of double digits or higher for listings enhanced by this toolkit, driving incremental GMV for eBay.
In early October, we reached a major milestone with two billion pieces of fitment data added to live listings using myFitment's technology. While this is outstanding progress, we continue to invest in simplifying the onboarding process, making it faster to import listings and identifying more vehicle matches for our more than 550 million live P&A listings. During Q3, we continued to deliver relevant experiences for the collectibles category across a number of areas. We generated over $10 billion in GMV from collectibles over the last 12 months, and more than one in four eBay buyers purchased at least one collectibles item over the past year.
These buyers carry some of the highest conversion, repurchase and retention rates on eBay. And they are also among the heaviest cross-category shoppers on our platform, which supports our other categories. Our goal is to remain the world's most loved destination for passionate collectibles enthusiasts, providing access to the most compelling assortment of inventory across multiple categories in a high-trust environment. In service of that vision, during Q3, we launched direct submissions to the eBay Vault.
This enables any U.S. resident to send in trading cards valued at $250 or higher from their personal collections to the Vault, even if they were not purchased on eBay. In July to coincide with the National Sports Collectors Convention the industry's biggest event, we announced Vault Enhanced submission, which now enables us to gather large amounts of high-ASP cards in person at tentpole events attended by top collectors. During one weekend at the National Loan, we added tens of millions of dollars of assets under management at eBay Vault, including a signed Jackie Robinson card valued at approximately $1 million.
During Q3, we also wrote out a revamped condition grading system for trading cards, which greatly improves transparency for collectibles in this category. New listings now carry more precise details, including whether a card has been professionally graded and the numerical grade or one of several predefined card conditions. Existing listings will be also migrated to the new standard over the coming months. Sellers have been asking us for this feature for some time, and we believe it will drive improved trust for buyers, better and more consistent price realization for sellers as well as more robust data and insights around individual card values for eBay.
In response to our growing community of collectors and enthusiasts, last year, we introduced eBay Live, an interactive live shopping experience within the eBay app. This feature marries eBay's unique scale with an engaging shopping experience that we believe enthusiasts across the collectibles, luxury and fashion categories are increasingly seeking. Buyers can interact with influential sellers and check out in real time without leaving the stream.
And sellers have loved this tool as they can move items at scale and increase their sales velocity while listing items as fixed price or as extended auctions. eBay Live is currently in beta, but we continue to expand its availability to more sellers and categories. While we've been thoughtful about the pace of onboarding as we fine-tune the beta experience, Q3 market inflection point as we hosted over 1,000 live events saw our million fire tune in and grew GMV from eBay Live by four times quarter-over-quarter.
Now let me turn to the second pillar of our evolved strategy, scalable solutions. We're pleased with the progress we're making with our eBay International Shipping program, or EIS, which makes cross-border trade more seamless and cost-effective for sellers and buyers. We continued to scale EIS during Q3 and now have over 400 million live listings from U.S. sellers shippable to international buyers in more than 190 countries. Sellers have had an overwhelmingly positive reaction to the new program with customer satisfaction rates approximately 30 points higher than the previous global shipping program it replaced.
In October, we launched combined shipping for EIS, which allows buyers to order multiple items from an international seller and pay one consolidated shipping fee. Q3 also marked another strong quarter for our advertising business. Total advertising revenue grew 24% to $366 million. First-party ads grew 36% to $345 million or 36 points faster than FX-neutral GMV growth. Over 2.3 million sellers adopted a single ad product during Q3, and we currently have over 850 million live Promoted Listings.
Promoted Listing Standard, our cost per acquisition ad unit, was once again the largest contributor to growth in Q3 driven by continued optimization of placements, ad rate improvements and the recurring benefit of the Halo attribution change we discussed last quarter. Promoted Listings Advanced, our cost-per-click product, was the fastest-growing product in our ads portfolio on a year-over-year basis. PL Advanced continues to benefit from the simplifying and automating of core elements of the campaign setup and management processes.
In September, we launched smart targeting for PL Advanced, which makes creating and managing CPC campaigns easier than ever. Previously, these campaigns took a lot of time to set up and manage as sellers have to manually set keywords and manage campaigns individually. Now through smart targeting, eBay uses AI to manage keywords on behalf of sellers and optimize campaigns dynamically, all with just a few clicks to set up. As part of the smart targeting launch, we've also extended CPC ads to the similar items recommendations module when users are viewing another item, using fully automated targeting and bidding technology.
Moving to our third pillar, magical innovations. Last quarter, we discussed our magical listing experience, which represents the biggest transformation of the eBay listing process in our 28-year history. For over two decades, two of our biggest focuses were at odds with each other: making it a simple and fast as possible to list an item and ensuring listings are rich and comprehensive to maximize sales. Now generative AI allows us to leverage our treasure trove of images and listing data to quickly create compelling listings.
Early users have told us these capabilities will unlock more of the inventory in their closets and garages, which could ultimately keep more products out of landfills. The first phase of our magical listing experience leverages generative AI to instantly populate the item description within the listing flow based on a product's title, category and other aspects. This feature rolled out to 100% of mobile app users in the U.S., U.K. and Germany during Q3. In October, we extended the generative AI descriptions to 50% of desktop users in these countries.
The first phase of the magical listing experience has been incredibly well received by sellers as usage, adoption, customer satisfaction and content acceptance rates have all been higher than expected. As much as sellers have enjoyed the first phase of magical listing, we believe the next iteration will be so simple and easy to use that all of our sellers will love it. This experience will enable sellers to point their camera at an item, take a photo, and eBay does the rest. Behind the scenes, we have powered this experience with our proprietary computer vision technology and generative AI to seamlessly populate the description, category and any other item aspects.
Our camera-based magical listing experience has been in employee beta for several months and is currently in a limited beta with a number of large sellers. Feedback from our beta sellers has been extremely positive as they found the new experience intuitive and easier to use. We are incredibly excited to bring this experience to more sellers over the coming months. As part of our magical listing initiative, we also rolled out a vastly improved background removal tool powered by AI during Q3. Sellers have told us that simpler, cleaner images of their products have a significant impact on conversion.
Our enhanced tool has now rolled out to all users in the core listing flow, and sellers have told us they are already noticing significant quality and performance improvements from the revamped tool versus our prior version. Overall, I'm incredibly pleased by the progress we are making across all three pillars of our strategy. It is particularly encouraging to see how recent advancements in AI and machine learning can help us address more long-standing pain points for sellers and buyers on eBay in efficient and scalable ways. Next, I'd like to highlight the impact we're having on the communities we serve.
In Q3, we released our second annual small business report, which examines the sentiment of our global sellers. Despite macroeconomic uncertainty, eBay sellers are confident they can build their businesses and give back to their communities. In fact, more than half of eBay sellers expect their overall business to grow in the next 12 months, and over 2/3 expect their businesses on eBay to increase over the next five years. We also recently announced the winners of our up-and-running grants.
This program is currently in its fourth year and provides entrepreneurs with capital to invest in their businesses, along with training and mentorship to help them grow and thrive. The third quarter also marked the 20th anniversary of eBay for Charity, a program created as a way for people to give back during times of crisis. It has evolved to a global platform supporting countless organizations and causes and raised more than $1.3 billion for nonprofits to date. In Q3 alone, the eBay community raised $40 million, up 16% year-over-year.
All of these efforts demonstrate our purpose-driven community, and we are honored to be recognized for our progress. We're proud to be ranked on the U.S. News & World Report's inaugural list of Best Companies to Work For. eBay was also recognized as a top corporate philanthropist by the Silicon Valley Business Journal and San Francisco Business Times. In closing, I'd like to thank our extraordinary eBay team for delivering another solid quarter and continuing to innovate for our customers.
We made significant progress against our long-term objectives during Q3. Our accelerating pace of innovation is fundamentally changing the eBay experience, driving higher customer satisfaction and paving the way for new growth and revenue opportunities. As the macro environment remains uncertain, we'll be balanced in how we invest in the future, prioritizing our highest-ROI investments in order to generate long-term shareholder value.
With that, I'll turn the call over to Steve to provide more details on our financial performance. Steve, over to you.
