eBay Inc. received a double dose of good news on Friday, with the company reporting better-than-expected first-quarter results and being linked to a potential acquisition by GameStop. The online marketplace's shares jumped approximately 9% in after-hours trading, while GameStop shares also rose about 3% on the speculation.
Strong Q1 Performance
eBay reported first-quarter revenue of $3.089 billion, up 19% year-over-year, surpassing the analyst consensus of $3.04 billion. Adjusted earnings per share came in at $1.66, well above the expected $1.58. Net income reached $512 million, or $1.12 per share.
Gross merchandise volume (GMV) rose 18% to $22.2 billion, or 14% on a currency-neutral basis, driven by strong performance in collectibles categories such as trading cards, toys, coins, action figures, and comic books. Motors, electronics, and fashion also contributed to the growth.
CEO Jamie Iannone described the quarter as "a strong start to the year," noting accelerated GMV growth. CFO Peggy Alford highlighted the company's robust GMV and revenue growth coupled with healthy earnings and operating leverage.
GameStop Acquisition Speculation
According to a Reuters report citing the Wall Street Journal, GameStop is preparing a potential offer for eBay. The video game retailer, with a market capitalization of nearly $12 billion, has reportedly been quietly accumulating eBay shares. eBay, valued at roughly $46 billion, could receive an offer as soon as later this month. Neither company commented on the speculation.
Second-Quarter Outlook
For the second quarter, eBay projected revenue between $2.97 billion and $3.03 billion, slightly above the LSEG consensus of $2.97 billion. However, the company's GMV outlook of $21.3 billion to $21.7 billion is lower than the first quarter's performance. Adjusted EPS guidance of $1.46 to $1.51 falls just below analyst midrange expectations.
eBay faces several headwinds, including heightened competition, volatile consumer engagement, trade policy shifts, currency fluctuations, and regulatory pressures.
Strategic Initiatives and AI Push
eBay continues to invest in advertising, live shopping, and AI-driven tools. Total ad revenue reached $581 million in the quarter, with $555 million from its own ad products—a 33% year-over-year increase. The company's "Magical Listings" AI feature drove a more than 50% increase in new listing rates, while its AI-powered card scanning tool has processed over 30 million scans.
The company is also pursuing its $1.2 billion all-cash acquisition of Depop from Etsy, expected to close by the end of the third quarter pending regulatory approvals in the U.K. and Australia. CEO Iannone noted the global fashion recommerce space is "very competitive," with rivals like Vinted raising customer expectations.
Financial Strength and Shareholder Returns
eBay generated $970 million in operating cash flow and $898 million in free cash flow from continuing operations. The company returned $639 million to shareholders, including $500 million in share buybacks and $139 million in dividends. As of the end of March, $2.3 billion remained under its repurchase authorization.
