eBay (EBAY) Q3 2026 earnings review
eBay's US sales accelerate, but Depop costs squeeze profit margins
eBay's US marketplace accelerated past tough comparisons while the newly closed Depop acquisition weighed on profit margins. Total merchandise volume grew 16% in constant currency — about 13.5% excluding Depop by our math — and US volume jumped 27%. Chief executive Jamie Iannone raised the full-year outlook and set a fourth-quarter revenue plan slightly above what the prior full-year plan pointed to.
| Merchandise volume (constant currency) | +16% ~13.5% excluding Depop by our math |
|---|---|
| Revenue | $3.21B +14% from a year ago (+13% constant currency) |
| Profit per share, excluding one-offs | $1.51 +12% from a year ago |
| Full-year volume outlook | Raised 2 pts to 14% constant-currency growth |
⚖️ Verdict: 🟢 Bullish
The story got better because marketplace demand cleared its hardest collectibles comparison without slowing down. Raising the full-year volume plan to 14% constant-currency growth shows the US momentum is durable. Two cautions remain: operating margin excluding one-offs slipped 0.7 percentage points on higher marketing spend, and the fourth-quarter outlook quietly includes up to $150 million in new restructuring charges.
The question now is whether eBay can turn its faster volume growth back into margin expansion while integrating Depop. Either high-margin advertising and cross-border shipping offset Depop's buyer subsidies, or free casual selling and fashion marketing keep compressing the take rate. Fourth-quarter operating margin and the 2027 outlook next quarter will settle it.
🐂 Bull Case
US Volume Accelerated Despite Collectibles Comparisons
eBay runs an online marketplace where it earns fees on gross merchandise volume (GMV), the total value of goods sold. "Our Focus Categories, C2C marketplace, and Recommerce leadership are driving strong, sustained growth," chief executive Jamie Iannone said. Focus categories are priority lines such as trading cards, auto parts and luxury fashion, while C2C and recommerce mean casual sellers and secondhand goods.
Three months ago, management warned of tough comparisons from last year's trading-card boom and set a cautious plan. Instead, merchandise volume accelerated, led by the United States. Even after stripping out about 2.5 percentage points from the July acquisition of Depop, a secondhand fashion app, underlying constant-currency volume grew about 13.5% by our math, well above the 7% to 9% plan.
- US merchandise volume: $12.55 billion, up 27.1% from a year ago
- Total merchandise volume: $23.17 billion, up 16% in constant currency
- TCGplayer (its trading-card marketplace): passed $1 billion in volume over the past 12 months
- Fourth-quarter volume outlook: $23.7 billion to $24.1 billion, up 12% to 14% in constant currency
This matters because the fourth-quarter outlook shows the marketplace is holding double-digit volume growth through the hardest collectibles and gold-bullion comparisons of the year. What to watch: the exact growth rate for focus categories on the conference call. A reading in the mid-teens or better would confirm that priority categories stayed resilient.
Live Shopping and Cross-Border Shipping Scaled Up
To keep buyers and sellers on its marketplace, the company is rolling out live video shopping (eBay Live), artificial-intelligence listing tools (Magical Listing) and company-managed cross-border delivery (eBay International Shipping). Last quarter, Iannone promised that the cross-border shipping service would launch in the United Kingdom during the third quarter.
The company met that target and went further, launching eBay International Shipping in both the United Kingdom and Germany to "enable sellers to reach buyers in more than 190 markets by shipping to a domestic eBay hub". Meanwhile, eBay Live reached a "multibillion-dollar annualized run rate", with volume growing more than 100% from a year ago, and Magical Listing expanded to six countries.
These tools matter because easier listing and domestic hub shipping unlock supply from casual sellers without requiring them to handle customs forms. What to watch: international merchandise volume growth in the fourth quarter. A pickup from this quarter's 3.8% pace would show the new UK and German shipping hubs are lifting cross-border trade.
🐻 Bear Case
Marketing Costs and Depop Compressed Margins
"Our third quarter results demonstrate that eBay's strategy is delivering strong GMV growth and meaningful earnings expansion," finance chief Peggy Alford said. While profit excluding one-offs grew, it grew slower than revenue, and operating margin shrank from a year ago as the company absorbed Depop and spent more on marketing.
On July 30, the online marketplace paid $1.4 billion in cash to close Depop, which management says "strengthens our leadership in circular fashion and recommerce". Including Depop and buyer shipping subsidies, sales and marketing — advertising and promotional spending — jumped from 21.5% of revenue a year ago to 23.3% this quarter, a 1.8 percentage point increase.
- Operating margin excluding one-offs: 26.3%, down 0.7 percentage points from 27.0% a year ago
- GAAP operating margin: 19.2%, down 1.1 percentage points from 20.3% a year ago
- Fourth-quarter constant-currency outlook: revenue up 7% to 9% vs volume up 12% to 14%
- Fourth-quarter planned restructuring charges: $130 million to $150 million
The gap between volume growth and revenue growth is widening because shipping subsidies for Depop buyers are deducted directly from revenue. In addition, the fourth-quarter outlook embeds up to $150 million in new restructuring charges. What to watch: fourth-quarter operating margin excluding one-offs, where further declines would show that fashion subsidies and marketing are eating into core profitability.
Depop Drove the Active Buyer Jump
Active buyers — shoppers who paid for at least one item in the past 12 months — jumped from 136 million last quarter to 147 million in the third quarter, or 10% growth from a year ago. For the past year, eBay's underlying buyer count had grown only 1% per quarter.
The 11 million quarterly jump came from folding in Depop, which brought roughly 9 million buyers at close, alongside earlier purchase Tise, a Norwegian resale app. In the supplemental table, the marketplace operator stopped reporting active buyers excluding Depop and Tise for the third quarter. By our math, stripping out those acquired users leaves underlying buyer growth near 1% to 2%.
That means the core marketplace is still relying on existing enthusiasts spending more rather than attracting new shoppers. What to watch: whether management discloses active buyers excluding Depop on the call or in the quarterly filing. Continued 1% underlying growth would confirm that core user acquisition remains stalled.
European Demand Lags the US Marketplace
While the US marketplace surged, international merchandise volume grew only 3.8% as reported to $10.62 billion, slowing from 6.2% growth in the second quarter. As a result, international revenue dropped to 43% of total sales, down from 48% a year ago.
To counter weak European consumer demand and rival resale apps, the company overhauled its casual-selling rules in France and Italy this quarter, "bringing together free selling, buyer protection, enhanced local discovery, eBay Balance and simplified shipping". Giving up seller fees in Europe keeps volume from shrinking, but it shifts the burden of revenue growth onto US buyers. What to watch: international revenue share in the fourth quarter, where a drop below 43% would show European changes are not yet lifting monetization.
Risks this quarter didn't answer
Five standing concerns from prior quarters could not be fully tested from the earnings release alone.
- Focus category growth rate: not printed in the release after hitting 26% in the second quarter; the conference call remarks will show how much collectibles slowed.
- Fraud in transaction losses: bad-debt and buyer-protection losses rose 15.1% from a year ago to $122 million (slower than last quarter's 54% jump); the quarterly filing will show how much came from fraud versus volume.
- External AI shopping assistants: first-party ad growth slowed to 16% from 25% last quarter; call commentary will show whether external search tools are bypassing on-site ads.
- US casual-selling fee pressure: removing seller fees in France and Italy raises the question of whether rival Vinted will force similar fee cuts in the United States.
- Tariffs and cross-border trade rules: no new figures in the release on how US import rule changes affected cross-border volume.
💲 Other KPIs
Dipped by our math from 13.99% last quarter and 14.03% a year ago. Take rate is the share of merchandise volume that eBay keeps as revenue. The 0.19 percentage point drop from a year ago reflects faster growth in high-ticket collectibles and vehicles, plus buyer shipping discounts at Depop that are deducted from revenue.
Rose 15.6% from $525 million a year ago, with first-party ads on the eBay site up 16% to $575 million. That is a step down from 25% first-party ad growth in the second quarter. Total ads equalled 2.62% of merchandise volume by our math, down from 2.66% last quarter as newly acquired Depop carries fewer ads.
Increased by our math from $1.84 billion last quarter after the company spent $1.32 billion in net cash to buy Depop and $689 million on share buybacks. Total cash and non-equity investments fell from $4.9 billion in June to $3.3 billion, dipping slightly below management's $3.5 billion medium-term cash target while total debt held steady at $6.73 billion.
Shrank 3.0% from 467 million a year ago. The e-commerce group stepped up share buybacks to $689 million (about 6 million shares) in the third quarter, up from $310 million in the second quarter. That leaves $1.47 billion repurchased in the first nine months, keeping the company on track for its $2.0 billion full-year buyback goal.
🔮 Guidance
Raised against the prior implied fourth quarter. The plan calls for 7% to 9% constant-currency growth (8.4% as reported at the middle of the range), slowing from 13% in the third quarter as the marketplace laps last year's 15% growth and gold-bullion boom. By our math, if the 2.9% average beat from the past five disclosed quarters holds, fourth-quarter revenue would reach about $3.31 billion.
New. The forecast points to 12% to 14% constant-currency volume growth (12.5% as reported at the middle of the range), down from 16% in the third quarter. Volume growth is planned 5 percentage points above revenue growth at the middle of the range, reflecting a full quarter of Depop and holiday shipping promotions.
New. At the middle of the range ($1.505), profit per share excluding one-offs grows 6.7% from $1.41 a year ago, slowing from 11.9% growth in the third quarter. The slowdown reflects Depop operating losses, lower interest income after the $1.4 billion cash outlay, and a 17.5% tax rate compared with 16.5% last year.
New. The plan puts GAAP profit per share down 25.9% from $1.14 a year ago at the middle of the range. Footnote disclosures show the drop is driven by $130 million to $150 million in new fourth-quarter restructuring charges and $30 million to $32 million in amortization of acquired Depop intangibles.
Raised. Constant-currency growth moved up 1 percentage point to 12% to 13% (13.9% as reported at the middle of the range), passing the third-quarter beat plus a slightly higher fourth-quarter view through to the full year.
Raised. Constant-currency volume growth moved up 2 percentage points at the middle of the range to 14%. It is the second straight raise to the full-year volume plan: +4.75 percentage points in the second quarter (when Depop was added) and +2.0 percentage points in the third quarter.
Raised. At the middle of the range ($6.275), full-year profit per share excluding one-offs grows 13.7% from $5.52 in 2025, up from the 10% to 12% growth rate management planned last quarter.
New. Full-year GAAP profit per share is planned up 0.6% at the middle of the range against $4.26 in 2025, held back by $212 million to $232 million of full-year restructuring expenses.
❓ Key Questions
What is the $130–150 million Q4 restructuring charge for?
Footnote (a) of the outlook table reveals $130 million to $150 million in fourth-quarter restructuring costs after a $3 million credit in the third quarter. Investors need to know whether this is a workforce reduction at core eBay or integration severance at Depop.
How fast did Focus Categories grow in Q3?
Focus categories grew 26% in the second quarter and drive the growth case, but the release did not give the third-quarter figure. The exact rate will show whether trading cards held up against last year's surge or if other categories carried the beat.
How much did Depop contribute to Q3 revenue and volume?
Depop closed on July 30, adding two months of results to the quarter. Without standalone revenue and volume figures for Depop, investors cannot separate core marketplace performance from the acquisition.
Why did eBay drop the organic active buyer disclosure?
The supplemental table stopped printing active buyers excluding Depop and Tise just as total buyers jumped by 11 million. Restoring that figure is necessary to see if core buyer growth ever moves above 1%.