eBay delivered better-than-expected fourth-quarter results with revenue climbing 15% year-over-year to $3 billion. The e-commerce pioneer announced a transformative $1.2 billion cash acquisition of youth-focused fashion marketplace Depop from Etsy. Management issued first-quarter guidance substantially above analyst forecasts, signaling continued momentum in the company’s strategic turnaround efforts.
The e-commerce landscape witnessed a significant shift Thursday as eBay reported exceptional fourth-quarter performance that sent shares soaring nearly 8% in premarket trading. The online marketplace giant exceeded Wall Street expectations across multiple metrics while simultaneously announcing a major acquisition designed to capture younger demographics and strengthen its position in the rapidly growing recommerce sector.
eBay’s fourth-quarter financial results demonstrated robust operational momentum, with revenue reaching $3 billion, handily surpassing analyst projections of $2.87 billion. Adjusted earnings per share landed at $1.41, outperforming consensus estimates of $1.35. Gross merchandise volume showed particular strength, climbing 10% year-over-year to $21.2 billion, underscoring sustained consumer engagement on the platform during the holiday shopping season.
The company’s advertising business continued its impressive trajectory, generating $544 million in revenue during the quarter, representing 2.6% of total GMV. This growing high-margin revenue stream reflects eBay’s successful efforts to monetize its substantial traffic and seller base more effectively.
In a strategic move that caught market attention, eBay revealed plans to acquire Depop, the fashion marketplace that has captured the imagination of younger consumers, for approximately $1.2 billion in cash. The deal represents a significant bet on the future of fashion resale and the purchasing power of Generation Z and younger millennials. Depop currently facilitates approximately $1 billion in annual gross merchandise sales and serves 7 million active buyers, with the striking statistic that nearly 90% of these users are under 34 years old.
Chief Executive Officer Jamie Iannone framed the acquisition within the context of eBay’s broader strategic evolution, stating in the earnings release, “We have built significant momentum across our strategic priorities, delivering meaningful growth and reinforcing our leadership in recommerce.” The Depop acquisition aligns with eBay’s focus on authenticated fashion items and collectibles, categories that command higher average selling prices and stronger margins.
Looking ahead, management provided first-quarter guidance that substantially exceeded analyst expectations. The company projects revenue in the range of $3 billion to $3.05 billion, compared to the $2.97 billion anticipated by Wall Street. Adjusted earnings per share are expected to land between $1.53 and $1.59, comfortably above consensus estimates of $1.48. This optimistic outlook suggests management confidence in sustained operational improvements and successful integration of recent strategic initiatives.
The company maintained its commitment to shareholder returns, distributing $756 million to stockholders during the fourth quarter through a combination of $625 million in share repurchases and $131 million in cash dividends. This balanced approach to capital allocation demonstrates management’s confidence in the company’s cash generation capabilities while returning value to investors.
The Depop acquisition marks eBay’s most significant strategic move since Iannone took the helm, representing a deliberate pivot toward younger consumers who increasingly prefer peer-to-peer marketplaces for fashion discovery and purchases. By integrating Depop’s community-driven platform with eBay’s established infrastructure and authentication capabilities, the company aims to create a comprehensive fashion resale ecosystem capable of competing with both traditional retailers and emerging resale platforms.
Market analysts responded positively to the combination of strong quarterly results and the transformative acquisition, viewing the move as evidence that eBay can successfully evolve beyond its auction roots to capture value in the expanding recommerce market. The company’s ability to generate 15% revenue growth while expanding margins suggests that the strategic initiatives implemented over the past several years are beginning to yield tangible results.
