Good day, everyone. My name is Megan, and I will be your conference operator today. I would like to welcome you to the eBay Second Quarter 2025 Earnings Call. I will now turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's Second Quarter 2025 Earnings Conference Call. Joining me today on the call are Jamie Iannone, our Chief Executive Officer; and Peggy Alford, our Chief Financial Officer. We're providing a slide presentation to accompany our commentary during the call, which is available through the Investor Relations section of the eBay website at investors.ebayinc.com. Before we begin, I'll remind you that during this conference call, we will discuss certain non-GAAP measures related to our performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in our accompanying slide presentation. Additionally, all growth rates noted in our prepared remarks will reflect organic FX-neutral year-over-year comparisons, and all earnings per share amounts reflect earnings per diluted share, unless indicated otherwise. During this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from our forecast for a variety of reasons. You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent periodic reports on Form 10-K, Form 10-Q in our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of July 30, 2025. We do not intend and undertake no duty to update this information. With that, I'll turn the call over to Jamie.

Thanks, John. Good afternoon, and thank you all for joining us today. I'll begin with highlights from the second quarter. Then I'll go deeper on the fundamental drivers of our results and progress against our strategic initiatives. Following my remarks, I will turn the call over to Peggy, our new CFO, who will discuss our financial performance and outlook in greater detail before we open up the call for Q&A. We delivered another strong quarter in Q2 with all of our key financial metrics exceeding both consensus expectations and the high end of our respective guidance ranges. Our gross merchandise volume grew by 4% to $19.5 billion, accelerating by over 2 points sequentially. Revenue grew by more than 4% to $2.73 billion. Non-GAAP operating income grew 8% to $775 million, and our non-GAAP earnings per share grew 16% year-over-year to $1.37. These results are a testament to our continued progress in reinventing the future of e-commerce for enthusiasts. The fundamental drivers of our return to profitable growth remain intact, while our marketplace has proven resilient to recent uncertainty brought on by tariffs and trade policy changes. Now let's go deeper into the key drivers behind our Q2 performance. Our focus categories continue to be a significant engine of growth for eBay. In Q2, focus category GMV grew by over 10%, outpacing our core categories by 9 percentage points. This momentum was broad-based as all of our individual focus categories accelerated year-over-year during Q2. Collectibles was once again the largest contributor to growth as year-over-year growth in trading cards GMV accelerated for the 10th straight quarter on the back of continued momentum in both collectible card games and sports trading cards. Interest in Pokemon cards has surged recently, with GMV growth in the triple digits for the second straight quarter, amid renewed interest from collectors and a particularly strong slate of product releases. While we expect to start lapping elevated growth in Pokemon in Q4, we continue to see strong secular growth across all our major trading card subcategories. For instance, sports trading cards and Magic: The Gathering also accelerated sequentially, and GMV growth for each remains in the healthy double digits year-over-year. Our TCGplayer subsidiary is also consistently posting healthy double-digit GMV growth and set a new record for weekly GMV during its Mayhem event in Q2, which coincided with the pre-release window for the highly-anticipated Final Fantasy Universes Beyond crossover. Overall, we remain confident in the durability for the trading cards category even if our growth is not linear from quarter to quarter due to the varying cadence and relative strength of product release cycles. Our strategic initiatives and partnerships have meaningfully contributed to our recent momentum in collectibles as we improve on our industry-leading experience for hobbyists. During Q2, we fully ramped our grading add-on solution in the U.S. in partnership with PSA and continue to see healthy attach rates. We introduced bulk selling capabilities for cards added to My Collection to effortlessly populate multiple listings with just a few clicks. We began integrating inventory from Goldin Auctions into the eBay marketplace, generating more exposure for these high ASP listings. And our Goldin subsidiary acquired Studio Auctions, which expands our offering for collectors of Hollywood and pop culture memorabilia. Motors, Parts and Accessories or P&A, also contributed nearly 1 point of year-over-year GMV growth for our overall enterprise, driven by strength across our major markets and trade quarters. While we've observed some pressure on direct shipped inventory from Greater China following tariff increases and removal of the de minimis exemption, we've seen increased adoption of SpeedPAK and resilient growth trends within forward-deployed inventory. We also continue to expand buyers access to well-priced supply in key areas like used and green parts, many of which are sourced in their local markets. In the U.S., we've begun automating the enhancement of fitment data to P&A listings in recent quarters, which exposes them to a larger number of relevant auto part shoppers. And in July, we launched easy and free returns for P&A in the U.S., which enables buyers to easily return eligible purchases for any reason, further improving our leading value proposition for auto enthusiasts. Our luxury and apparel focus categories also contributed positively to growth in Q2. In recent months, we've expanded the number of streetwear and luxury apparel brands eligible for authentication in the U.S. And in June, we launched luxury apparel authentication in the U.K., covering dozens of the world's most sought-after brands. Our Authenticity Guarantee program achieved 2 significant milestones in Q2, inspecting over 1 million items in a single quarter for the first time and reaching a total of more than 15 million cumulative items processed through our authentication centers. Our momentum in fashion continues to benefit from improved consideration among enthusiasts, which has been amplified by our full funnel marketing strategy. In May, we sponsored the Met Gala live stream, and had a major presence on the red carpet, resulting in nearly 5 billion earned media impressions. eBay became the first non-designer brand to dress attendees head to toe with celebrities like Chappell Roan, Emma Chamberlain and Jeremy Pope wearing pre-loved and vintage items sourced from eBay. Our marketing efforts have also benefited from our increased capabilities in generative AI. In recent months, we've started leveraging Gen AI to optimize listing titles in our product listing ads syndicated to Google, resulting in measurably higher quality scores, rankings and overall performance for these listings, leading to incremental GMV. We have also leveraged proprietary models to detect and replace low-quality or clutter listing images with higher-quality AI-generated alternatives for Google PLAs, which has increased the acceptance rate on these listings and shown a significant lift to GMV. We're also leveraging generative AI to drive personalized engagement with our customers. In late 2024, we introduced AI-generated subject lines and pre-headers for personalized CRM e-mails in the U.S., which drove a greater than 40% increase in quality visits versus our prior approach. In recent months, we've expanded this feature to the U.K. and have seen similar results. We are now expanding these personalized e-mails to more use cases such as abandoned carts and followed seller e-mails. We've leveraged proprietary LLMs to generate these personalized messages. And our teams have managed to keep GPU utilization costs low by optimizing customer segmentation as we've seen the strongest uplift when focusing on our enthusiast customers. We're already sending millions of these tailored e-mails each week and plan to continue leveraging generative AI to personalize more touch points of the customer experience through CRM channels. Our geo-specific initiatives represent another key building block for growth in 2025, and we made notable progress on our U.K. initiative during Q2. Since launching a suite of new capabilities to upgrade the consumer-to-consumer experience in the U.K. in Q4, we have seen notably stronger GMV growth trends versus our prior baseline even after introducing a buyer-facing fee in Q1. During Q2, we continued to scale adoption of our managed shipping solution for U.K. C2C sellers as we introduce new features and functionality. We added package collection services for convenience, and a delivered store feature that enables buyers to have their item shipped to any of over 10,000 every parcel shops or lockers in the U.K., which yields significant cost savings relative to home delivery. In late Q2, we began mandating adoption of managed shipping for all new C2C listings outside of certain edge cases. Over the next few months, we plan to continue improving the managed shipping experience by adding new solutions for bulky items and age-verified products. We are also planning to expand the thousands more collection and drop-off points in the U.K. and drive awareness of the cost savings and sustainability benefits of adopting these services. These enhancements built upon the already strong value proposition that managed shipping offers, faster listing times, lower shipping costs, greater transparency from added tracking and protection against lost or damaged items. eBay Live is another major area of focus and investment in 2025. eBay Live brings our most engaged communities to life, transforming how enthusiasts discover, assess and compete for high-demand inventory in real time. It's a natural extension of our leadership in categories like trading cards, fashion, and luxury goods, where trust, storytelling, and scarcity are core to the purchase experience. By layering live commerce on top of our scaled marketplace, we're creating new shopping experiences where sellers can connect directly with their audience and like-minded buyers can engage with each other, all while leveraging the sellers' inventory and demand we already have. GMV and watch time for eBay Live continues to grow quarter after quarter as we onboard more sellers into the program. eBay Live initially ramped within the trading cards category, but during Q2, we saw accelerating contributions from luxury watches, jewelry, handbags, and pre-loved apparel. In May, we formally launched eBay Live in the U.K. market alongside a major activation at Comic Con London. Our teams also continue to innovate on the live commerce experience for sellers and buyers. During the quarter, we introduced a redesigned host console for sellers that enables real-time edits to listings, item lineup viewing, and a greater number of one-click actions to increase sales velocity. In the U.S., we launched two of our most requested features for eBay Live, autocharge and combined shipping capabilities, which improved trust and reduced friction. We also debuted eBay Live on Tour, a series of in-person events, bringing eBay Live to the community via trade nights, hobby, block parties, and pop culture events. We see eBay Live as a way to harness the power of the vibrant communities that have organically developed on eBay over the past 30 years. We have already seen significant evidence that live commerce can deepen engagement among eBay enthusiasts and unlock even greater velocity in our strongest verticals, which validates our continued investment in this experience. Turning next to advertising. During Q2, our first-party advertising revenue on the eBay platform grew 17%, driven by balanced growth across our ads portfolio. Active promoted listings made up nearly 1.2 billion of the close to 2.4 billion total listings on eBay, while 4.1 million sellers adopted a single promoted listings product during the quarter. Within promoted listings, general ads were the largest contributor to the year-over-year growth in Q2, followed by priority ads and promoted offsite units. Promoted stores also continue to scale quickly off of a small base. During the quarter, we implemented several optimizations for our ads portfolio that contributed to growth, such as leveraging proprietary models, trained on more granular buyer behavior to serve more relevant products, and using LLMs to analyze search queries and surface more relevant promoted products. We also extended priority ads to vehicle sellers for the first time, enabling both dealers and C2C sellers to generate more exposure for their vehicle listings. Within payments and financial services, we continue to focus on enhancing buyer choice, reducing conversion friction, and expanding our solutions for sellers. A key highlight this quarter was the successful expansion of our partnership with Klarna into the U.S. market on April 1, building on our established global strategic partnership. Following our successful expansion in Europe late last year, Klarna's U.S. launch has surpassed our initial expectations in terms of incremental GMV and new and reactivated buyers. The average order value on Klarna's transactions is approximately three times the U.S. marketplace average. While adoption has been particularly strong in focus categories like P&A, fashion, and electronics, Klarna is also helping us attract a younger demographic with roughly 50% of sales coming from Gen Z and millennial buyers and a higher mix of sales generated by female shoppers. Beyond Klarna, our other financial services initiatives continued to deliver value for customers. In the U.K., our eBay Balance feature continues to gain traction, enabling our several million active U.K. C2C sellers to utilize their sales earnings for eBay purchases, generating incremental GMV while lowering our payment costs in the process. Our Seller Capital program continues to empower small businesses with access to crucial funding, having dispersed over $100 million of growth capital year-to-date to more than 10,000 sellers globally. Beyond our operational performance, our dedication to the impact and sustainability of our marketplace continues to be recognized. I'm proud to share that eBay was named one of Time World's Most Sustainable Companies and Newsweek's World's Greenest Companies 2025, underscoring our unwavering commitment to e-commerce and a healthier planet. Our purpose-driven community also continues its incredible work, notably through the eBay Foundation's One Good Thing Campaign, where more than 8,500 volunteer hours and over $790,000 were donated by employees in the eBay Foundation to over 250 nonprofits globally, truly embodying our mission to create economic opportunity for all. In closing, Q2 was another strong quarter for eBay, demonstrating the continued momentum of our strategy and resilience of our marketplace. Focus categories remain an engine of growth for our marketplace and accelerated to 10% GMV growth. Our U.K. business is benefiting from a similar playbook being deployed at the geographic level with GMV growth comfortably above our baseline before our investments in overhauling the C2C experience. AI continues to fundamentally change the eBay experience for customers as we streamline the listing experience, improve the efficacy of search to connect the right buyers in inventory, create more inspirational shopping experiences, and enhance trust throughout our marketplace. Additionally, we are increasingly leveraging AI to improve the effectiveness of our advertising products and marketing and personalize our CRM communications with our enthusiast customers. We continue to invest in medium- and longer-term initiatives like eBay Live in our vehicles business enabled by the acquisition of Caramel, which are contributing modestly to GMV in 2025, but represent significant opportunities in the years to come. As we approach the 30th anniversary of eBay's founding in September, I would like to thank our teams for the significant progress they've made in reinventing the future of e-commerce for enthusiasts in recent years. Their unwavering dedication towards our mission has kept us firmly on the path towards sustainable long-term growth, yielding significant value for our shareholders. With that, I'll turn the call over to Peggy who will provide more details on our financial performance and outlook. Peggy, over to you.

Thank you, Jamie. I'm incredibly excited to return to eBay and help build on the strong foundation we have in place in order to accelerate our transformation. The opportunity ahead is significant, and I look forward to partnering with Jamie and the rest of our leadership team to drive the next chapter of eBay's growth story. I will begin with the financial highlights of the second quarter. GMV grew 4% to $19.5 billion. Revenue grew over 4% to $2.73 billion. Non-GAAP operating income grew 8% to $775 million, and non-GAAP earnings per share grew 16% to $1.37. In addition, we returned approximately $760 million to shareholders through repurchases and cash dividends. Let's take a closer look at our financial and operating metrics. GMV grew 4% to $19.5 billion in Q2 on an organic FX-neutral basis. The strength in the quarter was primarily driven by the continued execution of our strategic initiatives and more favorable trends in the U.S., where consumer demand improved through Q2, and the impact of tariffs was more muted than we anticipated. Goldin added over 10 basis points of growth in the quarter and we lapped the acquisition in mid-May. Foreign exchange also provided a tailwind of roughly 170 basis points to spot GMV growth. Focus categories were a key driver of our performance, growing over 10% in Q2. We saw year-over-year growth rates accelerate sequentially across all focus categories, luxury goods, collectibles, refurbished, sneakers, P&A and apparel. In the U.S. market, GMV growth accelerated to 7% and exceeded our expectations due to several factors. Healthy consumer demand drove broad-based strength across both focus and core categories, with particularly strong performance in trading cards. Our U.S. results were driven by growth in both sold items and average selling prices. The increase in ASP was partly attributable to category mix shift and also our expansion of our Klarna partnership to the U.S. market, which improved conversion on high-ticket items. We also observed enhanced efficiency in our lower-funnel marketing spend, partly due to competitive dynamics. International GMV grew nearly 2% on an FX-neutral basis, with foreign exchange providing a tailwind of more than 330 basis points to spot growth. Our investments in the U.K. and Germany have been instrumental in helping us navigate lower growth environments in both countries. Our cross-border volume growth in Q2 was similar to Q1 as U.S. tariffs have had a limited impact on GMV to date. We did experience some disruption to direct shipments from Greater China to the U.S. following the elimination of de minimis exemption, but the volume that persisted saw an uplift to ASP. As a reminder, the vast majority of our volume in this corridor is either forward deployed where tariffs are applied against sellers' wholesale cost, or utilizes our shipping service feedback, which helps sellers and buyers navigate applicable tariffs. Moving on to our buyer metrics. Our trailing 12-month active buyers were 134 million in Q2, up 1% year-over-year. Enthusiast buyers remained stable at roughly 16 million and spend per enthusiast buyer continued to grow year-over-year, reaching nearly $3,200 in Q2. Shifting to our income statement. Revenue grew over 4% to $2.73 billion in Q2 on an organic FX-neutral basis. Foreign exchange was a tailwind of nearly 170 basis points to spot growth. Our take rate was 14%, up modestly year-over-year. Advertising, shipping, and financial services contributed positively to take rate, which was offset by our U.K. C2C initiative and mix shift across our categories and geographies. On a sequential basis, U.K. C2C improved overall take rate by over 20 basis points in Q2, benefiting from a full quarter of buyer protection fee contribution and our managed shipping ramp. Advertising revenue was $482 million, representing GMV penetration of nearly 2.5%. Within the eBay platform, first-party ads grew roughly 17% to $455 million. We continue to deprecate legacy third-party display ads, which declined by 43% to $8 million. Off-platform ads grew 46%, reaching $19 million. Non-GAAP gross margin expanded by over 20 basis points year-over-year as pressure from shipping initiatives, traffic acquisition costs related to promoted offsite ads, and depreciation expenses was more than offset by cost of payments efficiencies as we lapped one-time tax expenses in the prior year. Our non-GAAP operating margin was 28.4%, up roughly 50 basis points year-over-year as volume leverage and contributions from advertising, financial services, and marketing efficiencies offset headcount-related costs, our U.K. C2C initiative, and M&A expenses. Additionally, FX represented a 40-basis points tailwind to operating margin in Q2. Non-GAAP earnings per share was $1.37, up 16%; and GAAP earnings per share was $0.79, up 77%. The higher GAAP earnings growth rate was primarily due to the lapping of investment losses a year ago. Moving to our balance sheet and capital allocation. Free cash flow was negative $441 million, in line with our expectations due to roughly $935 million of cash outflows in the quarter relating to taxes on equity investment sales last year and our final repatriation tax payment. We repurchased $625 million of eBay shares in Q2 at an average price of $71 and paid a quarterly cash dividend of $134 million in June or $0.29 per share. At the end of the quarter, we had cash and non-equity investments of $5.4 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments were valued at over $900 million. In May, we received approximately $225 million from Aurelia's shareholder distribution. This return of capital reduced the carrying value of our Aurelia investment to approximately $650 million at the end of Q2. Turning to our outlook. While the environment remains uncertain, our business has performed well in July, reflecting sustained healthy consumer trends in the U.S. and continued execution of our strategic initiatives. For the third quarter, we expect GMV between $19.2 million and $19.6 billion, representing FX-neutral growth between 3% and 5% year-over-year. Based on current exchange rates, we estimate FX would represent roughly 170 basis points of tailwind to spot GMV growth. While we have largely navigated the impact of tariffs to date, our guidance range does contemplate potential disruptions from impending tariffs and the potential elimination of de minimis exemptions on other trade corridors. We forecast revenue between $2.69 billion and $2.74 billion, implying FX-neutral growth of 3% to 5%. Based on current exchange rates, we estimate an FX tailwind of roughly 120 basis points to spot revenue growth. On a sequential basis, this implies take rate is roughly flat as advertising and managed shipping monetization are expected to be offset by an FX headwind of 10 basis points and some additional pressure from mix shift. We expect non-GAAP operating margin for Q3 to be between 26.6% and 27.1%, representing non-GAAP operating income growth between 2% and 6% as reported. We remain focused on maintaining a disciplined balance between top and bottom line growth as we invest for the future. Given the year-to-date strength in our business, we intend to reinvest a portion of further top line upside in strategic initiatives aimed at driving long-term value for shareholders. We forecast non-GAAP earnings per share between $1.29 and $1.34, representing year-over-year growth between 8% and 12%. Next, I'll share some updated thoughts on the full year. For 2025, our GMV is tracking towards the high end or slightly above our prior expected range of low single-digit FX-neutral growth. We continue to view much of the year-to-date strength in our business as durable, particularly the momentum within focus categories and contributions from other strategic initiatives. However, our outlook for the remainder of the year contemplates several mitigating factors to recent GMV trends. First, we faced tougher year-over-year comparisons in Q4 overall due to an especially strong holiday season. Second, we anticipate some potential moderation in trading cards growth in Q4, which improved substantially in late 2024 due to an exceptionally strong series of product releases. Third, we will lap an acceleration in the U.K. C2C volume as we launched our initiative in October of last year. Lastly, we continue to contemplate a range of scenarios regarding tariffs as new trade policies are announced and implemented. We forecast revenue growth modestly higher than GMV for the full year on an FX-neutral basis, driven by advertising, shipping, and financial services. We expect non-GAAP operating income growth between 4% and 5% year-over-year on an as-reported basis, which includes the impact of several unique headwinds to non-GAAP operating margin outlined in our earnings presentation. We forecast capital expenditures to be between 4% and 5% of revenue for the full year and expect our non-GAAP tax rate to remain stable at 16.5%. We now expect reported free cash flow of approximately $1.5 billion in 2025, which includes a headwind of $935 million from the unique tax items noted earlier. On a normalized basis, free cash flow is expected to be comfortably north of $2 billion. We are now targeting share repurchases of approximately $2.5 billion for the full year. Additionally, our Board declared a quarterly dividend of $0.29 per share for Q3 to be paid in September. Based on these assumptions, we now expect non-GAAP earnings per share growth between 10% and 12% year-over-year in 2025. Before we start Q&A, I'd just like to reiterate how thrilled I am to be joining as eBay's CFO and helping lead the company into our next stage of growth, focusing on categories where we are uniquely positioned to win. What I've seen so far has been impressive and energizing from the level of innovation and collaboration of our teams, the increased focus on serving the needs of our customers and our deep commitment to connecting people and building communities to create economic opportunity for all. We are uniquely positioned to thrive in this next stage of growth. We have a strong balance sheet, clear strategic priorities, and a world-class team. My focus will be on driving operational excellence and disciplined allocation of capital to support our longer-term growth ambitions, unlocking significant value for our shareholders in the process. And I look forward to meeting our shareholders and analysts' community soon. With that, Jamie and I will now take your questions.

Thanks so much for taking the question. Hopefully, you can hear me okay. Peggy, first, congrats on the new role and look forward to working with you going forward in it. Jamie, maybe a quick question on what you saw in the quarter and how to think about going forward with respect to marketing. There's been a lot of talk about elements of reduced competition in some of the lead gen or the performance marketing channels in the quarter. I wanted to get a little bit more granularity on what you saw in terms of return on marketing spend. And then when you look at where the world might be going with respect to AI agents or even agentic browsers, how do you think about repositioning or positioning the company more broadly for where traffic generation might come from when you look out over the next couple of years?

Yes. Thanks, Eric, and good to hear from you. So first, on the marketing side, look, we had a real full funnel approach over the course of the quarter. Some great upper funnel campaigns that we're running throughout the globe and then supported by some in-person events like at the Met Gala, and what we're doing with fashion with Emma Chamberlain and Chappell Roan just head-to-toe in eBay, and what we're doing in F1. Specifically, as it relates to lower funnel, which I think is where your question was going, we did see some ability to lean in due to the competitive dynamics and saw some efficiencies there in the marketplace. As you know, we're less reliant on kind of lower funnel and paid search than other players given how much of our traffic is organic. But we were able to kind of see some efficiencies in our spend over the course of the quarter. Relative to agentic commerce, we think AI represents a really significant opportunity for us because the technology can really accelerate personalization and relevance for our customers. And we have a multipronged strategy to ensure that we continue to thrive as our agents become more pervasive, really remaining a destination for enthusiasts by doubling down on the breadth and depth of non-new and seasoned inventory we have, investing in specialized experiences for key verticals, and focusing on continued innovation in new community experiences like eBay Live. Second is, I think our focus category strategy that we've had and the value-added services that we build really help us be the seller platform of choice. Whether that's the physical authentication, we just hit 50 million items authenticated, we did a million in this quarter alone, or a guaranteed fitment, or the frictionless payments pieces really creates a unique and compelling offering for buyers and sellers. Lastly, I'm excited by the work that we're doing on our own agentic capabilities on-platform. We recently announced an AI shopping assistant that we've been working on and testing. We've got other specialized agents across the experience. You know about the work that we're doing in magical listing to really kind of unlock the closet, etc. So ultimately, we believe our scale, our unique inventory, and our differentiated value proposition as well as accelerating our own AI capabilities position us extremely well to thrive in an agentic commerce future.

Thanks for the questions. First one, I wanted to start with. I really appreciate the details on the category performance and it leads into probably the most frequently asked question we get from investors. And when they think about an eBay future and the reacceleration of GMV growth, they always ask what category growth they're underwriting in that thesis, and you've done really well, obviously, in collectibles and P&A. But I wonder if you could maybe shine a light on what your expectations are as the drivers of future growth. I mean, I would expect you say broad-based, but if there are any categories you could call out that you're looking to going forward. And then following up on your remarks with AI. Just curious, I know it's very early days, but the traffic you're seeing coming from AI search to eBay, are those buyers behaving differently? Are they converting at higher rates? Are they spending more or less time on the marketplace? Anything around that would be really interesting.

Yes. Regarding your point about categories, we believe it's about the existing focus categories we've launched as well as those we have yet to introduce. Looking at our focus category performance, it increased by 5% in 2024, 6% in Q1, and 10% this quarter, showing strong performance across all focus categories. I highlighted the strength we're observing in collectibles and Parts and Accessories. These categories were launched some time ago, and we continue to invest in them because we appreciate the return on investment we're experiencing. Collectibles are a prime example, particularly with our innovative partnership with PSA in Parts and Accessories this quarter. We introduced several new features like free and easy returns in the U.S. and expanded fitment. We have five categories on the platform surpassing $10 billion, all relevant to our focus category strategy. Additionally, our horizontal efforts, especially in AI innovations, have positively impacted both focus and core categories. We're satisfied with the results of our investments in these areas. As for agentic commerce, it’s still small but experiencing good growth. One notable point is that users visiting eBay have high shopping intent, which is reflected in our traffic. This aligns with our strategy, as eBay offers unique inventory, emphasizing non-new, seasoned, and refurbished items. Last quarter, I mentioned that this type of inventory accounts for up to 40% of what's sold on our platform, combined with our value-added services like Authenticity Guarantee and Guaranteed Fitment, which encourages that shopping behavior.

Really encouraging results on the quarter. Two on my side. First, the U.S. showed really particular strength in Q2. Can you stack rank the primary drivers of that improvement relative to the international business? And how should we think about the ability for that to persist into the back half? And then on top of that, you talked about reinvesting some of the year-to-date upside into strategic initiatives. Can you give us a little more color on what those are and how it could show up in the P&L?

Yes. Look, when you look at the macro environment, U.S. in Q2 was more favorable than we expected despite the tariff announcements and the elimination of the de minimis for imported goods. Consumer demand held up through Q2. And we really saw broad-based strength across different categories as both our sold items and our average selling prices grew year-over-year in Q2. And then to your question about versus international, I would say Europe remains tougher similar to recent quarters. We've not seen a meaningful improvement in the European macro environment, though our investments across our initiatives are working and have offset some of the macro trends. Fortunately, our business, I think, is well suited to navigate these conditions, and we remain confident that our emphasis on e-commerce and non-new and seasoned will be a strategic advantage in this environment, especially as consumers prioritize value as they appear to be doing in the European markets. Related to our H2 investments, I would say it's really across the board. We talked in Q1 about investing in U.S. pre-loved fashion as our newest focus category. We've been investing in the C2C work that we've been doing in geographic specific areas across the U.K. and Germany. I talked about eBay Live, while in the early phase of growth, we think this has a lot of potential, and we like all the early metrics we're seeing in terms of engagement and how sellers are adopting the product. And then finally, I would just say continuing to invest in AI. The return we're seeing from the investments that we're making in both the customer experience and how our employees are leveraging AI to make them more effective in their roles is another key area for us to lean into and take advantage of.

Peggy, welcome to the call. Jamie, I wanted to follow up on your last question regarding the U.S. It seems that since ASP increased in the second quarter, there wasn't a natural advantage stemming from Temu, especially given the challenges in that channel in the U.S. market. Is that accurate? If the observed strength is largely due to collectibles, how much of that is due to gaining market share from Goldin and other initiatives you've implemented, versus the overall strength of that category? Additionally, shifting away from the U.S. market, I understand that fashion is one of the next areas you plan to focus on. What potential do you see in that category over the next couple of years?

Yes. Regarding your question about average selling price, we experienced growth in both sold items and average selling price. One factor contributing to this was a slight increase in forward-deployed inventory in China as it was replenished at higher tariffs. Additionally, we expanded our Buy Now Pay Later partnerships in the U.S., specifically with Klarna, which helped drive sales of high average selling price items in our market. These items typically have prices around three times the average of other products. Concerning collectibles, the growth was mainly from sold items along with a slight increase in average selling price, particularly with products like Pokemon, but there were also strong performances across various subcategories, including Magic: The Gathering and sports trading cards. I'm particularly enthusiastic about the fashion sector. We generate over $10 billion in fashion sales on our platform. With advancements in generative AI, we are introducing new ways for users to discover, explore, and define items. We have a long-standing reputation as a source for pre-loved fashion, thanks to our diverse inventory and unique value as a supplier. I’m eager to integrate new technologies, such as our explore feature, into key areas of fashion. I'm also excited about how brands are engaging with us through direct sales. A notable example is Chappell Roan showcasing eBay fashion at the Met Gala, a significant development for us. We are witnessing shifts in this category, and I believe we’re just scratching the surface in terms of potential improvements. Overall, I feel optimistic about our progress in focus categories and look forward to introducing more elements from the U.K. to the U.S. specifically in fashion.

A follow-up on trading cards. I appreciate that right now, demand looks very good for that category. Is this a market that consistently grows double digits? Or are we in a particularly strong window right now? I guess it would just be helpful to understand what you see as durable growth in trading cards as you look forward beyond the quarter. And then my second question is on margins, but I can follow up after...

No, go ahead, ask your question about margins, then I'll answer it.

Sure. Just the last few years have been this reinvestment cycle, mix shift, GMV pressure, all of that probably has been a headwind to margins. If this business is now growing low single digits to mid-single digits consistently, you just get the natural benefit of positive operating leverage? And does that naturally just start to push margins up again?

Yes. First, regarding trading cards and collectibles, growth has never followed a straight path; it fluctuates due to various factors such as release schedules, the quality of rookie classes, and key chase cards. Since late last year, we've observed a particularly strong range of cards and game series in addition to foundational improvements, which have been crucial for the category's growth. This includes the ease of selling graded cards on our platform and the process of getting ungraded cards graded. Although the recent streak of strong releases may slow down and we'll have to contend with tougher comparisons year-over-year later this year, as Peggy mentioned, we remain confident in the long-term growth prospects of the hobby and we will continue to invest in and enhance the collectibles experience. eBay Live is an excellent example of a new feature we're offering sellers in the overall business. Peggy, would you like to address the margin question?

Sure. Absolutely. Nikhil, nice to meet you. What we found is that a high gross margin provides us with operating leverage. We really concentrate on top line growth because when GMV increases, we achieve very healthy margins. We're focused on balancing top line growth with bottom line margins, as operating income dollars are what we aim for. As we concentrate on our strategic initiatives that drive accelerated top line growth, we find that this approach leads to very healthy margins, which reflects our philosophy.

I have a couple of questions as well. Jamie, congrats on the strong quarter, and Peggy, welcome back. So I guess along the same lines of the sustainability of GMV growth question, I'd be curious to hear how important the active and enthusiast buyer base will be in maintaining that level of growth as you look out beyond this year. And without getting too far ahead here, Jamie, does the performance year-to-date at all change your outlook for the medium and long-term growth potential of the marketplace?

Yes. So look, I'm happy with what we're seeing in terms of GMV growth. And to your comment on active and enthusiast buyers, active grew 1% year-over-year to 134 million in Q2, and we like what we saw there because obviously the top of the funnel is incredibly important to us. But we are very focused on enthusiast buyers as they buy 70% of the GMV on the platform. And turning those active buyers to enthusiasts and importantly, making sure that our marketing is focused on attracting enthusiast buyers to the platform. So we do aim to grow across the funnel, but that's really kind of the end goal of what we're doing. And we like what we're seeing in terms of the health of our buyer metrics. I don't want to get ahead of myself with respect to kind of looking out in future years. What I would tell you is that I feel like the growth right now is made up of a couple of components. It's obviously the focus category work that we're doing. It's the geo-specific investments that we're making in our business, specifically the ones that we're doing in the U.K. and C2C, and it's the horizontal initiatives. And what excites me about the horizontals is that they're helping in the focus categories and in the core categories, and that's helping drive new and reactivated buyers to the platform, helping drive more engagement and more retention. And so we're going to continue to kind of stay on that strategy and execute on the playbook, and it's been working well for us.

I wanted to ask about total listings volume on the marketplace. It seems like your AI investments, managed shipping, payments, all the product improvements have been aimed at lowering listings friction. And I'm just curious how that is trending and maybe the opportunity ahead to increase the total number of listings. And then maybe secondly, I don't want to put words in your mouth. I think your comments suggested some excitement around Caramel. I think that's a newer acquisition maybe a '26 opportunity. But just curious what you are seeing with that addition to the marketplace and thoughts on the opportunity ahead.

We continue to expand our listings, reaching 2.4 billion, and we have seen consistent double-digit growth year over year. Our main focus is on bringing unique, well-priced inventory to the marketplace, particularly in the C2C category. We have made significant improvements in the U.K. and Germany to enhance the C2C experience, which involves more comprehensive marketing efforts to unlock that inventory. We aim to make listing items easier, allowing users to simply hold their camera up to an item for quick listing on our platform. We auto-generate descriptions, fill key data fields, and even assist users with backgrounds for their photos. Currently, we are receiving over 500,000 listings daily that utilize generative AI, which is encouraging. There has been notable growth in trading cards, particularly through our bulk version of magical listings, showing the positive correlation between enhancing user experience and driving incremental listings. This feedback attracts a lot of interest in the platform. Regarding vehicles and our partnership with Caramel, eBay has a history in the vehicle market and we are excited about this collaboration. Caramel provides an end-to-end experience that includes financing, delivery, identity verification, and title transfer, making the process seamless for customers. We are particularly targeting the collectible car market, which represents a $75 billion segment of the more than $1 trillion used car market. Although it's still in the early stages and modest in scale, we see significant potential for future growth. We also see synergies with our Parts and Accessories business, as many enthusiasts of collectible cars are also engaged in that segment, which exceeds $10 billion. Each day, I enjoy hearing about interesting items sold, including a 1964 Lincoln Continental and a Porsche 911 Turbo S that sold for $144,000, both of which benefited from a secure end-to-end experience that delivers directly to buyers. This approach is resonating well with vehicle buyers.

Peggy, just to expand on the margin question from earlier. It sounds like the focus is on driving top line to expand margins. You talked about operational, I think, you used efficiency or excellence. Can you just maybe talk about the opportunities you see now that you've been in the seat for a little bit? And then one sort of tactical on the de minimis impact. So far, some impact from the China-U.S. corridor, but not a ton, but is this potentially or looks like it's going to expand across to other regions as well. Just walk us through what exposure you have in some of those regions too?

Absolutely, it's great to meet you, Ygal. Our primary focus is on investing in our business organically to ensure sustainable long-term growth in gross merchandise volume. Regarding margins, we aim for the best combination of GMV growth and operating margin to maximize growth in operating income over both the medium and long term. In terms of investment areas, as Jamie highlighted, we are concentrating on our strategic initiatives across key categories and specific regions, as well as horizontal initiatives, because we recognize their importance in strengthening our marketplace. Additionally, we have been investing in mid- and upper-funnel marketing to increase awareness and consideration in our main verticals. At the same time, we continuously seek operational efficiencies to create the capacity needed to support these investments. We believe that over the long term, we can achieve sustainable earnings growth while investing in strategic initiatives that drive GMV growth, and also provide healthy returns to our shareholders.

Peggy, you take the first one, and then I'll take the tariff, the de minimis... Look, our business is not immune to the increased costs from tariffs associated with these changes, but we believe we're relatively resilient from that perspective more so than others. And what I'd tell you is we did observe some breakage in elasticity relative to tariffs and de minimis in Q2, which primarily impacted our sellers in Greater China and, to a lesser extent, Japan, but there were some offsets that made the net impact to eBay relatively modest. In particular, we saw a reasonable or a notable amount of deceleration in our direct shipped inventory into the U.S. from some of our Greater China sellers. But they partially offset that by making their products available to buyers in other countries like the U.K. and Germany. And from a forward-deployed standpoint from inventory forward deployed from China to the U.S., while there was some breakage as those sellers paid higher tariffs, when they replenished their inventory, we benefited from an uptick in ASP on the sales that remained, which more than offset that elasticity. So overall, our guidance for Q3 and outlook for the full year contemplates a range of scenarios regarding tariff policies, including the de minimis exception. And if you look specifically at Q2, what I would tell you is that the GMV growth from forward-deployed items accelerated sequentially and the year-over-year growth for Greater China GMV overall was similar in Q2 versus Q1 on an FX-neutral basis.

I have two questions, one about ad revenue growth and another regarding the sustainability of GMV growth. Ad revenue has been growing nicely. How do you view the sustainability of this revenue segment? Is it due to ad load, new ad services, pricing, or ongoing share gains? Where do you expect future growth to come from? The second question pertains to the sustainability of GMV growth. This follows up on a previous question. When considering your growth profile, should we consider it as an increased penetration of focus categories alongside the benefits from horizontal initiatives, in addition to an improvement in core GMV growth? Will this potentially lead to growth exceeding mid-single digits in the medium to long term? Is that the correct perspective?

When we examine our advertising growth, we see significant potential for expansion and increased penetration driven by adoption, listing penetration, ad rate optimization, and scaling our new products. Our first-party advertising business experienced a 17% growth in the second quarter, which was broad and balanced across our various advertising types, including CPA, CPC, and offsite ads, all contributing to that growth. We achieved 2.5% of GMV and have mentioned that we aim for at least 3% penetration, viewing this more as a medium-term target rather than a limit. We anticipate that advertising revenue will continue to grow faster than GMV in the near future. I’m also encouraged by how our team is incorporating new AI technologies, not just in dashboards and recommendations for sellers but also in enhancing how we integrate advertising into the overall experience. Regarding the GMV opportunity, what we articulated during our Investor Day was that we believed core categories could remain essentially flat, while our focus categories would grow in the 9% to 10% range under normalized conditions. This quarter, core categories grew by 1%, and we observe the driving factors for focus categories. At a higher level, I agree with your earlier point that growth is driven by multiple factors. The success in focus categories is surpassing growth from core categories, and our initiatives in horizontal areas support both core and focus categories since many buyers in focus categories also engage with core categories on our platform. Additionally, our geo-specific investments, particularly in C2C, are starting to pay off in 2024 and will be key contributors to our growth in 2025 and beyond.

A couple if I could. Maybe just following up on an earlier question on international GMV. Obviously, the delta to the U.S. is quite wide right now. Is this all meant to be due to the macro environment and just the overall consumer backdrop? Or are there pieces of the U.S. market that are working quite well right now that could be on the come for the international side of the house in the coming years? And one follow-up, if I could.

Yes. Look, what I would say is it's predominantly the macro environment. If you look at the U.K., consumer confidence remains low, inflation remains elevated and the latest GDP forecast calls for very little growth in 2025. And I think Germany is even tougher with declining consumer confidence and no real GDP growth expected in '25. There's obviously some other kind of idiosyncratic factors like the challenges in the auto and the manufacturing sectors further, I think, straining the German retail landscape. I think the initiatives that we're doing are helping kind of our performance in international, specifically the work that we're doing around C2C is helping navigate well what I think is still remains to be a challenging backdrop in the EU. We continue to take innovations from every part of our business and looking and extending them to other geographies. But predominantly, I think the challenge we're seeing in Europe right now is the macro backdrop. Live streaming is a significant priority for us in 2025. Although it's still in the early stages of growth, we're genuinely encouraged by the strong interest from both sellers and buyers. This interest extends beyond the collectibles category, where we're seeing considerable adoption, into other sectors like luxury watches, jewelry, handbags, and pre-loved apparel. Recently, we launched eBay Live in the U.K. at London's Comic-Con and initiated eBay Live on Tour across the U.S. for live streaming events. We have made enhancements to the product, including a new seller host console that simplifies the process, making everything just a click away for easier execution on eBay Live. Additionally, we've introduced two highly requested features for our live sellers: autocharge and combined shipping. From my experience in this business since 2001, I know that when you provide sellers with tools in the marketplace, they find innovative ways to utilize them, which is truly exciting. With eBay Live, buyers prefer the authenticity of our sellers who are passionate and knowledgeable, whether it’s in Pokemon, anime, or luxury handbags. The community interactions emerging from eBay Live are thrilling, as we witness sellers engaging with buyers and buyers connecting with one another on the platform. eBay is becoming a hub for these community enthusiasts, and it's wonderful to see these dynamics developing. This gives me a great sense of optimism about the potential, especially considering the engagement levels and metrics showing buyers' growing interest and the increasing value they're contributing. We plan to keep investing in and enhancing this experience for both buyers and sellers, and I look forward to seeing how they can leverage eBay Live in various ways.

Thank you for joining. This concludes today's call. You may now disconnect.