Good day, everyone. My name is Megan and I'll be your conference operator today. At this time, I would like to welcome you to the eBay First Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time and have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. At this time, I would like to turn the call over to John Egbert, Vice President of Investor Relations.

Good afternoon. Thank you all for joining us for eBay's first quarter 2026 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-gap measures related to our performance. You can find the reconciliation of these measures to the nearest comparable gap 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. All year-over-year growth rates versus 2025 are also based on recast financials, reflecting our adoption of the new internally developed software accounting guidance in 2026. 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, and our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of April 29, 2026. We do not intend and undertake no duty to update that information. With that, I'll turn the call over to Jamie.

Thanks, John. Good afternoon, and thank you all for joining us today. I am pleased to report we're off to a very strong start in 2026. Our first quarter results exceeded our guidance and consensus estimates across the board, despite ongoing macroeconomic and geopolitical uncertainty across many of our major markets. During Q1, gross merchandise volume rose by 14% to over $22 billion, while revenue grew 17% to more than $3 billion. Strong flow-through of this top-line momentum led to 18% year-over-year growth in non-GAAP operating income, which reached over $900 million. And our non-GAAP earnings per share increased by 21% year-over-year to $1.66. cents. These strong top and bottom line results were driven by a broad-based GMB acceleration across all of our major categories, alongside improved year-over-year trends across most of our key geographies. Our most established strategic priorities now make up approximately 70% of our total GMB. This includes focus categories, our consumer-to-consumer or C2C business, and re-commerce, which is made up of pre-owned and refurbished items. These priority areas each individually grew faster than overall GMV in Q1, and collectively, they grew in the high teens year over year, reflecting the impact of our strategic investments over the last several years. Our focus categories continue to build momentum in Q1, with GMV growth accelerating to 24%, reflecting the benefits of our continued investments in trust, product experience improvements and full funnel marketing the collectibles category was the largest contributor to gmv growth in q1 reflecting broad-based momentum across the category the 30th anniversary of pokemon in late february fueled significant enthusiasm that translated into strong demand on our platform which we supported through coordinated activations across our core Marketplace, eBay Live, TCG Player, and Golden. Sports trading card GMB growth accelerated notably in Q1 and was a larger contributor to GMB growth than Pokemon, as we benefited from strong late season demand for the NFL and NBA, as well as 2026 releases for Major League Baseball. Outside of trading cards, we observed strong GMB growth across much of our broader collectibles offering, including in right-to-win areas like collectible coins, toys, action figures, and comic books. We also saw a transitory benefit to GMV growth from gold and silver bullion in response to precious metal prices, but this demand began to normalize in late Q1 as expected and should revert to historical levels in Q2. Within our off-platform marketplaces, TCG player growth remained strong, and gold and growth accelerated as it reached a new quarterly GMV record in Q1. Golden facilitated several landmark sales during the quarter, including a Pokemon Pikachu Illustrator card that sold for over $16 million, officially becoming the most valuable trading card ever sold at auction. To further support our trading card enthusiasts, we continue to enhance our AI-powered card scanning feature, which recently surpassed 30 million cumulative scans. This tool allows users to scan a single photo to instantly identify a card, surfacing historical prices and population data to help enthusiasts trade with confidence. In Q1, we expanded the card scanning feature Beyond Sports to cover our top five collectible card game genres, including Pokemon, Magic the Gathering, and One Piece. Overall, our continued investments in both on- and off-platform experiences are deepening engagement with collectibles enthusiasts. Through our innovation across multiple sports, genres, buying formats, and price points, we are further solidifying eBay as a premier global shopping destination for the hobbyist community. Importantly, the momentum we observed in Q1 extended well beyond collectibles, as the remainder of our U.S. business also delivered double-digit GMV growth and outpaced broader e-commerce benchmarks. Our Motors, Parts, and Accessories business, or P&A, delivered its strongest quarter of year-over-year GMB growth since 2021, contributing approximately two points of growth to our overall marketplace in Q1. Our Guaranteed Fit Program has meaningfully increased conversion on fitment-enabled listings in the US, UK, and German markets, helping fuel the strongest quarter of P&A GMB growth we have seen in several years. Given the success we've seen in our initial markets, we recently expanded Guaranteed Fit to Australia, helping further solidify our online P&A leadership in this market by giving motors enthusiasts the confidence to tackle their most complex projects, knowing they'll have the right part for the job every time or their money back. we also recently strengthened our pna value proposition with the acquisition of aladine systems a uk-based software provider for salvage yards we expect this acquisition to bring more recycled pna inventory onto the ebay platform which provides value for cost-conscious consumers and supports the circular economy our acquisition of caramel a little over a year ago is helping us bring a more comprehensive ebay motors offering by combining the strength of our scaled pna business with our nascent but fast-growing vehicles business we see meaningful opportunities for synergies between these businesses as they are highly complementary each vehicle sold on ebay creates a natural opportunity for future engagement in pna as buyers return to the marketplace to maintain repair and personalize their vehicles in vehicles our secure fully digital transaction capabilities are driving improvements across the purchase funnel, and we are seeing encouraging traction as we expand from our initial focus on C2C transactions to begin serving small dealerships as well. While it's far earlier in its journey than P&A, Vehicles continues to scale month over month and exited Q1 at an annualized GMB run rate in the hundreds of millions of dollars. In fashion, we are building on the momentum we initially created by enhancing trust across high ASB categories like watches, handbags, jewelry, sneakers, and streetwear through Authenticity Guarantee. More recently, we've expanded Authenticity Guarantee eligibility to a wider selection of pre-loved and luxury apparel, shoes, and accessories for a more complete head-to-toe value proposition for fashion enthusiasts. After diversifying our brand and inventory coverage in the UK and Germany last year, we followed suit in the US during Q1 by expanding authenticity guarantee to more than 70 shoe and fashion accessory brands. We've also improved our value proposition for fashion re-commerce by streamlining and calibrating garment sizing across global standards. These changes have simplified the listing process for sellers, removed a major point of friction for buyers, and contributed to immeasurable increases in quality views, bought items, and conversion velocity in fashion. Our breadth and depth of selection in branded pre-loved fashion inventory is also key to our relevance in the category. Our AI tools, like the latest generation of magical listing experience, are making it dramatically simpler for sellers to list pre-loved fashion items on eBay, helping drive a mid-teens year-over-year increase in casual fashion listers in Q1. At the same time, we are strengthening our position in fashion by using community to build greater awareness and consideration with enthusiasts ebay live is becoming a meaningful driver of gmv in certain fashion categories and in march we held our first direct from brand live shopping event with marks and spencer in the uk our second annual vogue vintage market events in the us and uk were another strong example of how curated events elevate ebay's relevance in pre-loved fashion we are consistently showing up at the cultural moments that matter most to fashion enthusiasts including the grammys the oscars and berlin fashion week during q1 we've also driven engagement through our sponsorships of the new saturday night live and love island all-stars programming in the uk taken together these efforts are making ebay a more compelling destination for enthusiasts and helped accelerate overall fashion gmv growth in q1 including healthy double digit growth across our fashion focus categories in aggregate. Our consumer-to-consumer or C2C business remains one of the most important strategic priorities. C2C sellers bring the unique, hard-to-find inventory that differentiates eBay and strengthens our position in re-commerce. Multiple years of investment have reduced friction and helped reinvigorate growth in a segment that makes up more than one quarter of our total GMV. We saw that momentum continue in Q1 as C2C delivered double-digit GMV growth across the us uk and germany meaningfully outpacing b2c growth in those markets we believe this momentum reflects the enhanced value proposition for consumer sellers in these markets with reduced transactional friction driving a healthier sell to buy flywheel in may we plan to revamp our consumer selling experience in australia our fourth largest market by demand we will remove selling fees for consumer sellers in australia and introduce a buyer-facing fee on C2C transactions, while also tailoring our seller segmentation and managed shipping service to cater to local market dynamics. Similar to our C2C initiatives in the UK and Germany, our goal is to reduce friction for casual sellers, increase our supply of differentiated inventory, and ultimately unlock a larger addressable market opportunity. Another area where we are seeing strong momentum is eBay Live. In categories where trust, storytelling, and community are central to the purchase experience, eBay Live gives sellers a powerful way to showcase unique inventory and engage buyers in real time, while helping us bring more customers into high-value enthusiast experiences. Now operating in seven markets globally, eBay Live continues to scale rapidly, with an annual GMV run rate more than eight times higher year over year in recent weeks. We supported that momentum in Q1 through strong growth in programming across a diverse mix of categories and improved event discovery throughout the eBay mobile app, including the recent addition of an eBay Live button on the bottom navigation for U.S. users on iOS. In Q1, we hosted our first live stream shopping event outside of the holidays as our 48 Hours of Drops event in the U.S. set a new daily record for eBay Live GMB with each day outpacing our previous record on Black Friday by 60%. We also saw impressive results internationally, where local 24-hour events in the UK and Germany each reached seven-figure daily GMV milestones, proving that our live stream playbook is effectively capturing enthusiast demand across geographies. We continue to leverage our AI capabilities to reimagine core experiences across the marketplace. For sellers, the latest generation of our magical listing experience uses our proprietary models, product knowledge graph, and 30 years of marketplace data to do much of the hard work of creating a listing, from guiding sellers on which photos to take to generating key details like titles, categories, item specifics, and pricing. The U.S. rollout of this experience has been one of the most impactful launches we've had in years, as it has driven a greater than 50% increase in new listing creation rate, double-digit percentage increases in sold items and GMV per lister, stronger retention, and a material increase in estimated customer lifetime value for these sellers. Based on these compelling results in the U.S. market, we began expanding this experience to new and reactivated listers in Germany in April, where early A-B tests are showing directly similar uplift on key seller KPIs as the U.S. launch, which gives us confidence to extend this experience to more countries and seller segments in the coming months. For buyers, our Gentic Search beta is creating a more intuitive and conversational way to shop by allowing customers to refine results through natural language and a multi-turn dialogue, much like working with a personal shopper that understands their sizes, styles, and brand preferences. While still early, we have observed some encouraging learnings from this beta, as we're seeing approximately 50% more search engagement in sessions utilizing AI-powered refinements, which is ultimately translating into double-digit percentage increases in purchase behavior. These innovations are just two examples of our transition to an AI-native marketplace. By embedding these capabilities into the core of our platform, we are fundamentally changing the pace at which we can remove friction, unlock supply, and drive long-term value for our enthusiasts. We are also extending the reach of our marketplace through partnerships. Following a successful pilot of eBay inventory in Facebook Marketplace search results last quarter, this integration has transitioned to general availability. eBay inventory is now enabled in the search box for the majority of Facebook Marketplace users in the U.S., Germany, and France. This integration further enhances the visibility of our differentiated inventory to Facebook's scaled audience, which can drive qualified incremental traffic to our seller's eBay listings. Our search integration complements our existing presence in the marketplace feed for a subset of users, where we continue to iterate on the experience and gather valuable learnings. Now turning to shipping. Shipping solutions are a major focus for us this year, as we leverage our scale and expertise to help sellers tap in demand across borders amid an increasingly complex trade policy landscape. in q1 we continued to scale ebay international shipping in canada following its q4 launch and we expanded access to speedpack for sellers in germany and six other markets our speedpack partnership continues to perform well in greater china and japan as these capabilities are becoming increasingly important as cross-border trade grows more complex before concluding my prepared remarks i'm proud to share that ebay was once again recognized as one of fortune's most innovative companies in january we also released ebay's inaugural climate transition plan a company-wide roadmap to reach net zero greenhouse gas emissions by 2045. this plan reflects how we are well positioned to drive sustainable commerce at scale and as a result creating during value for our customers communities and the planet in closing we delivered a very strong start to 2026 with results that exceeded our expectations and reflected broad-based momentum across the marketplace. A few key themes stand out from the quarter. First, our strategic priorities are driving the majority of our GMB growth. Focus categories, C2C, and Recommerce now represent approximately 70% of our total GMB and continue to gain share through our disciplined execution, which enhances our long-term resilience and strengthens the structural growth profile of our marketplace. Second, our GMV growth is broad-based and extends well beyond any single category. While Collectibles continues to outperform, we saw improved trends across all of our major categories, including accelerating GMV growth across eBay motors, electronics, and fashion. eBay Live continues to scale rapidly across a diverse group of categories, and we're in the early stages of realizing valuable synergies between P&A and vehicles. Third, we are progressing from AI-powered optimizations to building fully AI-native experiences on eBay. We're increasingly embedding AI into foundational elements of our marketplace to remove friction, unlock supply at scale, and deliver more personalized and relevant products to our customers. While the macro environment remains dynamic, as I look toward the balance of 2026, I'm confident in the sustainability of our underlying business trends and the durable foundation we've established to support long-term growth. With that, I'll turn the call over to Peggy to provide more details on our financial performance. Peggy, over to you.

Thank you, Jamie. I'll begin with our financial highlights for the first quarter. GMV grew by 14% to $22.2 billion. Revenue grew 17% to $3.09 billion. Our non-GAAP operating income grew 18% year-over-year to $907 million. Non-GAAP earnings per share grew 21% year-over-year to $1.66. And we returned $639 million to shareholders through repurchases and cash dividends. Let's take a closer look at the key drivers of our strong Q1 performance. GMV grew over 14% to $22.2 billion on an organic, FX-neutral basis. Foreign Exchange provided a tailwind of approximately 400 basis points to spot GMV growth. We saw broad-based strength this quarter, with year-over-year growth improving sequentially across all our major categories, with most contributing positively to GMV growth, led by collectibles, eBay motors, electronics, and fashion. Focus category GMV grew 24% in the quarter and outpaced the remainder of our marketplace by 15 percentage points. Shifting to our major geographies, U.S. GMV growth was particularly strong in Q1, up nearly 27%, driven by a broad-based acceleration across categories. Strength extended beyond collectibles, while the remainder of our U.S. business also delivered double-digit GMV growth and outpaced broader e-commerce benchmarks. Several of our strategic initiatives contributed more meaningfully to growth than prior quarters. eBay Live and C2C were each larger contributors and exports from the U.S. to our international markets also accelerated, supported by improvements to our eBay international shipping program and a weaker U.S. dollar. In addition, our year-over-year growth continued to benefit from lower funnel marketing efficiencies and our Clonar partnership. International GMV growth also accelerated in Q1 and grew over 2% on an organic, FX-neutral basis, with foreign exchange providing a tailwind of 770 basis points to spot GMV growth. While macroeconomic conditions remain challenging in our largest international markets, we are investing effectively in areas where we have a right to win. Focus categories C2C and eBay Live each contributed to improved growth in the UK and Germany. We also saw cross-border growth recover across key regions like greater China and Japan, reinforcing the benefits of our investments and shipping solutions, which are making it easier for buyers and sellers to transact globally amid a more complex trade environment. Next, let's look at our buyer metrics. Our trailing 12-month active buyers grew 1% to nearly 136 million in Q1, including buyers from recently acquired ties. On an organic basis, active buyers were over 135 million, also up 1% year-over-year. Buyer growth was especially strong in the U.S., accelerating to nearly 6% in the quarter. Enthusiast buyers remained at roughly 16 million, but grew by nearly 2% year-over-year, and spend per enthusiast buyer exceeded $3,400 on a trailing 12-month basis. In the U.S. market, enthusiast buyers grew even faster at 8% year-over-year. Now turning to our income statement. We generated revenue of $3.09 billion, up 17% on an organic FX-neutral basis, with foreign exchange providing a tailwind of 260 basis points to spot growth. Our take rate was 13.9% in Q1, up modestly year-over-year. Tailwinds from advertising, shipping initiatives, and lapping of our UK C2C buyer fee rollout in the prior year were partially offset by rapid growth in eBay Live and ongoing category and ASP mix changes. Additionally, foreign exchange was a headwind of approximately 20 basis points to our reported take rate year-over-year. Total advertising revenue was $581 million, dollars representing gmv penetration of over 2.6 percent first party ads grew 28 percent to 555 million dollars promoted listings comprised over 1.2 billion of the over 2.5 billion total listings on ebay and 5.2 million sellers adopted at least one promoted listing product during the quarter In addition, off-platform ads grew 29% while third-party display ads declined as expected due to our continued deprecation of these legacy ad units. Revenue from our shipping programs grew in the double digits during Q1 and is becoming a more significant contributor to our take rate. Our shipping solutions are also strategically important as they leverage eBay's scale and expertise to reduce costs and complexity, improve trust, and increase conversion and overall sales velocity. We intend to further scale our shipping initiatives, including managed shipping solutions for domestic C2C sales and cross-border solutions through EIS and our partnership with Speedpack. Moving to our profitability and earnings. Non-GAAP gross margin was 74.6% in the first quarter, up one point year-over-year, driven primarily by lower cost of payments and operational efficiencies. In addition, gross margin benefited from our UK managed shipping program switching from gross to net revenue recognition on January 1st, which I discussed last quarter. Our non-GAAP operating income grew 18% to $907 million in Q1, reflecting our ability to balance continued investment in our strategic priorities with strong flow-through to earnings. Sales and marketing expense increased in the quarter, primarily reflecting higher marketing investment behind strategic priorities like C2C and eBay Live, as well as incremental spending to capitalize on favorable returns in lower funnel marketing. Transaction losses increased as expected in Q1, reflecting newer shipping programs and customer experience enhancements. We were encouraged to see loss trends improve toward the end of the quarter, and we continue to expect these shipping programs to follow a typical curve with higher losses initially that moderate over time as we learn and optimize. Non-GAAP earnings per share was $1.66, up 21%, and GAAP earnings per share was $1.12. Shifting to our balance sheet and capital allocation, we generated free cash flow of $898 million in the first quarter and ended the period with cash and fixed income investments of $5.1 billion and gross debt of $6.7 billion on our balance sheet. Our equity investments and warrants were valued at roughly $770 million. In March, we received approximately $190 million from Arulia's shareholder distribution. This return of capital reduced the carrying value of our Rulia investment to approximately $470 million at the end of Q1. We repurchased $500 million of eBay shares in Q1 at an average price of approximately $90 and paid a quarterly cash dividend of $139 million in March, or $0.31 per share. Our pending acquisition of Depop is now expected to close by the end of the third quarter of 2026. We have received regulatory clearances for the transaction in the US and Germany, and reviews are in progress and on track in other markets, including the UK and Australia. Now turning to our outlook, starting with the second quarter. We expect GMV between $21.3 and $21.7 billion, representing total FX-neutral growth between 8% and 10% year-over-year. Based on current exchange rates, we estimate FX would represent a roughly 100 basis point tailwind to spot GMV growth. growth. Our Q2 guidance reflects continued broad-based GMV growth within our strategic priorities and incremental contributions from livened vehicles. Our guidance also contemplates lapping dynamics from lower funnel marketing efficiencies and our U.S. Klarna partnership, which became noticeable growth drivers during Q2 of last year. These factors, combined with gold and silver bullion volume reverting to historical levels in Q2 account for the majority of the implied year-over-year growth deceleration from Q1 to Q2. We forecast revenue to be between $2.97 and $3.03 billion in Q2, implying total FX-neutral growth of 8% to 10% year-over-year. Based on current exchange rates, we estimate FX would represent a roughly 120 basis point tailwind to spot revenue growth. We expect non-GAAP operating income growth between 6% and 10% year-over-year in Q2, implying non-GAAP operating margin between 27.6% and 28.1%. Our guidance contemplates a healthy balance between investments and strategic priorities with strong flow-through of operating leverage to the bottom line. We forecast non-GAAP earnings per share between $1.46 and $1.51, representing year-over-year growth between 7% and 11%. Next, I'll share some updated thoughts on the full year, excluding the impact of the pending depop acquisition which i will discuss separately for 2026 we are now planning our business around year-over-year gmv growth between 7 and 7.5 percent on an fx neutral basis this updated view reflects the strong momentum we are seeing across our business balanced against more challenging comparisons as we move through the year including lapping considerations from the prior year and a moderation of some of the category-specific tailwinds we have discussed on this call. We continue to expect revenue growth to be in line to slightly ahead of GMV for the full year on an FX-neutral basis, as healthy growth in advertising and shipping revenue is expected to be partially offset by mixed shifts in our business, including higher growth contributions from live and vehicles. We are now anticipating non-GAAP operating income growth of between 9 and 11 percent for the full year, reflecting our stronger GMV and revenue expectations. As we have noted previously, when our business outperforms, we will continue to evaluate opportunities to reinvest a portion of that upside into our strategic priorities to further strengthen our marketplace and drive future growth. We continue to expect non-GAAP earnings growth to be relatively in line with non-GAAP operating income in 2026. We anticipate our lower cash balance and higher interest expense would pressure the net interest and other line item year over year, partially offsetting the tailwind from our share repurchases. We continue to expect a non-GAAP tax rate of 17.5% for the full year, which is one percentage point higher than our tax rate in 2025. Our capital allocation outlook remains unchanged. We forecast capital expenditures to be between 4% and 5% of revenue for 2026. We are targeting roughly $2 billion of share repurchases for the full year. In addition, our board declared a quarterly cash dividend of $0.31 per share for the second quarter to be paid in June. As I noted earlier, we expect our pending acquisition of Depop to close by the end of Q3. Given the updated timeline, we expect Depop to contribute approximately one percentage point to total FX-neutral GMV growth year-over-year in 2026. From a profitability perspective, we expect the acquisition would represent a low single-digit headwind to the 9% to 11% operating income growth we anticipate for the core eBay marketplace, which includes planned investments in Depop and integration costs. We would also expect the Depop acquisition to dilute our non-GAAP earnings per share growth by low single digits, with the EPS impact modestly higher than operating income due to foregone interest income from the cash used for this transaction. In closing, we're encouraged by our strong start to the year and the broad-based momentum across the business. Our results reflect continued execution within our established strategic priorities and strong returns on our investments in emerging growth vectors like ebay live and vehicles as we look ahead we remain committed to balancing disciplined investments in areas that can strengthen our business over time with continued earnings growth and thoughtful capital allocation overall we feel very good about the path ahead and our ability to create long-term value for our shareholders. With that, Jamie and I will now take your questions.

We will now begin Q&A. For today's session, we'll be utilizing the Raise Hand feature. If you'd like to ask a question, simply click on the Raise Hand button at the bottom of your screen. If you have dialed in, please press star 9 to raise your hand and star 6 to unmute. Once you've been called on, please unmute yourself and begin your question. Please limit to one question and one follow-up before jumping back in the queue. Thank you. We'll now pause a moment to let the queue assemble. Our first question will come from Nikhil Devnani with Bernstein. Please unmute and ask your question.

Hey there. Thank you for taking my question. Jamie, I was hoping you could help bridge the gap between that 6% U.S. buyer growth number and the GMV number, which was much higher than that. What have you seen on order frequency trends relative to ASP growth? And I guess bigger picture is the funnel for new buyers that are coming to eBay expanding again?

Yeah, it is. And we're encouraged by what we're seeing with our buyers. And we see even more positive signals when you look at the underlying trend. So while global active buyers increased by 1% year over year and enthusiast buyers grew by 2% year over year, that really doesn't tell the whole story. Our U.S. buyer growth has been much stronger at 6% year over year. And U.S. enthusiast buyers grew even faster at 8%. We've also talked about our mid-value buyers in Akeel. And what we've seen is they've also grown year over year every quarter since the beginning of 2024, consistently outpacing our total active buyer growth, which really suggests strong trends beneath the service. that's somewhat counterbalanced by you know some of the trends that we're seeing international mitigated by the macro pressure so overall what i would say is i'm actually you know very pleased with the strength we're seeing across the board the improvements in buyer count the cohort mix the engagement um and the spend and it's really balanced like when you look at the us gmb nakil it's balanced between you know active buyers sold items nasp which is i think a healthy place to be

Thanks. And maybe if I could follow up with a question around gross margin and COGS for Peggy, as we think about initiatives like Live and all the AI product investment you're making now, how do we think about the puts and takes on COGS over the long term for the business and any offsets that you might have elsewhere, productivity gains or otherwise, to counter that as well?

Thank you. thanks for the question um you know uh when we when we look at our q1 gross margin um what we saw was that it was driven primarily by cost of payment and operational efficiencies are um you know we said it was up one point year over year um it benefited from the uk managed shipping program switching from gross to net accounting at the beginning of the year Um, and, you know, as we look further in the year, we do, um, see that there's going to be some similar puts and takes, um, to the gross margin driver. Um, but what we're really excited about is that, you know, we're continuing to see a lot of strength on the top line and, you know, because of the sort of like diverse nature of our growth areas, if you look at, um, live, um, and, some of the AI efficiencies that we're seeing, you're going to see some different sort of drivers to gross margin, but all we're seeing is going to benefit both the top line as well as our operating profit dollars as we scale.

Thank you both.

Our next question will come from Nathan Feather with Morgan Stanley. Please unmute your line and ask your question.

Hey everyone, thanks for taking the question. Broadly, consumer sentiment has weakened a bit over the past two months, although spending seems like it's held strong. How do you think about balancing those inputs as you put together your guidance for the remainder of the year? And then just more generally, what have you been seeing in the consumer health over the past few months as gas prices have risen? Thank you.

Yeah, look, we continue to see a dynamic global macro environment with a divergence between the U.S. and international. In the U.S. for our business, consumer demand continues to be resilient so far, despite the volatility and trade policy and geopolitics. And strength was really broad-based across the board in Q1, including collectibles, motors, and fashion. I would say it's a different story in Europe where it's more challenging as reflected in the consumer conference and some of the macro data, though the investments we've been making in the region have really helped offset that. And our international year-over-year growth improved from Q4 over to Q1, as did CBT and our other solutions. So, you know, we've kind of, you know, maintained a status quo or kind of thought about things in the status quo. You know, our ability to incrementally guide Q2 and raise the year is really based on the confidence of the resilience we're seeing in our marketplace. Remember, Nathan, that we're a bit more resilient because even in more challenging times, people turn to eBay to find value in used or refurbished or that perspective. So we feel more well-positioned because of that.

That's helpful. And then just given the really strong GMV performance over the past 12 months, on a go-forward basis, if we look at maybe like a two-year of a year to exclude the impact of tougher comps, any key limitations that would prevent the GMV momentum you're seeing in 2Q from persisting into the back half?

You know, we feel really good about the momentum that we're seeing overall. And so, you know, Peggy talked about the real kind of divergence that you see between Q2 and Q1 is just due to the number of factors that she called out, whether that be, you know, bullion or some of the lapping dynamics. But what we continue to see is a strong consumer. And more importantly than that, what we see is a great return on the investments that we're making in the business. So when you look this quarter at the focus category growth of 24% and the areas that we've invested in, and we're seeing it really resonate with consumers. And so, you know, we feel good about the back half and the strong two-year stack. And we feel great about, you know, what we're seeing in the consumer right now and just the underlying growth in the business.

Great. Thanks, Jamie.

Your next question will come from Ken Gorelsky with Wells Fargo. Please unmute your line and ask your question.

Thanks, guys. This is Zach Morrissey on for Ken. I just wanted to double click on the C2C strengths, specifically in the US. You know, obviously, it's been a source of strength. I think you said a double digit GMB growth there. Just curious what you're seeing from a competitive dynamic. I know we're seeing a lot of investments in the space. Vinted appears to be scaling and investing more aggressively in the US. I'm curious if you're seeing that reflected in any parts of your business, or is this kind of contributing to the broader industry kind of secular growth? And then I think you noted on kind of the marketing investments, specifically in C2C, is that something we should kind of expect to continue to be an area of focus throughout the course of the year?

Yeah, look, we continue to have a very strong C2C business around the globe, and U.S. is amongst our strongest businesses in C2C. And we saw, you know, really healthy growth there. You know, we've been operating in a very competitive global landscape for fashion re-commerce for years. And it's really raised the bar for the customer experience and help unlock the total addressable market that's locked up in closets, attics, basements, and garages. You know, what we're seeing as we roll out things like magical listing, and we're using AI for listings, which is now up to, you know, 500 million listings, is we're seeing more listings per lister great seller metrics because of our ability to kind of unlock all that inventory and so that's that's had a meaningful impact on our performance if you look at just you know total gmv growth in fashion it accelerated sequentially in q1 our fashion focus categories contributed roughly a point of growth to our overall marketplace with luxury growing it at healthy double digits and you know our improved c2c value proposition has been impactful in fashion frankly across the board and what we've seen is double digit growth in each of our top three markets by demand the u.s uk and germany so overall we feel really great about the momentum that we're seeing in fashion and uh you know our pending acquisition of depop indicates that we're really leveraging our build buy and partner playbook just like we did in collectibles to enhance the fashion experience for enthusiasts peggy do you want to talk about the full funnel marketing that we're doing?

Sure. You know, so in Q1, we leaned into full funnel investments in support of our strategic priorities, notably in focus categories C2C and live. Full funnel marketing does remain a really important way for us to support our strategic priorities. It drives awareness and consideration of eBay. We did a number of events and activations during the quarter. And when we think about, you know, how we think about it going forward we you know continue to see it as a strong lever we also um do take the opportunity when we have strong gmv performance and strong profitability in the quarter to make sure that we're investing including in sales and marketing in order to continue that growth ahead so that's that important balance that we'll you know continue to um continue to look at which is you know sort of that balance between strong flow through to the bottom line and investing in continued growth from quarter to quarter sales sales and marketing being one of those levers our next question will

come from eric sheridan with goldman sachs your line is open please ask your question thanks so much for taking the question maybe building on the last answer and and and sort of asking a two-parter when you look out over the next six to 12 months what do you guys see as the critical investments to make to maintain and build uh momentum around the enthusiast buyer part of your business, just so that continues to move in sort of a very positive direction. That'd be one. And then against the dynamic of what you laid out with respect to marketing, how are you thinking about marketing changes that you're seeing out there across the social media and the search landscape, referencing back to what kind of ROI you might be able to get as marketing ramps for you guys relative to innovations that are happening across performance marketing more broadly?

Thanks so much. yeah eric we're going to continue to invest in the areas that are really driving kind of healthy growth across the business we're going to continue to invest in the in the focus categories you're obviously seeing the nice return from the investments that we've made there we're leveraging ai throughout the entire product experience really taking the you know friction out of the experience and you're seeing more and more of that with the agentic search beta that we have going on with the incremental improvements and the new magical listing we've been investing in live and seeing really nice returns from that you know we grew we're growing in the last few weeks 8x year on year in that uh in that format and it's really engaging buyers and sellers in a new and different way um and you know while a little bit earlier vehicles as well is going to be kind of another area for us to continue investing over the course of this year um but um you know we're really pleased with the ROI that we're seeing off of those investments that we're making. You know, when you think about our marketing plan, we've been using a full funnel marketing approach that's been really working well. And you've seen more kind of mid and lower supported by the upper funnel that we're doing. We've been driving, you know, really interesting activations across social media. You know, we did, we're at all the popular events from the Grammys to the Oscars, we're sponsoring Saturday Night Live to Berlin's Fashion Week, driving all the way down to kind of putting products that are most relevant inside of people's social feed. You know, Facebook's a good example of that. We've got some new tests with them going on, in addition to putting the items inside of a Facebook marketplace in the search experience. So we're going to continue to push forward. You know, what's great is that AI is giving us a ton of new capabilities there, Eric, the ability to create creative at incredibly low cost and build a lot more of a test and learn infrastructure is really compelling to see, you know, the ROI on things like that that we're getting. It's also helping us in our own marketing and our CRM. You know, yesterday I was looking at a personalized glass with a dog paw and I was going to put my dog name on it. I forgot about it and I got an email this morning that said, you know, celebrate with new beer glasses. So AI had kind of written this really compelling subject line and things like that we're seeing numbers like 40 percent more engagement so what i feel really good too is how our marketing team is embracing those new ai technologies to really you know kind of speak to the long tail of inventory and opportunities that we have on ebay great thank you so much for the detail your next question will come from bernie mcturnan with needham your line is open please ask your question great um thanks taking the questions um one to ask on strategic priorities um the gmv grew from strategic priorities 10 25 and then accelerating 1q um is this mostly c2c or is there or is the strength more broad based and then within c2c is this primarily being driven by magical listings or any other product you would call out thank you yeah it's really broad based across the board um is what we're seeing, you know, in our year-over-year growth across all of our major categories sequentially, with the strongest growth in focus categories within collectibles, motors, and fashion, you know, and while U.S. GMB was particularly strong at 27%, we also saw improvements in our international trends. You know, when you look at our specific strategic areas, you asked about C2C, but focus category C2C and re-commerce now make up about 70% of total GMB. And individually, they each saw double-digit growth. So that kind of gives you a sense of how broad-based the growth is. You know, the strength that we're seeing in C2C is coming a lot from, you know, A, we're doing some really significant and helpful marketing about magical listing and the value proposition that we have there. And we're finding that the KPIs are really fantastic, right? I mean, it's got a customer satisfaction of 95%. You know, we're seeing 50% more listings per lister and more engagement. and it's driving a higher customer lifetime value for the sellers that are using it. This is why we're expanding it to new geographies and we'll expand it to additional seller segments over time. But that's really helping us drive, you know, that part of the business. But when you look at it, it's really across all of those priorities that we're seeing really nice double-digit growth. Thank you.

Your next question will come from Andrew Boone with Citizens. Your line is open. Please ask your question.

Thanks so much for taking the questions. I wanted to ask about advertising strength in the quarter. It surprised us in terms of the strength you guys saw. And then can you connect that into just expectations for 2026? And then you guys called out the benefits of AI search. Can you guys just speak to that? Where are we in the process of making search just more performant? What are the benefits today and what should we expect coming forward?

So first on advertising, strong quarter, right? Ads grew 27%. And that was a combination of strong volume growth and the continued monetization of our ads products. So that was mainly driven by our 1P business, which grew 28%. And across the board, our CPA and our CBC products on eBay and our off-site ads all contributed to Q1. You know, looking forward, we continue to expect ads revenue growth for 26 to be healthy. It's really driven by multiple levers, including seller adoption, listings penetration, ad rate optimization, and scaling new products. You know, we're now leveraging AI in our advertising products to increase the yield on the same type of placements while giving sellers a really good kind of ROAS, continuing to give sellers a really good ROAS on that.

So we continue to see advertising revenue outpacing GMB for the foreseeable future, and I'm really pleased by the innovations that are happening there. your next question will come from shweta kajuri with wolf please unmute your line and ask your question hi this is andrew rob for shweta thanks for taking the question um i really want to ask about agenda commerce and i guess start off more broadly i guess what are your updated thoughts on agenda commerce and ebay's role in that particularly as it relates to third-party partnerships and then if we think about maybe the terminal state of agenda commerce and thinking it's more agent to agent based you know would that be impacting the ad revenue potential

and i guess is ebay basically okay with making the trade-off for ad revenue for volume growth just your thoughts on that would be great thanks yeah look we see agentic ai as a real structural tailwind for ebay and it plays right into our core strengths you know first our innovations leveraging ai are already having a meaningful benefit for our business today you know take magical listing we've talked about the compelling stats i just mentioned that we're seeing and sellers have created half a billion listings using our ai tools and our agentic search beta which i realize i i didn't fully answer that question so i'll come back to that but what we've seen there is higher engagement and and increased purchase behavior off of that early test so we're going to continue to bring the latest agentic technologies to ebay to make it easier for sellers to list and for buyers to find the things they love you know second ebay offers really unmatched breadth and depth of unique and differentiated inventory. 90% of our 2.5 billion listings are non-new and seasoned, where items are more likely to be one of a kind. And in our strategic priority areas, we've optimized the end-to-end experience to make it more seamless and enjoyable for buyers and sellers. Third, and most importantly, what really differentiates eBay is the trust and enablement layer we've built over decades. The capabilities we've built, like our global network of authentication centers our suite of proprietary global shipping solutions regulatory compliance guaranteed fit just to name a few all of these provide a trusted experience for everything from a trading card to a designer dress to a vintage car sold across state lines and importantly all three of these areas are enhanced by our 30 years of proprietary data which gives us powerful insights that that no one else has you know so overall we see ai as a powerful force multiplier for our business, and it's already supporting the accelerated GMB we're seeing today. You know, when I look specifically at a Gentic search that you asked about, it's early innings, you know, but there's some encouraging early proof points about the, you know, quality of that traffic that's coming over. And even though it's very, very small, what we find is, you know, traffic that finds us, new buyers that find us via AI, the majority of the time, they actually come back directly organically to eBay.

So we're going to continue to test and learn. and you see us doing the open ai ads pilot we've expanded our more inventory to facebook marketplace as this as the space evolves your next question will come from tom champion with piper sandler your line is open please ask your question hi good afternoon uh jamie you've made a tremendous amount of progress over the last several years around authenticity and um shipping cost for for sellers i'm just i'm curious what you think of as the remaining frictions for for sellers today what what what what are you looking to um improve from here on out for the for the seller experience and then peggy maybe for you just could you talk a little bit about headcount growth and um how you're thinking about that uh through through the year as you uh incorporate efficiencies from from AI. Thank you.

Yeah, look, it's more than just AG. It's really trust across the board that we're looking at. So that's, you know, AG, it's guaranteed fit in motors, it's eBay money-back guarantee, it's warranties against refurbished, it's secure checkout that we're building in vehicles, and on and on. Having that kind of real trust layer at eBay is incredibly important to us and incredibly important to our consumers. And we're going to continue to invest in that. You just saw us roll out more authentication uh to 70 clothes and shoes and accessory brands in the u.s um driving that program further and further to really kind of build build trust in you know and it's more than just shipping it's all of the selling services that we provide whether that's you know ebay international shipping which we just expanded into canada last quarter it's speed pack which we've been expanding from china and japan to now germany and six more markets it's our forward deployment centers. It's really kind of handling all of those kind of end-to-end pieces. That's making it really easy for sellers. We're going to continue to invest in our payments technology to make it easier. We continue to invest in areas like seller financing and other elements that help buyers grow their business with their working capital and helping them with compliance and protections and really being able to make sure that we run an incredibly trusted marketplace there. You know, we're seeing, you know, really nice AI efficiency, you know, giving our teams leverage so that we can innovate more on behalf of our seller community. I think it's why we're seeing, you know, great response to a lot of the tools that we're building and our seller CSAT is pretty strong is because of what we're able to provide.

So we're going to continue to invest in that and make eBay that great destination where you can not only get started, but build a strong business on the platform your next question in terms of like oh so sorry did you was there a second part to that you know about it oh i was just curious about yes as well yeah hey can you want to take that one yeah you know we are we're really focused as um jamie mentioned earlier about you know really investing in our strategic priorities in order to do that well and still do what we are very focused on which is balance our top line growth and our op income dollar growth we're looking to create efficiencies in the business so that we can invest in our strategic priorities. We are seeing that even as we invest significantly in our AI talent capabilities, tech staff, we're able to sort of like maintain that balance and generate more capacity to be able to invest in these areas without pressuring our bottom line. And so that's the balance that we'll continue to take and really try to drive efficiency to create capacity to grow these very strategic initiatives that we're focused on.

Thank you.

Your next question will come from Michael Morton with Moffitt-Nathanson. Your line is open. Please ask your question.

Good evening. Thank you for the question. I wanted to talk about the live shopping. It's something I think e-commerce platforms have tried for almost my whole career. and listening to what you're saying, sounding like it's hitting a real inflection point. I was curious to hear why you think it's gaining so much momentum now. We were at an industry conference and people were talking about eBay's live commerce momentum. And then this is a long shot, but would love if you could maybe quantify the impact or your expectations for the impact to GMB growth going forward. Thank you so much.

Yeah, you know, you've seen this be strong in kind of Asian markets, and we're seeing kind of real excitement and momentum with live shopping in our Western markets. After our recent expansion now, eBay Live is available across seven countries, and it's becoming a more meaningful contributor to growth, particularly in our collectibles and fashion categories. You know, that's a big part of, or that's part of why we saw such strong growth in focus categories. We've been doing, you know, pretty meaningful activations around eBay Live. This quarter, we did a 48 hours of drops in the U.S. And we did the same thing in U.K. and Germany, where we did 24 hours of drop. And, you know, that really helped kind of drive engagement and boost sales with each market reaching a single day milestone as a result. And kind of that gives you a sense of the size and scale of even our newest markets, U.K. and Germany, saw a seven figure day on that day. We continue to scale it by adding new sellers, growing content density, expanding entry points. This quarter, we actually put it in the bottom of navigation for all mobile iOS users in the U.S., helping to increase discoverability. And, you know, what we're hearing is that, you know, buying inventory on eBay is different, right? There's an engagement. There's a community. There's an excitement that comes with it. And, you know, many of our sellers are finding that streaming on live, they're able to kind of bring that community together, drive that excitement, and it not only drives new business for them in terms of live, but it's actually driving more visits and buyers to their core business as a result of them, you know, seeing them on live. So, you know, we feel like, you know, great, our scale, our global buyer base, and the high bar for trust that we have really differentiates us in live commerce. And while it's still early, we believe live can be a meaningful growth factor over time, and increasingly important part of how enthusiasts shop on our platform.

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