Good day, everyone. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome you to the eBay Second Quarter 2026 Earnings Call.
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 Second 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-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. Additionally, all year-over-year growth rates versus 2025 are 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 August 5, 2026. We do not intend and undertake no duty to update this information.
With that, I'll turn the call over to Jamie.
Jamie Iannone
President & CEO
Thanks, John. Good afternoon, and thank you all for joining us today. eBay delivered another strong quarter in Q2 with the results that exceeded consensus expectations and the high ends of our guidance ranges across all key financial metrics. Gross merchandise volume grew 14% year-over-year to more than $22 billion.
Revenue also grew 14% to over $3 billion. Our top line outperformance gives the flexibility to increase investment behind several strategic priorities while still driving 16% growth in non-GAAP operating income and 17% growth in non-GAAP earnings per share. These results reflect the broad-based momentum across our marketplace, including continued outperformance in the U.S. and improving trends across our international markets.
Importantly, our growth continues to be driven by our key strategic priorities, including focused categories, our consumer-to-consumer or C2C business and recommerce, which we define as sales of preowned and refurbished items. Together, these strategic priorities made up more than 70% of total GMV in Q2, with each growing more than 20%, both individually and in aggregate. This momentum is further supported by emerging growth vectors and platform capabilities, including eBay Live, Vehicles and Shipping.
Focused categories remain a significant engine of growth for eBay, reflecting the cumulative impact of our investments in trust, innovation and full funnel marketing. Focused category GMV grew 26% in Q2 and eclipsed 40% of total GMV for the first time. The strength in focused categories was broad-based with collectibles, motors, fashion and refurbished all contributing to growth.
Collectibles GMV growth continued to be led by strength in trading cards, where we saw sustained momentum across all of the major sports and collectible card game genres, including notable strength in basketball cards through the NBA finals and accelerating demand for soccer cards around the World Cup. We continue to strengthen our value proposition in trading cards. Combining our unmatched inventory breadth with industry-leading trust and increasingly intuitive experiences for buyers and sellers.
In Q2, we launched authenticity guarantee for trading cards in the U.K., marking the first expansion of AG in this category outside of North America. In addition, our AI-powered card scanning experience exited beta and now has surpassed 80 million cumulative scans, making it easier for collectors to identify cards, understand pricing and list or shop with confidence. We also recently enhanced trading card listings with richer market data on the view item page, including Card Ladder indexes that track values across specific players, characters, sports and genres over time.
Our collectibles momentum is also extending to a number of subcategories as we continue to see strong growth in coins, toys and sports memorabilia. In Q2, we introduced new condition grading standards for collectible coins to improve trust and discovery. Gold and silver bullion remained a positive contributor to GMV in Q2, although they were much more modest drivers than the prior 2 quarters as expected.
Our off-platform collectibles marketplaces also continued to perform well. TCGplayer saw strength across Pokémon, One Piece and Magic: The Gathering, while its latest Roca sorting devices are now helping thousands more hobby shops and high-volume sellers ingest and organize their customers' inventory. The Goldin Marketplace had another record quarter with several landmark sales across sports cards and memorabilia, including the most valuable solo Michael Jordan card ever sold and an all-time public record for a hockey jersey with the sale of Wayne Gretzky's final Edmonton Oilers jersey. eBay Motors was another meaningful contributor in Q2, contributing nearly 2 points of GMV growth.
Our motors, parts and accessories business continues to benefit from eBay's unmatched breadth and depth of inventory as we expand our selection of new, used and recycled parts across our major markets. In Q2, we launched easy and free returns in the U.K., which strengthens buyer confidence and improves conversion as buyers shop for auto parts on eBay. In Canada, we launched Guaranteed Fit, extending fitment protection to a fifth eBay market.
We also brought automated fitment capabilities to Canadian sellers which augments their listing with vehicle compatibility data so buyers can discover a broader selection of relevant parts and shop with greater confidence. Our Vehicles GMV also continues to scale rapidly with particularly strong growth among C2C sellers and smaller dealers. In Q2, we launched native vehicle listing in the eBay mobile app, driving a notable increase in C2C inventory.
We are also using AI and automation to simplify the transaction process including verifying title, VIN and odometer images against verified DMV records and sale documentation with significantly less manual intervention. Alongside broader process improvements, this has helped reduce the average time to vehicle pickup from over 2 weeks to roughly 4 days. By making it easier to list, verify and complete a secure transaction, we are improving the customer experience and support continued momentum in GMV.
Fashion also contributed positively to GMV growth, led by luxury and pre-loved inventory. In Q2, we expanded Authenticity Guarantee to cover more than 100 apparel, footwear, and accessory brands across the U.S. and U.K. and began testing optional authentication across a broader range of price points to extend trust to more C2C fashion inventory. We also extended authenticity guarantee eligibility to jewelry sourced from Greater China.
Combined with eBay's breadth of inventory and AI-powered selling tools, these investments are strengthening our position in pre-loved and luxury fashion on the eBay platform. Last week, we completed our acquisition of Depop. I'm excited to officially welcome the Depop team and community to eBay.
Depop joins us with incredible momentum and strengthens our leadership positions in C2C and recommerce while extending our reach with a younger generation of buyers and sellers. It is also highly complementary to eBay's existing fashion business. eBay offers broad global selection across pre-loved and authenticated luxury while Depop brings a social forward and discovery-led experience with particular strength in pre-loved fashion inventory at accessible price points. These complementary strengths allow the combined company to serve a broader range of consumers and unlock more of the inventory sitting in closets around the world.
As we look at ways to support Depop's outstanding growth, our first priority is to maintain the brand, community and product experience that make Depop special while helping the team accelerate its existing road map. At the same time, we see clear opportunities to use eBay's scale and capabilities to support Depop's growth, including introducing Depop to relevant customers on eBay to stimulate demand, making shipping more affordable and convenient, and offering our expertise and trust and marketplace safety. We are still in the early days of bringing these complementary businesses together, but believe the strategic fit is compelling.
Pairing Depop's differentiated audience and user experience with eBay's scaled global user base and marketplace capabilities allows us to build on our established strengths in fashion, broaden our reach with younger consumers and unlock more of our total addressable market in C2C and recommerce. Our acquisition of Depop builds on the strong consumer selling momentum across eBay's core marketplace. As C2C GMV grew by over 20% in Q2, outpacing overall GMV.
C2C GMV continued to grow in mix in the U.S., our largest market for consumer selling, driven by healthy double-digit growth in both sellers and supply. Collectibles, electronics and fashion were the largest contributors to this continued momentum, while the latest generation of Magical Listing is further accelerating consumer supply by making it dramatically easier to list and sell on eBay. In the U.K., C2C GMV trends were particularly strong, supported by broad-based supply growth and continued outperformance in focused categories.
Active sellers reached their highest level since 2023, while U.K.'s C2C GMV saw its strongest growth in many years outside the pandemic period. In Germany, we're seeing healthy growth in C2C GMV as we intentionally shift investment toward the categories and experiences where eBay has the strongest right to win. That transition may create some near-term pressure on overall GMV and buyers in Germany as we continue to navigate a challenging macro backdrop, but we are seeing encouraging early results from this pivot that suggest it will increase penetration of strategic GMV and strengthen the long-term health of this market.
In Australia, we saw an acceleration in C2C GMV growth to double digits, which helped the region overall post its strongest growth in several years during Q2. New and reactivated listers, listing creation rates and other leading KPIs have notably increased since we launched our Australian C2C initiative in May, providing encouraging early evidence that our enhanced value proposition is resonating with consumers. Taken together, these initiatives are bringing differentiated supply onto eBay by unlocking inventory in consumers' homes and strengthening the sell-to-buy flywheel on eBay.
Importantly, our analysis suggests that Depop's success in C2C has been incremental to our own, further validating the significant untapped opportunity in recommerce globally. Now let's turn to eBay Live, which posted another record quarter as GMV grew by roughly 8x year-over-year in Q2, alongside rapid growth in viewers, watch time and sold items. Based on our growth and available market benchmarks, we believe eBay Live is gaining share across all 7 markets where it operates.
In July, we took a major step toward unlocking the next phase of growth for eBay Live as we move beyond our invite-only model and launched self-service onboarding for eligible U.S. sellers across more than 300 categories, with additional markets expected to follow in the coming weeks and months. This creates a direct scalable on-ramp for live sellers and inventory while maintaining the trust standards that differentiate eBay. From a product perspective, we continue to improve eBay Live for both buyers and sellers.
New discovery services across the eBay home page and mobile app make relevant events easier for buyers to find, while simpler event set up, inventory preparation and live item management reduced the workload for sellers. We have also improved bidding responsiveness, making events faster and more seamless for participants. Importantly, we're seeing eBay Live's benefits extend beyond each event.
Among established sellers who stream regularly, over 90% grow their GMV on eBay, and the median GMV increase for live sellers is roughly 3x that of similar sellers who do not use Live. And we're seeing similar results on the buyer side. For instance, first-time Live buyers shopping in collectibles are spending approximately 70% more than comparable non-live buyers with roughly half of the incremental spend occurring outside of live events.
These results reinforce our confidence that Live can deepen engagement, broaden discovery and increased velocity across the broader eBay marketplace. Next, I'll discuss how we're leveraging AI to reimagine the buying and selling experiences on an ongoing basis. For sellers, the next generation of our Magical Listing experience is making selling on eBay dramatically easier by leveraging AI and our product knowledge graph to do most of the hard work on their behalf.
We have now fully ramped the latest generation of Magical Listing to all new and reactivated listers in the U.K., Germany, and Australia, and are seeing compelling uplift on key KPIs directionally similar to what we observed in the U.S. Australia is our first market where we have released the latest Magical Listing experience to all C2C sellers, an important step toward extending these benefits to our broader seller base. In Q2, we began integrating enhanced pricing guidance into Magical Listing to help sellers balance velocity and price realization, and we improved the accuracy of package size estimates to help manage shipping costs more efficiently. For buyers, our agentic search pilot reinforced the value of natural language understanding in helping customers uncover more of the products they love within eBay's 2.6 billion listings.
We are now working to bring more natural language capabilities into core search to deliver greater density of relevant results while developing more conversational multiturn experiences in the parts of the shopping journey where they add the most value. These innovations build on eBay's structural advantages, 30 years of commercially relevant data, tens of billions of cumulative listings and product images and our ability to train and deploy AI models efficiently on our private cloud infrastructure. Shipping services are becoming an increasingly important part of our platform and a meaningful enabler of marketplace velocity.
By leveraging our scale and carrier relationships, we can reduce cost and complexity, strengthen trust and make lower priced transactions more economical to further unlock our TAM. In the U.K., the majority of C2C transactions go through our managed shipping program where we continue to expand our pickup and drop-off capabilities. Through our partnerships with InPost and Royal Mail, buyers and sellers can access approximately 50,000 lockers and parcel shops nationwide.
With 95% of U.K. buyers now living within 1 kilometer of a pickup or drop-off location, this network offers a convenient, lower-cost alternative to home delivery, particularly for lower ASP inventory. We recently announced that eBay International Shipping will also launch in the U.K. later this month. Following successful launches of this program in the U.S. and Canada, eligible U.K. sellers will now have access to over 190 countries with lower shipping costs and a simpler end-to-end experience with customs, returns, and internationally delivery, all managed by eBay.
Before closing, I'd like to share a few highlights on eBay's impact. In May, we published our 2025 impact report, which showcased the measured progress made over the last year from maintaining 100% renewable energy used across our operations to growing positive economic impact through recommerce and strengthening community support through programs like eBay for Charity and the eBay Foundation. Through eBay for Charity, buyers and sellers raised $58 million for charities in Q2.
This included an auction for a private lunch with Warren Buffett and Steph and Ayesha Curry. The winning bid exceeded $9 million and matching contributions from Mr. Buffett brought the total raise to $27 million for the GLIDE and Eat.Learn.Play. organizations. We also partnered with The Late Show with Stephen Colbert to auction iconic memorabilia from the Ed Sullivan Theater during the show's final season, raising more than $2 million for World Central Kitchen. eBay was also recognized by The Wall Street Journal as one of the Best Companies for the Future and by the U.S. News & World Report as one of the Best Companies To Work For, reflecting how our culture and commitment to impact support our long-term success.
In closing, Q2 was another strong quarter, with broad-based growth across our strategic priorities, focused categories, C2C and recommerce each grew more than 20% and now represent more than 70% of our total GMV. Our emerging growth vectors are scaling quickly and becoming more material. eBay Live grew by roughly 8x year-over-year in Q2. Vehicles GMV is growing rapidly as we improve the end-to-end transaction experience and shipping is lowering costs and friction across domestic and cross-border transactions.
AI is delivering measurable impact across both sides of our marketplace. Magical Listing is streamlining listing creation and bringing more C2C inventory onto eBay, while AI enhancements to search and discovery are helping buyers more easily find the most relevant items across our 2.6 billion listings. The addition of Depop broadens our fashion portfolio and expands our reach with younger consumers, strengthening our position in C2C and recommerce.
And finally, we continue to balance investments in long-term growth with disciplined execution. Q2 once again demonstrated our ability to invest behind our strategic priorities while still delivering strong growth in operating income and in EPS. I want to thank our employees for their continued execution and our global community of sellers and buyers for their trust and partnership.
With that, I'll turn the call over to Peggy to provide more details on our financial performance and outlook. Peggy, over to you.
Thank you, Jamie, and hello, everyone. In the second quarter, we exceeded expectations across all of our key financial metrics. GMV grew by 14% to $22.4 billion.
Revenue grew 14% to $3.13 billion. Non-GAAP operating income grew 16% year-over-year to $893 million and non-GAAP earnings per share grew 17% year-over-year to $1.60. We also continued our commitment to capital returns, delivering nearly $450 million to shareholders through repurchases and cash dividends.
Now let me dive deeper into the numbers. GMV grew 14% to $22.4 billion on an organic FX-neutral basis, while inorganic contributions were not material in the quarter. Foreign exchange provided a tailwind of nearly 1 point to spot GMV growth.
Our Q2 growth was driven by the sustained and broad-based momentum across our strategic priorities consistent with the last quarter. Focused category GMV grew 26% and outpaced the remainder of our marketplace by 20 percentage points, with collectibles, motors, fashion and refurbished all contributing. The breadth of this performance reinforces our confidence that our strategy is working, and our momentum is not dependent on any one category.
Next, let's look at how our major geographies performed. Our U.S. business delivered another great quarter in Q2 with GMV up 24% as our investments in focused categories, C2C, Live and Shipping are paying off. For instance, collectibles growth in Q2 was strong beyond trading cards as coins, comics and sports memorabilia all grew at a double-digit rate.
Both Parts & Accessories and Vehicles contributed to our eBay Motors GMV growth and our U.S. fashion business also posted double-digit GMV growth led by luxury focused categories, including handbags, jewelry, watches and apparel. International GMV growth improved to 4% year-over-year in the second quarter on an organic FX-neutral basis with foreign exchange providing a 160 basis point tailwind to spot growth. The investments we are making in focused categories in C2C and our international markets are working.
As GMV growth in both areas grew in the double digits in Q2, helping offset the continued weaker macroeconomic conditions in these regions. GMV growth in the U.K., Germany, Australia, and Canada also improved sequentially. Moving on to our buyer metrics.
Active buyers grew nearly 2% to 136 million on a trailing 12-month basis, including buyers from recently acquired, Tise. We are seeing particularly strong growth in the U.S., where active buyers increased 6% in Q2. Enthusiast buyers totaled 16 million and grew by nearly 3% year-over-year and spend per enthusiast buyer increased to approximately $3,600 on a trailing 12-month basis.
In the U.S., our enthusiast buyer growth accelerated to 9% year-over-year in Q2. Shifting to our income statement. Revenue grew 14% to $3.13 billion on an organic FX-neutral basis.
Foreign exchange provided a tailwind of approximately 1 point to spot revenue growth. Our Q2 take rate was flat year-over-year at 14%. Tailwinds from Advertising, Shipping and Financial Services were offset by ongoing category and ASP mix shifts as well as faster growth in earlier stage businesses like eBay Live.
Advertising, shipping and financial services create value beyond direct monetization. Ads help sellers improve visibility and sales velocity while shipping and financial services reduced transactional friction, expand choice and strengthen trust. In Q2, total advertising revenue was $596 million, representing GMV penetration of nearly 2.7%.
First-party ads grew 24% to $570 million. Promoted Listings comprised nearly $1.3 billion of the $2.6 billion total listings on eBay and 5.7 million sellers adopted at least 1 promoted listing product during the quarter. In addition, off-platform adds grew 21%, primarily driven by strong growth in our Qoo10 business in Japan.
We continue to see a long runway for advertising growth, driven by increasing ad relevance, seller adoption and listing penetration. In Q2, we made it simpler for C2C sellers to promote all of their inventory within our mobile apps. We also rolled out updated relevance models across CPC ads and recommendation services, helping sellers drive more velocity while preserving the buyer experience.
Within Financial Services, we continue to expand buyer choice, reduce friction and improve the economics of our payment flows. Pay by Bank in the U.K. is a great example of how a better customer experience can also improve our economics. This payment method is now fully ramped in the U.K. and is showing encouraging early adoption with average order value nearly twice the site average alongside lower cost of payments. eBay Balance also continues to gain traction across the U.S., U.K. and Germany, allowing sellers to use their proceeds for purchases on eBay while reducing payment costs.
These capabilities are part of a broader wallet strategy designed to deepen our financial relationship with our most engaged customers over time. Additionally, revenue from eBay shipping programs grew double digits in the second quarter. As Jamie noted, we continue to expand our range of domestic and international shipping programs while integrating more lower-cost delivery options within them to improve affordability for buyers and sellers.
Turning to our profitability and earnings. Non-GAAP gross margin was 74.1% in Q2, up 1 point year-over-year. Our non-GAAP operating income grew 16% to $893 million, reflecting healthy flow-through from our GMV outperformance alongside incremental investments within our strategic priority areas.
Sales and marketing expense increased in Q2 as we saw opportunities to invest across the funnel with attractive ROI to drive GMV growth with incremental spending focused on strategic areas like C2C and eBay Live. We continue to see strong efficiency in our lower funnel campaigns even as we began to lap a notable step-up in efficiency in the prior year midway through the quarter. Alongside other operational efficiencies, we also saw a moderation in transaction losses sequentially as a result of our team's work to optimize our newer shipping programs and customer experience with further progress expected in the second half of the year.
Our strong operating performance translated into non-GAAP earnings per share of $1.60, up 17%, and GAAP earnings per share of $1.21. Shifting to our balance sheet and capital allocation. We generated free cash flow of $326 million in Q2 and ended the period with cash and fixed income investments of $4.9 billion and gross debt of $6.7 billion on our balance sheet.
Our equity investments and warrants were valued at roughly $780 million. We repurchased $310 million of eBay shares in the second quarter at an average price of approximately $104. The pace of repurchases in Q2 was influenced by share price volatility during the quarter, which impacted our preestablished repurchase programs.
We also paid a quarterly cash dividend of $138 million in June or $0.31 per share. On July 30, we closed the acquisition of Depop for $1.4 billion in cash, reflecting the purchase price of $1.2 billion and approximately $200 million of net purchase price adjustments. The purchase price adjustments mainly reflected certain investments that Etsy and Depop made prior to the acquisition close.
Next, I will share some thoughts on our outlook, starting with the third quarter. Please reference the earnings presentation accompanying our release for our outlook and spot growth terms and foreign exchange implications. We expect consolidated GMV between $22 billion and $22.4 billion in Q3, including the impact of recently acquired Depop, which represents total FX-neutral growth between 10% and 12% year-over-year or organic growth between 7% and 9%.
Our guidance implies Depop would contribute approximately 2.5 percentage points to total FX-neutral GMV growth in a partial quarter. Our consolidated GMV guidance implies continued broad-based growth from the core eBay Marketplace as our strategic priorities continue to drive durable growth across multiple categories. The implied year-over-year deceleration from Q2 to Q3 is primarily due to the lapping dynamics we have discussed in recent quarters, which we started to observe in July as expected.
In contrast, our outlook contemplates an acceleration in Depop's year-over-year GMV growth versus Q2 on a pro forma basis, driven in part by the effectiveness of recent marketing and shipping investments. We forecast consolidated revenue to be between $3.07 billion and $3.12 billion in the third quarter, which represents total FX-neutral growth between 8% and 10% year-over-year or organic growth between approximately 7% and 9%. We expect Depop to contribute approximately 1.5 percentage points to total FX-neutral revenue growth, which is lower than its contribution to GMV growth, primarily because a significant portion of our planned shipping investment will be recognized as contra revenue.
We have seen strong buyer response to improve shipping affordability, including higher customer acquisition and transaction velocity, particularly at more accessible price points. We believe this investment can unlock a larger addressable market in C2C fashion, and we will continue to calibrate it based on the returns we observe. We expect consolidated non-GAAP operating income growth to be between 1% and 5% year-over-year in Q3, which implies non-GAAP operating margin between 25.1% and 25.6%, this includes an expected 3- to 4-point headwind to non-GAAP operating income growth from Depop.
Our outperformance in the first half has created incremental capacity to invest behind strategic priorities where we are seeing strong returns, including C2C, eBay Live and our Shipping road map, while continuing to drive healthy flow-through from the core business. We are also investing behind Depop's strong momentum and the significant opportunity we see in C2C and a younger customer demographic. Importantly, a portion of this investment is being funded by allocating existing marketing spend to Depop, which mitigates the incremental pressure on consolidated operating income.
We believe we are striking the right balance by investing behind our strongest growth opportunities where we expect attractive returns while continuing to deliver healthy consolidated earnings growth. We forecast consolidated non-GAAP earnings per share between $1.36 and $1.42 in Q3, which implies year-over-year growth between 1% and 5%. This includes an expected mid-single-digit headwind to non-GAAP EPS growth from Depop, with the impact to EPS being modestly higher than operating income due to foregone interest income on the cash used for this transaction.
Shifting to our full year outlook. We are now planning our business around consolidated year-over-year GMV growth between 11.5% and 12.5% on an FX-neutral basis, driven by our established strategic priorities, emerging growth vectors like eBay Live and Vehicles, and our acquisition of Depop. This includes an expected contribution of roughly 1.5 percentage points from Depop and assumes its GMV growth will accelerate by double-digit percentage points in the second half of this year versus Q2 on a pro forma basis, reflecting Depop's strong momentum.
We expect consolidated full year revenue growth to be roughly 0.5 point below GMV growth on an FX-neutral basis or between 11% and 12% year-over-year as healthy growth in Advertising and Shipping revenue is expected to be offset by mix shifts in our business, including higher growth contributions from Live and Vehicles and the impact of the Depop acquisition. We expect Depop to contribute roughly 1 percentage point to consolidated revenue growth. We now expect consolidated non-GAAP operating income growth between 10% and 12% year-over-year in 2026, which contemplates a stronger outlook for operating income growth driven by the core eBay Marketplace, while Depop is expected to be roughly 2-percentage point headwind to growth.
We expect full year consolidated non-GAAP earnings per share growth between 10% and 12% year-over-year, with Depop representing roughly 2.5 percentage points of dilution to our non-GAAP EPS. 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 1 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 the full year. We continue to target roughly $2 billion of share repurchases for the full year and plan to increase our quarterly repurchase rate from Q2.
In addition, our Board declared a quarterly cash dividend of $0.31 per share for the third quarter to be paid in September. In closing, Q2 was another strong quarter that clearly demonstrated the power of our strategy. Broad-based momentum across our strategic priorities delivered outperformance on both the top and bottom lines.
We enter the second half of the year in a strong position with our improved full year outlook reflecting the momentum we see across focused categories, C2C and recommerce. We are confident in our strategy and focused on driving durable, profitable growth for our shareholders. With that, Jamie and I will now take your questions.
Your first question comes from the line of Colin Sebastian with Baird.
I guess, first off, I mean, you talked about higher engagement of eBay Live buyers, and I was hoping you could perhaps explain a little bit more about how this can resonate across the broader platform, how extensible this is to other categories, and a larger buyer base? And then secondly, Jamie, on the AI-powered discovery, and listing tools, those seem fairly well utilized now across the marketplace. What's the next frontier for AI on eBay or untapped opportunity, I guess, if it's seller side, automation or search and discovery or something else?
Jamie Iannone
President & CEO
Yes. Thanks for the question, Colin. So first off, on Live buyers, what's exciting to see is the synergies between our core Marketplace and on eBay Live.
So when we look at buyers that start shopping in Live, they're spending 70% more than comparable buyers that are not shopping on Live. And it's great to see like the engagement that we're getting, the increased views, et cetera, saving sellers and driving that engagement. And so we put up some healthy buyer numbers this quarter, and it's great to see kind of what's happening with Live.
It's a really nice halo. We're seeing the nice thing -- the same type of thing on the seller side, where our sellers that are doing Live are seeing faster growth because of the -- because of their participation in Live. On Magical Listings, we're really excited.
I mean now it's been hundreds of millions of listings that are out there. We've expanded it now across our major geographies across U.S., U.K. and Germany. We just added it to Australia, and we continue to see great reaction from sellers, faster listing times, stronger repeat behavior and significantly more sold items in GMV per listing attempter, and that's leading to a measurable uplift on C2C sellers and supply, and we talked about the success we're seeing in C2C.
The next step is to expand that to all C2C sellers, because it's right now just in new and reactivated sellers. And so Australia is the first market where we're doing that. In fact, starting this month, we are -- we've expanded that to all C2C sellers, and we'll learn a lot through that market to keep expanding it.
Broadly, beyond selling, we continue to apply our 30 years of data to lots of different areas. AI is being helpful to us in advertising. It's really helping us drive our search experience and our search conversion with what we're doing there.
We're using it in our CRM materials to be much more targeted, and we're seeing much more engagement there. So really across the board, we're seeing it. But in terms of Magical Listings, we've still got a lot more penetration to go to drive to increase the experience and continue to drive our listings growth with it.
Your next question comes from the line of Michael Morton with MoffettNathanson.
Good afternoon. Thank you for all the context on the planned investments in the C2C business and the Depop acquisition. Big picture, I was wondering what your outlook is for the competitive intensity in this market, I would say, in the U.S., but also internationally.
C2C is accelerating, but that's not a secret, and there are several players making aggressive investments in that? And then my second question, maybe just a boring accounting one. For eBay Motors, when you speak to eBay Motors and you talk about it contributing 2% of GMV growth, I just want to make sure that's not including parts and accessories.
And if it is just eBay Motors as in vehicles. Is -- can you kind of help us understand that growth rate that's organic, more volume versus being able to be measured due to the Caramel integration where you can kind of guarantee that the transaction occurred?
Jamie Iannone
President & CEO
Yes. I'll take the first one. So first on the opportunity there.
We see a huge underpenetrated opportunity in C2C fashion in the U.S. market. And the market growth we're seeing really validates the size of that opportunity. We're coming at this from a real position of strength. eBay has over $10 billion business in Fashion, and C2C GMV is growing faster than our overall U.S. business.
And now we've added Depop, which brings an established brand, a discovery-led product experience and a strong reach with younger consumers. And when you look at it, both eBay and Depop delivered very strong growth in Q2, suggesting that Depop's momentum was incremental to ours and the addressable market is expanding. So we're really focused on using these complementary value propositions to unlock substantially more consumer supply and capture more of the significant untapped market opportunity in C2C and in recommerce.
Peggy, do you want to take the motors question?
Sure. Thanks for the question, Mike. So for eBay Motors, that includes both parts and accessories and vehicles.
The majority of it is parts and accessories since that's established piece of it. Vehicles is earlier stage, but becoming a larger contribution to overall motors and to the company overall. And obviously, the acquisition of Caramel has just really improved the user experience and the ability to list vehicles and sort of have an all-in offering, which is helping the growth of the Motors business, Vehicle specifically, but also with parts and accessories being very complementary to the vehicles business.
Your next question comes from the line of Ken Gawrelski with Wells Fargo.
Could we talk a little bit more about Depop and the opportunity there. How do you -- could you talk a little bit about ongoing marketing intensity. There's a new market entrant in the U.S., you've faced this market entrant in Europe, U.K., Germany, other European markets.
Could you talk about what you learned from those lessons, what you might apply to, what you see here in the U.S.? And talk about using Depop as kind of an offensive weapon relative to maybe the tactics you used in the U.K. and Germany.
Jamie Iannone
President & CEO
Yes, I'll take that. So look, when you look at the U.S. consumer, first eBay brings a really strong U.S. C2C business. It's one of our strongest area.
But when we look at the U.S. market, we believe that the pre-loved closet, if you will, is even underpenetrated relative to other markets. So we see a massive TAM, and that TAM is generally, and is broadly incremental to kind of TAM that we've seen on the eBay business before. So when you look at fashion, C2C and recommerce, were already important drivers to eBay's growth before the acquisition.
But Depop brings a fast-growing established brand, community, a great sell-to-buy flywheel, and a real discovery-led product experience that also expands their reach with younger consumers. In a world of limited resources, they decided to focus their efforts on the U.S. market, and it's been performing very well. If you look at the time of the acquisition, Ken, we had -- they had 7 million buyers, by the end of Q2, they had 9 million buyers.
And we see the opportunity to combine that with eBay's scaled demand, our trust, our shipping capabilities, our marketplace infrastructure that can really help them capture more of that untapped opportunity. So we're really excited. Our analysis suggests that C2C second-hand fashion only has low single-digit online penetration today compared to significantly higher in Europe.
And so we're excited to kind of go after that TAM and leverage the investments. Peggy, do you want to talk more about how we're thinking about the marketing side?
Yes. The investments that we're making are primarily within full funnel marketing and shipping affordability. It's important to note that some of our planned investments in Depop are being funded by deploying existing eBay C2C and fashion marketing dollars.
It doesn't translate incrementally to expenses overall for eBay. The shipping investments are coming in the way of tiered buyer-facing incentives that reduce the all-in cost of a purchase, which is particularly important for lower ASP fashion, where shipping can represent a meaningful portion of the total price. So by increasing the affordability at a broader range of price points, we're seeing increased conversion, more customer acquisition, converting those buyers into enthusiasts.
And so we're really seeing that the ROI of that investment is worth the investment. And overall, we were able to do this all within a very healthy financial architecture overall for eBay.
Can I ask 1 follow-up, please, if you don't mind. Just -- as you think about the tactics employed in Western Europe, it ultimately ended up in commission changes from a seller to a buyer fee in the U.K. and then a complete reduction in the fee, I think, or elimination of the fee in Germany. What's your level of confidence that the tactics you're employing now will be effective in -- more effective in the U.S.?
I completely appreciate what you're saying, and that you have a much stronger platform here to fight with. But could you please just touch on those points for us, please?
Jamie Iannone
President & CEO
Yes. As it relates to the U.S., we have no current plans to change the fees as it relates to eBay. Depop already has a buyer fee model, which is complementary to kind of that discovery-led type of experience.
And so that's kind of built into that pricing change. They made that change quite some time ago. And so overall, we feel like we're in a very strong competitive position.
When you look at the combination of the scale and the capabilities that we've built, the strength that we have in our eBay Fashion business, combined with this high-growth, well-established brand that appeals to younger consumers, we feel very, very strong. I have -- had a huge group of interns here this summer. And I went around and said, "How many of you use Depop?" And almost every hand went up.
And they talked about how much they love the experience, the high customer satisfaction, the sell-to-buy flywheel. And I think that's why it's such a strong and growing brand. And I'm excited.
I mean, it's only a couple of days into the acquisition, but I'm really excited to kind of be able to unlock more and more of the synergies that we've talked about to this real hyper-growth asset, that's now part of eBay.
Your next question comes from the line of Ross Sandler with Barclays.
Maybe shifting gears to core eBay ex Depop, so the -- we're about to lap some of the kind of nondurable items that you guys have talked about in the past, yet the 3Q and the implied kind of 4Q GMV looks like it's just shy of 10% kind of organic. So just curious for an update on some of those lapping dynamics. It seems like we're broadening out a bit across these focused categories.
And so maybe some of that non-durable is becoming more durable. Just curious to hear what's going on with the consumer and your increased confidence in this growth rate in the back half?
Jamie Iannone
President & CEO
Peggy, do you want to take that one?
Yes, sure. So first on your question about lapping dynamics. In Q3, some of the dynamics.
In Q3, we'll be lapping a full quarter of last year's benefit from the launch of our U.S. Klarna partnership as opposed to only a partial quarter in Q2. We also will continue to lap last year's marketing efficiency gains from a favorable competitive environment. And then for the core marketplace, excluding Depop, we believe that a year over 2-year comparison, provides a clearer view.
You can really see the lapping dynamics that way. And on that basis, our outlook implies a Q3 GMV growth, that's still quite healthy. When we think about the second half in total, so the whole second half of the year, beyond the lapping dynamics, we expect, and this is baked in a deceleration in Pokémon growth as we lap last year's triple-digit growth with tougher year-over-year comparisons in the second half.
And then beginning in Q4, we'll start to lap the strength in the bullion demand, which we flagged in late '25 and early '26. So outside of that, we believe that the majority of our growth is durable, and we remain very confident about the underlying strength of our business, which is what drove us to raise our full year outlook. And in that, we've considered a variety of scenarios as it relates to the macro and economic environment.
We're not expecting any significant change that we've baked in. And all of that is included in our confidence in raising the full year.
Your next question comes from the line of Deepak Mathivanan with Cantor Fitzgerald.
Jamie, can I ask about eBay Live? Basically, we've seen growth, approximately 7 to 8x year-on-year over the last few quarters. Any incremental color you can provide on penetration in terms of seller or buyer participation?
How are you now increasingly using AI to make merchandising life easier. And then second question, maybe for Peggy, on marketing reallocation from core to Depop, are there certain markets that are discretionary in core that you think can be reallocated to Depop over the next few quarters? Any additional insights you can provide on what those dollars would be?
Jamie Iannone
President & CEO
Yes. Look, I think we're really excited because eBay Live is growing, as you said, 7 to 8x year-over-year. And to date, it's kind of been more of an invite-only type of program.
And starting just this past month, we actually moved it to a self-service type of thing. So we're going to keep kind of the same high trust bar that we have on the platform, but making it easier for sellers to come into the platform and onboard there. And we see that, as I talked about upfront, it's really strengthening sellers' businesses when they come on.
So sellers who stream regularly see more visits than comparable sellers. And so it's really driving that. You've also seen us doing a lot more demand scaling, whether that's the paid social things that we're doing, working with our sellers, increasing the prominence of live on the overall kind of website and app.
When you look at it, we're actually taking share in all 7 markets. We just had this great activation at The National, which is the largest collectibles trade show. And we were there with Logan Paul and Ken Goldin, hosting Lives, et cetera, Rob Gronkowski did one.
And we're really kind of happy with the growth that we're seeing, but I'm also really excited for these new demand drivers and opening up sellers kind of more broadly on the marketplace. Peggy, do you want to take the second one?
Sure. One of the things that we've been focused on for a while now is really a discipline around OpEx and efficiency with a focus on delivering sustainable growth in operating income and earnings per share. We've been executing on a strategy where we're really focused on balancing investment in GMV and revenue growth, while also improving operating margin and return to capital in order to get that mix right.
And so when we think about Depop, we feel like over time, eBay scale, marketing expertise, carrier relationships, shipping technology are all areas that are going to help us convert today's growth investment into a structurally better unit economic model. And that's what gave us the confidence to say that Depop is going to become accretive to consolidated non-GAAP operating income in 2028. And so what's great about the way we're investing is that there's a lot of synergies between eBay and Depop, and so that enables us to really focus our investment in areas that are going to allow us capture a growing TAM in the fashion C2C business.
And so that's where we're able to continue to get efficiency to invest in the top line.
Your next question comes from the line of Tom Champion with Piper.
Jamie, maybe to begin with you. It's been quite a journey in GMV growth from post-COVID till now. And I'm just curious if you could take a step back and frame for us what you think the GMV growth opportunity is maybe on a longer-term basis?
Is there a back of the envelope or heuristic that you go back to? And then maybe, Peggy, for you, I'm just curious if you could talk about active buyer growth and the prospects for that relative to the 2% we've seen in the last couple of quarters. I think you referenced some stronger enthusiast buyer growth recently.
Any comments on that would be really helpful.
Jamie Iannone
President & CEO
Yes. Thanks for the questions, Tom. Good to talk to you.
So if you look at our growth right now, it's really kind of broad-based and across the board, which speaks to kind of the durability. I'd say specifically to your question, if you look at the 2-year stack for the second half of the year, it's a good indicator of the durable underlying strength of our marketplace, which I think compares very well to benchmarks. The other thing I'd say is that we are taking share in focused categories in C2C, and in eBay Live.
And every quarter, our strategic priorities are growing in mix. So these tailwinds are influencing more of our total marketplace growth. And it's great to see now that 70% of our GMV is driven in these strategic areas of the business.
And we're seeing that over 20% growth in our focused categories and in recommerce, and C2C, which makes me feel great about the durability of the growth that you're seeing in the business. Peggy, do you want to take the buyer question?
Sure. Yes. We were very encouraged to see global active buyers grew 2% year-over-year to 136 million in Q2.
In addition, enthusiast buyers grew by nearly 3% year-over-year with average spend per enthusiast buyer also growing to $3,600. We've seen that buyer trends in the U.S. have been even stronger. We've seen growth in active buyers at plus 6% year-over-year.
And in the U.S., enthusiast buyers up 9%. And we're seeing strength across buyer counts, cohort mix, engagement, spend trends. And so what's been nice also is that we talked about the synergies of the Depop business.
Depop had approximately 7 million buyers on a trailing 12-month basis when we announced the acquisition and had close to 9 million active buyers in Q2, and we feel that these are very additive to the active buyer base. And so we're excited to include them in our buyer count starting in Q3.
Your next question comes from the line of Michael McGovern with Bank of America.
I just want to ask about the advertising penetration. I saw it ticked up to 2.7% in the quarter, still seeing really strong growth. But as we get closer to that 3% target, is there a time frame for when we might see ad growth converge a little bit with GMV growth?
And is that 3% a ceiling? Or can you continue to push beyond that?
Jamie Iannone
President & CEO
Yes. Thanks for the question, Mike. Look, Q2 was another strong quarter for ads growth at 23% FX-neutral growth.
And it was really across all of our 1P ad products, which grew 24%, CPA, CPC, and offsite ads. As you said, it now represents 2.7%, but we've always said that, that 3% is just a midterm goal, and that we continue to believe that our advertising revenue will outpace the growth of the business, the growth of GMV. And we continue to have multiple levers, including seller adoption, listings penetration, ad rate optimization, as well as scaling new products.
And we've been bringing AI technologies in both on the ability to improve the yield that our sellers are getting on the ad placements, but also to just improve the overall experience from the seller side to leverage AI for recommendations, for campaign building, for suggestions on their dashboard, and that's performing well. So we continue to believe we have a nice long runway for advertising growth.
Operator, can we do 1 more question, please. We want to take one more question, operator.
Your next question comes from the line of Nikhil Devnani with Bernstein.
I wanted to ask a couple. First, just on the GMV strength. Is it possible to deconstruct the contribution from order volume strength versus ASP dynamics?
And then secondly, maybe one for Peggy. If you just put aside Depop when we think about core eBay, have you pulled forward or accelerated various investment efforts over the past year against the strong top line you've had? I'm just trying to put your overall EBIT algo into a broader context of your investment mandates.
Jamie Iannone
President & CEO
Yes, I'll take the first one. So when I look at the GMV growth, it's really balanced, which is great to see. It's balanced across buyers, frequency, sold items, and ASP.
And those ASP changes are really about mix. It's really about -- think about like some of our focused categories growing faster on the platform overall. And so what I would just highlight is the growth is super durable across the board.
When you look at focused categories, C2C, recommerce, and across the different elements that make up GMV, which give us a lot of conviction about the durability. Peggy, do you want to take the second one?
Of course, yes. We have taken the opportunity for the last several quarters that when we outperform on the top line, which we have been, that we reinvest a portion of that so that we can continue to drive durable GMV growth ahead, and you see that in the results. And so we did that in the first half.
We also plan to reinvest more of our top line performance in high-return opportunities in the second half, which will also include investing in Depop as we talked about. But we're always focused on making sure that we're balancing, being able to invest in the top line long-term growth and having healthy flow-through to the bottom line, which will continue to be focused on in the second half.
Jamie Iannone
President & CEO
If I take a step back, Nikhil, the strong growth we're seeing now across the board is really the results of investments that we've made years ago. We invested in our focused categories. We built out these authentication capabilities, and they're now growing 26% on the site.
A year ago, we bought Caramel and invested in vehicles, and talked about the run rate of hundreds of millions of dollars last quarter that we're seeing there. And so what we feel great about is we're able to drive this growth and this investment and still return a really healthy financial architecture, raising our full year guide to have OI and EPS in the double-digit range, I think, speaks to the power of our platform and our ability to invest in that long-term growth. So it's a formula that's been working for us, and we're going to continue to move forward.
Thank you for joining. This concludes today's call. You may now disconnect.
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