eBay Ad Revenue Soars 25% Post-Depop Acquisition

eBay has reported a significant uplift in its advertising division, with first-party ad revenue climbing 25% year-over-year to reach $570 million in the second quarter. This robust performance coincides with the successful finalization of eBay's acquisition of the Gen Z-centric fashion marketplace, Depop, a move that bolsters its presence in the rapidly expanding recommerce sector.

The e-commerce giant's total advertising offerings contributed $596 million to the quarter's revenue, representing 2.7% of its overall gross merchandise volume (GMV). On a constant currency basis, first-party advertising revenue saw a 24% increase, underscoring the growing effectiveness of eBay's in-house advertising solutions. This advertising growth outpaced the broader marketplace, which experienced a 15% surge in revenue to $3.13 billion and a corresponding 15% rise in GMV to $22.4 billion.

The acquisition of Depop, which closed on July 30th for approximately $1.4 billion in cash, positions eBay to capture a younger demographic and deepen its engagement within the circular fashion economy. Depop's established community of Gen Z and Millennial users is expected to drive further growth in consumer-to-consumer sales, a segment where eBay has historically excelled.

Beyond advertising and strategic acquisitions, eBay is also seeing impressive traction from its newer marketplace initiatives. The live shopping platform, eBay Live, delivered another record-breaking quarter, with GMV expanding nearly eightfold across its seven operating markets. Furthermore, the company's AI-powered trading card scanning tool has surpassed 80 million cumulative scans, highlighting the integration of advanced technology to enhance user experience and operational efficiency.

Financially, eBay generated $549 million in operating cash flow and $326 million in free cash flow during the second quarter. The company demonstrated a commitment to shareholder returns, distributing $448 million through share repurchases ($310 million) and dividends ($138 million). Looking ahead to the third quarter, eBay anticipates revenue between $3.07 billion and $3.12 billion, with GMV projected to range from $22 billion to $22.4 billion, incorporating the expected contribution from Depop.

This period of strong advertising revenue growth, coupled with the strategic acquisition of Depop and the expansion of innovative marketplace features, signals eBay's focused execution on key growth priorities. The company's ability to drive both top-line expansion and profitability, as evidenced by a 51% increase in GAAP net income to $552 million and a 56% rise in diluted EPS to $1.21, reflects a successful strategy in a competitive e-commerce environment.