eBay Q2 2025: Advertising Soars, But Operating Profits Weaken

As a household name in e-commerce, eBay's financial health offers a window into the state of online marketplaces. To understand its current performance and strategy, let's dive into the details of its Q2 2025 10-Q filing and see what the numbers reveal.

Revenue Growth Fueled by Advertising

For the second quarter of 2025, eBay posted total net revenues of $2.73 billion, a solid 6% increase from the same period last year. For the first half of the year, revenues grew 4% to $5.32 billion. This growth was supported by a 6% rise in Gross Merchandise Volume (GMV)—the total value of all goods sold on the platform—which reached $19.5 billion for the quarter, indicating more business is flowing through eBay's ecosystem.

While revenue from its core marketplace activities grew a modest 3% to $2.25 billion, the real standout was the company's advertising business. Advertising revenues surged by an impressive 21% to reach $482 million. This highlights a successful strategic push to further monetize its platform by offering sellers promoted listing opportunities, a key growth lever for many e-commerce platforms.

The Profitability Puzzle

To understand how eBay's revenue translates into profit, it's helpful to visualize the flow of money from sales to the bottom line.

Despite higher revenue, income from operations—a key measure of core profitability—declined by 12%, from $549 million in Q2 2024 to $484 million in Q2 2025. This was primarily driven by a 54% spike in General and Administrative (G&A) expenses, which rose to $371 million for the quarter.

So how did the company's final net income jump from $224 million last year to $368 million this quarter? The answer lies outside of its main operations. In the second quarter of 2024, eBay recorded a significant loss of $222 million on its equity investments and a warrant. This year, that same line item was a mere $4 million loss. This swing almost single-handedly explains the improved bottom line. It's a crucial distinction: the higher net income wasn't driven by operational efficiency but by the absence of last year's substantial investment losses.

A Focus on Shareholder Returns and Debt Management

A clear priority for eBay is returning cash to its investors. The company demonstrated this commitment in two key ways during the quarter:

• Share Repurchases: eBay bought back $628 million of its own stock in Q2, bringing the total for the first half of the year to $1.26 billion. This reduces the number of shares outstanding and signals management's confidence in the company's value.
• Dividends: The company also paid out $140 million in dividends to its shareholders.

On the balance sheet, eBay continues to manage its debt, having repaid an $800 million tranche of senior notes in March 2025. Total debt decreased from $7.43 billion at the end of 2024 to $6.75 billion as of June 30, 2025.

Final Thoughts

eBay's latest quarter shows a company successfully growing its top line, with its advertising segment emerging as a powerful engine. The growth in GMV suggests its marketplace remains relevant to millions of buyers and sellers.

However, the challenge lies in managing operational costs, particularly the sharp rise in G&A expenses, which are currently weighing on operating profitability. While the surge in net income is positive, it's important to recognize that it was largely driven by financial-line items rather than core business improvements. As a mature company in the competitive e-commerce landscape, eBay's focus appears to be on steady monetization and robust capital returns, a strategy that will likely continue to define its path forward.