Online marketplace eBay (NASDAQ:EBAY) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 15% year on year to $2.97 billion. On top of that, next quarter’s revenue guidance ($3.03 billion at the midpoint) was surprisingly good and 8.5% above what analysts were expecting. Its non-GAAP profit of $1.41 per share was 4.4% above analysts’ consensus estimates.

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Revenue: $2.97 billion vs analyst estimates of $2.88 billion (15% year-on-year growth, 3% beat)

Adjusted EPS: $1.41 vs analyst estimates of $1.35 (4.4% beat)

Adjusted EBITDA: $875 million vs analyst estimates of $850 million (29.5% margin, 2.9% beat)

Revenue Guidance for Q1 CY2026 is $3.03 billion at the midpoint, above analyst estimates of $2.79 billion

Adjusted EPS guidance for Q1 CY2026 is $1.56 at the midpoint, above analyst estimates of $1.48

Operating Margin: 20.3%, in line with the same quarter last year

Free Cash Flow Margin: 16.1%, down from 27.1% in the previous quarter

Active Buyers: 135 million, in line with the same quarter last year

Market Capitalization: $36.14 billion

Originally known as the first online auction site, eBay (NASDAQ:EBAY) is one of the world’s largest online marketplaces.

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, eBay grew its sales at a sluggish 4.3% compounded annual growth rate. This was below our standard for the consumer internet sector and is a rough starting point for our analysis.

This quarter, eBay reported year-on-year revenue growth of 15%, and its $2.97 billion of revenue exceeded Wall Street’s estimates by 3%. Company management is currently guiding for a 17% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 3.8% over the next 12 months, similar to its three-year rate. This projection doesn't excite us and implies its newer products and services will not catalyze better top-line performance yet.

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As an online marketplace, eBay generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.

Over the last two years, eBay’s active buyers, a key performance metric for the company, increased by 1.2% annually to 135 million in the latest quarter. This growth rate is one of the lowest in the consumer internet sector, largely a function of its already massive scale and saturated market. If eBay wants to reaccelerate growth, it likely needs to innovate with new products.

Unfortunately, eBay’s active buyers were flat year on year in Q4. The quarterly print isn’t too different from its two-year result, suggesting its new initiatives aren’t accelerating buyer growth just yet.

Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the company earns in transaction fees from each buyer. ARPB also gives us unique insights into a user’s average order size and eBay’s take rate, or "cut", on each order.

eBay’s ARPB growth has been decent over the last two years, averaging 5.2%. Its ability to increase monetization while growing its active buyers demonstrates the value of its platform.

This quarter, eBay’s ARPB clocked in at $21.96. It grew by 14.1% year on year, faster than its active buyers.

We were impressed by eBay’s optimistic revenue guidance for next quarter, which blew past analysts’ expectations. We were also glad its EPS guidance for next quarter exceeded Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 6.4% to $87.31 immediately after reporting.

Indeed, eBay had a rock-solid quarterly earnings result, but is this stock a good investment here? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.