eBay (EBAY): Volume Up 15%. Buyers Up 1.5%.

eBay Inc. (EBAY) Q2 2026 — Revenue $3,134M UP 15% vs a $3.02B bar. GMV $22,398M UP 15%. Non-GAAP EPS $1.60 vs $1.50 - a real beat against a RISING bar, and the full year was raised. But Active Buyers went 134M to 136M, up just 1.5%. eBay's GMV grew 15% to $22,398M - its best volume quarter in a decade. Its Active Buyer count grew 1.5%, from 134M to 136M. GMV per buyer went from $145.63 to $164.69, up 13.1%. Thirteen of the fifteen points are the same people spending more, not new people arriving. And it is a US-only story: US GMV +24%, International +6% and decelerating. THE CALL: AVOID (3/5, A REAL INFLECTION, ALREADY IN THE PRICE) — base-case value ~$88.0 vs ~$111.15 today. KEY METRICS: - CALL: AVOID 3/5, fair value ~$88 vs the $111.15 PRE-PRINT close (-20.8%) - below the Street's $92 LOW. Panel: 68 analysts, 31 Buy / 35 Hold / 2 Sell = Hold, $110.29 average, already BELOW the price. Base $88 (2026 owner earnings $1,750M growing 9% then 4.5%, 8.5% discount, 2.5% terminal); bull $141; bear $51. Backwards: $111.15 needs owner earnings to compound 9.5% a year for TEN years. Our base gives 6.7%. - 15% MORE VOLUME, 1.5% MORE BUYERS - AND IT IS ONE COUNTRY. US GMV $11,688M vs $9,428M, +24%; International $10,710M vs $10,086M, +6% and DECELERATING from +10%. $2,260M of the $2,884M of new volume is domestic. Active Buyers 136M vs 134M. GMV per buyer +13.1%. Take rate exactly flat at 13.99% both years - the fee lever eBay pulled for five years is finished. - THE RAISE IS A MARGIN GUIDE-DOWN. Q3 revenue guided $3.07-3.12B, ~$130M ABOVE the $2.97B Street bar. Q3 non-GAAP EPS guided $1.36-1.42, a $1.39 midpoint, 4c BELOW the $1.43 bar. Back it out: ~$779M of non-GAAP operating income on $3.095B = 25.2%, against 28.5% this quarter and ~27.2% a year ago. ~330bp sequential and ~210bp YoY compression - with Depop already inside the guide. - THE 56% GAAP EPS JUMP IS A COMP ARTIFACT. Q2 2025 carried $52M of legal matters and $55M of restructuring/executive bonuses; Q2 2026 carries $(10)M and $1M - a $116M pre-tax swing. The tax rate fell 22.6% to 17.1%, worth $37M. About 29c of the 43c of GAAP EPS growth is not this year's operations. Non-GAAP operating income grew 15.8% - exactly with revenue. And 87% of the $0.39 GAAP-to-non-GAAP gap is stock comp ($188M of $217M); equity marks were +$2M. - GIVE IT ITS DUE, THEN PRICE THE CASH. Revenue beat by 3.9% and EPS by 10c against a bar RAISED four quarters running; US GMV has accelerated five straight quarters (+7, +13, +19, +27, +24); 1P advertising +25%. Against that: FCF $326M on $727M of non-GAAP net income = 45% conversion; capex $223M = 2.2x D&A; FY25 FCF FELL 24% to $1,484M; H1 buybacks -35% to $809M with only $2.0B authorised, short-term debt $750M to $1,593M, and $1.4B paid for Depop on July 30. What to watch: UP: Active Buyers growing above 4%, free cash flow converting above 70% of non-GAAP net income, or Q4 revenue guided above $3.4B. BEAR: international GMV growth below 4%, transaction losses above 0.65% of GMV, or a Q3 non-GAAP operating margin printing under 25%. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.