Online marketplace eBay (NASDAQ: EBAY) announced better-than-expected revenue in Q1 CY2026, with sales up 19.5% year on year to $3.09 billion. Guidance for next quarter’s revenue was better than expected at $3 billion at the midpoint, 1.1% above analysts’ estimates. Its non-GAAP profit of $1.66 per share was 5% above analysts’ consensus estimates.
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eBay (EBAY) Q1 CY2026 Highlights:
- Revenue: $3.09 billion vs analyst estimates of $3.04 billion (19.5% year-on-year growth, 1.7% beat)
- Adjusted EPS: $1.66 vs analyst estimates of $1.58 (5% beat)
- Adjusted EBITDA: $860 million vs analyst estimates of $976.8 million (27.8% margin, 12% miss)
- Revenue Guidance for Q2 CY2026 is $3 billion at the midpoint, above analyst estimates of $2.97 billion
- Adjusted EPS guidance for Q2 CY2026 is $1.48 at the midpoint, below analyst estimates of $1.50
- Operating Margin: 19.8%, down from 23.6% in the same quarter last year
- Free Cash Flow Margin: 29.1%, up from 15.7% in the previous quarter
- Active Buyers: 136 million, up 2 million year on year
- Market Capitalization: $44.96 billion
"eBay's first quarter results marked a strong start to the year," said Jamie Iannone, Chief Executive Officer at eBay.
Company Overview
Originally known as the first online auction site, eBay (NASDAQ: EBAY) is one of the world’s largest online marketplaces.
Revenue Growth
A company’s long-term performance is an indicator of its overall 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 5.7% compounded annual growth rate. This fell short of our benchmark for the consumer internet sector and is a tough starting point for our analysis.
This quarter, eBay reported year-on-year revenue growth of 19.5%, and its $3.09 billion of revenue exceeded Wall Street’s estimates by 1.7%. Company management is currently guiding for a 9.9% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 4.8% over the next 12 months, similar to its three-year rate. This projection is underwhelming and suggests its newer products and services will not accelerate its top-line performance yet.
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Active Buyers
Buyer Growth
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 1.3% annually to 136 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. 
In Q1, eBay added 2 million active buyers, leading to 1.5% year-on-year growth. The quarterly print isn’t too different from its two-year result, suggesting its new initiatives aren’t accelerating buyer growth just yet.
Revenue Per Buyer
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 impressive over the last two years, averaging 7.3%. Its ability to increase monetization while growing its active buyers demonstrates its platform’s value, as its buyers continue to spend more each year. 
This quarter, eBay’s ARPB clocked in at $22.71. It grew by 17.7% year on year, faster than its active buyers.
Key Takeaways from eBay’s Q1 Results
It was good to see eBay provide revenue guidance for next quarter that slightly beat analysts’ expectations. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its EBITDA missed and its EPS guidance for next quarter fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $103.55 immediately after reporting.
eBay underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
