eBay Inc. (NASDAQ:EBAY) J.P. Morgan 52nd Annual Global Technology, Media and Communications Conference May 21, 2024 3:05 PM ET

Company Participants

Jamie Iannone - President, CEO
Steve Priest - CFO

Conference Call Participants

Douglas Anmuth - JP Morgan

Douglas Anmuth

All right. We're going to go ahead and get started. I'm Doug Anmuth, JPMorgan's Internet analyst. We're very pleased to have with us today eBay President and CEO, Jamie Iannone; and CFO, Steve Priest. eBay is one of the world's largest and most vibrant marketplaces for discovering great value and unique selection. The company empowers millions of buyers and sellers and more than a 190 markets around the world. eBay enabled about $73 billion of GMV last year.

Jamie has more than 20 years of experience across digital pure-play and omni-channel marketplaces. Prior to returning to eBay, 4 years ago, he was COO of Walmart e-commerce and CEO of SamsClub.com. Also, prior to that, EVP of Digital Products at Barnes & Noble, and spent 8 years at eBay before that across a number of various leadership positions. Steve has been CFO for nearly 3 years. Prior to joining eBay, Steve was CFO of JetBlue. And before that, he spent nearly 20 years at British Airways. Welcome, Jamie and Steve.

Jamie Iannone

Thank you, Doug. Good to see you.

Steve Priest

Good to see you.

Douglas Anmuth

All right. So let's kick off a little bit bigger picture. You're reinventing the future of e-commerce for enthusiasts. Talk to us about this evolution of the platform, how this new strategy is going where you see the biggest opportunities?

Jamie Iannone

Yes. Thanks, Doug. So really, we've focused on 3 key areas for us and remain the future of e-commerce for enthusiasts. The first is relevant experiences, building the ideal experience, whether it's a specific category, specific country, et cetera. It's a big part of our focus category strategy where we're driving game-changing experiences from a CSAT perspective, which leads to more GMV and really doing that across the board.

The second element is scalable solutions. eBay is a $73 billion business with over 130 million buyers. You can shift to 190 countries. So leveraging that incredible scale to drive new opportunities. The two most relevant that we've driven over the past couple of years as payments and advertising, but we continue to use our scale launching new efforts like eBay International Shipping, new financial services programs, et cetera.

And then the last pillar is what I would call magical innovations. And that's across the site, how do we launch new AI-based experiences, AI, non-AI-based experiences really with this bar of taking all of the friction out of the eBay experience, making it feel much more compelling and magical with what you do, making it more relevant for younger demographics, et cetera. So those are the 3 pillars that add up to what our kind of key strategies are for reminding the future of e-commerce.

Question-and-Answer Session

Q - Douglas Anmuth

Okay. Let's talk about AI. You're leveraging GenAI driving a lot of productivity improvements around customer care, developer productivity, overall tech velocity. Maybe you can talk about the road map there both internally, in terms of how you're getting efficiencies, but then also as you see it for products and agents for customers.

Jamie Iannone

Yes. So I'll separate it out. On the employee side, we look at how we leverage AI to make our employees more successful. So obviously, we're doing that in our call center. You can imagine with the number of transactions that we have. The call center takes a good number of calls, e-mails, chats, et cetera. And we're using AI there really make that teammate's job easier, more successful, let them focus on revenue-driving things like advertising because they can get through their calls faster. Just think of people used to send us very long e-mails about something that they wanted us to kind of take a look at. Now you can use Generative AI summarize that, saves the team and a lot of time in resolving the solution.

We're doing the same type of thing with our engineers on GitHub, CoPilot, really leveraging AI to make them more productive, really, I can't think of a part of the organization that's not using AI to figure out how we make our employees more successful. We even use it in our tax group. You want to talk about how we use AI and other functions?

Steve Priest

Yes. I mean we've been using AI for well over a decade. And I think tax is a great example of this. As Jamie has talked about reaching 190 countries, if you're selling a pair of casual boots versus a pair of working boots. The working boots attract a different VAT or difference on direct tax regime, and we've been able to use AI to basically discern how that specific sale should get treated. And so, this is a part of our DNA and some of the initiatives that we continue to drive over the last decade, and it's not just about the front-line customer experience. It's not just about the usual areas you think about in terms of engineering, customer support, et cetera. But we're looking at it across the whole enterprise.

Jamie Iannone

And I can talk about the customer facing whenever you want.

Douglas Anmuth

Go for it.

Jamie Iannone

Okay. So on the customer-facing side, across selling, buying CRM merge, I feel lucky to be the CEO of eBay right now because we've had AI for a long time. We search, advertising, risk modeling that we do, we have a great AI team. But the opportunity for us to use generative AI to fundamentally change the process of selling and buying on the site. Just take selling, we rolled out a feature we call magical Listing, which writes the description for you, saves you a lot of time from doing that, using generative AI. We have another version that we're working on, which basically -- you just hold your camera up to it and it takes out -- here's all the item specifics of that specific trading card. Here's the price we know what it is. It writes the description.

And when you look at it, the average household has $4,000 of stuff that could be online, and less than 20% of that is online. And people have a lot of inventory. They usually say it's their spouse has a lot of inventory that could be sold online. But our opportunity to really change the selling experience, make pictures more compelling is a huge opportunity. Same on the buying side. We just launched two features for our fashion vertical in the U.K., one called Shop the Look, which lets you shop across kind of whole outfits based on your style, athleisure, Scandinavian minimalism, whatever it is, and puts together outfits.

Now this is actually really compelling on eBay because eBay is a completely unstructured marketplace. So it allows you to list just about anything that you have on the platform. Now you can do it in a much more compelling way.

We're also launching a feed-based product called Explore, which helps you navigate your size, your styles and more of a social media feed like perspective, we're trialing that in the U.K., and we think that will be really compelling.

If you just take a step back, eBay has an over $10 billion fashion business. People love the values that they can get on the marketplace. They love the unique items that they can get. And so bring these capabilities to an experience that has been mainly search-based for 2 decades, we think is going to unlock some pretty rich and interesting opportunities for us for our customers.

Douglas Anmuth

Okay. Great. Let's talk about macro a little bit. Remains challenging globally for discretionary spending, just given the backdrop. What are you seeing today across U.S. and international markets?

Steve Priest

Yes, Doug, it certainly has been pretty volatile in terms of the macro environment we are navigating for the last 8 quarters, and I think the team have done a very nice job working through that. I think about 3 biggest markets, the U.S., the U.K. and Germany. The U.S. in fairness has been slightly more resilient. But to your point, Doug, certainly because we lean into discretionary items, the U.S. consumer, the sentiment is down. They're obviously dealing with higher interest rates, housing costs, et cetera. So it is impacting the U.S. consumer.

I think the U.K. and Germany are particularly interesting. They've had many quarters now of negative e-commerce growth. Think about the first quarter where both Germany and the U.K., were in negative low single digits. And we're operating in that environment. The U.K., for example, has just come out of a technical recession.

So we are obviously impacted by those macro headwinds. But again, I think the teams are doing a really nice job sort of navigating that and executing for the customer. And so it puts our results in context when you think about the environment that we're operating within.

Douglas Anmuth

Okay. Great. Let's talk about focus categories. So obviously, big -- big effort across the company. Focus category, GMV grew 5% in 1Q. The rest of the business was down 1%. You're also looking to get focused categories to about half of GMV near term. How are you tracking toward that goal?

Jamie Iannone

Yes, very well. So that's still our medium-term target is to get to half the business growing at market rates of growth. We think when we get out of the current macro dynamics, that will be about high single digits. And that's kind of what we've outlaid, and we still feel very good about that. You've got to remember, right now, Germany is effectively at a negative e-commerce negative 2 across the board. U.K. is kind of in that same range. So we're dealing an environment where a big part of our business is seeing negative e-commerce growth. But when we get to normalize, that's kind of the architecture that we've put together.

I'll tell you a couple of things we feel great about. One is even in this macro environment, our focus categories are growing 5%. When you look at our focus categories in aggregate, in 2023, we actually took share in those categories. And so I feel really good about the overall performance, the positive growth that we're seeing across those businesses. And what's great about eBay's model is for those who don't follow the story, in our focus categories, we've really moved customer satisfaction, up in a lot of cases like over 20 percentage points, and that's led to very strong GMV growth that we're seeing.

But the unique thing about our model is the cross-category shopping behavior that we see. So when we acquire, for example, a sneaker enthusiast someone who buys sneakers over $100. They will spend $500 in sneakers, but they'll buy $2,000 across the rest of the site. And there's this huge multiplier benefit that we have on eBay means we can afford a really attractive CAC for acquiring those customers. It means we can really drive the CLTV of what we're doing with our overall portfolio of categories and offerings that we have across eBay, and that's really unique.

And we continue to innovate not just on new categories. We launched a number of things in the U.K. around pre-loved fashion this quarter. But invest back into categories that we've already launched because we like the return that we're seeing in them. So we continue to push forward. I can talk to you on about what we just did in collectibles this past quarter, but we just closed a relationship with Golden and Collectors to actually really simplify the collecting experience on the platform.

If you're a heavy collector, I don't know if we have collectors in this room, but a lot of people take an ungraded card to get it graded to see the value right after they buy it on eBay or they'll take a graded product that they get a great grade for and go to list online. And historically, that was kind of a multistep process and sending it to the grader and getting it back and then listing et cetera.

And so the idea was, how do we build this partnership to help the hobby and the industry of trading with something like that. So that's an example of how we continue to push the envelope as part of that. We've acquired Golden Auctions, gives us the most desirable inventory in that category to have on the platform. And I could talk about multiple other categories, but just a good example of how we like the ROI, Doug, we're seeing the investments that we're making in focused categories. We like the growth rates that we're able to drive there. And so we're going to continue to do both, expand into new categories, invest in categories because we see the ROI and the return of what's working.

Douglas Anmuth

I know focus categories as you're -- multiple years, obviously, into this. But if -- for someone who perhaps -- even someone in the room, for example, who hasn't shopped on eBay, in a number of years, like what would be most different to them in terms of the experience and what they're seeing in those focus categories in particular?

Jamie Iannone

Yes. Think about it this way. It's optimizing what's the ideal experience for a given category to really kind of change the experience to be leading in a category, but yet still be familiar enough that you could go shop across all of eBay, because one of the benefits is we get you into sneakers, then you start buying street wear and everything else. And so that's a big opportunity for us.

And so if I just take the example of handbags, right? If you look at our handbag experience, really rich picture as we increase the number of pictures that you have, you can now take video and do videos of those products, et cetera. Like in sneakers and watches, we authenticate those products. So before the customer actually receives them, they will get -- that will stop at an authenticator, be a great experience on arrival, et cetera. We also intermediate the returns. We built managed shipping. So we track the shipping throughout.

So basically, think about it as everything you need to have an amazing experience in that category, but yet familiar enough across the eBay platform that after you buy handbags, you go buy watches or apparel or those types of things. That's what's the difference. And it's different for every category.

An example of our parts and accessories area, where we really focused was how do we build the leading experience there. And in U.K. and Germany, we are actually a leader in the parts and accessories area and very strong #2 in the U.S. When you look at it, we built fitment finders to make it perfectly easy to be guaranteed that it fits your vehicle. We actually put that authenticity guarantee out there and said, we guarantee it will fit your vehicle or you can return it for free. We build enhanced features in My Garage. My Garage is a feature to store cars that you have. We have over 100 million cars in My Garage, the people fix up and their parts and accessories.

So it's been a different answer for every category. In handbags, we did a bunch of changes. We authenticated it in parts and accessories, different answer, different answer for what we've done in refurbish. But in each category, we've built that game-changing leading CSAT experience, which has led to the GMV growth.

Douglas Anmuth

Okay. Great. GMV, you've guided for FX-neutral GMV growth in the back half of the year or to turn positive, let's say, 3Q, 4Q. Just given macro remains difficult. Maybe you can just talk about what you view is driving that momentum underneath the hood and kind of what changes in the back half for you?

Steve Priest

Jamie, do you want to pick that up from what we’re learning from an investment standpoint?

Jamie Iannone

So there's really 3 areas that we're focused on. One is focused categories is driving a good part of that growth, right? So you think about growing 6 points faster, it's becoming a larger percentage of the business, and we're expanding it. So the work that we're doing in focus categories is, I'd say, the first key part of what's driving that.

The second is geographic specific work that we're doing. So we've been having the success with our playbook across verticals, if you will. And we decided last year to take that to specific segments and specific markets. So for example, we focused on C2C business in Germany, made a number of discrete changes about 10 different changes to that experience, made a lot of adjustments and said, let's see if we can do it on a category segment level. And we've had great success, Doug. If you look at it, that business had not been as healthy and a declining part of our business, we turned that to positive growth, really got it driving even a year after lapping it, we're still seeing really healthy positive C2C growth because C2C is a really important part of the overall mixture for eBay. It brings really unique inventory on the marketplace, which is compelling. If we get you to sell as a C2C seller, you become 2 to 2.5x more valuable as a buyer. So there's a lot of elements.

And the third thing that's really working there is that starting last year, the third pillar of our strategy had been magical innovations. But when generative AI capabilities came along, we decided to really double down on the opportunity to go after and change the horizontal experiences because we knew they would help not only focus categories but also kind of our other core categories.

So all the work that we've been doing to leverage AI, for example, in the selling process is not just the elements that I talked about before, where it's figuring out all the attributes for you, it's writing the description for you. But it's also a thing like pictures. I've been around in this business for -- I started the eBay 23 years ago, and quality pictures make a huge difference for shopping on the experience. And so we said, let's make it easier for sellers to put quality pictures out there.

So if I take a picture of shoes on this super ugly carpet here that would be -- wouldn't look as good, it would wipe out the background for me, and I could put it right on a basketball court and it would look really gorgeous, right? You can imagine a pair of Air Jordan 1s, [indiscernible] on that background versus on it. And so the ability to make it just easier for sellers to list to use AI. And it's not just for casual sellers on the platform. It's also for professional sellers. I've had professional sellers tell me that -- and I met one woman that we had on stage in one of my all hands, and she said, I would normally have -- she has a bunch of listers, like 8 different people who just list product.

She says, the average lister could list maybe 100 or 150 items in a day. But with the new technologies you guys are building, I think they can do at least double that. And so it's not just unlocking that $4,000 in people's homes. It's even making how our professional sellers stronger. So those are really the 3 elements, Doug, that I would say are what gives us confidence about the growth that we're driving, give us confidence that this is really healthy, long-term sustainable growth in our business and that kind of ex the current macro factors that are going on, we feel really good about the underlying momentum that we've created.

Douglas Anmuth

And is there any change in macro environment assumed in the back half to get there or no?

Steve Priest

No, we're assuming that the macro environments remain stable. And so it continues to be choppy. We'd expect that to persist through the rest of the year. And therefore, as you can imagine in order to sort of turn positive in either Q3 or Q4, then we continue to take forward some of the share gain that we saw in 2023.

Douglas Anmuth

Okay. Let's talk about ad revenue, just over 2% of GMV in the first quarter. How are you tracking towards the 3% goal? What are some of the puts and takes in reaching that penetration level?

Jamie Iannone

Yes. We feel great about our advertising business. We're right on the trajectory we thought when we put that -- put those goals out there. And it's a combination of things that are working. One is our existing products continue to perform well, but we continue to see more opportunity in them. So if I look at Promoted Listing Standard, which is our CPA-based product, we continue to have additional penetration opportunities. We continue to make improvements in the optimization of that product. We only have about 950 million listings that have adopted any product. So we still have less than half of the inventory available in terms of penetration and feel good and still the largest contributor to growth.

We've been doing a lot of work on Promoted Listings Advanced to make the process a lot easier. When we first launched that product, you had to create the campaigns, you had to choose the keyword. It was a very time-consuming process to drive advertising. And over the past couple of quarters and years, we've made that product a whole lot easier. We've done things like suggested campaigns, we will come up with it for you. We've done things like smart targeting and broad match to make it easier to just develop those products on the way to kind of just like I say, with selling on AI make it so easy to adopt. It's almost seamless and part of the -- part of a seller's individual business.

So we continue to see a lot of runway there. And then what we're seeing is that our new -- some of our new products are getting traction. So we started in beta a couple of quarters ago, if you're following the advertising blogs with a couple of sellers who have been trying out the idea of off-site advertising.

So using a CPC-based product on external services like Google, where we're kind of driving the advertising on behalf of the seller using their marketing dollars. And what we've seen is really great traction on that product, and we talked about it on the earnings call because for a seller, we make it extremely easy for them. And so the whole idea is you just tell us the budget and then you can leverage eBay's decades plus experience in doing advertising and all the sophistication and the day parting and the optimization and the pricing and everything that we've done for a very long time, you don't have to worry about that. We're taking care of that on the seller's behalf.

I was with a seller at a dinner the other night. And you say, you know what I love is I was about to go hire a marketing manager to run this part of my business and you guys launched this feature, I can potentially save that cost now and not do that, and I'm just using kind of your offsite ads product. And so -- and it obviously is great for eBay because it drives traffic back to the platform on behalf of the seller. So that's a long way of saying we feel really good about the traction. We feel good that we're on this trajectory that we thought we would be on and that we're excited both about the additional opportunities that we have in our portfolio, but also about the new products that are coming online.

Douglas Anmuth

Okay. Great. We'll take a couple in the room, if there are any, just feel free to raise your hand and there's a mic going around. There's one upfront. Let me just ask one and then we'll go to you. Just on profitability, Steve, you've been investing. Margins have compressed over the past few years, but you're guiding to 60 to 100 basis points of margin expansion this year. Maybe you can talk about the drivers of leverage, what's creating that change here in '24?

Steve Priest

Yes. So we have been very, very intentional in investing in the business. And we've done that over the last few years because we recognize the importance of doing that to drive profitable, sustainable long-term GMV growth. And that's been a key ingredient to everything that we've been driving forward. As we enter 2024, we are obviously in a position now that we can leverage some of those investments that we've made. But to Jamie's point earlier, the onset of things like generative AI has helped us start looking for additional efficiencies across our business.

We launched a structured cost program about 3 years ago with regards to generating about $300 million in aggregate, we're ahead of that target. We've had benefits that we've seen across our engineering space, across like GCX space, we talked about the opportunities that we can drive with efficiencies across the rest of the organization. And Doug, that has continued to drive additional capacity for us to continue to invest in the business.

And I think when you've got a financial architecture like eBay, we are in a position to create our own capacity. We can continue to invest in some of the products that Jamie has talked about and drive bottom line benefits of that. And hence, it gives us the opportunity to drive 60 to 100 basis points of margin expansion in '24. Where we land on that will be a function of where we decide to invest additionally in '24 based on the ROI that we see from the investments. And then ultimately, it's a key ingredient towards the 10% earnings growth that we see at the midpoint of the '24 guide. So very pleased with where we are with our financial architecture for the year.

Douglas Anmuth

Okay. Great. Go for it.

Q –Unidentified Analyst

Now the turnaround story sounds very exciting in terms of removing the friction to list. I guess what are the signs that you're looking for in terms of understanding how long it takes for that thesis to take hold and actually start to impact the trajectory of growth that you're looking for?

Jamie Iannone

Yes. We're obsessed with customer satisfaction and NPS in the platform. If you think about what's made eBay successful, the word of mouth has been incredibly powerful for 20 years, right? And by definition, that's kind of NPS and CSAT. And so what we've seen in our focus categories, and I've talked about this on our various earnings calls, is like a 20-point movement in customer satisfaction. In Germany, we saw a 20-point movement in customer satisfaction. And what always happens then is GMV follows that customer CSAT. And it takes some time if you look at parts and accessories, for example, there have been multiple quarters now where we're growing mid-single digits, in line with kind of the market rates of growth on a huge $10 billion business.

So I would say this is the same thing for our new product features and innovations, which is how we change in the CSAT, what's that going to drive how much inventory is it going to lock, how many more C2C sellers will it bring to the platform. And it's very early days, right? The first version is out to everyone now. The second version will be coming, we're testing it now with a small percentage of customers. But early signals of the CSAT are like wow, and when I talk to customers and I demo these features, they're like, oh, my god, I have stuff in my closet that I wanted to sell if you just make it kind of super easy. So we're excited for the long-term potential of what that means for those products.

Douglas Anmuth

Other questions? Let me go to just kind of sticking with margins. International shipping eIS. It's weighed on gross margins, but overall margin neutral. Maybe you can talk about the longer-term benefits you're seeing from this product and then also about seller adoption.

Steve Priest

Jamie talked about scalable solutions at eBay. We talked about payments. We talked about advertising and shipping is another ingredient there. I think what I love about eBay International Shipping not only is it accretive from a financial perspective, but it's great from a strategic standpoint. As you rightly said, Doug, it puts a bit of pressure on gross margins as we went through 2023 in terms of the investment in that program and get into sort of neutral operating margins and starting to drive incremental dollars for eBay.

We have opened up the aperture for our U.S. sellers on an international basis. 132 million buyers across the globe across 190 countries. You're now in a position if you're a U.S. seller, there is -- this is easy to ship from San Francisco to Munich as it is from San Francisco to New York. The sellers actually ship their products to Chicago and eBay takes care of the rest. And you think about that from a duty standpoint, from a paperwork standpoint, from the friction in terms of potential returns, et cetera, we have unlocked that.

And as a result of eBay International Shipping, we have literally opened up the aperture for 400 million listings in the U.S. that traditionally would have only gone domestically on an international basis. So this is yet another pillar that is a benefit of our size and scale at eBay, where we have those buyers, we have those sellers, we have that inventory. And not only can we monetize it and drive incremental dollars, but it also takes friction of the platform. And to Jamie's point about CSAT, we see over 20% increase in CSAT from the sellers that are using eBay International Shipping than where they were before. And so it's a great addition to the portfolio of investments that we've got.

Douglas Anmuth

Okay. Great. Maybe we can talk about capital allocation a little bit, just how you're thinking about the strategy there, strong balance sheet, very healthy and sustainable free cash flow growth. You talked about returning 130% of free cash flow through '24, so can you talk about just how you're tracking to that goal? And then how we should think about perhaps any changes post close of the Adevinta stake?

Steve Priest

Yes. We have a great track record over the last few years in terms of being good stewards of capital and getting the balance right. As a reminder, first priority is to reinvest in the business. We see that as the best way to drive long-term sustainable GMV growth and drive value for our shareholders. The beauty of the eBay model, is that we can do both. We can invest in the business, drive healthy margins and drive healthy capital returns to our shareholders.

Since the start of 2022, we've returned $6.2 billion of capital return, which is 134% of our free cash flow over the period and so ahead of the targets that we laid out. We obviously look at the sources and uses of cash, the strength of the balance sheet, including potential other sources coming into the company. And we've guided for 2024 just over $2 billion of returns. And so our philosophy hasn't changed. We continue to lean in to capital returns, and I'm pleased that we're able to create that sort of value for shareholders.

Specifically tuned to the Adevinta deal, I'm pleased with the deal that was -- has been struck. We expect it to close by the end of May. We did recently put out an additional 8-K with regards to some additional proceeds for another 25 million shares. So the gross proceeds we should expect will be about $2.4 billion. This is different from the additional option that Premier and Blackstone have an option to take the 10% of the company. So -- and if I stand back from this, the value that has been created has come from a 50% increase in the undisturbed share price that it was sitting at before the transaction was sealed.

So really, really pleased with the work the team have done, really pleased with the value that is being created for shareholders. And again, our philosophy in terms of driving healthy capital returns and getting the balance right will remain intact.

Douglas Anmuth

Okay. And how are you thinking about M&A, just in particular as it relates to the focus categories?

Jamie Iannone

Yes, I'd say our strategy hasn't changed, which is we look at build by partner for everything. So if you look at the case of Adyen, we did a partnership there with Warrens, which worked out great. In the case of MyFitment or Certilogo, we bought companies that we thought were really congruent with the strategy of what we're doing. And have been really beneficial for us. We just launched a one click to resell with Certilogo as an example of just being able to immediately get value out of those, which has been fantastic.

In other cases, we build, a lot of the AI technology that I talked about, we built that internally because we have the skill sets to pull it off. Maybe I'd look at the Golden deal is -- I mean, the Golden and Collectors deal is a good example. There's an acquisition with Golden and there's a partnership with Collectors and PSA to really create that seamless experience. So I think that strategy has worked really well for the company and it will be continue the framework that we use going forward.

Douglas Anmuth

Okay. A lot of attention in this space just around China e-commerce? I know it's a frequent question that you get. But maybe you can just talk about kind of how you're thinking about the latest there? Any impact on your business? How do you think about that going forward?

Jamie Iannone

Yes, it really hasn't impacted our business to see some of the Chinese competitors come in for a couple of reasons. One is, eBay has a -- the vast, vast majority of our traffic is organic. So we don't have as much as other people with paid traffic. So when another big paid player comes into the market, it just impacts us less. Secondarily, for those who have been following the story for a while, we moved away from kind of the low ASP overseas inventory a while ago to really focus on our core of where we're strong. And so you can look at what we're doing in focus categories, our focus on non-new in season. It has been a differentiated strategy that's worked out well for us.

I'd say the one thing that's happened over in Asia that is starting to come to the U.S. and U.K. is live shopping. And so we started rolling out live shopping many quarters ago, in areas like Collectors, in collectibles, people doing case breaks online, showing off the inventory that they have, et cetera. That's expanded into other areas like fashion and handbag before I walked in here, I got a push notification about one starting.

Today's e-commerce stay, by the way, on eBay with Alicia Silverstone, talking about all the work this company does in e-commerce. But one of our sellers was doing a live commerce who sells handbags in fashion, and she had 2,700 people on that live stream that I was just on, and it shows you like the appeal of giving sellers a new tool that they can use to market what they're doing on the platform. And so just launched our first one of those in the U.K. a couple of weeks ago. It's obviously more nascent in the U.S. and European markets, but pretty interesting to watch how the communities take advantage of things like that.

Douglas Anmuth

Okay. Great. We're going to wrap up a quick word association. So I don't know which one of you, but whoever is stepping up. So -- okay. Focus categories.

Jamie Iannone

Who's doing it. Each of us or just one of us?

Douglas Anmuth

No, just one of you.

Steve Priest

Come on you can do it.

Jamie Iannone

Focus categories, awesome, 5%.

Douglas Anmuth

Macro.

Jamie Iannone

Better in the U.S. than Europe.

Douglas Anmuth

GenAI.

Jamie Iannone

Pretty phenomenal and lucky to be the CEO. I guess I'm supposed to say one word, compelling.

Douglas Anmuth

Parts and accessories.

Jamie Iannone

Healthy.

Douglas Anmuth

Advertising.

Jamie Iannone

Very strong.

Douglas Anmuth

Margins.

Jamie Iannone

Good.

Douglas Anmuth

Amazon.

Jamie Iannone

Great at what they do.

Douglas Anmuth

Free cash flow.

Jamie Iannone

I love this business and being CEO of a business with such a strong financial -- I should have -- that one. But we have a really healthy business that throws off a lot of cash, and it's -- gives us flexibility.

Douglas Anmuth

Back half GMV.

Jamie Iannone

We're projecting positive growth in Q4.

Douglas Anmuth

Enthusiasts.

Jamie Iannone

They buy 70% of the inventory on the platform, we love them.

Douglas Anmuth

All right. Cool. Leave it there. Thank you.

Jamie Iannone

Thank you.

Steve Priest

Thank you, Doug. Thank you, everyone.