President and Chief Executive Officer at eBay
Thanks, Joe. Good afternoon, everyone, and thank you for joining us. Before discussing our first quarter results, I want to acknowledge the terrible human tragedy that continues to unfold in Ukraine. This is a very difficult time for many, and I'm proud of how eBay employees and customers have mobilized to support those affected. At our core, eBay exists to help people and communities around the world. This role is fundamental to our purpose and motivates our workforce. In addition to direct and indirect support for refugees and citizens, we will continue policy actions to help customers in the region. These events have had a negative impact on consumer health, primarily in European markets. Despite this unexpected headwind, our global results for Q1 were strong. Let me highlight a few achievements from the quarter. Focused category innovation expanded, and these categories continue to grow faster than the rest of the marketplace. 18 million enthusiast buyers continue to shop regularly on eBay, purchasing items over 30 times per year. Sellers are seeing a simpler unified listing experience, and we made several improvements to eBay stores in the quarter. We announced a deal with climate to provide more popular payment methods to German buyers, and we started testing the new eBay wallet. Our advertising business grew faster than GMV due to increased optimization and adoption of new products. And finally, we made significant progress on our e-commerce, DE&I and sustainability goals. Sellers and buyers are turning to eBay, and this led to financial results at the high end of our expectations.
We delivered over $19.4 billion in GMV and close to $2.5 billion in revenue. We continue to make the long-term investments laid out at Investor Day while achieving a 32% operating margin. And our non-GAAP EPS was $1.05, $0.02 ahead of consensus. Given the challenges our customers are facing around the world, we are pleased with our performance to start the year. Since late February, when the war in Ukraine began, we have seen lower e-commerce traffic, inflation in gas prices and home energy costs and historically low consumer confidence, particularly in the U.K. and Germany. As we look forward to the rest of 2022, we find ourselves in the most dynamic macro environment I have seen since returning to eBay as CEO. We expect more near-term headwinds to e-commerce growth rates this year, and our revised guidance reflects our best year based on recent trends. Steve will go into more detail about our full year expectations later. During these uncertain times, one thing that remains clear is that the tech-led reimagination is improving the underlying health of our business, and we are on track towards our long-term growth targets. One example is in focus categories. The investments in trust, user experience and marketing are driving higher customer satisfaction, leading to faster GMV growth. In Q1, excluding trading cards, focused category GMV grew nine points faster than the rest of the platform. This growth is on top of last year's stimulus-driven surge, which drove exceptional volume in many high ASP products. Despite challenging year-over-year comps, trading cards remains one of our healthiest growth businesses.
In the first half of 2021, we saw an unprecedented surge boosted by mobility restrictions and stimulus. Since that time, volume has remained elevated. And in Q1, GMV was more than double the size of pre-pandemic levels. As a leading trading cards platform, we continue to innovate our experience to increase trust between buyers and sellers. In Q1, we launched authenticity guarantee for ungraded cards above $750. Just this week, we expanded authentication to cards by signing a strategic partnership with PSA, the global leader in trading card grading and authentication. We expect this partnership will increase customer satisfaction and result in more GMV growth. We are incredibly excited for the launch of the Vault this quarter, which will transform our Collectibles business. Items in the vault will be able to securely transfer between sellers and buyers in a matter of seconds without the need to ship or the need to reauthenticate. We see an opportunity to hold up to $3 billion of inventory in our vault in the next few years, creating significant GMV and revenue growth potential. Looking beyond Collectibles, we continue to expand coverage of focused categories to more products and markets. Let me share a few examples. At the end of March, we started authenticating high-value handbags in the U.K. and Australia. We also expanded the number of handbag brands covered by our authenticity guarantee and began to authenticate men's bags in the U.S. Another area in Q1 was eBay Refurbished.
After success with certified products direct from manufacturers, we have significantly expanded the program across smart watches, tablets, laptops and guest steps. Now buyers can shop from sellers across a wide range of refurbished inventory backed by eBay's moneyback guarantee and warranties. These trusted products contribute to e-commerce, which saves consumers money and reduces carbon emissions. The luxury watch category continues to grow at positive double-digit rates on top of last year's strong growth rate. To date, we have authenticated watches over $2,000 across three markets. This quarter, we added the ability for buyers to request expert verification for a fee for watches valued between $1,000 and $2,000. This additional service marks an important milestone in our journey to increase trust through authentication. This feature is portable to other categories and markets across the platform and demonstrates the scalability and effectiveness of our playbook. In our sneakers category, we reintroduced final value fees in the U.S. in January, and growth momentum continued. These fees are lower than most other platforms and customer satisfaction remains near historically high levels. Sneaker GMV is also growing significantly faster than the rest of the business in our international markets. We repeated the successful approach first deployed in the U.S., which includes authentication, influencer partnerships and increased social marketing investments. In parts and accessories, supply chain constraints and low vehicle inventory are driving up the price of new and used cars.
These trends are driving more consumers to extend the life of their current vehicles. With approximately 0.5 billion P&A listings, we are well positioned to supply all the parts they need. We have been investing in full funnel marketing for parts and accessories since December, and we are starting to see modest gains in initial consideration. This includes partnerships with leading influencers and enthusiasts to showcase our vast inventory selection. A recent example is the eBay Auto Parts Show in New York, where several top influencers showcased that restored in custom vehicles. These do-it-yourself enthusiasts crafted reconcept cars using unique and hard-to-find parts on eBay. This event generated three billion media impressions in one week, supporting the momentum we are seeing in the P&A category. While sellers and buyers love what we are doing in focused categories, we are also making site-wide enhancements to help all sellers grow their business. In Q1, we made several significant changes to further modernize our store's experience. First, our new storefront page provides sellers the ability to tell their story, showcase their brand and increase trust in their business. Second, we optimized SEO for stores to drive more free traffic. Third, we increased the prominence of store inventory and made it easier for enthusiasts to find stores throughout the buyer journey. To support sellers and help them grow their buyer base, we also increased the ability for buyers to save sellers for future purchases. Now when buyers purchase items, they are prompted after checkout to save that seller.
This has driven a 4x increase in the number of saved sellers to date, which leads to more purchase frequency. New buyers who save a seller in their first 90 days are more than twice as likely to repurchase an item. More sellers are sending coded coupons to drive repeat purchases. To date, over 7.5 million buyers have purchased an item from a seller funded coupon, equating to approximately $500 million in GMV. To help sellers improve targeting, they can now categorize their buyers in unique groups for customized marketing campaigns. Our payments platform is enabling new services and reducing transactional friction for sellers and buyers. We signed an agreement with Klarna in early March, bringing two popular payment methods, pay upon invoice and installments, to our German buyers. Testing is underway, and we are on track to make it available to all German consumers this quarter. We started testing and scaling other payment studies in Q1, including the new digital wallet we announced at Investor Day. When sellers earn money, that balance is stored on eBay and readily available for them to purchase items or pay for selling expenses like shipping labels. We will continue to optimize this feature and expand to more customers during the year. Approximately one in five transactions occurs across borders, and our payments platform is reducing friction on these purchases. In Q1, we started giving buyers the option to pay in their local currency in addition to the currency of the listing. This feature simplifies cross-border trade and also enables incremental payments revenue to fund further innovation.
I'm excited by the pace of innovation in payments. After completing the migration last year, we are moving quickly to reduce friction, launch new services and leverage our scale to benefit sellers and buyers. Another area where innovation is driving growth is our advertising. In Q1, our ads business once again outpaced volume. Ad revenue growth was driven by Promoted Listings, which generated $222 million in revenue, up 2%. This was 19 points faster than GMV, and it has accelerated due to product innovation. Our standard Promoted Listings product, which still drives most of our first-party ad revenue, continues to drive growth through increased adoption and conversion optimization. And we see further runway in the quarters and years ahead. The three new products launched last year are early in the growth cycle but are up more than 50% versus Q4. The first product, Promoted Listings Express, is increasing conversion and price realization for auction sellers. A typical auction that leverages this feature is attracting several hundred more buyers per listing. The second product, External Promoted Listings, is now open to our entire global seller base. Similar to standard Promoted Listings, sellers choose the value of their ad spend. We continue to expand the list of affiliate partners in the program to drive more traffic directly to sellers with Promoted Listings. The third product, Promoted Listings Advance, while still limited data, has been scaled to more professional sellers. In Q1, we expanded the number of ad groups, providing more bidding capacity and flexibility. This product will take time to reach its full potential, and we see opportunities for significant growth.
We are continuing to invest in our advertising platform and expect ad revenue to outpace volume for the foreseeable future. We continue to make meaningful progress on ESG. Let me share a few highlights. Firstly, on Recommerce. In 2021, our platform generated over $4 billion in positive economic impact from the sale of used and refurbished goods. This activity avoided 1.5 million metric tons of carbon emissions, equivalent to taking 300,000 cars off the road for a year. Recommerce on eBay is growing due to our focus on non-new and season categories. Demand for refurbished and used goods is growing in many categories, and we are well positioned to hit the long-term goals I shared with you at Investor Day. Secondly, I'm proud of our team's efforts around DE&I. We are about to publish our sixth annual diversity, equity and inclusion report. This report provides insights into our four strategic objectives: increased representation, cultivating a sense of belonging, engaging our communities and building inclusive technology. Aligning and executing on these objectives is how we build a richly diverse, truly equitable and fearlessly inclusive place to sell, buy and work. The third area of progress I would like to highlight is reducing our impact on the planet. Last year, we set ambitious, long-term, science-based targets. For the full year 2021, we reduced Scope one and two emissions by 26% versus 2019. For Scope three, which includes the impact of shipments on our platform, we reduced emissions by 7% versus 2019 despite volume growth. Lastly, 90% of our energy now comes from renewable sources, and we remain a carbon-neutral company.
You can find more details about our sustainability programs and our annual impact report later this month. I'm always impressed by the generosity of our sellers and buyers. In Q1, eBay for Charity raised over $36 million, up 2%. We recently announced the grand finale of the Power of One charity auction with Warren Buffett. Since launching on eBay over 20 years ago, over $34 million has been raised to support Glide, a nationally recognized center for equity. The eBay Foundation, whose mission is to remove systemic barriers to entrepreneurship, committed $11 million to nonprofits in Q1. In addition, during March, over $2.4 million was raised from employee contributions and eBay Foundation matching gifts, many of which went to support Ukrainian relief efforts. Across a number of other employee and customer channels, the company has raised millions of dollars for Ukraine-related causes. In several countries, customers contributed to give at checkout campaigns that supported the Red Cross, Nova Ukraine and Save the Children. We are very fortunate to work for a purpose-driven company with a team relentlessly focused on helping people and the scale to deliver meaningful impact to our communities. In closing, Q1 was a strong start to the year. We extended focused category coverage in watches, handbags, trading cards and eBay Refurbished. And we laid the groundwork to launch the Vault this quarter, a game-changing experience for collectors. We released several new features for eBay store sellers like new store fronts and enhanced SEO. And we're encouraging more buyers to save their favorite sellers to drive repeat purchases.
In payments, we launched Klarna for German buyers, started testing a new digital wallet and increased currency payment options for cross-border buyers. Our advertising business is meaningfully outpacing volume growth through optimization and new product innovation. And we are achieving all of this while executing on an ambitious ESG agenda to support our communities and the world we live in. Before I hand it over to Steve, I would like to express my sincere appreciation to our seller and buyer community whose energy and unique inventory make our marketplace truly differentiated in e-commerce. I would also like to thank all of our global employees for their tireless efforts to delight customers and support our communities. Their dedication and focus are improving our underlying business health every day. Lastly, I'm thrilled to welcome Eddie Garcia back to eBay as our new core product leader. His wealth of eBay knowledge and track record of innovation will be great assets to continue to drive the tech-led reimagination.
With that, I'll turn the call over to Steve to provide more details on our financial performance. Steve, over to you.