Key Points

Online ads represent nearly 20% of eBay revenue and deliver substantially higher margins than marketplace transactions.
eBay collectible items continue to fuel expansion as nostalgia lifts prices for classic products.
eBay maintains several product categories that post double-digit year-over-year revenue increases.

eBay (NASDAQ: EBAY) has posted a 24.4% gain year to date, outpacing the S&P 500 advance of 7.9%. The platform serves as a primary destination for collectors, and its purchase of Depop targets younger fashion-oriented shoppers. These factors, together with expansion in the online advertising business, position the company for continued upward movement.

Image source: Getty Images.

Online advertising can boost profits further

eBay posted first-quarter revenue of $3.1 billion, reflecting a 19% rise from the prior year. Online ad revenue reached $581 million and comprised almost 20% of total revenue. In the same quarter of 2025 the company recorded $442 million in ad revenue, marking a 31.4% year-over-year increase.

Strong growth in online ads supports overall revenue expansion while also improving profit margins. These ads carry higher margins than marketplace transactions. Although net income showed little change in the first quarter, the higher-margin contribution from ads is expected to appear in subsequent periods.

With 136 million buyers defined as users who purchased at least once in the trailing twelve months, online ads can lift average revenue per user and support ongoing expansion. The Depop acquisition may also attract new customers or re-engage those inactive for more than a year.

Collectibles continue to attract buyers

eBay Q1 materials indicated that collectible items will keep supporting gross merchandise volume. Grand View Research forecasts a 6.9% compound annual growth rate for the collectibles market through 2033, and eBay holds a leading position in the sector.

The company highlighted Pokémon repeatedly in its results discussion. A rare Pokémon card achieved a record $16.5 million sale on the Goldin platform, one of several notable transactions. eBay also conducted a Pokémon Day auction via eBay Live, its interactive livestream shopping service. eBay Live has increased engagement and recently launched in France, Italy, and Canada, allowing the platform and sellers to connect with cultural events and brand milestones that tap into nostalgia across diverse product lines.

Motor vehicle parts and fashion categories likewise recorded solid year-over-year gains. eBay operates across multiple diversified product areas rather than depending solely on collectibles, providing additional momentum that can sustain an extended rally.

Should investors consider eBay shares now?

Before purchasing eBay shares, note the following:

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Marc Guberti holds no positions in the stocks mentioned. The Motley Fool maintains positions in and recommends eBay. The Motley Fool follows a disclosure policy.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.