eBay Inc.

Ladies and gentlemen, thanks for standing by, and welcome to the eBay Q4 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Joe Galante, VP of Communications and Investor Relations. Thank you. Please go ahead.

Good afternoon. Thank you for joining us, and welcome to eBay's Earnings Release Conference Call for the fourth quarter of 2020. Joining me today on the call are Jamie Iannone, our Chief Executive Officer, and Andy Kring, our Interim Chief Financial Officer. We're providing a slide presentation to accompany Andy's commentary during the call, which is available through the investor relations section of the eBay website at investors.ebayinc.com. Before we begin, I'd like to remind you that during the course of this conference call, we will discuss some non-GAAP measures related to our performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in the slide presentation accompanying this conference call. All revenue and GMB growth rates mentioned in Jamie and Andy's remarks represent FX-neutral year-over-year comparisons, unless they indicate otherwise. In this conference call, management will make forward-looking statements, including, without limitation, statements regarding our future performance and expected financial results. These forward-looking statements involve known and unknown risks and uncertainties, and our actual results may differ materially from our forecasts for a variety of reasons. You can find more information about risks, uncertainties, and other factors that could affect our operating results in our most recent periodic reports on Form 10-K and Form 10-Q and our earnings release from earlier today. You should not rely on any forward-looking statements. All information in this presentation is as of February 3, 2021, and we do not intend and undertake no duty to update this information. With that, let me turn it over to Jamie.

Thanks, Joe. Good afternoon, everyone, and thank you for joining us. I'll begin today's call with some key highlights from last quarter and last year and walk you through an update on the progress of eBay's tech-led reimagination. I will then turn the call over to Andy to discuss the details of our recent performance and near-term outlook. Overall, 2020 was a great year for sellers and buyers on eBay. We are pleased that we closed out the year with strong results. For Q4, gross merchandise volume in marketplaces grew 18%, well ahead of our expectations. The holiday season contributed to the strong performance as we saw record volume with high velocity in hard-to-find and sold-out items. Refurbished gifts also emerged as a top trend, and we saw many products from top brands in our certified refurbished experience sell out completely. Our buyers were very active during the holiday season. In the US, one in 10 online shoppers bought something on eBay. In Germany, that number was one in seven. And in the UK, it was one in four. In addition to this holiday surge, we experienced unprecedented traffic levels for most of 2020. And yet our platform had the highest availability in the last six years. To put this in context, more than 100 days in 2020 exceeded peak 2019 traffic levels. eBay has been able to seamlessly handle these peaks while keeping our marketplace open for all during a global pandemic. For the full quarter, revenue grew 10 points faster than volume, up 28%, driven primarily by payments and advertising. And we delivered 86 cents in non-GAAP earnings per share, which was above our expectations and included reinvestments for the long term. Our customer metrics grew on both sides of our marketplace in the quarter. Active buyers grew 7% to 185 million globally, and our active seller base increased by 5% as more small business and consumer sellers listed and sold on the platform. These results capped off a tremendous year for eBay. In 2020, we added an incremental $14 billion of GMV. That's more growth in the past seven years combined. Organic revenue grew 21%, and non-GAAP earnings per share grew 49%. and we returned nearly $5.6 billion to shareholders through dividends and buybacks. In July, I laid out a long-term vision for the company, and we have re-architected our roadmap to achieve our tech-led reimagination over the next few years. We also made progress on our multi-year initiatives, payments, and advertising, which drove tremendous financial results while providing customers with a significantly improved experience. We continue to make significant advancements with our managed payments transition, ending the year with over 1 million sellers migrated. During the quarter, eBay managed payments for over 38% of on-platform volume. In the U.S., we exited the year with over 50% of the migration complete. In addition to the five markets where we already launched, transitions have been announced or underway in France, Italy, Spain, and Greater China. we have also started to transition consumer sellers in the U.S., U.K., Canada, and Germany. Seller satisfaction has improved compared to Q3, and NPS scores from sellers in managed payments remain more than 10 points higher than the NPS of sellers who have yet to migrate. Over the course of 2021, we plan to roll out payments to remaining markets, launch cross-border trade, and release product capabilities for all use cases. This roadmap opens up managed payments to all sellers globally and places us firmly on our path toward 100% migration. As the vast majority of the transition will be complete by the end of this year, we are well positioned to deliver at least an incremental $2 billion in revenue and $500 million in operating income annually in 2022. In Q4, advertising growth outpaced volume once again as sellers leaned further and promoted listings to grow their business. For the quarter, promoted listings delivered over $215 million of revenue, up 57%, despite having left a major product launch that drove strong acceleration a year ago. For the full year, promoted listings grew 86%. This product continues to grow in part because sellers who have adopted promoted listings are seeing, on average, a double-digit sales increase. Our total advertising revenue reached a new milestone in 2020, passing $1 billion for the year. We see tremendous growth potential remaining, as this represents approximately 1% of GMV, well below industry benchmarks. We expect advertising revenue to outpace volume for the foreseeable future. Now I'd like to share an update on the transfer of classifieds to Adaventa. We remain excited to bring together two highly complementary businesses that can create tremendous value over time. We believe the deal is on track to close as we have received the vast majority of regulatory approvals. We expect closure by the end of the first quarter, subject to the remaining regulatory approvals which we are working to obtain. We also recently announced that we are exploring options for our Korean business. Our two local platforms, Gmarket and IAC, have built leading e-commerce positions by tailoring to customer needs with innovative experiences. With a paid loyalty program of over 2.5 million members and a growing first-party inventory program, these businesses primarily focus on new and seasoned products from B2C sellers with limited cross-border trade. As we mentioned in our press release, we will not be communicating any further information about the strategic review process until there is material information to disclose. I will now provide an update on the progress we have made towards our long-term vision for eBay. The three strategic priorities to support this vision remain the same. First, to defend our core by building compelling next-gen experiences for our enthusiasts. Second, to become the partner of choice for sellers. And third, to cultivate lifelong trusted relationships with our buyers. In the past few months, we launched several new product experiences aligned with this vision. While we still have a long way to go, we are encouraged by the initial reaction from buyers and sellers and the acceleration in GMV in several categories. During the fall in the U.S., we launched authentication for luxury watches and quickly rolled out a similar experience to sneakers a few weeks later. We have put a greater focus on protecting buyers and sellers by preventing counterfeits and eliminating fraudulent returns. These experiences are driving significantly higher than average customer satisfaction, and we see opportunities to expand this capability to other verticals and markets. This new product experience is driving material growth in these categories for U.S. business. For luxury watches, over $2,000, we saw a double-digit increase in GMV growth in Q4 versus Q3, driven by higher sell-through rates and higher average prices. For sneakers over $100, we saw triple-digit growth year over year in Q4. While some volume growth is due to the effects of the pandemic, significant growth drivers included the authentication rollout, pricing reductions, and marketing changes. Sneaker buyer behavior is a great example of the power of the eBay platform. In 2020, the average customer who purchased a pair of sneakers over $100 spent a total of $2,500 on eBay. Approximately 80% of that spend was in categories outside of sneakers. We will continue to drive more cross-category shopping to grow GMV per buyer over time. To expand the buyer base, we are investing in new channels, including social marketing to reach more Gen Z and millennial customers. We launched a TikTok campaign called Lace Them Up, generating 4.7 billion views. And we also have been partnering with celebrities, famous athletes, and influencers on exclusive promotions. Another area of non-new and seasoned inventory we're focused on is outlet fashion. In the UK, we launched an optimized brand outlet experience with 150 fashion brands offering products at deep discounts. This contributed to strong double-digit GMV growth in fashion ahead of UK market rates. We also saw active listings double and active buyers in the category grew 30% in Q4. Moving on to the second key priority of our vision, becoming the platform of choice for sellers. In addition to enhancements in payments and advertising, we continue to provide small businesses with more tools and capabilities to help them grow. In Q4, we added more automation and scale to seller-initiated offers. This uniquely eBay feature allows sellers to escape the limits of a buy box by enabling them to offer custom deals to individual buyers. For the year, seller-initiated offers drove over $1.2 billion of GMV. Another win for sellers on eBay and Q4 was in SEO. The work we have done in the past to optimize our platform for search engine ranking and visibility is paying off. SEO traffic is growing faster than paid channels and delivering more new buyers to small business sellers on eBay. Last, we continue to increase seller visibility in our native app by driving traffic to their eBay stores. 95% of our store subscribers have migrated to the newest experience, and they are seeing a 20% average increase in visits to their storefront. The third key priority of our strategy is to cultivate lifelong trusted relationships with buyers. To achieve this, we are leveraging technology to remove friction throughout the buying journey. A major focus for us has been the native app experience. In 2020, almost half of our global GMV was transacted in the app, and it continues to grow faster than the overall business as buyer and seller preferences evolved. We have maintained high ratings in both iOS and Android, and our app was downloaded more than 50 million times in 2020. To drive engagement from buyers on mobile, we have simplified item pages, made it easier to like or share an item, and provided more exposure by granting direct access to seller stores. Additionally, we improved conversion by enhancing search relevance and streamlining sort and filter options, allowing app users to find what they are looking for faster. While we are focused on delivering our vision, we remain committed to keeping our purpose at the forefront by leveraging the power of our platform to support our communities. One way we did this last year was by helping to quickly and efficiently distribute PPE to frontline workers in the U.K., eBay partnered with the UK's National Health Service, the Department for Health and Social Care, and logistic partners on this effort. I am proud to report that in December, the NHS PPE portal, powered by eBay, reached a significant milestone. Together, we delivered more than 1 billion PPE items to more than 45,000 social care providers in the UK. Another way the eBay platform provides opportunity is by enabling a thriving customer community that loves to give back. During the year that has been challenging for so many, the eBay for Charity community continues to be an inspiration. 2020 was a record-breaking year with nearly $123 million raised globally in charitable donations. The generosity showed by our buyers and sellers is amazing. the spirit of a global community centered around connection and economic opportunity for all is clearly alive and well. Over the course of 2020, eBay invested more than $100 million to support the growing needs of small businesses around the world through programs like Up and Running. These programs provided the access, training, and resources needed to start selling online and connect new sellers to eBay's global community of buyers. And just last quarter, we announced further assistance through an up-and-running grant program. In the coming weeks, we will reward a number of eBay U.S. small business sellers a grant package worth $10,000 each. As I've mentioned in the past, at eBay, we focus our sustainability initiatives on the most impactful goals that will help strengthen our business and provide the most value to all our stakeholders. And our commitment to climate action and transparency is being recognized externally. we were once again included in the Dow Jones Sustainability World and North America Indices and recognized in the Carbon Disclosures Project A-List for the first time. In the past year alone, we have avoided an additional 720,000 metric tons of carbon emissions through people selling their pre-owned electronics and apparel on eBay. In summary, we are making progress on our vision to realize the enormous untapped potential of eBay, and we have a clear roadmap for 2021 and beyond. Our payments transition is on track and will largely be completed this year. Our advertising business will continue to outpace volume through promoter listings and other products. As we defend the core, we plan to expand our new vertical experiences to more markets and innovate in more categories. To date, we've only touched a single-digit percentage of our global GMV, but in the coming years that will expand to a majority of volumes. To build a platform of choice for sellers, we will continue to expand the store's experience and give sellers more tools to increase velocity. We will also leverage technology to dramatically simplify the end-to-end selling process for consumer and business sellers. To create more lifelong buyer relationships, we will connect with them through new channels, deepen their engagement with the eBay app, and deliver trusted experiences when they shop with us. Last but not least, we will continue to invest in product and technology and evolve how we spend marketing in order to become the best marketplace in the world for buyers and sellers. I know we can accomplish all of this through the fantastic team I have the privilege of leading. Our employees lived our purpose in 2020, and I look forward to what we can do together for our customers in 2021 and beyond. With that, I'll turn the call over to Andy to provide more details on our financial performance. Andy?