eBay Inc. (NASDAQ:EBAY) Goldman Sachs Communacopia & Technology Conference 2023 Call September 5, 2023 1:10 PM ET
Jamie Iannone – Chief Executive Officer
Steve Priest – Chief Financial Officer
Conference Call Participants
Eric Sheridan – Goldman Sachs
Right up on time. We’re going to start with the next session. So, for those who don’t know me, my name is Eric Sheridan, I’m Goldman Sachs’ U.S. Internet analyst. It’s my pleasure to have the team from eBay here at the conference again this year. We did this last year. Look forward to do it again this year. And I think for those in the room, we’re going to start with a clip on the screens from eBay.
Okay. Well, there was a lot in that clip that I want to talk about in the next 30 minutes with Jamie Iannone, CEO; Steve Priest, CFO. Jamie, Steve, thanks so much again for being part of the conference this year.
Thanks, Eric. Thanks for having us.
Q – Eric Sheridan
So, I think maybe if we take a step back, and it was interesting to start with a clip like this, Jamie, you talked about eBay entering a new phase of its strategic vision on the last earnings call. Maybe just set the table for us in terms of what you think about the future of e-commerce and how you’re aligning eBay as a platform against that vision?
Yes. So, when you look at us strategically, over the last three years, we’ve done a lot of the foundational work to really put in place where we are now. And so, the new strategy that we’ve rolled out is really an evolution, not a pivot, really focused on reinventing the future of e-commerce for enthusiasts only at eBay. And when you think about it, it really boils down to three key pillars.
The first pillar is relevant experiences. And by that, we mean, really making sure for every shopping occasion at every touch point, eBay is bringing to you the most relevant experience that we can in that category. It’s what allowed us to be really successful in focused categories, and the focused categories will continue to be a key focus for us going forward. But by building relevant experiences, by building tire installation in Germany for how people specifically search on tires there, has allowed us to reach those market rates of growth that we’ve been talking about as an example.
The second pillar is about scalable solutions. And this is really about leveraging the fact that we have 130 million-plus buyers shipping to 190 different countries and building scalable solutions that align with that. So think about the work that we’ve done in advertising, as an example, or payments where we brought currency translation really easily to all categories on the site. We’re doing it now with new capabilities and authentication where you can expand that across categories. We’re doing it with eBay International Shipping, where we’re leveraging the power across the marketplace and our scale to make shipping really easily. So that’s the second pillar.
And the third pillar, which was kind of evidenced in some of the video that we just showed, is really about magical innovation. And it’s about doing all of the hard work for the customer so that we’re making it really easy, whether to list or buy or find that next specific item on the platform, leveraging new AI capabilities, leveraging a new design that we’re working on that’s much more modern and intuitive that we’re launching as well.
And what makes eBay really unique is the ability to combine those three. So, when I talk about only at eBay, it’s the ability to have that extremely relevant, yet, leverage the scale of eBay. So, I can figure out that if you’re listing a pair of Air Jordan, Nike Force One, you can — we can figure out that product. We can use our scale to make it available to ship to 190 different countries. We can make it that we’ll handle 40 different currencies that you can take the payment. We’ll handle the trust and supply. And so, that’s the unique benefit for eBay, is really the intersection of those three coming together. And that’s why I’m really excited by the strategy that we’re evolving towards.
So based on the clip we saw and something in your answer there, AI, obviously, is a very different place thematically now than it was a year ago when we had this conversation. We didn’t even have it on our team’s list a year ago as a research team. But talk about AI as both consumer-facing and as well of a way in which you can drive productivity gains and efficiency gains internally inside the company, and how you’re thinking about that technology more broadly?
Yes. So, AI is not new to eBay. We’ve been doing AI for over a decade now. When you think about 1.9 billion listings on the platform, and how do you search through that? How do you run an ads business of our scale? We’ve had to use AI. But I’d say two things have changed in the last year. One is that we developed a new core AI technology out of our AI organization, which has been really useful for the whole rest of the organization. And the second has just been the explosion of innovation that’s happening with generative AI.
So, the example that you saw there, which we call the magical listing flow, that went from like a concept to idea in a matter of like two months — sorry, from concept to being a working version of it in two months. Our Motors team just launched a couple of innovations where we can now do things like, “If you own this specific version of this vehicle, this is the next do-it-yourself upgrade to do for that vehicle. Here’s the parts that match.” That’s all powered by AI and these new capabilities. That went from a whiteboard to being in our Motors app in a matter of weeks.
So, what excites me about eBay is the explosion of innovation that’s happening and the canvas with which we have to operate on this new AI technology. With the breadth of categories that we have, with the breadth of countries that we have, with 130 million buyers, with the level of data that we have, think about 28 years of pricing history of image data, of item description, it is a massive canvas with which we can innovate. So, to do things now, like, let’s find the perfect dress that matches this stress that I’ve owned that I no longer want to have, we can do really trivially, where before, if you had to do that with metadata, et cetera, it was complex.
The version we showed there is a product that’s currently an employee beta, which is, how do I figure out what a product is and do all the hard work so the seller doesn’t have to do anything? And I’ll just tell you a story. We’re cleaning up my garage with my wife, and she finds this old remote control from a stereo I had 25 years ago. And she’s like, “Okay, throw this out. Like, Jamie, we don’t have the stereo. It’s been 25 years.” And I’m like, “Okay, better idea, let me sell it on eBay.” So, I literally just hold up my phone to it, and it figures out what this remote control is, it figures out what stereos it’s compatible with, it writes the description for this remote control, and I listed on the platform. It says to price it at $30. I priced it at $30. And guess what, a week-and-a-half later, this remote control sells for $30. That would have absolutely been in the trash without this technology.
And so you think about the average household has $4,000 of stuff they could sell on eBay and less than 20% of that is online. And so by building this, what we call magical innovation technology in this third pillar, think about how much we can unlock out of people’s garages, out of their closets, et cetera, and that’s what excites me is about how that’s happening on eBay.
I’ll close quickly on the productivity side. We’re just at the earliest stages of figuring out and using our co-pilot tools to help our engineering productivity to help figure out how to do subject line testing, right? What used to take 10 copywriters now, AI can do with maybe one or two copywriters. So, we’re excited for what it can drive in terms of the velocity of our organization for productivity as well, and we’re just at the early stages of that.
So, when you think about where you’re going and the innovation you learn and infuse them to the platform, bring it back to what you see as the key investments you have to make as a team broadly against those technology shifts when not only just on 2023, but when you think about the medium to longer term, aligning investments against what you want to capture from a growth perspective?
Yes. Look, we’ve talked for a while about some of the vertical investments that we’re making as a platform. And those investments in our focused categories have led to the outperformance of our focused categories versus the rest of the business. What excites me, Eric, is about these investments and their ability to help our core categories and really across the whole platform.
So, when you think about the ability to get in there with search and drive kind of new relevance and new capabilities using this explosion of data, that’s exciting. When you think about the ability to invest in, for example, the selling flow and unlocking that opportunity, when you think about searching across products and being able to use new technologies, so — right now, we’re testing modules in search to say, “visually similar to this product,” that’s really powerful.
And so, what excites me about those investments is we can leverage them across the core categories just as much as we’re leveraging them for the focused categories, and we think that unlocks a lot of potential and helps us achieve our long-term ambitions of long-term sustainable growth.
Got it. Bringing it back a little bit more shorter term, I think one of the debates that came out of the last earnings call was this element of the margin trajectory into the back part of the year. Can you talk a little bit about what you see as some of the investments that you’re making for the long term that might be putting pressure on some of the margin trajectory implied in the back part of this year against how you think about it longer term?
Hi, good morning. Eric, it’s great to see you. Thanks for having us this morning. The first thing I would say is we will continue to control what we can control. We’ve obviously continued to be in a challenged macro environment, and we articulated that extensively on the last call, but we’ll continue to make the right investments for the business.
As I think about margins through 2023, we guided 27% to 27.4% in terms of our range for the full year. There’s a number of puts and takes. I mean the first thing I would say is we are seeing some deleverage associated with the macro environment. And then, I’ll specifically point to four areas.
The first one is about eBay International Shipping. You heard Jamie talked about that. It’s really been a great unlock for our customers and where we can open the aperture, a huge amount of inventory across 190 countries to over 130 buyers. We’ve always said that this would have some pressure on margins through 2023 and expect that to be back to sort of enterprise-wide margins at the end of the year.
The second thing is around M&A. We continue to go forward with a build by partnership philosophy in terms of investment in the business as the first use of capital. We’ve continued to invest inorganically: you think about myFitment, that has continued to help fuel parts and accessories; you think about TCGplayer, [indiscernible] from a trading card standpoint; and someone like 3PM Shield that is enhancing trust on the overall platform.
So, in aggregate, EIS and M&A generate about 1 point of margin pressure for the full year as we’re going forward.
The third element is really about FX. Half of our business roughly comes from the U.S. and half of it is international. And when I think about that, it’s where the seller is ultimately domiciled. As a result of a very volatile FX environment, we are lapping some significant hedging gains that we saw in the fourth quarter of last year, which creates about 2 points of margin pressure in the fourth quarter and about 0.5 point of pressure for ’23 as a whole.
The fourth and most important aspect is investment. We continue to invest to drive long-term sustainable growth in eBay. I’m delighted with what we’re seeing in parts and accessories and refurb and other focused categories where we’re seeing a discernible growth over and above the core platform, and we’ve been seeing that quarter after quarter. We continue to attract new buyers to the platform and new and reactivated buyers to the platform that really is a reflection of health. And we continue to invest in horizontal initiatives, like the AI example that we shared earlier, because we truly believe this will be a game changer for us and drive long-term sustainable growth.
And so, that’s really what’s happening in terms of the margin profile as we go through 2023, and I’m really excited by what we’re seeing as a result of that.
Okay. Thanks, Steve. And Steve, maybe I’ll just come back to two things you said there and bring Jamie back into the conversation. One is on focused categories. We first started talking about this at the Analyst Day a while ago now. Maybe give us an update on where you are in terms of the state of play for the focused categories you’re the most alert to in terms of driving growth for the platform? And how focused categories and enthusiast buyers sort of feed into each other in terms of creating some of the elements of growth you’re trying to capture, Jamie?
Yes. So, if you look at it, we announced in Q4 that we had about 25% coverage across the business, 28% in our big three, and we’ve made some progress since then. The largest focused category, I’d call out is parts and accessories, which is one of our more recent ones. Parts and accessories was one where we really focused on driving fitment in a new way, enhancing My Garage, building new tools and capabilities, expanding assortment.
We launched Guaranteed Fit in the U.S., and we’re just now starting to launch Guaranteed Fit, it’s called Vehicle Parts Promise, in Germany. And when you look at that as an example, one of our largest categories, over $10 billion, we’re driving market rates of growth. We’re driving mid-single-digit rates of growth, showing that the playbook is applicable to even our largest categories.
We continue to expand areas like luxury and what we’re doing there. We just launched Streetwear as a new category in the past quarter. Streetwear allows us to go after people that are also shopping in sneakers, a younger demographic, et cetera, with another kind of key focused category for us on the platform. So, we feel really good about the continued strategy and evolution of what we’re seeing there.
I might call out refurbished as another example. Refurbished last quarter grew double digits year-over-year in what we’re doing there. And it’s helping areas like electronics, because we’re getting direct great relationships with brands, think of things like Bowes, or Sonos, or Lenovo selling those refurbished products on eBay with a two-year warranty, 30-day hassle-free returns, eBay Money Back Guarantee, or home and garden brands like Milwaukee tools or Dyson vacuum and that type of thing. It’s providing a great value to consumers, especially in these challenging times right now.
The other interesting thing that’s happening to us in luxury is two quarters ago, we launched this program we call Certified by Brand, and that’s really working directly with brands in those categories. And then Steve talked about some of our M&A activity. We recently acquired Certilogo, which is this new AI QR-based technology, which allows us to trace brands, make it easy to relist clothes and fashion on the platform, works with high-end brands like Armani and Versace, et cetera, to bring them on to eBay. So, it’s changing eBay’s relationship with brands. Frankly, the work that we’re doing, Streetwear is helping brands because a lot of streetwear brands know that there’s a lot of counterfeit products out there and the work that they were doing is really helping them from that perspective.
So, we feel really good about the trajectory that we’re on, the outperformance that we’re seeing with focused categories. Last quarter, it was 7 points. And we’ve continued to see an outperformance there. But more importantly is the strategy is working. We’re driving customer satisfaction double digits, which is changing the GMV trajectory.
So, going from focused categories then to talking a little bit about enthusiast buyers, talk a little bit about what you see from existing enthusiast buyers and trying to grow wallet share and pollinate them into new categories versus onboarding new enthusiast buyers and how some of those efforts might continue to evolve?
Yes. So, if I just back up, our enthusiast buyers on eBay, there are buyers that shop six times a year and spend over $800. And when I look at them as a group, they drive about 70% of the overall GMV on the platform, these 16 million buyers. And so, it’s an important group for us because, a, they shop — 90% of them shop in focused categories. But what’s really beneficial about — unique about eBay is the multiplier effect that we have.
So, when we acquire an enthusiast buyer into say, parts and accessories, they end up shopping across the full suite of categories that we have. If we acquire a handbags buyer, they will buy $2,600 in handbags for us, but they’ll buy $5,600 in other categories — core categories on the site as they go to shop. And that’s a really unique benefit, because if we’re competing against any other buyer that’s just selling luxury or just selling handbags, we can have a CAC that’s so much more affordable because of our ability to monetize them across categories.
So, I’ve been talking for a few quarters now about how I thought we would be seeing a stabilization as we lap some of the COVID dynamics that are out there, that we would see a stabilization even in this macro environment, and that’s what we’re seeing. So, our enthusiast buyers are stable quarter-over-quarter at 16 million. We’re actually seeing their spend increase. In each quarter, we’ve been talking about spend per buyer going up for enthusiast buyers, which is really healthy as we drive this portfolio of activities for them. And importantly, I’ve talked about how the top of the funnel will get healthier as well, and that’s what we’re seeing as well.
So for four quarters now, we’ve had new and reactivated buyers in positive growth. And we’ve seen two quarters of new buyer growth as well. So, our short-term metrics are looking healthy exactly as we predicted they would coming out of this.
The last thing I’d say, Eric, is that I’m really happy with our marketing efforts. So, we’ve really shifted to a full funnel marketing approach to, as you say, either acquire enthusiast buyers or to acquire buyers who could become enthusiast buyers on the platform. And that’s been working for us really well. So, if you’re in the U.K. and you’re seeing what we’re doing with parts and enthusiasts, we’re talking to enthusiasts in the channels that they have with a really clear value proposition and message. Here in the U.S., we’re talking about Guaranteed Fit and what we’re doing from that perspective, and it’s resonating and driving real awareness in that category. And so that marketing is really helping us fuel the growth that we’re seeing in those categories. And if I just look at parts and accessories buyers as an example, those buyers grew double digits faster than the rest of the platform because of the work that we’re doing from a marketing standpoint. So, the marketing is really driving closely and tightly aligned with what we’re doing from a focused category standpoint.
Okay. Another area you introduced a couple of years ago was your push into advertising and obviously, elements of retail media networks and advertising has become a bigger component of a lot of e-commerce looking out over the last couple of years. Give us an update on where your own advertising efforts sit now versus your broader goals? And what you’re most excited about in terms of potential for product innovation in the advertising efforts going forward?
What I feel great about is that over the last five or six years, we’ve shifted from being a third-party advertising platform to really a first-party advertising player. So the vast, vast majority of what we do in advertising is first party. And what’s been great is that as we’ve launched this new suite of products, what we’re seeing is a really healthy return on ad spend for our sellers. So, still the workhorse for us is a product we call product — Promoted Listing Standard. It’s a CPA’s product — CPA-based product that’s really easy for sellers to use and adopt. And so that continues to grow as we drive new capabilities, new relevance and new tools for them and really being the workhorse.
But over the past few quarters, we’ve been really focused on a new suite of advertising products, one of which — three new suites, the one of which that I’ll talk about the most is Promoted Listings Advanced. So, this is building a CPC-based capability inside our advertising portfolio. And when I look at the new products overall, they’re growing 30% quarter-over-quarter. But what I like about what we’re doing in this product is we’re opening up new ad budgets and new capabilities for our sellers on the platform, but we’re continuing to make it easier to use to drive up conversion and adoption of the product. So, in Q4, we launched a quick setup product to basically make a one-click setup to get you into Promoter Listings Advanced. In Q2, we launched Suggested campaigns, where we’re doing the work of suggesting how to put a CPC-based campaign together because we believe it has significant potential, and I’m extremely bullish on it. But it’s really about how do we make it really easy for our advertisers to use.
So, if I just sum it up and I look at last quarter, for example, and Steve can talk a little bit about this, our advertising continues to outpace GMV. Last quarter, it grew 49% faster than the rest of the business, which is great. We continue to believe that the return on ad spend that we’re providing to sellers is extremely healthy. And the team continues to innovate on new tools and technologies to drive penetration on the platform without impacting the buyer experience, right? All of this is not about, hey, let’s drive up ad load or let’s do more third parties that takes you off of the site, this is about building the right advertising tools.
And maybe you could just talk about the penetration goal that we just had.
Yeah. So, last quarter, we hit 2% of GMV in terms of sort of advertising penetration, which was a goal that we set from a longer-term perspective when we had our investor event. For me, what’s so important about this, and it’s sort of leapfrog where we were with payments, it creates the fuel for us to invest in the platform. And you saw some of the benefits of that on the underlying business as we’ve gone forward, so as is a critical component to the sort of long-term sustainable growth of eBay.
Steve, in your answer earlier, you talked a little bit about international shipping. I wanted to bring you both into the conversation of what your early learnings have been from rolling out international shipping? And how should we be thinking about the investments to further roll it out going forward and what it might do for the platform in terms of an engine for growth looking beyond just the next one or two quarters? Because it feels like it’s more of a longer-term initiative for you guys.
Yeah. The reason we built it was to make it really simple for sellers to sell globally to 190 different markets. And when you look at our business, 20% of our business, both in units and GMV actually crosses borders. But in our big three markets, less than half of that inventory was available to be shipped across borders. So, how do we take care of the customs, the duties, return, so that customer doesn’t have — the seller doesn’t have to worry about an item not received claim? And so, we’re basically to take that all for you as part of this. We brought it in-house to make it even better than the last shipping program we had. And for a seller now, they can ship from here in San Francisco to Oslo, but feel like they’re shipping to L.A. because we’ve made all the hard work happen for them.
I think the important part is under 50% of the inventory — you think about the amount of listings on eBay, about 1.9 billion listings, and obviously, that’s concentrated in a number of key markets. Our top three markets, only about 50% of the inventory was opened up to global trade. And by shipping that item from San Francisco to Chicago, and eBay doing the rest, if that item is going to Stockholm, for example, it takes a tremendous amount of friction out of the process for sellers and opens up the aperture for significant cross-border trade that’s incredibly important.
The other thing that’s really great about this is that we’re using third parties and our ability to drive economics associated with this where we can dial up and down the sort of shipping charges that we charge the buyers means that it’s operating profit accretive for us as we go forward.
So, we’re in the early stages, as Jamie says, but really happy with the momentum so far and exactly where we thought we were going to be at this stage.
Okay. I think we’re about 18 months into the broader investment community being worried about an impending recession. It was supposed to have started last year, now maybe next year. You sit at a unique spot. What are you seeing from the elements of behavior by the global consumer? And how that feeds into a broader macro view about how the consumer might traject going forward?
Undoubtedly, we continue to have operated in quite a challenging macro environment this year. Seven months into the year when we did the earnings call, we talked about this extensively. And don’t forget, eBay is a truly global company. So, it’s not just looking to the U.S. lens, but certain parts of Europe there. Think about Germany went into recession last quarter. The U.K. is teetering on recession. Interest rates are very, very high across the globe. So, it naturally puts pressure on big e-commerce players like eBay.
I think the beauty of our platform is the focus on non-new in-season items, and particularly in re-commerce, where our customers are continuing to lean in for value, puts us in a sort of better position. The size and scale of eBay means that our business will ebb and flow based on the economic headwinds that happen. And we are planning, as we talked about on the earnings call for continued macro pressure as we go through the back half of the year. But underneath the hood, we are continuing to invest, and we’re very pleased with the momentum that we continue to see.
I think the bright spots in some of our focused categories we’ve talked about, Eric, parts and accessories, re-commerce, for example. Some of the areas that continue to be challenged, particularly in the discretionary area sort of higher-value luxury items where we’ve continued to see a little bit of ASP pressure. But the beauty of things like authentication and driving trust on the platform means that we’re driving more volume through the platform to sort of offset some of that.
So, we’ll continue to focus on what we can control. But again, from a planning standpoint, we expect those macro headwinds to continue through the back half of the year.
Speaking of things outside of your control, the competitive dynamic is another big investment community debate around commerce. There’s been the rise of platform selling from Asia into rest of world. There’s been the rise of more niche marketplaces in e-commerce in the last two to five years. What’s your current state as you see the competitive landscape that eBay operates in? And how you’re positioning eBay to be a rising platform inside that broader competitive landscape you see?
Yeah. I think the increase of the competition out of China really hasn’t impacted our business. In fact, if you look at our 10-Q, our cross-border trade business was extremely strong in the past quarter. A couple of years ago, we really moved away from that low ASP, low quality business on eBay, really focusing on non-new in-season and where we thought we had a great right to win.
When you think competitively, in general, whether it’s a vertical marketplace or someone’s spending short-term marketing dollars, there’s a couple of unique things about eBay. One is that the vast, vast majority of our traffic is organic, and that’s a massive benefit towards — versus anybody who’s using — back in the day with vertical competitors using free VC money to try and go after and acquire customers. That’s a huge advantage. The second thing is the cross-category nature of shopping on eBay. So, we’re able to acquire people in — we’ll spend money in a full funnel approach for P&A, but that won’t just benefit our P&A, that will benefit all of our core categories across eBay. So that’s really unique for us as well.
So, we feel really well strategically positioned. We think we can compete with our CAC and the value proposition and the customer satisfaction changes are significant. That’s why with our new strategy of relevant experiences in driving that CSAT and leveraging the power of the scale of this platform, that’s what makes us such a strong competitor in this marketplace and allows us to be really aggressive and go after investments and winning.
So, maybe just take your competition answer there, Jamie, and bring it back to take rate and unit economics on a marketplace like eBay. When you think about offering more services to sellers, but at the same time, wanting to be competitive on a take rate standpoint with some of these peers globally, how do you think about the puts and takes of take rates on a marketplace? And whether you should try to be in a rising take rate environment or lowering take rate environment? And whatever decisions you make on take rate, how do you think about deploying take rate back into the business to continue to fuel some of those broader growth initiatives?
Do you want to take that?
Yeah, happy to pick that up. So, as a reminder, the take rate we disclosed on our last quarter earnings is just shy of 14%. For us, it’s getting the balance right in terms of driving the right take rate for our sellers, driving towards being the seller platform of choice and making sure that we wisely invest in those services for the sellers.
And so, as I think about three core components that sort of go through the take rate, one is the traditional final value fee, which we generally sort of look at it and we’ll look at it by category, look at it by market to make sure we remain competitive. And then, we’ve seen a couple of monetization opportunities or service opportunities that have gone forward over the last couple of years.
Firstly, with regard to payments, where we bought payments in-house with our partners and made sure that we continue to drive that forward. And that saw a significant take rate accretion. That’s got to a more mature phase as we’ve gone through that, we will see some modest increases on that with services like Buyer FX and things like that, that we’d take forward. Advertising, we talked about earlier, Eric, and that has continued to fuel take rate expansion as we’ve gone forward.
At the earnings call, we talked about expectations that we would continue to expand take rates on an FX-neutral basis as we sort of go forward over the remainder of 2023. And we would expect that to moderate over forthcoming quarters, but really pleased about the continued expansion. And as I mentioned earlier, the likes of advertising and payments creates the fuel for us to continue to reinvest in those seller tools, to reinvest in delighting our customers, to reinvest in driving trust on the platform. And so, I think we’ve got the balance right in terms of how we do that.
Okay. You talked earlier a little bit about M&A and deciding to either buy things or build things. I think there’s a wider conversation to have in the last few minutes, we have about capital allocation. But maybe just starting with M&A, how do you think about that decision between building something versus buying something? And you’ve done some smaller acquisitions in the more recent past that seem to be aimed at some of the core functionality you want on the platform medium to long term, just curious how you think through that decision.
Yeah, I’ll start and then you jump in.
Yes, thank you.
Our first priority is always in organic investments in the core business where we think we have opportunities. But M&A has been and will continue to be a key tenet of our capital allocation policy. And when you think about eBay, we look at a build by partner framework and try to figure out kind of what makes the most sense. And so, if you look at the acquisitions that we’ve done, if you think about somebody like myFitment really helping us drive P&A by being able to — we have 500 million P&A listings. So, we apply myFitment AI technologies that has a massive win. TCGplayer gives us access to hobby shops in the collectibles category. Collectibles is one of our big — our five biggest categories on the platform. I talked a little bit about Certilogo and what that means about bringing that capability in for our fashion and for our luxury businesses. So, these are things that are helping us accelerate our strategic objective that we’re already on, which is working really well for the business and helping us move with speed.
I think your broader point on capital allocation and I can have that sort of [fit in] (ph). And as Jamie said, the primary or the first priority for us is to invest in the business through the build by partner framework that we’ve talked about. You’ve seen us deploy capital very well over the last few years as we’ve divested in certain parts of the business, driven significant shareholder returns through that process. And as we laid our investor event back in 2022, the goal between ’22 and ’24 of return 125% of free cash flow, we’re bang on track. We’ve returned $4.4 billion over the last 18 months, which is about 130% of our free cash flow.
The thing for me, which is rather unique about eBay is that we have a fortress balance sheet. We generate significant free cash flow. You think about driving about $2 billion a year on aggregate as you go through that. It enables us to do both, which is to continue to invest in the business to drive long-term sustainable growth. And while doing that, continue to give very healthy returns to our shareholders through capital returns.
Just wrapping up, Jamie, as you look out over the remainder of this year and into the years ahead and maybe bringing a full circle with some of the themes we talked about, what are you most excited about? What are you spending the most amount of your time on in terms of aligning eBay with your core principles? And where you want the platform to go?
One of the things that I think is most exciting is the pace of innovation and what I’m seeing change at eBay. Being able to develop this stuff in a matter of weeks and months, we’ve been doing a lot of core work over the last few years on our tech velocity and our tech infrastructure. And we haven’t even deployed a lot of the copilot tools used against engineering, et cetera. But I think it’s really exciting because that innovation is happening now from 12,000 people across the company.
Our Skunkworks thing that we just completed, our event had so many amazing ideas. When you think about the canvas of eBay, the scale of eBay, the number of buyers that we have, the number of categories and our ability to really create now next-gen relevant magical experiences for our customers, and to do that at the scale of eBay, to do that with the volume of business that goes through our rails every single day, and to be able to do that with speed, just makes me really excited because what we’ve seen is that the playbook works. Relevant experiences drive faster GMV growth and the scale allows us to win versus competitors out there.
And when I see what’s happening internally with our employees, that’s what gets me the most fired up, because I know that’s going to have a massive impact on our customers. And I can’t wait, for example, for us to take some of this new technology out of employee beta and to give it to all of you and all of our customers, because I think it’s going to unlock so much interesting inventory that’s out there in the marketplace.
Great. Well, please join me in thanking Jamie, Steve and the whole eBay team for being part of the conference this year.
Thank you, Eric.