The company, facing intense competition from Amazon.com Inc and Walmart Inc, has focused on its promoted listings program and payments business, as well as worked to make its platform simpler to use through the introduction of grouped listings and personal recommendations.
More than 800,000 active sellers took advantage of the promoted listings in the first quarter, helping more than double advertising revenue to over $65 million, the company said.
Chief Executive Officer Devin Wenig on a post-earnings call reiterated that the company was reducing third-party ads that are not accretive and remained on track toward a $1 billion advertising revenue opportunity.
The results come as eBay is in the middle of a review of its StubHub and eBay Classifieds businesses following activist investor pressure.
The San Jose, California-based company has also agreed to appoint two new directors to its board as part of an agreement with activist investors Starboard Value and Elliott Management.
"We see the beat and raise as a positive reflection of management's efforts, prior to the involvement of the activist, to improve its operating results - including expanding its efforts in advertising and payments," said Tom Forte, an analyst with D.A. Davidson.
EBay's shares rose 5 percent in extended trading after the company also beat first-quarter revenue and profit estimates.
The company raised its full-year revenue forecast to range between $10.83 billion and $10.93 billion, and its profit to be between $2.64 per share and $2.70 per share.
Net revenue rose 2.4 percent to $2.64 billion in the first quarter ended March 31, beating analysts' average estimate of $2.58 billion, according to IBES data from Refinitiv.
EBay said active buyers grew 4 percent to 180 million in the reported quarter. However, the company's gross merchandise volume, which is the value of goods sold on its websites within a certain time frame, fell 4.2 percent to $22.59 billion.
Excluding items, eBay earned 67 cents per share, beating estimates of 63 cents per share.
(Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila)
By Arjun Panchadar