eBay released its Q1 2019 earnings report. Here are the most important details.
- Revenue of $2.6 billion
- GAAP and Non-GAAP EPS per diluted share of $0.57 and $0.67, respectively, on a continuing operations basis
- GAAP and Non-GAAP operating margin of 23.0% and 29.8%, respectively
- Returned $1.6 billion to shareholders in Q1, including $1.5 billion of share repurchases and $125 million paid in cash dividends
eBay Inc. delivered revenue for the quarter ended March 31, 2019 of $2.6 billion, increasing 2% on an as-reported basis and 4% on a foreign exchange (FX) neutral basis, primarily driven by gross merchandise volume (GMV) of $22.6 billion, down 4% on an as-reported basis and down 1% on a FX-Neutral basis.
During the quarter, eBay delivered GAAP net income from continuing operations of $521 million, or $0.57 per diluted share and Non-GAAP net income from continuing operations of $608 million, or $0.67 per diluted share.
The company generated $550 million of operating cash flow and $368 million of free cash flow from continuing operations while also repurchasing approximately $1.5 billion of its common stock and paying $125 million in cash dividends in the quarter.
“We delivered a solid first quarter with revenue and EPS. Our initiatives to create a next generation payment and advertising experience are on track, we saw healthy buyer growth and disciplined cost control, and we continue to simplify the buying process while remaining focused on seller’s success.”
Devin Wenig, President and CEO of eBay Inc.
Based on these results and increased confidence in the year, eBay raised 2019 revenue and EPS guidance.
In the first quarter, eBay grew active buyers by 4% across its platforms, for a total of 180 million global active buyers.
Underlying total eBay performance, the Marketplace platforms delivered $2.2 billion of revenue and $21.6 billion of GMV.
Marketplace revenue growth was 3% on an as-reported basis and 4% on a FX-Neutral basis, and GMV was down 4% on an as-reported basis and down 1% on a FX-Neutral basis.
StubHub platforms drove revenue of $230 million, flat on both an as-reported and FX-Neutral basis, and GMV of $1.0 billion, down 3% on an as-reported basis and down 2% on a FX-Neutral basis. Classifieds platforms delivered revenue of $256 million, up 4% on an as-reported basis and up 12% on a FX-Neutral basis.
The company made measurable progress against protecting its unique advantage as a true marketplace in service of – not in competition with – sellers of all sizes, improving how people buy and sell on the platform.
eBay continued its multi-year path toward managed payments, intermediating $220 million in GMV in the first quarter – a 61% quarter-over-quarter increase – bringing the total GMV enabled since launch to $363 million and saving sellers $2.7 million in payment-related costs.
Today, the company announced Germany will be its second market for managed payments, subject to regulatory approval.
In addition, eBay recently announced the addition of Google Pay as a payment option and the completed integration of PayPal on the new platform, which has been live for a couple weeks with a small set of customers and will continue scaling.
In advertising, eBay grew promoted listings placements and eligibility. In the first quarter, there were more than 800 thousand active sellers who took advantage of the program, promoting over 200 million listings.
This drove over $65 million of revenue in the quarter, up nearly 110% year-over-year. Sellers in the US are seeing an average boost in visibility of 36% when using the first-party advertising offering.
eBay also unveiled several new initiatives for buyers and sellers. The company made registration quick and simple with an expedited process on both mobile and desktop.
It launched a search feature that couples advancements in computer vision with relevant filtering to allow shoppers to explore and discover products using pictures and words.
To make it easier to manage listings, provide value to buyers, and help improve conversion, eBay delivered a series of enhancements to the Seller Hub and introduced a new ‘Offer to Buyers’ feature that enables sellers to proactively make offers to interested buyers.
During the quarter, eBay completed its acquisition of Motors.co.uk, a leading UK-based classifieds site that makes the car buying and selling process intuitive and simple.
The Motors.co.uk team has joined Gumtree UK, an eBay Classifieds business, and, together with eBay Motors UK, will offer more than 620 thousand car listings seamlessly across these platforms.
Other Selected Financial and Operational Results
- Operating margin — GAAP operating margin increased to 23.0% for the first quarter of 2019, compared to 22.5% for the same period last year. Non-GAAP operating margin increased to 29.8% in the first quarter of 2019, compared to 27.9% for the same period last year.
- Taxes — The GAAP effective tax rate for continuing operations for the first quarter of 2019 was 22.6%, compared to 25.6% for the first quarter of 2018. The non-GAAP effective tax rate for continuing operations for the first quarter of 2019 was 17.6%, compared to 20.4% for the first quarter of 2018.
- Cash flow — The company generated $550 million of operating cash flow from continuing operations and $368 million of free cash flow during the first quarter of 2019.
- Capital returns — The company repurchased approximately $1.5 billion of its common stock, or 42 million shares, in the first quarter of 2019. The company’s total repurchase authorization remaining as of March 31, 2019 was $5.7 billion. The company also paid cash dividends of $125 million during the first quarter of 2019.
- Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $7.3 billion as of March 31, 2019.
- Second quarter 2019 — The company expects net revenue between $2.64 billion and $2.69 billion, representing Organic FX-Neutral growth of 2% – 4%, with GAAP earnings per diluted share from continuing operations in the range of $0.41 – $0.45 and non-GAAP earnings per diluted share from continuing operations in the range of $0.61 – $0.63.
- Full year 2019 — The company expects net revenue between $10.83 billion and $10.93 billion, representing Organic FX-Neutral growth of 2% – 3%, with GAAP earnings per diluted share from continuing operations in the range of $1.94 – $2.04 and non-GAAP earnings per diluted share from continuing operations in the range of $2.64 – $2.70.
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