eBay Released 2019 Q3 Financials – GMV Down 4 Percent


eBay Inc. delivered revenue for the quarter ended September 30, 2019 of $2.6 billion, remaining flat, on an as-reported basis and increasing 2% on a foreign exchange (FX) neutral basis. Gross merchandise volume (GMV) of $21.7 billion, was down 4% on an as-reported basis and down 2% on a FX-Neutral basis

During the quarter, eBay delivered GAAP net income from continuing operations of $310 million, or $0.37 per diluted share and non-GAAP net income from continuing operations of $563 million, or $0.67 per diluted share.

The company generated $1.0 billion of operating cash flow and $913 million of free cash flow from continuing operations while also repurchasing approximately $1.0 billion of its common stock and paying $115 million in cash dividends in the quarter.

In addition, $400 million of floating-rate notes and $1.15 billion of 2.200% fixed rate notes matured and were paid during the quarter.

“We performed in line with expectations in Q3 while improving the Marketplace experience, creating better customer outcomes, and maintaining momentum in advertising and payments. We also made progress on our portfolio review and completed a thorough operating review that has resulted in a three-year plan to drive margin improvement while enabling reinvestment in critical customer initiatives.”

Scott Schenkel, interim Chief Executive Officer of eBay Inc.

In the third quarter, eBay grew active buyers by 4% across its platforms, for a total of 183 million global active buyers.

Underlying total eBay performance, the Marketplace platforms delivered $2.1 billion of revenue and $20.5 billion of GMV. Marketplace revenue was down 1% on an as-reported basis and was up 1% on a FX-Neutral basis, and GMV was down 5% on an as-reported basis and down 2% on a FX-Neutral basis.

StubHub platforms drove revenue of $306 million, up 5% on both an as-reported and FX-Neutral basis, and GMV of $1.2 billion, flat on both an as-reported and FX-Neutral basis. Classifieds platforms delivered revenue of $265 million, up 4% on an as-reported basis and up 8% on a FX-Neutral basis.

Based on these results and increased confidence in the year, eBay raised non-GAAP EPS guidance and narrowed GAAP EPS guidance for the full year.

Momentum of Growth Initiatives

Since launching the managed payments offering approximately one year ago, eBay has processed over $1.1 billion in payments for more than 20,000 sellers, with over $500 million of those payments processed in Q3.

In September, the service reached 9.4% of volume in the U.S. and successfully launched in a second market, Germany.

First-party advertising also continued its momentum. More than one million sellers now leverage promoted listings, promoting over 300 million listings on the marketplace, which has resulted in revenue of $103 million, up 119% on an as-reported basis and up over 120% on a FX-Neutral basis.

Improving the Marketplace Experience

During the quarter, eBay introduced new tools and features that enhance the customer experience.

Terapeak, a suite of features that help sellers identify what to sell, when to sell, and how to price inventory, was integrated into Seller Hub in major markets.

The company also introduced additional seller protections, continued to enhance the new buyer experience, announced a Managed Delivery fulfillment service in the U.S., and bolstered its grocery partnership with Coles in Australia.

Additionally, Multi-User Account Access became available for sellers in the U.S., with a planned expansion to Germany in 2020.

Commitment to Responsible Business Practices

eBay continued to demonstrate its dedication to responsible business practices. During the quarter, Retail Revival launched in Baton Rouge, Louisiana, and a version of the program was also brought to Plovdiv, Bulgaria, connecting local businesses to the global marketplace.

Approximately 400 businesses across 12 cities globally have participated in the program, collectively selling nearly 600,000 items to buyers in 162 countries.

In recognition of Retail Revival, eBay was named to Fortune’s 2019 Change the World list. eBay also announced 100% renewable energy sourcing at its two largest locations – San Jose, California, and Draper, Utah.

These sites join the company’s locations in Dreilinden, Germany; Dublin, Ireland; and Portland, Oregon for 100% renewable energy sourcing.

Additionally, eBay was ranked by both the Dow Jones World and North America Sustainability Indices for responsible business practices in 2019.

Update on Operating Review and Portfolio Review

The company completed an extensive operating review resulting in a multi-year plan for operating efficiency.

These efficiencies, combined with 2019 margin expansion and reinvestment, are expected to drive 3 points of additional operating margin by 2022 and create the capacity to reinvest in critical customer initiatives.

eBay continues to review the role and value of StubHub and Classifieds in its portfolio to determine the best path forward and anticipates sharing an update on the StubHub business before the next earnings release.

Complete eBay, Inc. 2019 Financial Report for Q3

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