eBay grew Marketplace GMV (Gross Merchandise Volume) by 7 percent fx-neutral in the second quarter of 2018 to $23.6 billion, with revenue of $2.6 billion.
Press release follows:
eBay Inc., a global commerce leader, delivered revenue for the quarter ended June 30, 2018 of $2.6 billion, increasing 9% on an as-reported basis and 6% on a foreign exchange (FX) neutral basis, primarily driven by gross merchandise volume (GMV) of $23.6 billion, up 10% on an as-reported basis and 7% on an FX-Neutral basis.
During the quarter, eBay delivered GAAP net income from continuing operations of $638 million, or $0.64 per diluted share and Non-GAAP net income from continuing operations of $533 million, or $0.53 per diluted share. The company generated $372 million of operating cash flow and $188 million of free cash flow from continuing operations while also repurchasing approximately $1.0 billion of its common stock in the quarter.
“In Q2 we continued to execute our strategy, making improvements to the core eBay experience. At the same time, we pursued significant opportunities in advertising and payments,” said Devin Wenig, President and CEO of eBay Inc. “As we look ahead to the second half of 2018, we expect acceleration in our core business and continued strong growth in earnings.”
In the second quarter, eBay grew active buyers by 4% across its platforms, for a total of 175 million global active buyers. Underlying total eBay Inc. performance, the Marketplace platforms delivered $2.1 billion of revenue and $22.6 billion of GMV. Marketplace revenue growth was 9% on an as-reported basis and 6% on an FX-Neutral basis, and GMV was up 11% on an as-reported basis and 7% on an FX-Neutral basis. StubHub drove revenue of $246 million, up 4% on an as-reported basis and 3% on an FX-Neutral basis, and GMV of $1.1 billion, up 5% on both an as-reported and FX-Neutral basis. Classifieds platforms delivered revenue of $259 million, up 18% on an as-reported basis and 10% on an FX-Neutral basis.
eBay continues to make it easier to buy and sell on its platform. During the quarter, the company launched Interests, a new feature that tailors consumers’ shopping experience based on their passions, hobbies and style. Shoppers select what they’re interested in, and the new feature transforms their homepage with themes and items chosen just for them. To ensure that customers have access to the best deals, eBay introduced Best Price Guarantee, offering US shoppers 110% of the price difference if they find an item for less on a competitor’s website. The company rolled out a number of competitive initiatives in Australia, including eBay Plus, eBay’s membership shopping program that gives members in Australia free delivery and returns on 15 million products, and Guaranteed Delivery, which provides the ability to search and filter items by delivery speed. For sellers, eBay released an update to simplified selling on its Android and iOS native apps, which allows items to be listed on eBay within seconds and makes selling even easier.
The company also announced its intent to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion. Following the close of the transaction, eBay will end its current strategic relationship with Flipkart. The company plans to relaunch eBay India with a differentiated offer to focus initially on the cross-border trade opportunity. In Q2, eBay also completed its acquisition of Giosis’ Japan business, including the Qoo10.jp platform, which expands its footprint in Japan.
Second Quarter Financial Highlights (presented in millions, except per share data and percentages)
(See press release on eBay’s website for chart)
Other Selected Financial and Operational Results
Operating margin — GAAP operating margin decreased to 15.4% for the second quarter of 2018, compared to 19.8% for the same period last year. Non-GAAP operating margin decreased to 25.2% in the second quarter of 2018, compared to 26.4% for the same period last year.
Taxes — The GAAP effective tax rate for continuing operations for the second quarter of 2018 was 9.7%, compared to 93.6% for the second quarter of 2017. The non-GAAP effective tax rate for continuing operations for the second quarter of 2018 was 13.3%, compared to 19.9% for the second quarter of 2017.
Cash flow — The company generated $372 million of operating cash flow from continuing operations and $188 million of free cash flow from continuing operations during the second quarter of 2018.
Stock repurchase program — The company repurchased approximately $1.0 billion of its common stock, or 26 million shares, in the second quarter of 2018. The company’s total repurchase authorization remaining as of June 30, 2018 was $5.7 billion.
Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $8.6 billion as of June 30, 2018.
Third quarter 2018 — The company expects net revenue between $2.64 billion and $2.69 billion, representing Organic FX-Neutral growth of 5% – 7%, with GAAP earnings per diluted share from continuing operations in the range of $0.37 – $0.41 and non-GAAP earnings per diluted share from continuing operations in the range of $0.54 – $0.56.
Full year 2018 — The company now expects net revenue between $10.75 billion and $10.85 billion, representing Organic FX-Neutral growth of 6% – 7%, with GAAP earnings per diluted share from continuing operations in the range of $1.91 – $2.01 and non-GAAP earnings per diluted share from continuing operations in the range of $2.28 – $2.32.
Note: See full press release including tables in link below.
SOURCE: eBay Press Release
Update 7/19/18: Comment on the EcommerceBytes Blog.