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eBay Grows Marketplace GMV 5% in Q3 2018

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eBay logoeBay grew Marketplace GMV (sales) 5% in the third quarter. eBay grew active buyers by 4% across its platforms in the quarter; it had boosted its investment in brand marketing this year.

eBay CEO Devin Wenig appears to be pinning his hopes on Payments and Advertising. In its press release, eBay called out the expansion of its Promoted Listings placements during the quarter, revealing that it now has over 400,000 sellers promoting over 160 million listings.

eBay also noted that it had begun rolling out its new managed payments experience in the US last month and said it has intermediated $38 million of GMV thus far.

We’ll have more on what the eBay CEO and his Chief Financial Officer had to say in its Tuesday earnings call with Wall Street analysts. (See eBay CEO Forced to Shift Tactics Due to Shopper Resistance.) In the meantime,…

Press release follows:

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eBay Inc., a global commerce leader, delivered revenue for the quarter ended September 30, 2018 of $2.6 billion, increasing 6% on an as-reported basis and 6% on a foreign exchange (FX) neutral basis, primarily driven by gross merchandise volume (GMV) of $22.7 billion, up 5% on both an as-reported and FX-Neutral basis.

During the quarter, eBay delivered GAAP net income from continuing operations of $720 million, or $0.73 per diluted share and Non-GAAP net income from continuing operations of $554 million, or $0.56 per diluted share. The company generated $560 million of operating cash flow and $381 million of free cash flow from continuing operations while also repurchasing approximately $1.0 billion of its common stock in the quarter.

“This quarter we continued to make foundational investments to improve the long-term competitiveness of our marketplace while setting the stage for significant growth opportunities,” said Devin Wenig, President and CEO of eBay Inc. “We will continue to innovate the customer experience while executing our growth initiatives in Payments and Advertising to position eBay for future success.”

In the third quarter, eBay grew active buyers by 4% across its platforms, for a total of 177 million global active buyers. Underlying total eBay Inc. performance, the Marketplace platforms delivered $2.1 billion of revenue and $21.5 billion of GMV. Marketplace revenue growth was 6% on an as-reported basis and 5% on an FX-Neutral basis, and GMV was up 5% on both an as-reported and FX-Neutral basis. StubHub drove revenue of $291 million, up 7% on both an as-reported and FX-Neutral basis, and GMV of $1.2 billion, up 7% on both an as-reported and FX-Neutral basis. Classifieds platforms delivered revenue of $254 million, up 8% on an as-reported basis and 11% on an FX-Neutral basis.

eBay rolled out a number of new or expanded programs for its customers during the quarter. For sellers, eBay and Square Capital announced a partnership that enables eBay’s sellers in the US to access up to $100,000 in funding in as little as one business day to help them grow their businesses. For buyers, eBay continued to scale guaranteed delivery and launched the service in Australia. For its developer community, eBay introduced new application programming interfaces that allow developers to now incorporate eBay features such as Image Search, machine translation and marketplace feeds into their own platforms.

The company remains focused on its growth opportunities in Payments and Advertising. According to the timeline it committed to at the beginning of the year, eBay began rolling out its new payments experience in the US last month and has intermediated $38 million of GMV thus far. The company also began accepting Apple Pay – an easy, secure and private way to pay – as one of the first forms of payment in this new experience, with approximately 12% of iOS transactions made with Apple Pay to date. In Advertising, eBay expanded Promoted Listings placements during the quarter and now has over 400 thousand sellers promoting over 160 million listings.

In the third quarter, eBay completed the sale of its equity investment in Flipkart, representing net proceeds of nearly $1.0 billion, and ended its strategic relationship with the company. eBay also recently announced its intent to acquire Motors.co.uk, a leading UK-based classifieds site. Combining the inventory, customer relationships and traffic available on Gumtree UK, eBay Motors UK and Motors.co.uk is expected to help UK car dealers increase their leads and bring buyers more choice and value.

Other Selected Financial and Operational Results
Operating margin — GAAP operating margin decreased to 21.0% for the third quarter of 2018, compared to 23.0% for the same period last year. Non-GAAP operating margin decreased to 26.4% in the third quarter of 2018, compared to 28.4% for the same period last year.

Taxes — The GAAP effective tax rate for continuing operations for the third quarter of 2018 was 24.1%, compared to 25.0% for the third quarter of 2017. The non-GAAP effective tax rate for continuing operations for the third quarter of 2018 was 15.4%, compared to 22.8% for the third quarter of 2017.

Cash flow — The company generated $560 million of operating cash flow from continuing operations and $381 million of free cash flow from continuing operations during the third quarter of 2018.

Stock repurchase program — The company repurchased approximately $1.0 billion of its common stock, or 29 million shares, in the third quarter of 2018. The company’s total repurchase authorization remaining as of September 30, 2018 was $4.7 billion.

Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $9.0 billion as of September 30, 2018.

Business Outlook
Fourth quarter 2018 — The company expects net revenue between $2.85 billion and $2.89 billion, representing Organic FX-Neutral growth of 4% – 5%, with GAAP earnings per diluted share from continuing operations in the range of $0.87 – $0.92 and non-GAAP earnings per diluted share from continuing operations in the range of $0.67 – $0.69.

Full year 2018 — The company now expects net revenue between $10.72 billion and $10.76 billion, representing Organic FX-Neutral growth of approximately 6%, with GAAP earnings per diluted share from continuing operations in the range of $2.62 – $2.67 and non-GAAP earnings per diluted share from continuing operations in the range of $2.29 – $2.31.

Click the link below to see the full press release including charts, guidance, and disclosures.

SOURCE: eBay Press Release

See the EcommerceBytes Blog for more coverage:

eBay CEO Forced to Shift Tactics Due to Shopper Resistance (October 30, 2018)

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

2 thoughts on “eBay Grows Marketplace GMV 5% in Q3 2018”

  1. A PL is a crap shoot until it sells, and there’s no guarantee a PL will sell simply because it’s a PL.

    Wish on a star, Wenig…it’s what you’re good at. The ONLY thing you’re good at.

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