eBay saw third-quarter 2020 GMV (value of sales on its marketplace) grow 22% year over year. An excerpt of the company press release follows with a link to the full release below.
eBay Inc. Reports Better Than Expected Third Quarter 2020 Results and Raises Full Year Guidance
Classifieds business reported as discontinued operations; on track to close in Q1 2021
eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its third quarter ended September 30, 2020.
“I’m pleased with the third quarter results,” said Jamie Iannone, Chief Executive Officer at eBay Inc. “On an apples to apples basis, we delivered results that exceeded expectations on both the top and bottom lines. Our third quarter performance reflects the strength of our newly focused strategy coupled with the enormous untapped potential of our marketplace. As we continue our multi-year journey to become the best global marketplace to buy and sell, I am proud of the progress our team is making toward our tech-led reimagination.”
Third Quarter Marketplace Financial Highlights
- Annual active buyers grew by 5%, for a total of 183 million global active buyers.
- Gross merchandise volume (GMV) was $25.0 billion, up 22% on an as-reported basis and up 21% on a foreign exchange (FX) neutral basis, year-over-year.
- Revenue was $2.6 billion, up 25% on both an as-reported basis and an FX-Neutral basis.
- GAAP net income from continuing operations was $621 million, or $0.88 per diluted share.
- Non-GAAP net income from continuing operations was $604 million, or $0.85 per diluted share.
- Generated $716 million of operating cash flow and $584 million of free cash flow from continuing operations.
- In early July, completed the $3.0 billion accelerated share repurchase plan announced in February, at an average price per share of $40.77.
- Repaid $500 million of 3.250% senior fixed rate notes due 2020, and redeemed the remaining outstanding balance of $421 million on our 2.875% senior fixed rate notes due in 2021.
- The company remains on track to complete the transfer of its Classifieds business to Adevinta in Q1 2021, subject to regulatory approvals.
- eBay continues to scale its management of payments globally, exiting the quarter with more than 340,000 sellers migrated. During the quarter, over 20% of on-platform volume was processed through managed payments. The company announced the Q1 2021 expansion plans to France, Italy and Spain, along with enablement for eBay for Charity sellers in the U.S. and U.K. to leverage the new experience.
- Promoted Listings delivered $186 million of revenue in Q3, up 79% on an as-reported basis and up 77% on an FX-Neutral basis.
- In building its trusted marketplace for sellers, the company launched authentication on all watches sold over $2,000 in the U.S. with the new “Authenticity Guarantee” service and quickly followed with plans to expand this service in one of its highest-profile categories: sneakers. The sneakers authentication program, launched in October with the most popular sneaker styles and brands, will scale to include all collectible sneakers over $100 by early 2021.
- The company also launched a new destination that features Certified Refurbished products direct from the world’s most popular brands. In addition to great savings, all Certified Refurbished purchases include a two-year warranty, eBay money back guarantee and hassle-free 30-day returns.
- The company announced a new collaboration with UPS in the U.S. that provides sellers with more options to support their businesses. – – Additionally, eBay is supporting seller profitability during the upcoming holiday season by working with carriers on its platform to eliminate peak season shipping surcharges.
- In the U.K. and Australia, the company launched Virtual Tracking Number to substantially increase package tracking and provide buyers and sellers with ease and confidence.
- Keeping with its commitment to be the platform of choice for sellers, the company further integrated Terapeak’s capabilities into other areas of Seller Hub, including in the listing flow and in active listings. Additionally, Terapeak’s capabilities were expanded to include searching and filtering of Item Specifics, better aligning results with what sellers are searching for.
- The company launched new features like Time Away, which allows sellers to update their listings and protect their on-time delivery record while they are on vacation and provide buyers with more accurate shipping estimates; Great Price Signal to highlight competitively priced items from trusted sellers; and expanded seller features, like the ability for buyers to counter Seller Initiated Offers, into other markets including France, Italy and Spain.
- Further underscoring eBay’s commitment to sustainability, the company joined the EPA’s Green Power Partnership, ranking 14th on its Top 30 Tech & Telecom list.
- eBay Foundation reached its $1 million Kiva lending goal to support global untapped entrepreneurs through an employee micro-lending initiative and matching funds from the Foundation.
- During the quarter, eBay for Charity began working alongside international artists through a campaign called Artists Band Together, helping to raise funds for organizations that work to increase voter turnout for the upcoming U.S. elections.
Other Selected Financial and Operational Results
- Operating margin – GAAP operating margin increased to 26.1% for the third quarter of 2020, compared to 19.6% for the same period last year. Non-GAAP operating margin increased to 30.7% in the third quarter of 2020, compared to 26.7% for the same period last year.
- Taxes – The GAAP effective tax rate for continuing operations for the third quarter of 2020 was 19.8%, compared to 21.2% for the third quarter of 2019. The non-GAAP effective tax rate for continuing operations for the third quarter of 2020 was 14.1%, compared to 15.6% for the third quarter of 2019.
- Cash flow – The company generated $716 million of operating cash flow from continuing operations and $584 million of free cash flow during the third quarter of 2020.
- Capital returns – The company repurchased approximately $700 million of its common stock, or approximately 18 million shares, in the third quarter of 2020. The company’s total repurchase authorization remaining as of September 30, 2020 was $2.5 billion. The company also paid cash dividends of $111 million during the third quarter of 2020.
- Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $4.1 billion as of September 30, 2020.
You can find the full press release including charts and guidance on the eBay corporate website.