Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Jan 16 2013 16:21:06

eBay Sees 19 Percent Increase in Q4 GMV for US

By: Ina Steiner

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eBay announced fourth quarter 2012 earnings today, January 16, 2013. eBay's conference call with analysts is at 5:00 pm EST, here is the company's press release, you can view the full release with tables on the eBay investor website.

eBay Inc. Reports Strong Fourth Quarter and Full Year 2012 Results
Net Income up Double Digits in 2012 on Record Revenue

SAN JOSE, Calif. - eBay Inc., a global commerce platform and payments leader (NASDAQ:EBAY), today reported that revenue for the fourth quarter ended December 31, 2012 increased 18% to $4.0 billion, compared to the same period of 2011. The company reported fourth quarter net income on a GAAP basis of $751 million, or $0.57 per diluted share, and net income on a non-GAAP basis of $927 million, or $0.70 per diluted share. The increase in non-GAAP earnings per diluted share was driven by double digit user growth across the portfolio, strong gains in mobile adoption, and accelerating growth in the company's Marketplaces business, reflecting a 19% increase in U.S. gross merchandise volume (GMV), excluding vehicles.

For the full year, revenue increased 21% to $14.1 billion, compared to 2011. The company reported net income on a GAAP basis of $2.6 billion, or $1.99 per diluted share, and net income on a non-GAAP basis of $3.1 billion, or $2.36 per diluted share. eBay Inc. enabled more than $175 billion of commerce volume (ECV) in 2012, representing growth of 18%. ECV is the total commerce and payment volume across all three business units consisting of Marketplaces GMV, PayPal merchant services net total payment volume and GSI global ecommerce (GeC) merchandise sales.

"We had a great finish to an excellent year, with fourth quarter results exceeding our expectations," said John Donahoe, eBay Inc. President and CEO. "eBay Marketplaces in particular had a terrific fourth quarter, with growth in the U.S. accelerating three points, outpacing ecommerce."

"Mobile continues to rewrite the commerce playbook, and we continue to be a mobile commerce and payments leader," Donahoe said. "eBay mobile finished the year with $13 billion in volume - more than double the prior year - and PayPal mobile handled almost $14 billion in payment volume, more than triple the prior year. In 2013, we expect each to exceed $20 billion."

"Web-enabled multichannel commerce is evolving quickly, and consumer shopping behavior is changing rapidly. Our focus is on being a global commerce leader in this new environment, connecting buyers and sellers everywhere, and being a preferred multichannel partner of choice for retailers and brands of all sizes."

The company's PayPal business continued to expand its leadership position in global payments. PayPal's active account growth accelerated to 15% and ended the year with approximately 123 million registered accounts. PayPal added nearly 2 million accounts a month in the fourth quarter, representing the company's fastest active account growth rate in years. Net total payment volume (TPV) increased 24%, producing revenue growth of 24%. Key drivers included continued merchant and consumer adoption coupled with geographic expansion. PayPal's mobile payment volume reached nearly $14 billion in 2012, up more than 250% over the prior year, as more consumers used their smartphones and tablets to pay online. In addition, PayPal continued to invest in future growth initiatives and made significant progress towards the rollout of its offline payment solutions. Twenty-three major retailers adopted PayPal's offline payment solutions in 18,000 locations in 2012.

The company's Marketplaces business delivered a record $2 billion revenue in the fourth quarter, propelled by strong performance in the U.S. Revenue for the full year was driven by continued investments in the customer experience and efforts to bring the world's inventory to global buyers. Active user growth accelerated two points to 12%, driven by mobile, site enhancements designed to streamline the shopping experience on eBay and emerging markets. Fixed price GMV, excluding vehicles, increased 21% and contributed to a 16% increase in GMV, excluding vehicles. U.S. GMV growth, excluding vehicles, accelerated three points to 19%. Mobile commerce volume in 2012 grew more than 120% to $13 billion driven primarily by increased adoption of eBay's mobile apps and increased engagement from product innovation. eBay's suite of mobile apps attracted more than 4 million new customers in 2012.

GSI revenue for the quarter increased 10% to $398 million driven primarily by a 17% increase in GeC merchandise sales. Same store sales grew 19% outpacing ecommerce. For the full year, GSI shipped a record 146 million units for its clients. GSI contributed revenue of $1.1 billion in 2012, as GSI continued to grow its relationships, investing and driving value to its clients through eBay Inc. technology solutions, including mobile app development, buy online and pick up in-store and mobile express checkout.

Other Selected Financial Results

Operating margin — GAAP operating margin decreased to 21.9% for the fourth quarter of 2012, compared to 22.3% for the same period last year. Non-GAAP operating margin decreased to 28.5% for the quarter, compared to 28.7% for the same period last year. The decrease in GAAP operating margin and non-GAAP operating margin was due primarily to the impact of acquisitions and business mix.

Taxes — The GAAP effective tax rate for the fourth quarter of 2012 was 14%, compared to 19% for the fourth quarter of 2011. For the fourth quarter of 2012, the non-GAAP effective tax rate was 18% compared to 20% for the fourth quarter of 2011. The decrease in the GAAP effective tax rate was due primarily to U.S. taxes on the sale of the remaining equity interest in Skype in the fourth quarter of 2011.

Cash flow — The company generated $1.4 billion of operating cash flow and $1.1 billion of free cash flow during the fourth quarter. For the full year the company generated $3.8 billion of operating cash flow and $2.6 billion of free cash flow.

Stock repurchase program — The company repurchased approximately $256 million of its common stock in the fourth quarter.

Cash and cash equivalents and non-equity investments — The company's cash and cash equivalents and non-equity investments portfolio totaled $11.5 billion at December 31, 2012.
   
PayPal customer balances — The company now holds PayPal U.S. customer balances directly, rather than as a custodian for its customers. As a result, PayPal U.S. customer balances and the associated customer liability are now reflected on the company's consolidated balance sheet, contributing to the $8.1 billion balance in funds receivable and customer accounts at December 31, 2012.

Restructuring — The company incurred restructuring charges of $31 million during the fourth quarter of 2012 related to work force reductions designed to simplify and streamline its organization and strengthen the overall competitiveness of its existing businesses.

Business Outlook
First quarter 2013 — eBay expects net revenues in the range of $3,650 - $3,750 million with GAAP earnings per diluted share in the range of $0.48 - $0.50 and non-GAAP earnings per diluted share in the range of $0.60 - $0.62.

Full year 2013 — eBay expects net revenues in the range of $16,000 - $16,500 million with GAAP earnings per diluted share in the range of $2.23 - $2.29 and non-GAAP earnings per diluted share in the range of $2.70 - $2.75.


See Thursday's EcommerceBytes Newsflash story for more information on eBay earnings and its post-conference call with analysts.
 

Comments (42) | Leave Comment | Permalink
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Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Massachusets Howler This user has validated their user name.

Thu Jan 17 14:08:42 2013

John Donahoe PROMISED that Paypal HELD funds would not be put in interest bearing funds.
This SLANTED PROMISE may or not have been kept, but to INCLUDE SELLERS HELD FUNDS in any kind of metric that allows ebay to claim it as income or anything else sounds VERY DECEPTIVE to me.
Those are SELLERS FUNDS so it has nothing to do with ebays Income.

Ebay WILL DO ANYTHING to make it LOOK LIKE they meet and beat analyists ''expectations''.

Hey KRAMER- PP is not a BANK- they have a money TRANSMITTERS LICENSE ONLY so they shouldn't even be allowed to HOLD our funds. He is saying on his show that PP should be a bank stock- IT IS NOT a ''bank stock''- they cannot  handle the scrutiny.
Mass Howler

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: permacrisis

Thu Jan 17 15:02:06 2013

Hey, Phil:

"Wall Street knows that this rusting old hulk, that Captain Ho keeps driving onto the rocks, is going nowhere"

Guess Motors to Core really got to him. He thinks it's an amphibious vehicle!

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Ric

Thu Jan 17 15:56:59 2013

19%... is that the best eBay's got? I guess it is enough to continue bamboozling the easily misled Wall Street Analysts.

19% is not a whole lot to boast about given the realities of how eBay derives their GMV figures.

eBay's reported GMV figure includes unpaid items ( a sale without a completed payment should not be counted as a sale ), and does not account for the value of returned goods.

Subtract out unpaid items and returns, and eBay would likely be reporting single digit GMV growth.

As to the claimed growth in mobile payments, this does not reflect genuine eBay growth as eBay cryptically admits Mobile transactions cannibalize non mobile transactional volume.

The Bain like mythical reporting methodology continue to conjure up less than honest revenue figures which are fabricated solely for the purpose of lining the pockets of eBay's top management as they rush to sell off gifted shares.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Philip Cohen
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Thu Jan 17 16:57:20 2013

I'm wondering how long it will be before the Enron effect bubbles to the surface ...

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Thu Jan 17 18:11:24 2013

How can they include money that isn't theirs on their balance sheet? Those assets do not strengthen their position in any way.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Thu Jan 17 18:17:33 2013

I read that wrong. They are considering them as liabilities.  

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: bitbybit

Thu Jan 17 20:05:34 2013

So when cars go to core, ebay will count all unpaid vehicles as still sold in GMV.

Do I have this right?  

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Bloggo This user has validated their user name.

Thu Jan 17 20:29:43 2013

Forbes has yet another uncritical ebay Q4 puff piece. It's pump and dump time.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Ric

Thu Jan 17 21:14:12 2013

bitbybit said   "So when cars go to core, ebay will count all unpaid vehicles as still sold in GMV. Do I have this right? '

Moving eBay motors into core is Donahoes next deceptive move designed to make it next to impossible for analysts and investors to be able accurately evaluate the health and vibrancy of eBay's marketplace.

Folding ebay Motors into core is JD's next great slight of hand Bain like accounting maneuver designed to further obfuscate eBay's marketplace revenues.

And, since ebay has no intention of addressing the unpaid item issue, unpaid vehicle transactions will be counted as part of GMV.

The future obfuscation of eBay revenue will likely include a slow folding of each individual eBay division one by one into eBay in order to continue to disguise declining eBay marketplace revenues.

This Bain like slight of hand accounting of revenues will likely play out many times in the coming years, and Wall Street Analysts will be fooled like a two year old who can't figure out how uncle John magically pulled that quarter out from behind their ear.


Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Moonwishes This user has validated their user name.
Web Site

Thu Jan 17 21:27:52 2013

PP holding our money now. All I know is I keep trusting PP less and less and instead of dumping my account whenever it got near $100 and then $50, now I do it at around $20. I would rather get interest on my own money, thank you very much than let them hold it.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Philip Cohen
Web Site

Thu Jan 17 21:45:43 2013

@ Ric, That's probably the reason why GMV is up but profit is down ... It's all to do with the smoke and mirrors creative accounting process ...

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Ron This user has validated their user name.

Thu Jan 17 21:58:14 2013

I don’t know if anyone saw the interview on Charlie Rose yesterday with Roger McNamee, founding partner of venture capital firm Evolution Partners.  McNamee has been around for a long time and was an early investor in Facebook.

During the interview McNamee states that Amazon “has done the things to ensure their future....they’re an admirable company because they never stop investing.  I contrast that to eBay, a company that...”  Charlie Rose cut him off before he could finish his thought, but later he says “Twitter is a horrible disappointment.  I group it with eBay, a company that on the merits is manifestly successful, but in relation to what its opportunity was, not so good”.

And there we have it - eBay can report whatever growth, and Wall Street analysts can regurgitate whatever spin that eBay puts out there, but those industry people who can see the overall trends and are in a position to best judge what companies are best positioned to take advantage of the evolving internet landscape are the people with the credibility.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Bloggo This user has validated their user name.

Fri Jan 18 06:44:54 2013

Roger McNamee is absolutely spot on. ebay's anemic growth under the "guidance" of John Donahoe is dwarfed by the business and potential business that John Donahoe has driven away.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Rexford

Fri Jan 18 13:21:28 2013

Would love to see an audit that reveals the actual facts and the hard numbers.  Wall Street just seem to read the press releases submitted by eBay.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: nsc This user has validated their user name.
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Fri Jan 18 15:52:32 2013

ebay does seem to be doing something right with mobile (for once) but the transcript of the call was the same as ever on the marketplace -- you want to know about the marketplace? let me tell you about mobile and Paypal instead. And this in a quarter when ostensibly the numbers are quite good.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Patricia This user has validated their user name.

Fri Jan 18 17:25:22 2013

If we wait a few days the experts cut thru the smoke and mirrors and give us the true figures - which generally vary quite a bit from Ebay's :-)

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Philip Cohen
Web Site

Fri Jan 18 17:25:59 2013

@nsc,

You've summed that up well ...

What a shame mobile transactions will be improving at the cost of transactions from the laptop and desktop ...

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Digmen1 This user has validated their user name.
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Sat Jan 19 15:57:19 2013

@nsc
Yes JD is very good at diverting things to paypal and mobile.

But we do have to give JD some kudos for making ebay mobile friendly, but really they are the same buyers.

Maybe we should get Oprah to interview JD.

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

This user has validated their user name. by: Philip Cohen
Web Site

Sat Jan 19 18:07:39 2013

"get Oprah to interview JD" ...

Yes, I'll pay that. It would be most interesting to see who does the most squirming, JD or Lance ...  

Perminate Link for eBay Sees 19 Percent Increase in Q4 GMV for US   eBay Sees 19 Percent Increase in Q4 GMV for US

by: Bloggo This user has validated their user name.

Sun Jan 20 02:50:56 2013

Oops!
http://news.yahoo.com/toys-r-us-reports-gloomy-232848180.html

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