Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Jan 21 2015 16:31:17

eBay GMV Stutters to 2 Percent Growth in Q4

By: Ina Steiner

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eBay Marketplaces gross merchandise volume (GMV) grew a measly 2% in the all-important fourth quarter of 2014, with the U.S. up 3% and International up 1%. eBay said it would prioritize its resources towards "core shoppers" and its Deals business for its Marketplaces business.

eBay's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing fourth quarter 2014 earnings, you can view the full release with tables on eBay's investor relations website.


eBay Inc. Reports Fourth Quarter and Full Year Results
Global commerce platform and payments leader eBay (Nasdaq:EBAY) today reported that revenue for the fourth quarter ended December 31, 2014 increased 9% to $4.9 billion, compared to the same period in 2013. GAAP earnings were $936 million or $0.75 per diluted share, and Non-GAAP earnings were $1.1 billion or $0.90 per diluted share, driven by enabled commerce volume growth of 21%.

eBay Inc.’s commerce and payments ecosystems continued to increase the role they play in global commerce with mobile gaining share. Mobile payment volume grew 58% in the fourth quarter to $45.6 billion for the full year representing 20% of total volume. Mobile commerce volume grew 30% in the fourth quarter to $27.9 billion for the full year representing 34% of total volume. In the fourth quarter, cross-border trade grew 20%, representing 21% of total company ECV.

"In a year of unexpected events and distractions, we ended 2014 with double-digit revenue growth, solid earnings growth and strong cash flow, reflecting the fundamental strengths of our company," said John Donahoe, president and CEO of eBay Inc. "PayPal had another strong quarter, finishing an excellent year. eBay, while facing challenges, continues to be a great business and is focused on stabilizing performance and engaging its core customers. Looking ahead, our plans are on track to separate eBay and PayPal into independent companies in the second half of 2015, and we are confident this is the right strategic path for each business."

PayPal net total payment volume (TPV) grew 24% in the fourth quarter with Merchant Services volume up 33% and on-eBay volume up 3%. Revenue grew to $2.2 billion. PayPal gained 4.6 million new active registered accounts in the quarter and 18.9 million for the full year, up 13% to 162 million. Global on-eBay penetration increased to 80.8%. PayPal product innovations and investment to make payments simple and easier resulted in accelerating transaction growth, up 25% in the quarter, representing more than 3.6 billion transactions for the full year.

eBay Marketplaces gross merchandise volume (GMV) grew 2%, with the U.S. up 3% and International up 1%. Revenue grew to $2.3 billion. Marketplaces gained 2.9 million new buyers in the quarter and 14.9 million for the full year, up 11% to 155 million. Traffic was impacted by both the decline in new users due to SEO changes and the occasional buyer not returning to our site or being met with increased friction due to the password reset when they did come. In addition, the rising dollar negatively impacted export volume in the U.S. We are taking decisive action to focus the business in an effort to simplify and speed up decision making while re-aligning the cost structure to create capacity to invest. We are prioritizing our resources towards our core shoppers and we are doubling down on areas of strength like our $2 billion GMV Deals business.

eBay Enterprise gross merchandise sales (GMS) grew 9% in the quarter. Revenue grew to $443 million. Enterprise enabled its clients to grow same-store sales 12%. Enterprise signed up more than one thousand new clients and renewed or extended its relationship with more than 1,700 additional clients in 2014. It continues to expand its omnichannel capabilities, delivering $1 billion in ship from store sales in 2014, and broaden Magento's reach and global ecosystem. Enterprise supports merchants across the entire customer experience journey - from getting new shoppers into clients’ brick-and-mortar and online stores and inspiring them to buy - to delivering the goods and turning customers into loyal repeat buyers.

Looking forward to 2015, we will be simplifying organizational structures to focus the businesses and ensure that we are set-up to compete and win. During the first quarter, we plan to reduce our workforce globally by approximately 2,400 positions which a represents about 7% of our total workforce across eBay Marketplaces, PayPal, and eBay Enterprise. We will also be exploring strategic options for eBay Enterprise, including a sale or IPO. Enterprise is a strong business and a leading partner for large retailers, managing mission critical components of their e-commerce initiatives. However, it has become clear that it has limited synergies with either business and a separation will allow both to focus exclusively on their core markets, as we create two independent world class companies.

The company also announced today that it has entered into a standstill agreement with investor Carl Icahn, the company’s largest active shareholder. In addition to certain corporate governance provisions to be adopted by PayPal as an independent company at the time of its spin-off from eBay Inc., the agreement also appoints Icahn Capital executive Jonathan Christodoro to eBay Inc.’s current Board of Directors. On September 30, 2014, eBay Inc. announced that its board of directors had approved a plan to separate the company’s eBay and PayPal businesses into two independent publicly traded companies in 2015, subject to customary conditions. The agreement with Mr. Icahn allows him to determine which board Mr. Christodoro will serve on at the time of separation.

In a separate press release today, the company also announced the appointment of seasoned Wall Street executives Frank Yeary and Perry Traquina to its board of directors. These appointments bring the total number of directors to 15, 13 of whom are independent.

Other Selected Financial and Operational Results
    Operating margin - GAAP operating margin decreased to 21.6% for the fourth quarter of 2014, compared to 22.6% for the same period last year. Non-GAAP operating margin decreased to 27.7% in the fourth quarter, compared to 29.2% for the same period last year.
    Taxes - The GAAP effective tax rate for the fourth quarter of 2014 was 11.2%, compared to 17.3% for the fourth quarter of 2013. The non-GAAP effective tax rate for the fourth quarter of 2014 was 18.7% compared to 19.7% for the fourth quarter of 2013.
    Cash flow - The company generated $1.6 billion of operating cash flow and $1.3 billion of free cash flow during the fourth quarter of 2014.
    Stock repurchase program - The company repurchased approximately $1.2 billion 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 $14.6 billion at December 31, 2014, up from $12.8 billion at December 31, 2013.

Business Outlook 2015
    First quarter 2015 - The company expects net revenues in the range of $4,350 - $4,450 million with GAAP earnings per diluted share in the range of $0.37 - $0.43 and non-GAAP earnings per diluted share in the range of $0.68 - $0.71. GAAP earnings include an estimate of separation and restructuring costs of $210 - $240 million.
    Full year 2015 - The company expects net revenues in the range of $18,600 - $19,100 million with GAAP earnings per diluted share in the range of $2.17 - $2.32 and non-GAAP earnings per diluted share in the range of $3.05 - $3.15. GAAP earnings include an estimate of separation and restructuring costs of $350 - $400 million.

In January 2015, the company's board of directors authorized an additional $2 billion stock repurchase program. Together with the $1 billion remaining under the company’s prior stock repurchase program authorized in January 2014, the company's total repurchase authorization as of January 21, 2015 is $3 billion. In addition to offsetting dilution from its equity compensation programs, the company expects, subject to market conditions and other factors, to make opportunistic repurchases of its common stock to reduce outstanding share count. Any share repurchases under the company’s stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means.

Quarterly Conference Call and Webcast
eBay Inc. will host a conference call to discuss fourth quarter and full year 2014 results at 2:00 p.m. Pacific Time today. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company's Investor Relations website at http://investor.ebayinc.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.

eBay Inc. uses its Investor Relations website at http://investor.ebayinc.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor, in addition to following press releases, SEC filings, public conference calls and webcasts.

See accompanying Newsflash article.

Comments (156) | Leave Comment | Permalink
Readers Comments

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: laurengrace

Wed Jan 21 22:03:52 2015

Maybe some of those displaced workers will help blow the whistle on the criminal activity at eBay. Out of 2400 should be able to get some willing to talk.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: bitbybit

Wed Jan 21 22:17:58 2015

''JD blames Google and the hack for all of Ebay's troubles. He takes no responsibility for the downfall of Ebay at all.''

Narcissistic sociopaths never take responsibility and ALWAYS place the blame on others. All part of the Bain blame group where they feel justified dismantling businesses and slaughtering the lives of those who were loyal.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: Anonymous Annie

Wed Jan 21 22:43:10 2015

We told you so. We ALL told you so.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: Basset

Wed Jan 21 22:52:38 2015

Per Ina's  ''Little Hope....'' article:

''eBay identified several problems with Marketplaces in the fourth quarter, included poor exposure in search results (SEO), leading to a lack of new shoppers - as well as a segment of existing shoppers not returning or having difficulty resetting their passwords in the wake of eBay's security breach last year.'' (Donahoe quote)


IMO,  that segment of existing shoppers not returning might just be sellers who have done ''r-u-n-n-o-f-t'' (like Mrs. Hogwallop in Oh Brother Where Art Thou) .  

Somehow, I really doubt that resetting passwords is the problem.

Poor exposure in search results - yup, might be a problem.



Donahoe says Wenig will have ''more focus on the top of the funnel''

-  I'm just going to have to remember that quote.  Wouldn't it be nice to say in polite conversation: ''Well, Mr. Basset is working on a problem that requires him to have 'more focus on top of the funnel''.  

I'm not even sure I know what that means!  I'm picturing Wenig with two funnels over his eyes like strange sunglasses! Him being ''ruthlessly focused'' on rebuilding demand 'n all.



And for those who care.....Customer service wait times are gonna get longer.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: maxmad This user has validated their user name.

Wed Jan 21 22:54:06 2015

Even an absolute idiot could tell you how to fix ebay, the problem is, this is NOT what they want,

JD had a master plan, to break the ebay monster up into more sellable smaller parts, and I am sure most of the deals were probably done under the board room table.

At this point It really makes no difference to me personally, what happens at ebay, as our business has grown in sales by double since we took control back and moved product away from ebay.

But.........
Very Sad about the thousands of lives of good people they destroyed in their quest of greed, yes for sure business can be cruel, and this is a prime example at it's absolute worst,  

Karma will get even with these crooks one day,

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: laurengrace

Wed Jan 21 23:01:42 2015

@bassett
"IMO,  that segment of existing shoppers not returning might just be sellers who have done ''r-u-n-n-o-f-t''
Too funny! and so true!  

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: bulky This user has validated their user name.

Wed Jan 21 23:50:24 2015

as has been said so many times before stop getting rid of the small sellers and be kinder to sellers so they encourage buyers back to the platform

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: thebobman This user has validated their user name.

Wed Jan 21 23:58:32 2015

I want ebay, so I can find stuff I can't find elsewhere, like weird replacement parts for my old AV equipment, (like a belt for a turntable that doesn't cost $20), fan motor for my Impala, A Component to VGA converter, $17 ODBII to USB cord. And I use ebay to sell weird stuff like vintage test equipment (oscilloscopes, tube testers, tubes..), ISA computer cards, Commodores, boat lights, dictation equipment, jukebox parts.

Trying to change ebay into a marketplace of mass produced goods (cell phone cases/chargers/clothes you can buy at the company's main website) is like selling tampons & frozen foods at NAPA auto parts

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: nsc This user has validated their user name.
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Thu Jan 22 00:05:50 2015

@orwellwasright, eBay has already reversed course on some dunderheaded moves JD made when he came in, like killing eBay Live Auctions because eBay wasn't going to be "just for auctions" anymore. (Though he never did get around to telling the buyers just what eBay was going to be for now.)

Of course, they won't admit it. That's not in their characters.

I suspect what it really catching up with eBay is their fundamental dishonesty in doing business. I'm sure we can all recall protestations of "just a venue" and "level playing field" as they let the "diamond sellers" in on the sly while refusing volume discounts to their existing customers.

They hit small sellers the worst, but I'm sure all their customers have figured it out. The biggest and meanest customers are just doing it back to them -- which may also account for the drop in profits.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: Maryhilden This user has validated their user name.

Thu Jan 22 00:21:01 2015

Just sold my first item on Ecrater. It had 48 views in 2 weeks compared to Ebays 8. I am thrilled. I have a ton of items to get listed. Only have 2 listings left on Ebay. Bye-Bye Ebay.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: handmedownheaven This user has validated their user name.
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Thu Jan 22 00:23:56 2015

Why don't they just tell the truth.  When you have pissed off this many sellers, do you actually think they are going to keep buying?  For ever seller like us they removed for stupid reasons, they also lost a buyer.  We started our own website for which ebay did us a favor and I have not purchased a thing on ebay since.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: Philip Cohen
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Thu Jan 22 00:25:33 2015

The only problem with the eBay marketplace has been the cretinous Johnny Ho and his gaggle of hand-picked Keystone Kops ...

The eBay executive suite—where the incompetent mingle with the disingenuous, the malevolent and the outright criminal, and the just plain stupid ... http://bit.ly/11F2eas

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: handmedownheaven This user has validated their user name.
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Thu Jan 22 00:26:21 2015

So one mudslinging liar just joined with another mudslinging liar.  No news here LOL

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: Postthoughts This user has validated their user name.

Thu Jan 22 00:26:57 2015

His cassini search is a failure and I think its another contributing factor to their abysmal results.  

He still doesn't get it, ebay sellers were buyers to and the more he pissed them off and kicked them off, the more business he lost.  

I stopped buying on ebay and asked friends and family to do the same.
I will not shop where I was treated so poorly as a seller.  I know he thinks of small sellers as "Noise" but when the noise spreads the word, noise can cause bigger problems than he anticipated.

I think the only reason the stock went up is the anticipation of a good payout when the Chinese buy it.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

This user has validated their user name. by: thehosst

Thu Jan 22 00:28:49 2015

eBay is cutting the jobs, but only in the USA, the "phone transferring" staff will not be affected.  

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by: gizmo This user has validated their user name.

Thu Jan 22 01:31:06 2015

I guess my not shopping on ebay , has had an impact afterall. LOL  I laugh last.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: Jus_e This user has validated their user name.

Thu Jan 22 01:46:26 2015

Carl Icahn must be loaded, I kept hearing (that name) on our local news, I kept saying to myself, why does that name sound so familiar? Then it hit me, ebay/payapl. Well dude must be loaded because he also owns a couple of buildings in the Falling/Failing Atlantic City, NJ Casinos. Not sure if that's good or bad.

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

by: dreamweaver149 This user has validated their user name.

Thu Jan 22 01:47:54 2015

Please excuse my ignorance, but reading para. 7 of the above report it says that eBay enterprises could be floated off on the stock market as a seperate business....Does this mean that the big brand shops will disappear from the "Normal" eBay site?.....Just wondering, cos if so, although very late in the day it may be a bit of a result for those that feel they are stuck on eBay, for whatever reason. I seem to remember that on eBay UK at least, they tried an experiment a few years ago with big sellers getting their own section.
Just wondering is all....

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

Thu Jan 22 02:10:39 2015

Very ODD that they would now ALL OF A SUDDEN sell off GSI/EE.

This is something they NEED, now, they are selling it off??!?

Very ODD.

Ebay is OVER.

I guess ebays recent claim about 1 billion in sales and all the renwals from 1000's of venders is JUST SMOKE to build it up in "perceived" value for a RESALE!

They are MARKETING the damn thing!

I see now. We told everybody the Bain breakup was happening- SEE??

They need a bigger funnel to trap more sellers into this model is what they need a funnel for- ebay, take it from me, we are done putting $$ into your FUNNEL. Your funnel is too damn big and nothing is coming out of the bottom.

You have gotta wonder how many cans of Red Bull it took for Bob Swan to come up with .90 cents?

INVESTIGATE BOB SWAN- HE IS RESPONSIBLE FOR NUMEROUS MISLEADING ILLEGAL QUARTERLY REPORTS.

MH
(LDS-me too-Hang in there brother).

Perminate Link for eBay GMV Stutters to 2 Percent Growth in Q4   eBay GMV Stutters to 2 Percent Growth in Q4

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

Thu Jan 22 02:23:23 2015

I just saw your gsi sale story Ina.

This company is being broken up and ebay will have all the debt.

And GSI with the priceless MAGNETO getting offered out- INCREDIBLE!

If they are going to sell off gsi the big brands have got to be SQUEALING about lower sales too- that was all HOGWASH just a few weeks ago about the "success" of Enterprise vendors- 1 billion in sales/ a milestone-what BUNK!

I DID NOT KNOW that pp will have 5 billion and ebay only 2 billion- when the FREAK did that happen!

MH

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