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

by: ilikespaghettios This user has validated their user name.

Fri Jan 23 10:37:25 2015

Sorry Honeville, but you have drunk the kool-aid that management served you.  Does anyone remember Marty from the old stores board?

He had a similar pow-wow as you, oh some 5 years ago? I know he meant well at the time, but he came to the board recommending that people just stay the course, don't leave ebay!  They really have your best interest at heart and things will be changing!

Sound familiar? Those guys really have a way to coddle you up and say just what you want to hear...maybe they believe it too, who knows.

Your experience is just deja-vu all over again.

But, it takes quite a bit of ego to recommend to other sellers how they should run their businesses (and thereby affect their LIVES) when you have no position on the inside to really know the score.

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

by: brokentoys19 This user has validated their user name.

Fri Jan 23 11:30:47 2015

I'm liking Honeville's suggestion. Take a pill. Take lots. If they don't work try Vodka, crack or what have you. Then enjoy more ebay kool-aid. mmmmm.

Just please don't leave! Stick it out! You know it takes years to indoctrinate people to the mysterious ways of ebay. That's a feat more easily accomplished while the victims, erm,  I mean fellowship is impaired on mind altering substances.

Finding millions of new pigeons ready, willing and able to waste time while paying fees on services not provided and give away items free isn't easy. Especially when the new crop of management will likely be even more clueless and dishonest than the former.

Besides, no one can leave ebay. They love it way too much. Such bittersweet, mindbending romance. LMAO

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: Ming the Merciless

Fri Jan 23 13:33:21 2015

@Honeville

Every day seems to present us with a fresh supply of chorlophyll.

Except for extremely desperate job seeker, who in their right mind would sign on with a corporation that's being sold off in pieces?

Bright, fresh new talent? ROTFLMAO!

More like more middle schoolers playing with their cell phones during important meetings, those whining about about the ebay cafeteria not being free, and those who barely graduated if in fact they graduated at all with a C- average.

Ebay hasn't been able to attract top rated talent for years and will continue to have to scrape the bottom of the barrel in order to hire all the temps they're going to need while laying off 2,600.

It's even harder now to contact the Peggy Department so guess which department lost the highest percentage of its employees?

Ina, I hope you find at least one terminated employee and get them to tell the truth.

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
Web Site

Fri Jan 23 13:53:25 2015

@iheart, what do you mean by “From "ecommercebytes" to "e***s" to "s***e" made it difficult if not impossible to track bad buyers.” The seller see the underlying pseudonyms; only potential buyers can’t see who the other bidders are, and the only reason eBay did that was to further obscure from naïve buyers the endemic shill bidding by unscrupulous sellers … 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: Eric Saeger This user has validated their user name.

Fri Jan 23 15:16:15 2015

Ming, Honeville's one of the biggest cheerleaders on the Powerseller board. You'd have to pry the pom-poms from his cold dead hands.

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

by: OnlyPollyPocket This user has validated their user name.

Fri Jan 23 16:37:21 2015

As many have said, I struggle to understand a word this joker is spouting!  The "more focus on the top of the funnel" line is my favorite...gotta use that sometime when I don't know how to answer ;)

He must subscribe to the adage "If you can't dazzle them with brilliance, baffle them with bullsh*t"

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

by: AgendaSwallowsAll This user has validated their user name.

Fri Jan 23 17:02:41 2015

@Honeville

We are doing business exactly as we were 2-3 years ago as a TRS with 100% feedback and we have near twice the number of feedback you do.

Since 2011 give or take, JD & Co. first took our TRS, the result of a  seller update we couldn't address due to our business model and now for to this latest seller update where simple questions, not anger, not complaints, item not as described or anything similar we with our still 100% feedback, not even a neutral in the past 1 & 1/2 years with 5 stars filled out star point to star point, we are on a 6 month look back for a defect rate created by nothing more than simple questions.

We were told ''no consequences'' would be had during the course of this time-frame we had to lower the defect rate, we'd be kept at Above Standard, etc.

We made no change in the way we do things, there was nothing we could do for our business model leads to questions being asked. What eBay did is change wording on the questions page and apparently CSR's have ceased directing all to immediately utilize a damaging link so only the most ignorant, the unfortunate of mind and other sellers who have set us up to create a defect now utilize a damaging link.

Our ''defect'' rate dropped near 4% over the first 3 months in which for 2-4 days we were dropped to Below Standard with sales made during those 2-4 days having all payments in that time-frame placed on PayPal hold, so much for ''no consequences'' over the look back period.

During the ''Below Standard'' drop, every single one of our listings, not some but all were dropped to the very bottom of search be it a specific or more generic search in all given categories but 2-4 days later for the first 3 months after having received a ''Great job! You've improved your seller performance'' email from eBay in those first 3, our listings would go back to where they'd been, many on page #1 of specific or generic due to number of watchers and/or sales.

On month 4 we were once again dropped for the 2-4 days but after having received the eBay ''Great job! You've improved your seller performance'' email all listings remained buried, no movement back to where they were as Above Standard yet we were labeled ''Above Standard''.

Both our sales and our ability to quickly reduce defects at the rate we had been was in one fell swoop taken away.

Honeville, your business model is one that allows for free ship, free returns, etc., you have to be an eBay darling with such policies. The bulk of us who made eBay don't make the astronomical per item sale profit you do that allows of your business model being profitable in spite of free ship, free returns, etc. and in tact throughout these seller updates to this point but you need to consider this is nothing else. For reasons I'm not clear on because it all slaughters every last shred of my intellect led mind, JD & Co. are on a continued course to have all feel everything should be free no matter what so my hop for you is that all will still be shiny & bright in your mind re: JD & Co. if at some point your return rate leaves you without profit having you become part of the noise both you and JD & Co,. label us.

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

by: Orwellwasright This user has validated their user name.

Fri Jan 23 18:15:18 2015

 There is absolutely no point in trying to analyze Ebays actions from a logical functional business standpoint.  Or to try to understand why they did and continue to do to us

As I have pointed out many times on this board, In my opinion The  six year war they have waged against their seller base cannot be explained away as simply   bad management decisions.  Although there are plenty of those as well.

    The Absolute hatred for and vindictive dishonesty ebay directs towards us can only be defined as a mental illness.  

 A shared paranoid pathology where upper management has deluded itself into believing that the seller base which built the site are now flea market schmendricks. Losers, liars and thieves who are denigtrating the  reputation of ebay and blocking the vision of a massive online upscale mall, where
Millinials  endlessly order the latest electronics on their iphones .

  How  else can you explain the thousands of man hours and millions of dollars spent on a never ending series of oppressive, insulting demeaning and hateful metrics to the point where the average seller has a “dashboard” that looks like the control panel of a jet,, and that’s not counting the hidden metrics.

If the Madman management spent Half the time, money , energy, and resources to  attracting new buyers as they do to  smashing the sellers, destroying their businesses and dumping them in the trash  they would not have the problems they are having now

  Only a group locked in their shared delusion could ignore the evidence, That over the last six years they increased the number of listings by a factor of 10, Have destroyed who knows how many millions of small business, Shoved the remaining die-hards to the bottom of the barrel , Crammed  their platinum pals in every buyers face ,  and yet these  buyers are running for the exits.  
   The management mission at this point can best be summed up by  Macbeth :

“I am in blood stepped in so far that should I wade no more, Returning were as tedious as go o’er,”









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

by: gramophone-georg This user has validated their user name.

Fri Jan 23 18:25:02 2015

HoneVille wrote:

''Ina and followers...  Time to go see a doctor and get some Prozac.  New board members... ALL senior management is gone... a whole new senior management is coming in... huge turn over in other key positions... You don't get this kind of turnover without getting fresh talent with new and fresh ideas.  This is a WHOLE new ballgame and the first freakin' pitch hasn't even been made and I hate to tell you all this but your BITTERNESS is now creating blindness.  It's time to gather around, join hands and sing DING DONG THE WITCH IS DEAD... it's time to bury the past and look to the future.''  
________________________________
Danny, I loves ya like a brother, but this is just not the reality... right down to echoing Donahoe's ''We need to let go of a very successful past'' comment.

We've been waiting with the same attitude you're still advising- time after time after time for the last 7 years. Every spring and fall update, every holiday season, we've been hopeful that things were going to change- that better days were right around the corner- only to come up empty every time.

The witch isn't dead... the witch IS on steroids!

eBay is in DEEP DEEP trouble. Anyone who doesn't realize this and take action to insulate themselves from the coming implosion is a fool.

PERIOD.

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.

Fri Jan 23 18:45:11 2015

One hug from 1 (straight) friend guy to another.
Big hug from MH to ldsbrother.
MH
PS: You have FRIENDS here.

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

by: brokentoys19 This user has validated their user name.

Fri Jan 23 18:50:20 2015

Everyone go look at this article. The chart in particular.

"Here's Why eBay Is In Trouble"
Dave Smith
Jan. 22, 2015

http://www.businessinsider.com/ebay-earnings-q4-2014-2015-
1



You
might characterize ebay as being in deep dookie.

The inferences that folks who watched profits and visibilty drop 90% etc are either "haters" or have real need for headshrinking happy pills is so warped, in light of everything we've seen, one can only laugh.

My bet is that they won't last through the year before "something happens". (devilish snicker)

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.

Fri Jan 23 19:13:01 2015

Honeville,
Got chased off the ebay stock boards again where folks have been LAUGHING AT YOU for over 10 years.

Go argue with Scully, he (and many others) waiting for you over there.

We will not put up with your crap here.

This guy has admitted that he lives in his mother-in-laws BASEMENT.

(I thought you got a day job).
mh

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

Fri Jan 23 19:25:53 2015

@brokentoys19
I read the article. Ebay is history. I also believe ebay will be gone by the end of year. I really expect they will be gobbled up by a real company.  

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

Fri Jan 23 19:43:13 2015

Seeking Alpha posted this headline today.
eBay: A No-Brainer

I couldn't agree more.lol

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: iheartjacksparrow

Fri Jan 23 21:20:06 2015

@Philip Cohen - I know that only buyers can see the truncated/twisted IDs. But it used to be that buyers, at least in the doll categories I bought in, would warn sellers if they knew a buyer was going to be problem. Not all sellers have the time or energy to research every buyer that places a bid. I know when I sold on eBay I never looked up bidders' histories as I simply did not have the time to do so (I worked as a paralegal and sold online in my spare time). I fondly remember a time at eBay when sellers and buyers weren't adversaries.

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: The End

Fri Jan 23 22:12:56 2015

Those of us who built Ebay never had 1,000 things to list. So, Ebay is pandering to the wrong people.

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
Web Site

Sat Jan 24 00:59:29 2015

@iheart, I agree entirely; since 2008, buyers/bidders have not been able to easily identify and thereby contact other buyers/bidders.

eBay brought in that additional anonymity for two reasons, primarily to make it that much more difficult to keep track of shill bidding by unscrupulous sellers and secondly, make it impossible to pass on such information. That problem buyers get a free run via the same additional anonymity is of no concern to eBay as long as they get a fee …

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

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

Sat Jan 24 01:03:07 2015

@The End, eBay is not even interested in the "small" professional sellers that followed thereafter; the Ho is only interested in Enterprise sellers and national brands; though, too bad his plan is not ever going to work ...

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: Massachusets Howler This user has validated their user name.

Sat Jan 24 02:22:42 2015

Great post- the sellerwho was run off was BRUCE HERSHORN.

He is selling several million in posters a year now and well below a million when he left here.
MH
I know Bruce- he is a HECK of a nice guy and a very experienced business guy.
mh

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

by: Orwellwasright This user has validated their user name.

Sat Jan 24 06:56:02 2015


Anyone who thinks anything is going to change

Go to the ebay seller boards, there is a great essay by one of the legions of sellers who were defected off the site.

Whats most interesting is the obvious ebay employee plants, who insult him and tell him how he deserved to be kicked off

This is what I have referred to before a  companywide disdain for the majority of the seller base

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