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: nsc This user has validated their user name.
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Sat Jan 24 12:38:29 2015

To be fair, if eBay had not changed since 2008, if eBay had not tried to keep growing by attracting larger enterprises, it would also have failed; just in a different way. Their old reliance on organic growth of just small & hobby sellers was maturing and maxing out.

Things change fast on the Internet. eBay did have to grow to compete. The problem is less what eBay said it was trying to do than the actual way it went about it.

Had eBay wooed enterprises with above-board volume discounts available to all, and imposed standards that really were to protect buyers, not to steer favored sellers towards a limited set of buyers, I think it would have been a very different story.

An eBay that wasn't myopically focused on promising whatever it took to woo the biggest enterprises (who didn't need eBay to begin with), would have done everything it could to chain its successful small to medium sellers in 'golden handcuffs' by giving them such good deals and making them so successful they would have no reason to look elsewhere.

Instead eBay took this class of seller and begin hitting them with whips. Higher fees, lower service, hoops to jump through for no benefit but to stay in business. I think eBay regarded the loss of these 'small fry' as insignificant collateral damage. (Some of the lost sellers were not so small, either; Bruce Hershorn was paying eBay nearly $200K per year in fees before he left, if I recall correctly.) eBay assumed that lost sellers could be easily replaced and that disgruntled sellers wouldn't ding eBay's image too much.

Maybe if eBay had executed well, they would have been right. But eBay made a mediocre hash of things. Anybody remember eBay Express? And now they need a new catalog? What, again? To go with their new Search engine that doesn't work either?

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

Sat Jan 24 14:07:48 2015

WRONG.

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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Sat Jan 24 14:38:09 2015

Wrong? Well, I agree 100% with "nsc" ...

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: Orwellwasright This user has validated their user name.

Sat Jan 24 15:49:03 2015

Nsc:

  Your  essay is flawed based on false premises,

In my opinion
 First of all there was no mention by the JD regime of diminishing growth or anything of the sort.
  ebay was a money rainmaker and getting stronger.

  If  you recall he immediately stated he Wanted to transform ebay away from its “flea market” (meaning the garbage sellers,  aka:  US!) image,  into a “classy” online hi tech mall . His hatred of the Pushcart vendor sellers(aka:  US) was palatable.
   We were “noise” we were con men, who ebay had to protect their buyers from. Right from the start he began his attacks (remember changing neutrals to negatives?)

If growth was a concern , why methodically  undermine and eviscerate their massive seller base?  NO sane Business and I mean NO SANE BUSINESS  alienates a loyal profitable customer base  in order to pursue some phantom future customers.
  Again another example.. remember the big lots guy? At one point he was the second or third largest seller on ebay .. he bought out warehouses and sold the contents  at one penny auctions. Unbelievable values, lots of great stuff for pennies on the dollar . Ebay killed him off because a few too many buyers did not understand that if you buy 10 as is vcrs for 5 bucks they wont all work right.       Again ebay just cut him loose . One of thousands and thousands of discarded broken merchants . I growth and volume were a concern, Ebay would have been working to rehabilitate supposedly problematic  merchants not discarding them

 Again If growth and safety were a concern then install an ACTUAL  trust and safety dept to monitor the site, invest in account reps to help sellers (non existant  for the schmendrick class)  YOU KNOW, an actual support center

By now we know the Meaning of disruptive innovation
1) Feverishly persue Large accounts, prestige sellers and off shore Junk factories  to flood the site (BTW whatever happened to those High class prestige merchants?)
2) To  insure that these now prefferd sellers meet their volume requirements , design a search engine to funnel buyers to them and eliminate as much of the competition as is feasible through attrition.
    Attrition defined a increasingly harsh series of metrics designed  winnow out the original seller base. As well as starving us out through “non existant” rolling blackouts
3) Cram as much paid click away advertising into every corner of the site as possible
4) Force the original seller  base into using paypal whose one sided polices insure that sellers are easily cheated , which guarantees that even more will leave
And that my friends is the master plan …
Brilliant!  Yes ? No?
And it continues up to this very second..
Two great essays on the ebay user boards right now
One dealing with a seller who was  just defected out. Very very Informative and BTW watch 2015 as the defect system will absolutely incinerate the seller base
Another dealing with a seller who just cheated out of $2,400 through paypal
Read his essay carefully, No merchant service provider would have ruled against that seller based on those facts yet paypal did,   read carefully

 Anyone who thinks any new managemenat will do anything to reverse the vendetta are dreaming. Management want to dump before any more embarrassing details become public..

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.

Sat Jan 24 17:02:49 2015

This 4th quarter report is the absolute proof, John Donahue’s  leadership was a COMPLETE FAILURE , , , it took him less then 6 years to completely destroy a perfectly good highly  profitable , highly respected company,  to even think 6 years ago that ebay would be destroyed to this degree, was unthinkable, just stop and think about how much damage you would have to do to the ebay brand to finally come to this, it’s unimaginable,  

ebay is now the ABSOLUTELY  WORST platform on the planet to run your business, in fact it’s NO way to do business.

If you’re an exclusive ebay seller, wake up, look up and all around you,  business is booming everywhere except ebay

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.

Sat Jan 24 17:25:28 2015

Here's a good one. Looks like ebay's solution to getting caught spamming google is to wall to wall spam on every other site under the sun and your email as well. Read the quotes here:

"How Google Inc (GOOGL) Changes Have Impacted eBay Inc (EBAY)"

http://www.insidermonkey.com/blog/how-google-inc-googl-
changes-have-impacted-ebay-inc-ebay-338382/


BTW,
it also looks like they are still spamming google with the same type of fake pages/results of a page full of dead or expired listings labeled "more items related to xyz" or WE. They changed the url slightly  from the first time.

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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Sat Jan 24 17:36:21 2015

@orwellwasright, I think we are having a violent agreement here.

I was not speaking of eBay's actual history, but of a hypothetical eBay, one not led by a CEO who exemplifies the Peter Principle.

I was simply pointing out that the most commonly given alternative of "they should have left everything alone" would not have worked either. eBay is a public company, and Wall St. demands growth.

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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Sat Jan 24 17:39:33 2015

@orwellwasright, can you provide links to the essays you referred to?

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

by: Mark4 This user has validated their user name.

Sat Jan 24 18:17:36 2015

more and more desperate as the ship sinks

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.

Sat Jan 24 20:07:22 2015

I hope everyone saw the front page story of this blog today and noted that Paypal will walk off debt-free, while Marketplaces inherits whatever it was $7 billion in debt.

Hate to brag, but I told you so.  Bankruptcy dead ahead.  We all got thrown under the bus, every one of us, all to enrich 5 or so greedy scumbags.  Same as KB Toys, same as GS Technologies.  

Maybe Alibaba buys out Marketplaces after all.  Who knows. Donahoe is and was a typical Bain criminal, period. Abandon ship.

See:
http://www.bloombergview.com/articles/2012-08-12/
bain-s-creative-destruction-destroys-lives

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 21:25:55 2015

Yup- they are giving ebay 7 billion of debt and leaving ebay w/ 2 billion cash.
PP will be debt free with what was it Ina, 7 billion in cash.
Buried in DEBT and getting broken up.
SO, HOW DO YOU NEW BIG BRANDS THAT "JUST SIGNED UP" feel about ebay selling YOU out??????
(Hope those were short-term contracts- LOL).
LMAO,
MH
(That article was a good tip Ina and David).

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: askalice59

Sat Jan 24 22:36:41 2015

I'm packing my suitcase...

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

Sun Jan 25 03:38:04 2015

Philip Cohen shows his true colors.
Apparently he has never made a living on Ebay and is totally pro "other corporate nonsense".
Those of us who have been with Ebay in the Good Days referred to it as "My Ebay business".
Philip Cohen has had no connection whatsoever with selling in the Good Days on Ebay.
We (true early on sellers) know Ebay never had any competition and, after a much needed retweeking, would still have no competition today. It was one of a kind. Ebay was a unique entity unto itself. Seemingly Of the people, By the people, and For the people.
Philip Cohen is full of nonsense and has no clue, but is pol-parroting the conceptions conjured up by the Wall Street phonies.
Philip Cohen. Mingles with the disingenuous, the malevolent, the outright criminal, and the just plain stupid.

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

Sun Jan 25 04:00:10 2015

@The End,

Could I suggest that you read again what "nsc" actually said, and read it a little more slowly next time ...

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

by: Patricia This user has validated their user name.

Sun Jan 25 12:28:12 2015

Well I, for one, am content to sit back and watch the happenings between Paypal, Ebay and Ichan.  He entered this over a year ago and once he does that he infiltrates...hence he already has one of his executives on the board.  I've seen him raid a lot of companies in the past.  He already has the largest share of active stock.  Perhaps he'll split Ebay into two like Overstock did in the past with retail and resale...perhaps he will sell off the company piece by piece.  It will never be the same again...so I'm happy I found other sources years ago.  This is just the beginning of Ichan's plans for Ebay.

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

by: Jerseygal This user has validated their user name.

Sun Jan 25 13:47:12 2015

Ebay is dead already. I've been watching it deteriorate for years and quite honestly it cannot be any worse.  Whatever the plans are for it can only be an improvement if it even exists at all. JD will be gone. That's an improvement and if it is sold off that will move it out of this current mess of a BOD. If it closes, so what.  Most of us have moved on.  

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.

Sun Jan 25 15:03:24 2015

Phil is a PATRIOT.
His tireless efforts are very APPRECIATED here.
Mass Howler

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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Mon Jan 26 00:10:21 2015

Apparently the brainiacs didn't stop to think about the fact when you make this many sellers mad, they will stop shopping also hoping you crash & burn.  Don't look for me to provide the fire suppressant

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

by: Watching the Wheels This user has validated their user name.

Mon Jan 26 00:39:01 2015

Since Donaho and the Bailouts for Bonus Bucks are approximately around the same time frame, doesn't ANYONE factor in that a lot of people are just plain broke?

Yeah, sure gas prices have dropped, but groceries are at an all time high.

People have less money, and need to prioritize necessities.

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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Mon Jan 26 05:47:35 2015

@Watching, people may be broke, but they aren't more broke when they shop on eBay than when they shop on Amazon. Indeed, a site like eBay which specializes in second-hand should be prospering in hard times. Yet it's not. Some other explanation is needed.

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