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: mykee3d This user has validated their user name.

Mon Jan 26 08:08:16 2015

The Google thing has ebay doing lazy spamming tactics on Facebook. Had to ban them from my page. I started getting ebay ads for the items I looked at over and over for a couple of weeks until I had to click and stop them from putting ads on my facebook page. They had some kind of cookie and it was weird to see Items i looked at following me around. Poor Ebay is just in free fall trouble on so many levels.  

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: Bidonmine

Mon Jan 26 10:04:47 2015

i believe that Ebays 'poor' performance comes down to a lack of advertising. They depend to much on word of mouth which has not been very good. They need to blitz the airwaves with positive advertising in order to keep their name in front of the public in a positive way.

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.

Mon Jan 26 10:46:52 2015

@mykee3d
Pretty much same thing on youtube. The ebay spam has reached insane proportions. Blatant, nonstop spam vieled as legit user content. They must have a good deal for getting 'content' created offshore for "mere pennies" (or whatever some of their recent social media techniques bragging was)

They must not understand that using spammer tactics only makes you as spammer?

Search youtube for ebay by date added to see for yourselves.
wow sleazebay, you are some piece of work.  

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

Mon Jan 26 11:18:21 2015

Ina: Please attach a blog link to the UPS Preparedness article.
Thanks  :o)

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

by: mazelgirl This user has validated their user name.

Mon Jan 26 13:03:26 2015

Lots of comments!  It just occurred to me--eBay is blaming visibility as an issue. Visibility problems was caused by their insane search tool--which they take such pride in building.
JD came from Bane--they don't build at Bane-they tear down.  That's what he seems to have done and is now completing.  
I don't know why everyone  thinks Alibaba is going to buy eBay--I can't think of a single reason why they need it.

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

by: pace306 This user has validated their user name.

Mon Jan 26 13:21:32 2015

LMFAO when you hire people who have ZERO experience in the job they were hired to do.... how could the outcome be anything else but bad?

I FULLY understand the need to make eBay grow, to help shape it beyond "grannies attic sellers", but the way it was done, the nasty comments made by JD, the purpose hurt they caused - NONE of it was necessary to make eBay grow.

JD in plain English is/was King Midas in Reverse. He was the guy that turned gold into lead. Worse - no one on eBay's board ever said anything. They just let the mutt run wild. As long as they got their checks, their bonuses, went to parties, spoke to the "right people" all was good - till now.

I have no clue what eBay's future is - but its NOT being Amazon, its NOT being the Mall of America. It USED to be - being eBay, but management destroyed it all. The slap in the face is golden parachutes that they jerks are getting - getting paid to destroy - and for no good reason.

As for Hone-evil - the comments here that you made arent any smarter then the moronic ones you make on eBays board - just here Lithium cant protect you.

I dont know how much to heart eBay took your comments or what position you REALLY have there or anywhere else - but what ever they were - they showed that you too have no idea about the real world, and "monkey see monkey do" ISNT a business strategy.

Me? Yes I can talk abit. Ive worked for a FEW multimillion dollar consumer electronics companies, I do have industry connections - based on being inthe industry since 1984 and more.

I was selling, buying, servicing PC's and electronics, while you were still smoking weed in your moms basement in 6th grade.

Your statements about returns, about how business works, about how things impact business's are ALL wrong.

Ive given you link after link - but you kept telling everyone that YOUR business model - selling $1 t-shirts for $15 and then crowing that you could afford to kiss eBays posterior and do returns ie pay for em was the RIGHT way to do things.

Most of us dont sell that kind of crap. Most of us have REAL companies, employees, payroll, taxes (city, state, federal and sales taxes) - you dont. We arent in the RETURNS business - we are in the MAKING sales business - do you even remotely get it?

"Take a chill pill" .... So far the new hires have as little experience as the LAST set of monkeys - and as I said to you over there - Ill say it here - OK SHOW ME.

So far - you cant.

While you are here smirking in the corner - care to buy any of the NON DEFECTIVE, returned destroyed, customer is always right, not really SNADs that eBay pushed on me this holiday? Its only about 2k worth - come on - show me and every one here how big of a man you REALLY are - PLEASE.

TWICE and Dealerscope dont even talk about eBay, the hiring of Noah Hershman to help "fix" aka destroy the smaller sellers in the electronics categories went bust, Rich Matsura ran screaming for the hills ... LMAO "Seller Protection" ... who you fooling son?

"Seller Protection" is like getting useless healthcare or car insurance - useless. Every try and "get some" "Seller Protection"? I Have and it "aint pretty". Like Kyser Soze its a myth.

No one argues that improvements couldnt be made to eBay - but the way it was handled showed that thee ones in charge had no clue on how to run things.

Stealing from your sellers ISNT a business plan.

I dont begrudge eBay for taking back end money - everyone else does. From Walmart to Best Buy and everyone inbetween - theres plenty to go around - but then if you do - leave your smaller sellers alone - unless they are doing something SO BAD that it needs to stop.

STOP using VERO to bully people all while leaving fakes running wild, stop hidding peoples items, comments, listings and feedbacks. Just STOP.

The proof is in the pudding - if eBay wants to grow, wants to become relevant again - its more then hiring a few people thats needed - WAY MORE.

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.

Mon Jan 26 13:25:38 2015

You never know about Ali Baba...they put their toe in the water with 11 Main they just might want to take over the US market.

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

by: bb6 This user has validated their user name.

Mon Jan 26 14:46:21 2015

@mazelgirl They would want to buy it simply for the userbase and the name. Everyone knows the name ebay.  Ask 100 people on the street what Etsy, 11 Main and Bonanza are and most wouldn't know. That's also why you never hear about extremely high sales on those venues.  

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.

Mon Jan 26 15:13:17 2015

If ebay were to be bought out or taken over, the new owners would have to dry dock it, fix it right, and clean up the insane policies.

So long as the names ebay and paypal exist there will still be lots of bad word of mouth regardless of the ownership.

Whoever buys it would have to at least also change the name, and many of the major villains, past and present, including Pierre would have to completely divest to avoid a continuation of the negative public sentiment.

There are still many victims who were ripped off, disrespected, never got paid back or apologized to, and were stalked and harrassed by ebay's trolls and goon squads. They won't stop badmouthing ebay or paypal and convincing people to never use the sites.

Not to mention the massive following of outright scammers who will never stop what they do. They will always be there to sully ebay and paypal's reps (not like ebay or paypal needs help accomplishing that. 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: Philip Cohen
Web Site

Mon Jan 26 16:19:15 2015

"We think the world of John Donahoe. He has been a fantastic manager of the business"— Tony Scherrer, director of research for Smead Capital.—LOL …

http://money.cnn.com/2015/01/26/investing/carl-icahn-ebay-gannett/
index.html?source=zacks


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: troglites This user has validated their user name.

Mon Jan 26 19:42:50 2015

I needed a good laugh. Don't believe I would want him to manage my money.  

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

Tue Jan 27 06:11:29 2015

"EBay Employee Admits He Helped Build The Silk Road"

http://www.businessinsider.com.au/ebay-employee-involved-in-silk-r
oad-2015-1


Hmmm, so, when they aren't writing code to "pea and thimble" their users these shysters are freelancing on other nefarious activities, apparently ...

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: maxmad This user has validated their user name.

Tue Jan 27 07:02:00 2015

@Philip

Wow, shocking, and all these years, I thought I knew how business works,
hire good people, give good customer service, show profit.

Boy was I wrong, I had it all mixed up,,, just hire the most useless, underhanded people on earth, slap your customers faces, give nothing, break up the company into pieces, and all will be good.

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.

Tue Jan 27 12:55:10 2015

There's more to it. The person also used silk road to buy drugs. More than just cannabis. Some heavy duty stuff.

So all the jokes about 'what are they on/smoking in San Jose?' ring true. Now you know why things are so broken down and policies so very surreal. There's ebay corporate culture exposed for ya!

Follow the link here to wired and Ars technica. Even more juicy.


eBay Engineer Says He Helped Code Drug Marketplace
By Ina Steiner
EcommerceBytes.com
January 27, 2015


http://www.ecommercebytes.com/cab/abn/y15/m01/i27/s02
<
BR>


The
topper: Looks like he is still on staff. bwhahahahahahhahahaa!

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

Tue Jan 27 15:35:42 2015

http://seekingalpha.com/article/2692565-the-signal-and-the-noise-the-e
bay-spin-off-and-apple-pay?


“… it's nice having a non-troll comment on this article for a change. For some reason Ebay attracts a lot of trolls in the comments section, never have experienced that with other SA articles I've written.”—Ibex Investor, contributor, SeekingAlpha.com

One has to wonder if Ibex Investor has ever wondered why that is so?

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

Tue Jan 27 15:58:30 2015

Anyway, it's nice to see so many of you noisy "trolls" placing so many negative comments on articles invariably promoting eBay on SeekingAlpha.com.

Do keep up the good work whoever you all are ...

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

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