Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed July 17 2013 16:21:03

eBay Grows Marketplaces GMV 13 Percent in Second Quarter

By: Ina Steiner

Sponsored Link

eBay announced second quarter 2013 earnings today, July 17, 2013. eBay's conference call with analysts is at 5:00 pm EST, here is the company's press release, you can view the full release with tables on the eBay investor website.

eBay Inc. Reports Strong Second Quarter 2013 Results
SAN JOSE, Calif - Global commerce platform and payments leader eBay Inc. (Nasdaq: EBAY) today reported that revenue for the second quarter ended June 30, 2013, increased 14% to $3.9 billion, compared to the same period of 2012. The company reported second quarter net income on a GAAP basis of $640 million, or $0.49 per diluted share, and non-GAAP net income of $822 million, or $0.63 per diluted share. The year-over-year increase in second quarter non-GAAP earnings per diluted share was driven primarily by strong top-line growth. GAAP earnings per diluted share declined on a year-over-year basis due to a gain on the divestiture of a business in 2012.

Total company Enabled Commerce Volume (ECV) grew 21% for the quarter, to $51 billion. The growth demonstrates the power of the company's global commerce platforms. Marketplaces, PayPal and eBay Enterprise connect merchants, retailers and brands of all sizes with consumers everywhere. Cross-border trade in the second quarter was $11 billion, representing 22% of the company's total ECV. The company's mobile commerce leadership is also driving an efficient channel for growth and engagement, with mobile attracting 3 million new customers in the quarter and growing more than 90%. eBay Inc.'s mobile assets and capabilities are delivering innovative, seamless commerce experiences for merchants and consumers across multiscreen shopping environments.

"We had a strong second quarter, with $51 billion of enabled commerce volume across Marketplaces, PayPal and eBay Enterprise driving double-digit revenue and earnings growth," said eBay Inc. President and CEO John Donahoe. "Macroeconomic headwinds in Europe and Korea will continue to be a challenge in the second half of the year. But our core businesses are strong and we continue to attract millions of new customers each quarter through mobile innovation. We remain confident in our ability to meet our goals and drive global commerce innovation and leadership."

PayPal delivered a strong second quarter performance with revenue increasing 20% to $1.6 billion. PayPal gained 4.7 million active registered accounts in the period and ended the quarter with 132 million, a 17% increase. PayPal's net total payment volume (TPV) grew 24% to $43 billion driven by consumer and merchant use of PayPal both on and off eBay. PayPal continues to invest in growing its addressable market, product development, and consumer awareness. Payment velocity increased with a sequential acceleration of both the number of transactions and payment volume. PayPal made strides offline with PayPal Here now live in six countries while growing domestic merchant coverage by signing agreements with more than 50 merchant acquirers to facilitate usage of PayPal over the Discover network.

Marketplaces delivered a strong second quarter performance with revenue of $2.0 billion, increasing 10%, or 12% excluding the gain from the resolution of an indirect tax dispute in 2012. Marketplaces gained 3.5 million active users in the period and ended the quarter with 120 million, a 14% increase. Gross merchandise volume (GMV), excluding vehicles, increased 13% to $18 billion. Fixed price GMV grew 17% globally and represented 69% of total GMV. U.S. GMV, excluding vehicles, increased 16% to $7.3 billion driven by mobile and momentum in the parts & accessories and home & garden categories. International GMV, excluding vehicles, increased 11% to $11 billion, showing stable growth while facing a tougher macroeconomic environment. Marketplace's new search engine, which went live in North America in the second quarter, will help to enable smarter, faster and more intuitive search experiences.

GSI Commerce was renamed eBay Enterprise, reflecting the partnership that the business offers to retailers and brands through its comprehensive technology solutions and marketing services. eBay Enterprise contributed $246 million in revenue for the second quarter, an 11% increase. Its enterprise commerce platform generated $815 million in global ecommerce (GeC) Merchandise Sales, a 21% increase. eBay Enterprise enabled its clients to grow faster than the ecommerce market as measured by the 19% same store sales growth, but revenue was pressured by a reduction in take rate. The company expects its omnichannel product portfolio, including complementary eBay Inc. assets, to be increasingly adopted by merchants seeking opportunities to grow their businesses while seamlessly meeting the needs of their customers.
 
Other Selected Financial Results
    Operating margin - GAAP operating margin decreased to 19.3% for the second quarter of 2013, compared to 20.5% for the same period last year. Non-GAAP operating margin decreased to 26.3% in the second quarter, compared to 27.3% for the same period last year.
    Taxes - The GAAP effective tax rate for the second quarter of 2013 was 15%, compared to 19% for the second quarter of 2012. For the second quarter of 2013 and 2012, the non-GAAP effective tax rate was 19% and 24%, respectively. The decrease in the company's GAAP and non-GAAP effective tax rates was due primarily to discrete items recorded in 2012 related to uncertain tax positions.
    Cash flow - The company generated $1.0 billion of operating cash flow and $658 million of free cash flow during the second quarter of 2013.
    Stock repurchase program - The company repurchased approximately $466 million of its common stock in the second quarter of 2013.
    Cash and cash equivalents and non-equity investments - The company's cash and cash equivalents and non-equity investments portfolio totaled $11.7 billion at June 30, 2013 up from $11.5 billion at December 31, 2012.

Business Outlook
    Third quarter 2013 - the company expects net revenues in the range of $3,850 - $3,950 million with GAAP earnings per diluted share in the range of $0.49 - $0.51 and non-GAAP earnings per diluted share in the range of $0.61 - $0.63.
    Full year 2013 - the company expects net revenues in the range of $16,000 - $16,500 million with GAAP earnings per diluted share in the range of $2.21 - $2.26 and non-GAAP earnings per diluted share in the range of $2.70 - $2.75.




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Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: pace306 This user has validated their user name.

Wed Jul 17 18:12:15 2013

Its up %14 because of ebays latest "lowest fees ever" scam.

ebay is doing more with "the big guys" and less with the smaller guys - so theres a temporary bump in sales.

If you buy thier stock - you're a fool!

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Ming the Merciless

Wed Jul 17 19:19:42 2013

Again, more deceptive financials spoon fed to the Wall Street piranhas eager for 'good' news to move a lot of stock in either direction.

Wall Street simply regurgitates whatever ebafia tells them, and no one in their right mind would listen to their investment advice.

Users up "3.5 million?" Ebafia never mentioned that millions on NARUs or inactive accounts and continues to count these accounts as users. They don't mention where all these "new" users are because none of the above are buying on .com.

How much, IF ANY, of ebay's alleged 14% YoY increase occurred on .com?

The Street should compel ebafia to disclose what their NET merchandise volume is on .com rather than the intentionally deceptive GMV.

Before these analysts should be believed about anything, they should be legally required to report the TRUTH about the stock they praise or give buy or hold ratings to.

And corporations once again should be compelled to report accurate financials or risk long term incarceration of their upper management.

The sad truth is that neither The Ho, Pierre the Pirate, or Wall Street give a damn anymore about .com.

Instead they have their greedy, beady eyes firmly focused on the emerging markets in the Pacific Rim, Russia, and Brazil.

It matters not to them now how many small American businesses they exterminate.

Ebafia's long term strategy is to become the venue of choice for the Communist Chinese to sell directly to the above markets.

Using a variety of contrived policy violations and illegally manipulated searches, any American small business on ebafia competing directly with the Chinese will sooner or later find themselves history.

Sadly Wall Street doesn't care about American owned business anymore unless they're selling on a large scale to the EU and emerging markets.

You and I and our businesses no long matter to the financial health of Wall Street or to greed driven. inherently dishonest corporations. like ebafia.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Ebay's Slow Death This user has validated their user name.

Wed Jul 17 20:42:28 2013

What would happen to PayPal, if tomorrow the Justice Dept. said Ebay couldn't require all their Sellers and Buyers to exclusively use it?

PayPal has the Ebay Marketplace locked up. If it were suddenly unlocked, you would have to cover your ears from the sound of PayPal's crash. Ebay keeps PayPal afloat by making us Sellers accept (pretty much) only it.

How come those high-paid analysts don't pay attention to that?  Oh yah, they are too busy counting their money from Ebay's payoff. ''Look over there, don't look here.''


Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Rexford

Wed Jul 17 21:09:36 2013

eBay stock = $57.00
Amazon.com stock = $308.00

I would love to know how they define a marketplace "user".  3.5 million user increase? Seriously?

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Ric

Wed Jul 17 21:10:23 2013

eBay's quarterly reports should begin like all fairy tales with the words - "Once Upon A Time"...

It is little wonder why eBay is pushing sellers into participating in their managed returns program. Eventually, eBay will need to find more magic revenue, and at that point, the option to participate in managed returns will be eliminated and participation will become mandatory.

eBay's Managed Returns Program bills sellers for the cost of return postage, thus allowing the company to inaccurately report the costs incurred by sellers for return shipping as revenue when in fact it is not.

This deceptive accounting practice has yet to be questioned by analysts who simply turn a blind eye to the fallacy.

Speaking of returns, eBay counts items sold as part of their GMV, but unlike other retailers, eBay does not account in any way for the value of returns.

This is another deceptive practice eBay employs and is also something analysts accept on blind faith despite the inaccuracies inherent in the scheme.

While we are on the subject, unpaid items are also counted as Sold and are part of GMV despite the fact that items are not really 'sold' until the item is paid for. eBay is unconcerned about this discrepancy since it works in their favor.

Let's not forget eBay's biggest unchallenged Wall Street deception... Free shipping.

When sellers offer their items with shipping included in the selling price, those sellers are helping eBay inflate their GMV since the built in shipping costs are counted as part of GMV. When sellers do not include shipping costs in their selling price, eBay is unable to count those costs as part of GMV which is why eBay assessed a Final Value Fee on shipping costs when they are not included in the selling price.

When considering eBay's reported increases over last year, let's also keep in mind that eBay only recently began including eBay Motors as part of overall marketplace sales, and that newly included revenue is also falsely boosting reported GMV.

It is hard to tell who the bigger criminals are... eBay's MBA's who cook the books and perpetrate massive fraud and deceptive schemes or the Wall Street Analysts who ignore the deceptions and financial manipulations by accepting them as fact.

Either way, owning eBay stock is much like playing musical chairs. Eventually the deceptive eBay practices will see the light of day and the music will stop, leaving those holding eBay stock without a place to sit and their investments in ruin.




Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: bitbybit

Wed Jul 17 22:44:59 2013

A crook is a crook and a liar is a liar. It takes one to know one. Ebay MBA's and Wall Street Analysts. Need I say more?

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

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

Wed Jul 17 23:04:44 2013

Look at the huge drop in the after-hours numbers.

Just wait until the Asian markets open in a few hours.


Ebay will will dump below $50 within 48 hours, and it is about time.

MH


Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Ina

Wed Jul 17 23:05:18 2013

I think these two points are interesting and have to do with how eBay surfaces listings in search results using its Best Match algorithm:

- eBay Marketplaces Top Rated Sellers outpace ecommerce growth: their same-store sales grew 22%. They account for 45% of eBay's U.S. GMV in Q2.

- Half of all U.S. Marketplaces transactions included free shipping in Q2.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Bloggo This user has validated their user name.

Wed Jul 17 23:39:38 2013

More phony numbers.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Ming the Merciless

Thu Jul 18 00:32:11 2013

Even if the numbers Ina cited in her post above were true -- and I don't think they are based on anecdotal seller reports across the internet -- they seem remarkably sooooo self serving because they're LIES ebafia wants us to swallow to force "free" shipping on holdouts.

The Ho can only count in Chinese. I don't think American TRS sellers have fared at all well because of the many types of abuse The Ho has heaped upon us.

But Wall Street just vomits up what The Ho gives them eat, and the beat goes on for the Street criminals who ruined our economy in 2008.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Digmen1 This user has validated their user name.
Web Site

Thu Jul 18 00:59:21 2013

Once again we have the same old ebay haters not believing the figures.

A 14% increase on gmv from last year has to be good for ebay. The inclusion of shipping in the figures has now worked its way through to annual comparisons.

Most businesses would be very pleased with a 14% increase in today economic climate.

Ok they are not as good as Amazon.

How are sites like bonanza and ecrater and ebid.net doing? I bet they'd die for a 14% increase.


Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Digmen1 This user has validated their user name.
Web Site

Thu Jul 18 01:08:03 2013

I just found this presentation on ebay's figures.

Very easy to read and shows good increases in all areas.

http://files.shareholder.com/downloads/ebay/2588593050x0
x676973/ee92a74c-cc57-4e1f-b3d6-8898e15f49a5/eBay_Q2-13EarningsDeck.pdf

Its
a 30 pages power point style.
Shows marketplace sales and paypal.
And income and expenses.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Bloggo This user has validated their user name.

Thu Jul 18 02:28:20 2013

@ Digman1 - You beleive eBay's accounting shows the truth, I don't.

Definition of 'Voodoo Accounting'
Any form of accounting that does not follow principles of conservatism. While there are many methods by which financial statements can be fudged, it always comes down to inflating revenue or hiding expenses. Examples of accounting shenanigans include the big bath, cookie jar accounting and improper recognition of revenue.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Bloggo This user has validated their user name.

Thu Jul 18 03:28:14 2013

Here is a real-world example of how eBay inflates it's numbers. Every month I pay my eBay bill comprised of listing fees, final value fees and the monthly cost of my eBay Store.  In May, something didn't seem right. I was charged double for my store. I was billed for May, as is usual, and I was also billed for June in advance.
Obviously, May 2013 would look better than May 2012 on eBay's balance sheet.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

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

Thu Jul 18 05:42:09 2013

At the end of the day, the only measure of a company's performance is its share price, and regardless of what the so called Wall Street “analysts” say, the “smart money” on Wall Street says that, notwithstanding they were both $40 in August 2007 about the time the Ho took the helm, Amazon is now worth $308 and eBay only $57 … no matter how much hot air Digmen1 tries to pump into the eBay financials, the share price spells fail, fail, fail. Obviously, the smart money knows that all is not kosher, for how else can you explain the huge disparity between the Amazon and eBay share prices?

It’s surely only a matter of time before it all implodes and the Ho disappears to Bermuda … http://bit.ly/11F2eas

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Rexford

Thu Jul 18 07:22:46 2013

Digman1 would make a great Wall Street analyst. He believes everything that eBay and Wall Street report.

One day I hope that eBay is audited by the lens of a microscope. Only then will we see whether their accounting practices are on the up-and-up.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: Ogri This user has validated their user name.

Thu Jul 18 07:53:24 2013

Few things strike me looking at the numbers from an investors view:
The Operating Margin is steadily decreasing past couple of quarters (no graph of this in PDF).  Earnings per share is a bit irrelevant if the company has a buy back programme reducing the number of shares in circulation.

'Active' users increasing, but doesn't appear to be an equivalent proportional increase in revenue.

Including postage in GMV should give an automatic one time increase of around 15% (assuming cost of postage per sale around 15% of total sale).  Once that has been included for a full year, true increase (decrease) would be seen.

Mobile sales don't appear to be split smart phone v tablet or ipad.  Pretty much everyone I know has an ipad or tablet and uses it in preference to laptop when sitting around at home - that's not the same as buying using a phone at the bus stop or wandering around a shop.

Emphasis on large high street/mall stores assume will steadily reduce margins, as they should be able to negotiate lower fees than smaller sellers.

Think I'd wait a year or so if I had a pile of cash to invest, until the mobile, big store recruitment drive, inclusion of postage, and new search engine had worked their way through the numbers.

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

by: gutspiller This user has validated their user name.

Thu Jul 18 11:13:12 2013

I'm a European seller. I've just read an Ebay report in the biggest financial newspaper in my country an here it's a complete different story.

Here'a translation

In the second quarter Ebay made a profit of 640 million $ or 49 cents per share with a turnover of 3,88 billion dollar. That's a decrease all the way compared with the same period in 2012. Then Ebay made a profit of 692 million $ or 53 cents per share with a turnover of 3,4 billion dollar.

Not taking into account a few minor things the last 3 months Ebay made a net profit of 822 million or 63 cents per share. That is as expected according to analysts and more then the year before (56 cents).

However for the 3th quarter Ebay isn't very optimistic. They expect a profit of between 3,85 and 3,95 billion $. The weak European economy and slower grow in Asia will decelerate growth. The average analysts expections stand at about 3,97 billion $.

J.D warns for headwinds in the second year half.



Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Ming the Merciless

Thu Jul 18 15:30:40 2013

I believe ebay does do stock buy backs which further dilutes their inflated numbers.

IMO, anyone interested in buying ebay stock should wait a decade before even considered buying it or until such as they report accurate and truthful quarterlies.

If The Ho is still charge at this time next year, we'll still be seeing voodoo accounting and dishonest financials

Perminate Link for eBay Grows Marketplaces GMV 13 Percent in Second Quarter   eBay Grows Marketplaces GMV 13 Percent in Second Quarter

This user has validated their user name. by: Ming the Merciless

Thu Jul 18 15:36:48 2013

As I write this, ebay stock is down 6.88% and plunging as the market winds down for the day.

Investors aren't buying The Ho's BS.

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