|Wed Oct 15 2014 15:28:44|
eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter
By: Ina Steiner
eBay's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing third quarter 2014 earnings, you can view the full release with tables on eBay's investor relations website.
eBay Inc. Reports Third Quarter Results
Global commerce platform and payments leader eBay (Nasdaq: EBAY) today reported that revenue for the third quarter ended September 30, 2014 increased 12% to $4.4 billion, compared to the same period in 2013. GAAP earnings of $673 million or $0.54 per diluted share, and Non-GAAP earnings of $848 million or $0.68 per diluted share, were driven by accelerating enabled commerce volume growth and double-digit revenue growth.
eBay Inc.’s enabled commerce volume (ECV) increased 27% in the third quarter to $63 billion. Mobile ECV advanced 67% to $14 billion representing 21% of volume. eBay Inc. mobile downloads since inception exceeded 282 million, attracting 7.3 million new customers in the quarter. Cross-border trade grew 27%, representing $14 billion, or 22%, of total company ECV.
“Rapidly changing competitive environments in commerce and payments underscore the opportunities for eBay and PayPal, and highlight how each business will benefit from the focus and agility of being an independent company,” said eBay Inc. President and CEO John Donahoe. “PayPal had another strong quarter, and its mobile payments leadership and momentum continued with mobile volume up 72 percent to $12 billion. PayPal is on track to process 1 billion mobile transactions in 2014. And eBay continues to focus on enhancing its competitive position, improving the experience for buyers and sellers and investing in consumer engagement. As we prepare to separate eBay and PayPal in 2015, our teams are focused on strong execution to ensure each business is set up for long-term success.”
PayPal net total payment volume (TPV) grew 29% with Merchant Services volume up 37% and on-eBay volume up 9%. Revenue grew to $2.0 billion. PayPal gained 4.4 million new active registered accounts to end the quarter at 157 million, up 14%. Global on-eBay penetration increased to 80.5%. Mobile payment volume grew 72% to $12 billion, representing 20% of TPV. Active accounts acquired on mobile were 2.9 million. Newly rebranded PayPal Credit grew 29%. PayPal also rolled out new product innovations like its One Touch offering making it simpler and easier to check-out and pay with PayPal.
eBay Marketplaces gross merchandise volume (GMV) grew 9%, with the U.S. up 7% and international up 11%. Revenue grew to $2.2 billion. Marketplaces gained 3.4 million new buyers to end the quarter with 152 million active buyers, up 13%. The selection of items available on Marketplaces grew to over 800 million listings, including both platform and non-platform offerings, reflecting the success of improved selling initiatives, particularly on mobile. Marketplaces mobile volume grew 41% to $7 billion. Fixed price sales grew 15% and now represent 79% of the total sales on the platform.
eBay Enterprise gross merchandise sales (GMS) grew 14%. Revenue grew to $259 million. Enterprise enabled its clients to grow same-store sales 13%.
Other Selected Financial and Operational Results
Operating margin — GAAP operating margin decreased to 17.9% for the third quarter of 2014, compared to 20.5% for the same period last year. Non-GAAP operating margin decreased to 23.7% in the third quarter, compared to 26.8% for the same period last year.
Taxes — The GAAP effective tax rate for the third quarter of 2014 was 15.9%, compared to 21.1% for the third quarter of 2013. For the third quarter of 2014 and 2013, the non-GAAP effective tax rate was 19.2% for both periods.
Cash flow — The company generated $1.4 billion of operating cash flow and $0.9 billion of free cash flow during the third quarter of 2014.
Cash and cash equivalents and non-equity investments — The company's cash and cash equivalents and non-equity investments portfolio totaled $15.1 billion at September 30, 2014, up from $12.8 billion at December 31, 2013.
Fourth quarter 2014 — The company expects net revenues in the range of $4,850 - $4,950 million with GAAP earnings per diluted share in the range of $0.73 - $0.76 and non-GAAP earnings per diluted share in the range of $0.88 - $0.91.
Full year 2014 — The company is reducing full year revenue guidance to $17.85 - $17.95 billion.
UPDATE: Want to know what eBay CEO John Donahoe and chief financial officer Bob Swan told Wall Street analysts after the earnings release? We bring you the highlights of eBay's conference call in EcommerceBytes Newflash.