Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Oct 15 2014 15:28:44

eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

By: Ina Steiner

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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.

Business Outlook

    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.




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Readers Comments

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: sasikat9 This user has validated their user name.

Wed Oct 15 16:12:05 2014

Cooking the books

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: AgendaSwallowsAll This user has validated their user name.

Wed Oct 15 16:13:37 2014

Up 7 percent? in 2007 and prior we were doing $30-$40k per month and up to as late as 2010-2011 we were spending $7-$10k per year on the site. We're now at $4-$6k per month sliding at what is an alarming rate in these past 6-7 months with maybe 10-12 sales over 3 accounts in this past week and we now spend essentially nothing on the site, purchasing only that which can't be found locally.

How many stories are out there just like ours and if one checks JD & Co. Diamond sellers, their sales are way down as well or at least all we're aware of and WHAT do they buy on JD & Co. that would in any way, shape or form make up for that which is no longer being purchased by small to mid-levels.

Cooked Books or JD & Co's multiple theft platforms is the only way I can see a stated increased GMV.

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: laurengrace

Wed Oct 15 16:22:40 2014

Can't show a loss prior to selling off the now defunct eBay

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: Island_Sam

Wed Oct 15 16:47:57 2014

We used to do $12-15k per month sales. Now down to $3-4k (AND sliding) We used to spend $2-3k in supplies, shifting our purchases elsewhere. Something is not jiving with ebay's numbers....

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: collectorjim This user has validated their user name.

Wed Oct 15 17:09:23 2014

The security breech that happened on Sept.14 inflicted extensive damage to sellers businesses.

eBay calling it a technical glitch is a lie. The system was hacked and sellers business information has without a doubt now been compromised.

My sales went from $200-$500 a day for last two years to $10 a day. I ended all my listings and reset my store and my sales returned to normal for two days and then back to $10 a day.

I've had complaints from buyers that they get an error when trying to purchase my items. I've noticed RSS feeds for everyone have vanished and been replaced by the advance search engine module...WTF

Customer service is a joke, you wait for two hours and they hangup on you without saying anything.

One thing I know for sure, just having a few database go offline because of a loss of power would not cause all the problems sellers are complaining about, problems that eBay has yet to fix.

I've made the decision that after Christmas I'm downsizing to the min. and putting my eggs in several different baskets and will use eBay to continue building my awesome email list that is over 15,000 satisfied customers.

I can't do business with people who do nothing but lie. I can't stand eBay any longer...they make me want to puke.


Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: eBankrupted

Wed Oct 15 17:22:49 2014

Like plugging a billion holes in a sinking ship; they can only move assets around for so long before the massive decline starts to appear - to them!

Once PP is split, they also can't borrow PP profits to artificially prop up ebay.

China sellers were a temporary boost, just by sheer volume of flooding catagories, but are now a long term permanent loss in sales volume because Chinese sellers DON'T BUY on ebay! USA sellers USED to buy on ebay, but now that sales have declined to near nothing, there's nothing to spend. We all told them in 2007 this would happen.

The Vulture Capitalist Pig's chickens have come home to roost, but the chickens have no feathers.

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: quirkyantiques This user has validated their user name.

Wed Oct 15 17:50:19 2014

800 million listings-yet 797 million originating from China.....(sarcasm)
Inactive users are counted in as active and book cooking fraud runs rampant as returns are NOT taken off the GMV and we all know how many returns there are.... Add to that the fact that items show sold at full asking price and the best price offer accepted amount is never shown. I'd say a culinary arts school could learn a lot from the book cooking extraordinaire going on at Ebay accounting!

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

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

Wed Oct 15 17:50:38 2014

I'll start believing eBay's financials when they start paying there stockholders a cash dividend ...

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 Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

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

Wed Oct 15 17:55:48 2014

Let us see what the market does with this tomorrow.

Business that is still here is being fed to ebay enterprise companies and this is buoying ebay.

The sales are happening, we small to medium sellers are just not getting them.

Our old established buyers are being steered away from us, we all know this.

The stock is lower now than even before the PP split announcement- either ebay, Andreeson or Stocktwits may slip out some rumor so watch for that.

The 2 year % for ebay just shifted down last week, alipay came out for US sellers today, ands Amazon will put up STELLAR numbers in about 5 days, so do not worry.

Ebay is really showing desperation as they are POOFING features to increase cash. The BBC (god bless em') is reporting on other issues pretty regularly now.
Another issue I see is that there is so much going on right now (ebola, Isis; etc.) that folks may not notice- many companies may guide down this week but we will just have to watch and see, Amazon should come in well.

7% growth when overall ecommerce is at 26-29%, not too good for ebay.

MH

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: Rexford

Wed Oct 15 19:23:17 2014

They give us 2 or 3 good days per month. We always know when they "turn on our lights".  We sell great popular products, and when they give us visibility, the sales pour in. But we can always tell when they flip the switch.  Great day yesterday and crickets today.

Despicable management at this company.

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Wed Oct 15 20:49:54 2014

Rexford.  I completely hear you about 'flipping the switch,' but I don't think it's exposure.  I think it's whether or not they decide to advertise.  

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: Ric

Wed Oct 15 21:28:14 2014

So this is the result of John Donahoe's turn around plan.

John Donahoe would not listen to the "noise"... now he can enjoy the silence.

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: Ogri This user has validated their user name.

Wed Oct 15 21:32:01 2014

Guess my math(s) may need checking, but don't the numbers give following marketplaces revenue Y/Y growth (excluding Motors)?

2014   2013   Growth
1,707  1,609  6.1%     Revenue
57        55                   % International
973    885     9.9%     International Revenue
734    724     1.4%     US Revenue


So US GMV has grown 7% but fees gathered 1.4%, only explanation can think of is someones getting a low priced deal on fees.

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: AgendaSwallowsAll This user has validated their user name.

Wed Oct 15 22:07:34 2014

@WOODJUNGLE! ON EBAY

JD & Co's current position has nothing to do with advertising, it has to do with site image and constant fiddling with search algorithms as well the continued Micromanagement.        

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

This user has validated their user name. by: shabbychick

Wed Oct 15 22:14:29 2014

According to CNBC today ''eBay executives blamed some of the slowdown on the cyberattack reported in May.''


EBay shares fell in extended-hours trading Wednesday after the e-commerce company missed revenue expectations and handed in guidance that fell short of forecasts.

Shares dropped nearly 4 percent in extended-hours trading.

In comments after the filing, eBay executives blamed some of the slowdown on the cyberattack reported in May.

''We expect it will take longer and cost more'' to recover from the cyberattack and SEO changes, an eBay executive said, according to Reuters.

http://www.cnbc.com/id/102087330

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: AgendaSwallowsAll This user has validated their user name.

Wed Oct 15 22:24:35 2014

@shabbychick

You beat me, I was going to add ''and possibly the security breech''. Sales have taken a give or take 50% hit on top of what had already been a massive hit from the Glory Days. Only thing is, I can't be certain  it's the breech itself or the meddling-fiddling-Micromanaging and the alarming escalation of non-transparency that has gone in to high gear since at an ever accelerating rate.

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: Henry This user has validated their user name.

Wed Oct 15 23:41:44 2014

This might explain eBay's new return (theft) policy. eBay forces sellers to give buyers a full refund, buyer gets to keep the merchandise and eBay gets to keep the revenue from fees. Ummm!

I once worked for a company that kept similar books - the company was bought by a competitor and hundreds of people lost their jobs. Hmmm!

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: comet This user has validated their user name.

Thu Oct 16 00:14:13 2014

Sales?

What are dese "Sales"  you speak of?

We has no sales!

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

by: quirkyantiques This user has validated their user name.

Thu Oct 16 00:46:02 2014

The security breech has NOTHING to do with poor performance. It has EVERYTHING to do with sellers leaving or being booted off the site and taking not only their customers, but the sellers own purchasing powers with them. Nobody that I know that has been booted off Ebay selling wise will buy on there now. And guess what? sellers are the biggest buyers-we are constantly looking to restock.
Add to that the constant bad press Ebay is getting and it's starting to feel like the *noise* from people like us is starting to become a cacophony....

Perminate Link for eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter   eBay Grows Marketplace GMV only 7 Percent in US in Third Quarter

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

Thu Oct 16 00:56:49 2014

>>Fixed price sales grew 15% and now represent 79% of the total sales on the platform.<<

Really? When I left ebay six years ago my fixed priced listing sales had slid down to 20-25% of what they had been in years past. Nothing I have heard since then tells me it has gotten any better. But then maybe I just can't read cooked books. Oh, I forgot, that last month I was there on ebay, my fees were MORE than my income so I guess if you charge enough fees, the numbers come out right.

I too wonder about that 3 year turn around. Is JD ever going to get a chance to say he succeeded or will he just say, "Yep, I turned ebay around all right! Now know one wants to sell on there."

I'm sure I am counted as an active buyer although since the hack I can't access my account even if I wanted to and haven't bought a thing off ebay in years.

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