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.




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

by: gramophone-georg This user has validated their user name.

Wed Jan 21 17:08:23 2015

Ouch.

OMG... they finally really killed it. Seriously.

This thing is gonna crash and burn after the split... wonder who their 'core shoppers' are? I think it was always all the small sellers they've been busy booting- the people that made up the 'eBay Community' that is now 'EBAY'S community'.

When the crows come home to roost it's awesome and a bit frightening, isn't it? We'd better get prepared for a post eBay world, because it's looking like the hollow shell that will be left after the PayPal spinoff is going to Enron out with a quickness.

Wonder if there will be any prison time for anyone?

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.

Wed Jan 21 17:14:36 2015

Wall street is fooled again- ebay up 2% after hours.
They cannot see beyond the smoke.
MH
Let's hope this 2% gets dissected in the next few days.
They appear to be wanting to IPO everything- this time GSI/ebay "enterprises".

The Bain disassembly begins....
MH

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

by: 1beck3 This user has validated their user name.

Wed Jan 21 17:28:34 2015

Yep, they really killed it.  Killed it so much the stock is up 3% after hours.  Haters gonna hate.

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

by: gramophone-georg This user has validated their user name.

Wed Jan 21 17:32:13 2015

I'm not "hating" at all. I'm very upset at what these chuckleheads have done to my old friend eBay. I am stunned.

TWO PERCENT GROWTH over the holiday season... TWO PERCENT...

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

by: sasikat9 This user has validated their user name.

Wed Jan 21 17:40:08 2015

Good old Alibaba is going to suck ebay up after the split so fast that even the useless customer service will be speechless....

If the sellers think that they aren't wanted now, just wait until that happens. Just call it the great Chinese invasion of junk.

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.

Wed Jan 21 17:44:07 2015


Every Business has what is considered to be their Hardcore devotes .  The hardcore runs from 5-10% for large business such as Wal-Mart or Mcdonalds , to as high as 30% for small unique business

This hardcore will almost never go elsewhere, they dedicate their available $$$ to that business , they are unpaid spokespersons, easy to please and make up a hugely disproportinate percentage of sales

When I had my B&M store my hardcore ran about 30% and they made up around 75% of my income

Ebay was unique in the fact that an extremely high percentage of pre donahoe users were hardcore, I would estimate at least 20-25% .

These were the dawn to dusk buyers and sellers, who literally lived and breathed ebay (I know I was one for a while) Not only did this hardcore produce tremendous income for ebay they were fantastic free advertising (rule of thumb, 1 satisfied customer produces at least three new customers)

 Then cam JD, who for possibly the first time in the history of commerce declared war on his hardcore group. JD believed one seller who could post 100,000 items was more valuable then 1000 sellers posting 100 items and acted accordingly .

Jd proceeded to deliberately destroy his hardcore base by any means necessary in order that the ever diminishing buyer base could be force funneled to his golden children

Years of increased fees and accounting tricks have hidden the damage, but that time has past, thus the timely departure of the architect of destruction

 Any pretense that the seller apocoylpse was in the name of buyer safety, was blown away with the introduction of the miserable defect system which will sweep through the seller base in 2015 like a scythe, giving JD his final victory , a barren soulless retail site with a dwindling buyer base and a ruined reputation

Of course being in the midst of a delusional denial pathology, the current management will never admit this and reverse course. In fact all evidence is that ebay is now abondoning  all pretense , and have instructed their phone bank non support staff to act as though all callers are unnecessary impediments .  
  I have read several postings from sellers who have been swindled by return fraud being told that ebays insane fraud friendly return polices are just a part of doing business, and that sellers come and go but buyers are will always be there

In other words : Tipping point reached, all run for the exits, sale pending . and all the crew who steered the ship into the iceberg will row away with huge fortunes while we sink

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: LDS Brother

Wed Jan 21 18:17:10 2015

Well this proves what I posted yesterday

GOOGLE has killed eBay and us sellers !

You can't grow with Donahoe, and ESPECIALLY when GOOGLE does not have anything from eBay shoppers type in their search engine

You won Donahoe you pig ! You profited for yourself while killing my business, others and eBay itself

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: LDS Brother

Wed Jan 21 18:19:41 2015

CORRECTION: when GOOGLE does not have anything on their 1st page from eBay when internet shoppers type in an item, how can we grow ?  

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

by: Ogri This user has validated their user name.

Wed Jan 21 18:22:37 2015

I'm no business guru, but I kind of think that if I had a strategy resulting in revenue growth declining to more or less parity in a market expanding (by conservitive estimates) at 15%, I'd change my strategy.

Core customers - great deal, free postage, and secure buying seekers who want a wide and diverse range of products. Hmm so bring in more large stores selling the same stuff you can find in B&M stores and other on-line retailers; and the customers will flood in.
Or maybe they liked the hugely diverse range of products from thousands of small sellers; sold at low prices as they dont have public shareholders to hand a chunk of their profit over to.

The share price, sure to go up as the earnings per share estimate was met, ably assisted by a huge share buy-back programmme reducing the number of shares available in the market.  

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

by: Volvo351 This user has validated their user name.

Wed Jan 21 18:33:33 2015

2% 'growth in 4Q2014? Most small sellers would be ecstatic to just maintain 2007 volume on this 'platform' that's sinking faster than a burning BP oil rig1

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

by: froggie This user has validated their user name.

Wed Jan 21 18:37:15 2015

''Tipping point reached, all run for the exits, sale pending . ''

I couldn't have said it better.

CNBC story titled: EBay CFO: It will get worse before it gets better

''During the company's earnings call, eBay Chief Financial Officer Bob Swan said 2015 would present ''real challenges'' and forecast that ''it will get worse before it gets better.''

http://www.cnbc.com/id/102351093#.

If you haven't taken your eggs elsewhere, now might be a good time.

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

by: XebayX This user has validated their user name.

Wed Jan 21 18:40:31 2015

When you clear the smoke and mirrors, padded books, and PR lies, how much negative growth did eBay have in Q4? -2%? -20%?

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: Ming the Merciless

Wed Jan 21 19:11:53 2015

@ibeckthree

I see you've received another chlorophyll transfusion.

Every time you post here about finance and ebay you demonstrate how little you know about either.

Of course ebay is UP after hours. Investors love Bainification. Investors love IPOs because it TEMPORARILY raises share price. Plus, many are anticipating ebay marketplaces to be sold which will also increase the value of the stock.

This of course further enriches the criminals who've been illegally manipulating ebafia for years.

However, it's likely the long anticipated death knell for the most evil and vile corporation in
the United States.

-- How many small businesses did John Donahoe destroy?

-- How many divorces?

-- How many suicides?

-- How many families on public assistance?

-- How many disabled and elderly good and honest sellers did Donahoe throw under his greed train and illegal schemes?

-- How many children are now on reduced fee or free lunches?

-- Why are any of them still alive?

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: LDS Brother

Wed Jan 21 19:33:04 2015

Ming said:

-- How many small businesses did John Donahoe destroy?

-- How many divorces?

-- How many suicides? (I HAVE CONSIDERED IT WHEN DSR'S LASTED 1 YEAR, AND WAS DRIVEN TO CONTEMPLATE IT SEVERAL TIMES, ONLY SINCE DONAHOE TOOK OVER, AND STILL FIGHT THE HOPELESS FEELINGS WITH THIS SINKING CAREER AS AN EBAY SELLER )

-- How many families on public assistance?

-- How many disabled and elderly good and honest sellers did Donahoe throw under his greed train and illegal schemes?

-- How many children are now on reduced fee or free lunches?

And Ming, how many
-- FORECLOSURES on peoples homes from his disrupting us right out of our careers ?

Wenig, stop the games ! There is NO New eBay, eBay is over and done with ! Just sell it off to the Chinese and put it and all of sellers out of our misery you pricks !  

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

by: Maryhilden This user has validated their user name.

Wed Jan 21 19:51:12 2015

Ebay cutting 2400 jobs in 2015. How many sellers have left already?

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: Ming the Merciless

Wed Jan 21 19:53:37 2015

:DS Brother

Spot on aboyt home foreclosures!

-- How many llers had to move in with family or go to homeless shelters?

John Donahoe is responsible for more human misery than any natural disaster I can think of. I hope he's soon struck by lightning.

He and ALL the rest of them should be serving life sentences in the oldest, meanest, roughest federal prison in the country.

The ebay sellers that John Donahoe destroyed will NEVER forget. Never.

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.

Wed Jan 21 20:31:21 2015

Core shoppers? The small seller which Ebay holds in such contempt is probably Ebay's biggest buyer. When the big box retailers start getting scam artist buyers like the blatant fraud I recently had, which resulted in me getting a totally unwarranted defect, they will begin to think twice. Ebay may wipe their slates squeaky clean (removing the big retailers defects and negs), but the word is out. Eventually, buyers won't discriminate between the big box stores and the small seller, because the expectation for free merchandise and rentals will already be set. Because they get away with so much with the small seller, those buyers who lack integrity and crooks are going to expect to get away with the same fraud with the big brand retailers. So large retailers - something to think about before Ebay's barnacles become fused beyond the point of no return.

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

by: aim04744 This user has validated their user name.

Wed Jan 21 21:25:53 2015

I am hoping that with minimal growth in the largest quarter of the year and Enterprise being spun off, the large retailers will be leaving as quickly as possible.

I find it interesting that JD blames Google and the hack for all of Ebay's troubles. He takes no responsibility for the downfall of Ebay at all.  

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.

Wed Jan 21 21:26:10 2015



I WANT MY OLD LIFE BACK!

I WISH I HAD NOT GIVEN UP A PROMISING CAREER FOR THIS.

I MISS OFFICE PARTIES, HOLIDAY BONUSES, FRIENDS KID PHOTOS, ANNUAL LEAVE AND BEING ABLE TO SEE A DAMN DOCTOR.

I'm going back.

mh

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: Rexford

Wed Jan 21 21:34:36 2015

ibeck3 says " Haters gonna hate."

Seriously?  2% growth rate?  Pray tell how much stock have you bought?  I wouldn't touch it with a 10 foot pole. The stock is likely up due to the fact that they are cutting 2400 positions.

Glad you aren't picking my stocks.

And they paid this CEO how much to stick around?   LOL

"Eliminating jobs is never easy, but these decisions were necessary," John Donahoe said in a conference call Wednesday, after outlining the challenges eBay faces without PayPal. (If only someone would have eliminated his job years ago.)

Donahoe also said "eBay's loyal customers are back, but our more occasional customers have not returned."



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