Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu July 16 2015 07:56:13

eBay Reports Second Quarter 2015 Results

By: Ina Steiner

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eBay's conference call with analysts is at 8:00 am EST today, here is the company's press release announcing second quarter 2015 earnings, you can view the full release with tables on the eBay investor relations website.

SAN JOSE, Calif. - Global commerce platform and payments leader eBay Inc. (Nasdaq:EBAY) today reported that revenue for the second quarter ended June 30, 2015 accelerated to $4.4 billion, with strength across both PayPal and eBay. This excludes $0.3 billion of eBay Enterprise revenue that is now presented as discontinued operations. GAAP income from continuing operations was $682 million or $0.56 per diluted share, and Non-GAAP income from continuing operations was $931 million or $0.76 per diluted share, driven by an acceleration in revenue growth at both businesses.

eBay Inc.’s commerce and payments ecosystems continued to increase the role they play in global commerce, with gross merchandise volume (GMV) growth on an FX neutral basis accelerating 1 point over the prior period to 6% and net total payment volume growth accelerating 3 points to 28%. On a year over year basis, foreign currency movements continued to have a negative effect, impacting the revenue growth rate of the eBay Marketplaces business by 8 points and the revenue growth rate of PayPal’s business by 3 points, with benefits from currency hedging partially offsetting the impact at PayPal. Additionally, weaker local currencies in some markets led to reduced demand for goods in export-oriented markets like the United States, impacting the growth of our cross border trade for eBay Marketplaces and PayPal.

"We are very pleased with our overall Q2 performance. PayPal and eBay both delivered strong Q2 results and have strong momentum. Dan, Devin and their respective teams are executing well and are prepared to create the next great chapter for PayPal and eBay," said eBay Inc. President and CEO John Donahoe.

PayPal net total payment volume (TPV) grew 20% in the second quarter to $66 billion, with Merchant Services volume up 27% and on-eBay volume down 1%. On an FX-neutral basis, PayPal TPV grew 28%, with Merchant Services volume up 36% and on-eBay volume up 6%. Payment volume through eBay Marketplaces was $14.5 billion, representing 22% of total TPV. Revenue grew to $2.3 billion. PayPal grew new active accounts 11% to 169 million and processed 1.1 billion transactions. We continued to deepen customer engagement with our customer base: in the second quarter transactions per active account increased to 24 per year, compared to 21 times a year ago, and monetization per active account increased to $50 per year. The strong, steady growth of PayPal’s customer base coupled with rising engagement continues to prove the brand’s growing popularity and value proposition globally. PayPal also agreed to acquire Xoom Corporation for approximately $890 million net of cash. We anticipate that acquiring Xoom will help accelerate PayPal’s entry into the $600 billion global remittance market, and that adding additional services to our technology platform will allow PayPal to amplify its consumer flywheel, creating a more powerful network effect.

"I am pleased with PayPal’s strong second quarter results. We continue to gain share globally in an incredibly dynamic market and I’m especially proud of our deepening engagement with our customers. As an independent company we will continue to lead the transformation of the payments industry by giving people better ways to move and manage their money," said PayPal President Dan Schulman. "I’d like to thank Devin and his team at eBay, who will continue to be key partners for PayPal in the future."

eBay Marketplaces GMV declined 2%, with the continuing strength of the dollar significantly impacting results; however, it grew 6% on an FX-neutral basis, a one point acceleration versus the prior quarter. In the U.S., GMV grew 2%; while International GMV was down 5%, it increased 8% on an FX-neutral basis. Total revenue for the quarter was $2.1 billion, down 3%, although growing 5% on an FX-neutral basis, a two point acceleration versus first quarter. eBay Marketplaces active buyers grew 6%. eBay had a strong second quarter and continues to execute against its three key strategic pillars: building a more robust commerce platform, driving a more vibrant marketplace and creating exceptional product and brand experiences.

Devin Wenig, President of eBay commented, "I am encouraged by the state of our business and the progress against our strategy. As eBay celebrates its 20th anniversary this year, we are making rapid changes to position the company for the future. My goal, and that of the entire leadership team, is for eBay to be the best global marketplace and a great enduring Internet business. As we move into our next chapter, we also look forward to continuing our strong partnership with Dan and the PayPal team."

During the quarter, the Board of Directors authorized the Company’s management to sell eBay Enterprise. Accordingly the results of eBay Enterprise are presented as discontinued operations, appearing net of tax in a single line in our statement of income. Based on the expected sales proceeds, the Company recorded an impairment of eBay Enterprise goodwill in the amount of approximately $786 million.

Other Selected Financial and Operational Results

Operating margin — GAAP operating margin decreased to 16.9% for the second quarter of 2015, compared to 20.8% for the same period last year. Non-GAAP operating margin increased to 27.4% in the second quarter, compared to 26.3% for the same period last year.
Taxes — The GAAP effective tax rate for continuing operations for the second quarter of 2015 was 21.3%, compared to 16.7% for the second quarter of 2014. The non-GAAP effective tax rate for continuing operations for the second quarter of 2015 was 20.1% compared to 19.0% for the second quarter of 2014.
Cash flow — The company generated $1.1 billion of operating cash flow from continuing operations and $688 million of free cash flow from continuing operations during the second quarter of 2015.
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 June 30, 2015.
Expected 2015 Financial Results for PayPal and eBay on a Stand-Alone Basis

PayPal Holdings, Inc.

Full year 2015 — PayPal Holdings, Inc. expects net revenues to grow 15% - 18% on an FX-neutral basis with GAAP earnings per diluted share in the range of $0.89 - $0.95 and non-GAAP earnings per diluted share in the range of $1.23 - $1.27. Guidance does not include the pending acquisition of Xoom Corporation.
eBay Inc.

Full year 2015 — eBay expects net revenues to grow 3% - 5% on an FX-neutral basis with GAAP earnings per diluted share in the range of $1.40 - $1.45 and non-GAAP earnings per diluted share in the range of $1.72 - $1.77.
In July 2015, eBay Inc.'s board of directors authorized an additional $1 billion stock repurchase program. Together with the approximately $2 billion remaining under eBay’s prior stock repurchase program authorized in January 2014, eBay's total repurchase authorization as of July 16, 2015, is approximately $3 billion. In addition to offsetting dilution from its equity compensation programs, eBay 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 eBay’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 second quarter 2015 results at 5:00 a.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.

About eBay Inc.

eBay Inc. (NASDAQ:EBAY) is a global commerce and payments leader, providing a robust platform where merchants of all sizes can compete and win. Founded in 1995 in San Jose, Calif., eBay Inc. connects millions of buyers and sellers and enabled $255 billion of commerce volume in 2014. We do so through eBay, one of the world's largest online marketplaces, which allows users to buy and sell in nearly every country on earth; and through PayPal, which enables individuals and businesses to securely, easily and quickly send and receive digital payments. We also reach millions through specialized marketplaces such as StubHub, the world's largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.

Presentation

All growth rates represent year over year comparisons, except as otherwise noted. All amounts in tables are presented in U.S. dollars, rounded to the nearest millions, except as otherwise noted. As a result, certain amounts may not sum or recalculate using the rounded dollar amounts provided.

UPDATE: eBay CFO Bob Swan announced moments ago during earnings call that eBay sold eBay Enterprise for $925 million, deal will close in 2nd half of 2015.

UPDATE: See today's Newsflash story for coverage of the eBay earnings call.




Comments (98) | Leave Comment | Permalink

Readers Comments

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: Volvo351 This user has validated their user name.

Thu Jul 16 08:07:49 2015

Typical PR flak piece with the usual boilerplate text. They're still referring to "payments" even though PayPig is technically [though not in FACT] being separated from the now nearly worthless "ecommerce platform" or what they're calling here a "global commerce platform."

Also note that they're going to dump available cash into stock repurchases to "offset" the watering down of the stock that's been accomplished by dumping options into the laps of the insiders - what they call "equity compensation." This will pump up net worth of The Hoe and the other Bain Capital crooks.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: Volvo351 This user has validated their user name.

Thu Jul 16 08:14:19 2015

Note that they claim that PayPig enables sellers to "securely" receive payments - tell that to the millions of people victimized by scammers who send back a broken item, their old defective item they've replaced with your property, a Box of Rocks, or nothing at all.

In coming months the scammers will be filing bogus INR disputes up to 180 days after sale date. PayPig has basically stated that they'll hand over your money to the scammer. The worthless Griff [aka Grief!] just says "What? Me Worry?" and passes the buck. eBay is content to stay gay-married to this PoS of a payment service. If you, as a victim, don't like it don't even try complaining to eBay - it's a PayPig issue and now they're "separate" co's. Yeah...whatever...

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: toolguy

Thu Jul 16 09:51:14 2015

@Volvo351

"tell that to the millions of people victimized"

I highly doubt the number is millions, maybe 10's of thousands but not millions!

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: toolguy

Thu Jul 16 09:51:48 2015

EBAY ROCKS!

I LOVE MY JOB!

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: ajeweler This user has validated their user name.

Thu Jul 16 09:53:53 2015

I wonder if these prices reflect gross sales of other holdings that ebay sold off like other companies they owned? and are using this as a "increase" in revenues to offset the losses of sales? to show a profit? any input Phillip?

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: ajeweler This user has validated their user name.

Thu Jul 16 09:57:54 2015

@ toolguy
I agree with Valvo351 there are millions of people victimized not "thousands" as you would think, when sales are in the millions I would agree with you, however with sales in the billions I think millions are effected

http://www.consumeraffairs.com/online/ebay_sellers.html

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: pace306 This user has validated their user name.

Thu Jul 16 09:59:31 2015

I guess Im a troll because"

1) eBay Marketplaces GMV declined 2%
2) Total revenue for the quarter was $2.1 billion, down 3%
3) On a year over year basis, foreign currency movements continued to have a negative effect, impacting the revenue growth rate of the eBay Marketplaces business by 8 points and the revenue growth rate of PayPal’s business by 3 points
4) GAAP operating margin decreased to 16.9% for the second quarter of 2015, compared to 20.8% for the same period last year

Of course eBays advertising campaign LMAO as theres no such thing, "negative trade show participation" ie they dont eve show up to any - even CES, lack of coherent business plan going forward, and the discontinuance or sale of the PROFITABLE parts of the company - makes TOTAL sense.

Yes, when eBay and Paypal steal from their sellers, that makes US trolls.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: Ric

Thu Jul 16 10:02:33 2015


Devin Wenig, President of eBay commented, "I am encouraged by the state of our business and the progress against our strategy...."

The rosy statements of incoming CEO Devin Wenig are wholly fabricated to distract investors from the reality that eBay continues to under perform and growth significantly lags behind that of other stronger ecommerce platforms due to eBay's continuing failed strategy of alienating both buyers and sellers.

The "strategy" Mr Wenig refers to is a tried and failed multi level plan which is much like the failed three year turn around plan JD allowed to drag on for nearly 8 years without any significant positive result and which brought the marketplace to the disappointing outcome we continue to see quarter after quarter.

Mr Wenig appears positioned to continue pandering to Wall Street and play his verbal fiddle while Rome burns to the ground.

eBay is in desperate need of a new plan, one which addresses and eliminates the adversarial relationship eBay has fostered between buyers and sellers.  

eBay needs to dump the Can't See Me Search engine and restore a search method which produces more relevant and accurate results to buyers instead of pulling in anything and everything eBay "thinks" a buyer might want to see.  The assumptions made by eBay's flawed search engine is the root cause of buyer alienation and is the reason eBay's growth is virtually non existent.

If eBay wants to restore sales and grow it's marketplace, they need to take their sellers off the eBay torture rack. This means giving seller listings real visibility as well as pulling back from the heavy handed policies which have proven not to help the marketplace grow.

Unless eBay takes significant actions to improve their relationship with sellers, the flat line which is eBay's growth rate will only continue to deteriorate as sellers have zero confidence in the marketplace under current system operations and policies.




Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: iheartjacksparrow

Thu Jul 16 10:18:44 2015

According to the Wall Street Journal, the Enterprise sale is "to a consortium led by private equity firm Permira...."

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: toolguy

Thu Jul 16 10:38:06 2015

Wall Street must like the news

EBAY

EBAYV

PYPLV

are all UP in today's trading!

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: Rexford

Thu Jul 16 11:04:21 2015

I am so sick of this company and their denial of their present state.  In addition to that, they are always looking for the next gimmick to save themselves, and now it is social media.  They are constantly throwing spaghetti against the wall to see what sticks, and nothing does.

GO BACK TO YOUR ROOTS YOU EMPTY SUITS!  (Level playing field, time ending soonest, and undo all that JD has wrought.)  

If DW is encouraged by the current state of eBay's business, sellers are in deep trouble.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: Rexford

Thu Jul 16 11:14:36 2015

Can we frame what Ric has posted and send it Special Delivery to Wenig?  Ric is right on target as usual.

Fix that sorry excuse of a search engine.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: toolguy

Thu Jul 16 11:28:55 2015

eBay's search engine works fine for my products!

But then again I don't sell chinese stuff, clothes, shoes or common items found at Walmart.

eBay doesn't work for some sellers and for that I am sorry.

That's why Etsy, Bonanza & Amazon exist. . .  

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: Rexford

Thu Jul 16 11:34:28 2015

Wall Street Journal writes "The marketplace business, which essentially makes up the main eBay.com website, shrank for the second straight quarter after several years of growth. As eBay plans for life on its own, it will have to contend with sluggish sales and customer growth as it faces down Amazon.com Inc. and new e-commerce entrants."

Hunker down Wenig, you have work to do.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: Will This user has validated their user name.

Thu Jul 16 11:51:50 2015

@toolguy

The name of the site is eBay, not toolBay. There's more to it than just your tools. You don't seem to like Chinese stuff, and that is fine, you're entitled to your opinion. However, eBay makes special concessions for the Chinese sellers and their stuff, and that fact should bother you.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: toolguy

Thu Jul 16 12:15:26 2015

@Will

It's not the fact that eBay is giving chinese sellers a advantage in pricing or shipping that's the problem.

It's the buyer!

People who buy the chinese stuff are to blame, ebay's just filling a void that needs to be filled.

I try real hard not to buy chinese products, but sometimes you have no choice.

My tools sell because they're QUALITY American made! Most are over 50 years in age.  So don't blame ebay, blame the American public who buys the cheap junk made in china.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

This user has validated their user name. by: silent anarchy

Thu Jul 16 12:44:27 2015

@toolguy.                            So if ebay is your job then ebay is your employer??. Employees dont pay for the privilege to work and most certainly would not  take any of that abuse. I dont know any ebay sellers that are "happy" to try to sell on ebay.You might want to tell your bosses that.You like to paint a rosey picture of how great ebay is but it is the worlds biggest minefield to navigate.Picture ebay similar to the "no mans land" of world war one with the buyers on the other side.

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: ajeweler This user has validated their user name.

Thu Jul 16 12:47:20 2015

@toolguy
I like you only buy American stuff!
however it is not the buyers that is the problem from china?? it is the Chinese counterfeits that took over the venue. and being sold here as American made or as seller was here in the usa.

so do not blame the buyers! WE SHOULD NOT BE SUBJECTED TO FRAUD DAILY

http://www.bbc.com/news/uk-northern-ireland-33279471

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

by: ajeweler This user has validated their user name.

Thu Jul 16 12:56:38 2015

"UPDATE: eBay CFO Bob Swan announced moments ago during earnings call that eBay sold eBay Enterprise for $925 million, deal will close in 2nd half of 2015."

Exactly what I am saying second half will show this as gains and revenues I mentioned earlier

@ cheerleader#1
if ebay was doing this well then why are they selling off all their sub companies??? simple math they are needing money due to the split up to make stock holders think their shares are going up so they will not have panic sale on shares

Perminate Link for eBay Reports Second Quarter 2015 Results   eBay Reports Second Quarter 2015 Results

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

Thu Jul 16 13:01:58 2015

@toolguy,

What was that, toolguy, "Wall Street must like the news"?

AMZN $471; EBAYV $27—LOL ...

And an anticipated $1.5bn bath on the sale of the eBay Enterprise unit—Ho-Ho-Ho ...

Yeah, everything's going as planned at eBay: the only people taking any cash dividend out of eBay are the Keystone Kops running around in circles in the executive suite and board room; and, I have to wonder how much of that ludicrous $23 million "retention" payment Johnny Ho is kicking back to the shysters that approved such unearned payment?

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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