Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Oct 19 2016 16:30:18

eBay Grows GMV 5 Percent in Third Quarter 2016

By: Company Issued Press Release

Sponsored Link

eBay's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing third quarter 2016 earnings, you can view the full release with tables on eBay's investor relations website.

SAN JOSE, Calif. - eBay Inc. (NASDAQ: EBAY), a global commerce leader, delivered gross merchandise volume (GMV) for the quarter ended September 30, 2016 of $20.1 billion, increasing 5% on a foreign exchange (FX) neutral basis and 3% on an as-reported basis. Revenue for the quarter was $2.2 billion, up 8% on an FX-Neutral basis and 6% on an as-reported basis. GAAP net income from continuing operations was $418 million, or $0.36 per diluted share, and non-GAAP net income from continuing operations was $509 million, or $0.45 per diluted share. During the quarter, the company generated $802 million of operating cash flow and $617 million of free cash flow from continuing operations while also repurchasing $500 million of its common stock.

"In Q3 we delivered good top- and bottom-line financial results, led by consistent performance across our business," said Devin Wenig, President and CEO of eBay Inc. "We continued to transform the shopping experience on eBay, delivered more personalization capabilities and began to activate our updated brand messaging."

In the third quarter, eBay added over one million active buyers across its platforms, to a total of 165 million global active buyers. Underlying total eBay Inc. performance, the Marketplace platforms delivered $19.0 billion of GMV and $1.8 billion of revenue. Marketplace revenue was up 5% on an FX-Neutral basis and 2% on an as-reported basis, driven by GMV growth of 4% on an FX-Neutral basis and 2% on an as-reported basis as well as growth in Marketing Services & Other revenue. StubHub had another strong quarter with GMV of $1.1 billion, up 23%, and revenue of $263 million, up 32%, aided by strength across concerts, theater and baseball as well as the continued benefit from ongoing product innovation. The Classifieds platforms delivered another quarter of good performance with revenue of $197 million, up 14% on an FX-Neutral basis and 11% on an as-reported basis, primarily driven by the Automotive and Real Estate verticals across several key geographies.

eBay made progress during the quarter in driving the most relevant shopping experiences for consumers. Marketplace delivered further enhancements to its mobile platform and introduced Quick Sale, a targeted consumer destination for selling mobile phones. The company also began to activate an updated strategy for the eBay brand and was recently ranked as number 32 in Interbrand's Best Global Brands 2016 report. StubHub continued to drive innovation, expanding its virtual reality technology to more venues in the United States, as well as launching a blended primary and secondary tickets experience with the Philadelphia 76ers. Classifieds began integrating tickets inventory from StubHub in Canada, while furthering efforts to integrate inventory from eBay in several markets.

eBay continues to be acquisitive in the areas of geographic and vertical expansion, and adding key technology and talent. Most recently, it announced an agreement to purchase Corrigon Ltd., a pioneer of visual search technologies, expected to contribute to the Marketplace platform's structured data initiative. In addition to its recent strategic acquisitions, eBay has returned $2 billion of capital to shareholders in 2016 in the form of share repurchases. eBay also recently sold most of its stake in MercadoLibre, Inc. The sale enables eBay to realize a significant gain on its investment, and the company intends to use the net proceeds in a manner consistent with its capital allocation policy.
Other Selected Financial and Operational Results

Operating margin - GAAP operating margin decreased to 24.4% for the third quarter of 2016, compared to 27.5% for the same period last year. Non-GAAP operating margin decreased to 29.9% in the third quarter of 2016, compared to 31.9% for the same period last year.

Taxes - The GAAP effective tax rate for continuing operations for the third quarter of 2016 was 21.6%, compared to 18.0% for the third quarter of 2015. The non-GAAP effective tax rate for continuing operations for the third quarter of 2016 was 22.2%, compared to 20.2% for the third quarter of 2015.

Cash flow - The company generated $802 million of operating cash flow from continuing operations and $617 million of free cash flow from continuing operations during the third quarter of 2016.

Stock repurchase program - The company repurchased approximately $500 million of its common stock, or 16.5 million shares, in the third quarter of 2016. The company's total repurchase authorization remaining as of September 30, 2016 was $2.3 billion.

Cash and cash equivalents and non-equity investments - The company's cash and cash equivalents and non-equity investments portfolio totaled $10.4 billion as of September 30, 2016.

Business Outlook

Fourth quarter 2016 - The company expects net revenue between $2.36 billion and $2.41 billion, representing FX-Neutral growth of 4% - 6%, with non-GAAP earnings per diluted share from continuing operations in the range of $0.52 - $0.54 and GAAP earnings per diluted share from continuing operations in the range of $1.05 - $1.15.

Full year 2016 - The company expects net revenue between $8.95 billion and $9.0 billion, representing FX-Neutral growth of 6% - 7%, with non-GAAP earnings per diluted share from continuing operations in the range of $1.85 - $1.90 and GAAP earnings per diluted share from continuing operations in the range of $2.22 - $2.32.

Quarterly Conference Call and Webcast

eBay Inc. will host a conference call to discuss third quarter 2016 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 https://investors.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 https://investors.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

eBay Inc. (NASDAQ: EBAY) is a global commerce leader including the Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity through Connected Commerce. Founded in 1995 in San Jose, Calif., eBay is one of the world's largest and most vibrant marketplaces for discovering great value and unique selection. In 2015, eBay enabled $82 billion of gross merchandise volume. 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.




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Readers Comments

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

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

Wed Oct 19 19:56:23 2016

I'm underwhelmed.  

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: pace306 This user has validated their user name.

Wed Oct 19 20:55:01 2016

LOL Ming - it should!

Amazon "only" grew %58 year over year ...... VERO THAT Wenig !

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: pace306 This user has validated their user name.

Wed Oct 19 23:44:12 2016

English translation (for those who cant read eBay corporate speak):

"delivered more personalization capabilities" - we've now completed our most extensive take over of our sellers listings by controlling most if not all listing times, "face time", location and duration's

"Marketplace revenue was up 5%" - please dont mention that Amazon's was up year over year %58 - PLEASE be amazed at our %5!

"eBay made progress during the quarter in driving the most relevant shopping experiences for consumers" - we revamped our mobile APP yet again and at some point it may actually be usable and helpfull/friendly

"introduced Quick Sale, a targeted consumer destination for selling mobile phones" - which no one uses and has ever heard of ... but it looks like we are doing SOMETHING new and innovative .. when we arent.

"ranked as number 32 in Interbrand's Best Global Brands 2016 report" - from a website that no one knows about - we ranked 32 ... YEY!  .... but shhhhhhh dont tell people that we are behind such companies as AXA, Alianz, Huawei, Zara, and a few others! Oh - and please dont tell anyone Amazon was #8 (oh and that our ranking actually SLIPPED this year over last)

"launching a blended primary and secondary tickets experience with the Philadelphia 76ers" - whom.... nobody watches and hasnt been to the play offs in YEARS. We tried to dig up Dr J's corpse but his widow wasnt willing for the cost of the free eBay "I attended eBay Open" T-shirt and free eBay branded padded envelope.

"announced an agreement to purchase Corrigon Ltd., a pioneer of visual search technologies" - 'cause we are STILL fighting with Google and we just simply REFUSE to license their search engine. We bought this hunk a junk instead (oh and the name is pretty too).

"eBay has returned $2 billion of capital to shareholders in 2016 in the form of share repurchases" - BUT WE HAVENT RETURNED ANY VALUE TO OUR SELLERS SINCE THEY ARE JUST THE WORST THING EVER.

"and (we) began to activate our updated brand messaging." - since people hate us so much, we are trying to get them to like us ... thats why we built .. er wasted money on that welcome center that no one needs or wants.

But PLEASR - lets get to the CRUX of the matter ... how eBay treats its business "partners" err takes advantage of .....  "The only way to
navigate the multiple avenues of
growth is to develop a clear and
cohesive strategy that is
completely designed around the
customer. Growth comes from  
a clear strategy and exceptional
customer experiences. "

As a seller on eBay, and I think most here can agree - we "arent getting any of that" !  (since eBay doesnt think sellers are their customers).

"That requires great people who
work together with a powerful
brand as both strategic vision  
and blueprint for experience" ... well we arent getting any of THAT either.

"To generate the creative energy your business needs, your people need the permission to challenge, the freedom to try" .... is that like the script reading kiddies eBay employs as CS agents?

"Once you’re able to
empower individuals personally, the positive effects will
ripple outward across your entire organization, to your
agencies and partners, and out into the real world." ...... Guess eBay didnt get THAT message either!

"Clarity about what the brand stands for is the condition
for growth. A well-crafted, well-communicated, and
shared vision of what the brand stands for, who it is
targeting, and how it should be experienced is a
foundational cornerstone that will ensure the whole
business is pulling in the same direction to support
growth objectives." .... Hello Wenig ....? Get the memo on this? Hello ?

Well theres alays NEXT YEAR  !

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: toolguy

Thu Oct 20 00:51:04 2016

I think my GMV grew at least 5% over the last year.

Me & my partner (ebay) are making sales!

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: Rexford

Thu Oct 20 06:51:12 2016

Ask small sellers how much it grew for them?

With business partners like eBay, who needs an accountant?

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: The End

Thu Oct 20 07:27:31 2016

Ebay has no merchandise.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: OnlyPollyPocket This user has validated their user name.

Thu Oct 20 07:30:46 2016

@Rexford

"With business partners like eBay, who needs an accountant?"

ROFLMAO!!!!!!  ( <--- laughing through our tears)

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: gizmo This user has validated their user name.

Thu Oct 20 10:55:48 2016

I think a celebration joke is in order. HA HA HA

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: bpm This user has validated their user name.

Thu Oct 20 11:53:54 2016

Global ecommerce growth of around 15% for 2015 and again for 2016; Ebay can pull out 5%, after a massage session with the figures?

Oh, and Toolguy - 5% growth in GMV is easy in a market where things just aren't selling - every unsold and relisted item makes the GMV look even better! That's why Ebay love GMV figures!

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: I Must be Crazy This user has validated their user name.

Thu Oct 20 12:08:25 2016

Apparently wall street isn't impressed given the stock is down over 10% this morning. I wouldn't be surprised if within 4 years (after the Paypal exclusivity agreement runs out) Amazon will purchase Ebay in a stock exchange deal. They will keep the auction format and the profitable subsidiaries. The rest of the business will be absorbed and shut down.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: Frank Abagnale This user has validated their user name.

Thu Oct 20 12:33:29 2016

I think ebay will be bought by a Chinese company like Alibaba. The complaint from many sellers is that there is too much Chinese merchandise on EBay but the reality is the more Chinese sellers on ebay the more enticing it would be for someone like Alibaba to buy it.

Also, despite any growth increase from any ecommerce platform (ebay 5%, Amazon 58%, etc) the only increase or decrease in ecommerce growth that a seller should be concerned about is their own.  

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: toolguy

Thu Oct 20 12:55:20 2016

@ Frank

My sales are UP from last year and the year before!

I'm HAPPY with eBay's performance as a seller of used items.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: I Must be Crazy This user has validated their user name.

Thu Oct 20 14:13:16 2016

@toolguy

My sales are up as well. A mere 1%. However they have declined 42% in the last 90 days as compared to the 90 days immediately preceding. So, while my year started off stronger than last, it will likely come in 1-3 percent higher. While that's not an acceptable rate of growth, I am somewhat fortunate. I am pretty sure there are a lot of sellers who are well below last year's numbers. I sell used items as well. For the record, last year was 14% lower than the year before. Given Ebay's bigger picture of performance over that same period, I would have to say that you are in the minority.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

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

Thu Oct 20 21:25:14 2016

Deviln also told Wall Street analysts that ebafia will be reducing and/or eliminating (vague) seller discounts and buyer "coupons."

And the downward spiral continues.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: Joey4711 This user has validated their user name.

Thu Oct 20 23:49:52 2016

Ming,
God knows that we wouldn't want Ebay to provide any discounts or coupons for buyers that might actually entice buyers to buy. What a concept and the top seller discount needs to go away which is fine. Let it go away and I will raise and hope everyone does my prices 5%.  Right now people cry about how expensive Ebay is (the products).

Wait till we raise prices even more.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: BobNJ This user has validated their user name.

Fri Oct 21 02:15:14 2016

Guess investors weren't impressed, stock dropped 10.8% to $29.02 after the announcements. eBay stock was the biggest decliner in the S&P500 per the Los Angeles Times article.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

by: Volvo351 This user has validated their user name.

Fri Oct 21 08:35:52 2016

OK, What TF is this thing they're calling GMV, anyhow? It sounds like just the total volume of stuff that's LISTED, but doesn't necessarily SELL. If that's an accurate take, and I believe it is, then by NOT SHOWING my item to potential buyers, so I have to RELIST it, they actually JUICE this thing called GMV, right?

Sounds pretty sick. IOW, right up Devil Wingnut's alley.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: RKTOYS

Fri Oct 21 09:31:57 2016

What seller discounts?  What buyer coupons?  I never see either of these things.  Seriously.

I know I should but I just haven't kept my records up to date since about April.  Last year was down about 20% and this year will likely be down 25% if my perception is right.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: Rexford

Fri Oct 21 11:13:04 2016

A company that is not experiencing robust growth will resort to any cost cutting scheme available to them to ensure that the C-Suite boys get their big  multi-million dollar bonuses.

These guys still don't get what made eBay successful in the early days, but as the esteemed leader stated, they are not going back.

When there is no incentive to jump through that hoop sellers will cease being eBay trained poodles.

Perminate Link for eBay Grows GMV 5 Percent in Third Quarter 2016   eBay Grows GMV 5 Percent in Third Quarter 2016

This user has validated their user name. by: bitbybit

Fri Oct 21 12:44:22 2016

Ebay has been very successful at taking their successful past and digging it into the ground.

And yes Volvo GMV is more like show & tell. Look at eBay as one big curio cabinet where items are listed just for show but seldom are allowed to be touched or sold. I know I am dating myself here with the curio reference.  

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