Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Apr 26 2016 16:27:25

eBay Grows GMV 5 Percent in First Quarter 2016

By: Ina Steiner

Sponsored Link

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

eBay Inc., a global commerce leader, today reported that gross merchandise volume (GMV) for the quarter ended March 31, 2016 was $20.5 billion, increasing 5% on a foreign exchange (FX) neutral basis and 1% on an as-reported basis, reflecting the continued impact of a strong U.S. dollar. 

Revenue for the quarter was $2.1 billion, up 6% on an FX-Neutral basis and 4% on an as-reported basis, driving non-GAAP net income from continuing operations of $550 million, or $0.47 per diluted share, and GAAP net income from continuing operations of $482 million, or $0.41 per diluted share. During the quarter, the company generated $641 million of operating cash flow and $483 million of free cash flow from continuing operations while also repurchasing $1.0 billion of its common stock.

"Q1 represents another quarter of solid results, as we continue to position eBay for long-term success," said Devin Wenig, President and CEO of eBay Inc. "We are executing our plan and making progress on our strategic priorities to ensure our buyers have the best choice of products and a simple, personalized shopping experience, while sellers benefit from our powerful selling platform."

Underlying total eBay Inc. performance, the Marketplace platforms delivered $19.6 billion of GMV and $1.8 billion in revenue for the first quarter. Marketplace revenue was up 3% on an FX-Neutral basis and flat year over year on an as-reported basis, driven by stable GMV growth and strong performance in Marketing Services & Other. StubHub had another quarter of strong performance, driving GMV of $869 million and revenue of $177 million, up 34%, aided by strength in sports and concerts in addition to a number of product innovations. The Classifieds platforms delivered another quarter of accelerating growth with revenue of $186 million, up 17% on an FX-Neutral basis and up 15% on an as-reported basis, primarily driven by strong performance in Germany and the United Kingdom.

In Q1, eBay continued to increase the amount of inventory on its platforms, with over 900 million live listings available at any time. eBay also leveraged its structured data initiative to launch improved user experiences on its Marketplace platform, such as the ability to search by product ID and a newly redesigned browse experience that enables shoppers to find great deals and top-selling products in an easy-to-navigate way. During the quarter, StubHub introduced several new product innovations, including a ticket recommendation engine, as well as the ability for fans to use virtual reality to enable an immersive view from available seats. Finally, Classifieds launched several user enhancements, including in-app chat on mobile, allowing buyers and sellers to message each other and facilitate an easier, faster buying experience.

Operating margin - GAAP operating margin increased to 28.7% for the first quarter of 2016, compared to 25.7% for the same period last year. Non-GAAP operating margin decreased to 33.4% in the first quarter, compared to 35.6% for the same period last year.

Taxes - The GAAP effective tax rate for continuing operations for the first quarter of 2016 was 18.4%, compared to 16.7% for the first quarter of 2015. The non-GAAP effective tax rate for continuing operations for the first quarter of 2016 was 20.4%, compared to 20.2% for the first quarter of 2015.

Cash flow - The company generated $641 million of operating cash flow from continuing operations and $483 million of free cash flow from continuing operations during the first quarter of 2016.

Stock repurchase program - The company repurchased approximately $1.0 billion of its common stock, or 42.3 million shares, in the first quarter of 2016. The company's total repurchase authorization remaining as of March 31, 2016 was $0.8 billion.

Cash and cash equivalents and non-equity investments - The company's cash and cash equivalents and non-equity investments portfolio totaled $10.3 billion as of March 31, 2016.

Business Outlook
Second quarter 2016 - The company expects net revenue between $2.14 billion and $2.19 billion, representing FX-Neutral growth of 4% - 6%, with non-GAAP earnings per diluted share from continuing operations in the range of $0.40 - $0.42 and GAAP earnings per diluted share from continuing operations in the range of $0.32 - $0.34.

Full year 2016 - The company expects net revenue between $8.6 billion and $8.8 billion, representing FX-Neutral growth of 3% - 5%.

Quarterly Conference Call and Webcast
eBay Inc. will host a conference call to discuss first 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.

Update: eBay made some interesting revelations during Tuesday's conference call with Wall Street analysts, learn more in Wednesday's Newsflash article, available now.




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Readers Comments

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

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

Tue Apr 26 17:25:54 2016

Ha! No wonder we all got barraged with 10% back in ebay bucks promos throughout Feb and March. Ebay was in trouble and needed to generate GMV so they gave away the fees to get it so its basically no income on all those sales! And they didn't need to pay the ebay bucks redemptions or put them on the books till 2nd quarter, so they are 'kicking the can down the road'...

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

This user has validated their user name. by: Rexford

Tue Apr 26 18:00:06 2016

Wenig says: "while sellers benefit from our powerful selling platform"

Is this the powerful selling platform that hides sellers' listings and places seller limits on sellers?  You betcha!

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

by: JQ This user has validated their user name.

Tue Apr 26 18:07:11 2016

Ignore the press release, just look at the actual numbers they are legally obliged to release.

Marketplace revenue declined by $360 million when compared to the same quarter last year. That is a 4% drop.

GMV increased from $20,151M to $20,450M, a 1% increase.

This was the sixth straight horrible quarterly report issued by eBay. They are hemorrhaging market share and barely holding sales levels stable during a period of strong growth across the board in e-commerce.

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

This user has validated their user name. by: iheartjacksparrow

Tue Apr 26 18:09:07 2016

Meanwhile, Amazon is developing original virtual-reality content:

www.thewrap.com/amazon-in-talks-to-create-virtual-real
ity-content-exclusive/


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

by: FeelingFroggy This user has validated their user name.

Tue Apr 26 18:47:27 2016

Those books are cooking so fast there is going to be a big spill pretty soon.

In the meantime the smart rats are fleeing the sinking dingie.

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

This user has validated their user name. by: toolguy

Tue Apr 26 19:08:40 2016

@JQ

You say:

"Marketplace revenue declined by $360 million when compared to the same quarter last year."

The above says:

"Marketplace revenue was up 3% on an FX-Neutral basis and flat year over year on an as-reported basis,"

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

This user has validated their user name. by: toolguy

Tue Apr 26 19:23:00 2016

Looks like eBay did OK

Just like I said they would.

They're still making a lot of money and at least they're growing (5%) instead of shrinking.

For some sellers eBay still brings in the buyers.

I'm happy with today's results, eBay & I did OK.

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

This user has validated their user name. by: Ric

Tue Apr 26 20:23:59 2016

eBay is pounding their chest and claiming a "solid quarter" all the while failing to make mention that the only way they achieved any growth in GMV was due to the recent USPS rate hikes.

IF significant numbers of sellers suddenly decided to stop offering 'free shipping' so that eBay could no longer count shipping costs as part of GMV, eBay would find themselves announcing double digit negative GMV growth in no time flat.

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

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

Tue Apr 26 21:53:06 2016

Well, Johnny Ho was at least able to read the writing on the wall (or someone read it for him), so he passed the helm of the rusting old scow to Devin Little, who appears to have even fewer clues than the Ho had ...

“There are a lot of questions out there and I don’t have any of the answers,”—eBay CEO Devin Wenig, Goldman Sachs Technology And Internet Conference, 10 Feb. 2016.

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

This user has validated their user name. by: Ina

Tue Apr 26 22:12:42 2016

eBay is going to launch some new categories, as we report in tomorrow's Newsflash.

What do you think they could be?

(See link to article above.)

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

This user has validated their user name. by: iheartjacksparrow

Tue Apr 26 22:44:31 2016

A complete transcript of the earnings call can be read here:

http://seekingalpha.com/article/3968006-ebays-ebay-ceo-de
vin-wenig-q1-2016-results-earnings-call-transcript?auth_param=16gf2q:1bi08pv:7d2d592297b2dfd0d37486a2bfdb14c5&uprof=82&dr=1


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

This user has validated their user name. by: toolguy

Tue Apr 26 22:55:26 2016

New Categories:

Bulk eBay Inventory

Chinese Widgets

Other Bull Shit (can I say that here?)

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

by: pace306 This user has validated their user name.

Wed Apr 27 00:07:44 2016

"Please ignore the presentation behind the curtain"!

From Q4 2015 to Q1 2016, eBay continues to slide downward with no end in sight. Personally I have no confidence in San Jose to ever get it right (especially since the people running the company havent a clue about the business they are in) (let me save everyone and address the TOOL in our midst - eBay is on AUTOPILOT. It continues to operate.... "just barely" and heres why.

"Simplify vast inventory" - how - you dont own any of it!

"Better targeting & merchandising" is this MORE Cassini intrusion?

"Enhance content with images & descriptions" eBay doesnt list anything itself, sellers do - is this a foreshadowing of new rules and onerous regulations to be thrown at sellers?

"Create product in
catalog where absent" ????? what?


Slide 11 - same number of buyers- the graph shows Q1 higher but the numbers are the same.

Slide 11 - "New buyer acquisition
face continued SEO headwinds" ... running off your sellers and making them HATE eBay, will diminish your buying pool. For every seller you run off - they tell 4-6 people NOT to buy on eBay and tell them how/why eBay feels its ok to steal from them (in various ways) SEO in this case means nothing.

Slide 12 shows GMV DOWN not up - unless in eBayland UP is the new DOWN

Slide 13 also incorrect it shows revenue DOWN for Q1

Slide 14 shows MARKETPLACE GMV & REVENUE DOWN for Q1

Slide 15 shows STUBHUB GMV & REVENUE DOWN for Q1

Slide 17 shows that even when GMV etc is down - expenses DIDNT go down .... stupid CEO cant save any money - FIRE GRIFF! Reduce your headcount (overall)(duh) Operating Expense at 44.9%, down ~0.2pts

Slide 18 shows NON-GAAP EPS DOWN!

Slide 19 shows that free cash is %50 LESS then last year! Where did it all go???? (besides the JD golden parachute!?)

Slide 20 shows 10.3 billion in CASH & CAPITAL ALLOCATION, but 9 billion in debt. Considering eBay owns nothing, creates nothing and advertises nothing - wheres he debt coming from?

I just copied what the investor relations PDF charts say - these reports indicate ABYSMAL performance.

You can color it any way you want, you can claim seller will do all the heavy lifting (instead of making up with GOOGLE) but nothing will change unless eBay radically changes its outlook and abandons its quest to be an advertising company and returns to its ecommerce roots.

Relying on positive changes to US currency valuations is NOT a business plan, and neither is USPS postal increases, VERO shakedowns or other gimicks.

GO ahead - buy eBay stock - I DARE you.



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

This user has validated their user name. by: toolguy

Wed Apr 27 00:14:31 2016

@pace306

"Slide 19 shows that free cash is %50 LESS then last year! Where did it all go???? (besides the JD golden parachute!?)"

You failed to mention that ebay bought back $1 Billion in stock.

But don't let the facts get in the way of your rant ~ LOL

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

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

Wed Apr 27 06:08:18 2016

@toolguy,

And do tell, what effect has that "$1 Billion" buyback of shares had on eBay's stock price?

Aug 2007: (pre John Donahoe) EBAY ~$40; AMZN ~$40;
Jul 2015 (pre eBay-PayPal split): EBAY ~$66; AMZN ~$480;
Jul 2015 (post-split): PYPL ~$37; EBAY ~$28; AMZN ~$530;
Currently: PYPL ~$39; EBAY ~$24; AMZN ~$611—LOL

eBay has for the past eight years been effectively going backwards—at a steady rate of knots—LOL ...


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

This user has validated their user name. by: Rexford

Wed Apr 27 06:49:59 2016

Here is hoping that the new category will be Chinese tools of all kinds including aircraft tools.  

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

by: pace306 This user has validated their user name.

Wed Apr 27 07:53:54 2016

TOOLFOOL - they spent %50 of their operating capitol buying back stock?

Is it 420 again already?

eBay issued shares to raise equity capital to fund expansion, but if there are NO potential growth opportunities in sight, holding on to all that unused equity funding means sharing ownership for no good reason.

Shareholders demand returns on their investments in the form of dividends – called the cost of equity capital – so the business is essentially paying for the privilege of accessing funds it isn't using.

Buying back some or all of the outstanding shares can be a simple way to pay off investors and reduce the overall cost of capital.

THE SECOND REASON EBAY IS BUYING BACK SHARES:

Another major reason why eBay repurchased their own shares is to take advantage of undervaluation. Stock can be undervalued for a number of reasons, ****** often due to investors' inability to see past a business' short-term performance ****** or sensationalist news items. Ill-timed news item questioning the company's leadership ethics causes panicked shareholders begin to sell (eBays general behavior), driving the price down per share. eBay decides to repurchase  shares and wait out the frenzy.

THIRD REASON EBAY IS BUYING BACK SHARES

Buying back stock can also be an easy way to make a business look more attractive to investors. By reducing the number of outstanding shares, a company's earnings per share ratio is automatically increased.

Instead of investing that money in new ideas, expansion or ventures (they admit BRIC was a failure) eBay was FORCED to spend precious capital - the money they just forced sellers to give over (for LESS services) to prop up the company.

Funny you didnt mention all the OTHER slides!

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

by: Mark4 This user has validated their user name.

Wed Apr 27 08:18:55 2016

The ship is continuing to sink

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

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

Wed Apr 27 08:44:55 2016

@pace360/toolguy,

"By reducing the number of outstanding shares, a company's earnings per share ratio is automatically increased."

And that might benefit shareholders if eBay paid a cash dividend, but they don't, so there is zero benefit to eBay's shareholders from such share buyback, nor has such buyback improved the share price either—LOL ...

Attention all passengers! Please proceed, in an orderly fashion, to the lifeboats in preparation for the abandoning of the rusting old scow ...

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

by: pace306 This user has validated their user name.

Wed Apr 27 09:41:02 2016

Philip - yes you are right - thats why I included the other 2 reasons.

BOD members @ eBay are bribed, not paid cash.

The issue here is that TOOL thinks we want eBay to go under. While some here may wish that - I know that I dont (I cant speak for anyone else).

I'd like eBay to be a strong and vibrant marketplace - but the games, the lies, the stupidities are overwhelming.

Amazon while delivering MUCH better traffic, turn over of goods and sales IS BY NO MEANS any kind of angel.

BUT, I like everyone else that sells there know its THEIR show. Thats unlike eBay who tells me its MY show when it really isnt.

I hate liars and stupid people - and over at eBay - most times you get BOTH.

I had to recently call eBay because I found a glitch that eBay KNEW ABOUT but refused to fix ... "why bother".

If you sell (specifically) in the headphone category, have GTC listings that are 6+ months old ... those listings cant be revised. Only JD in the depths of his mental illness would know why that glitch exists. You have to sell in that specific category, the listings have to be X months old and they have to be GTC. Bizzare. The eBay US rep said they knew about it, but since it "really" didnt matter..... insane.

TOOLFOOL thinks all of us have nothing better to do then bash eBay 24/7. And TRUE its fun - they are easily the easiest target - Im sure that ALL of us would rather be packing orders then trying to explain away eBays latest moronic decision(s).

I was hoping that the NEW CEO would realize that eBay as a company needed to do more - so far he says it - but it hasnt translated (at least for me) into anything tangible.

eBays earnings reports were what all of us (anyone with any common sense) though they would be - a now job covering up lackluster performance.

Maybe one day someone somewhere in eBays upper management will realize the dire straights eBay is in and actually DO SOMETHING POSIIVE ... but I wont hold my breath.

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