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eBay Inc. (EBAY - Free Report) reported third-quarter 2021 non-GAAP earnings of 90 cents per share, which beat the Zacks Consensus Estimate by 1.1%. The bottom line grew 9% year over year but declined 9.1% sequentially.
Net revenues of $2.5 billion surpassed the Zacks Consensus Estimate of $2.45 billion. Further, the figure increased 111% from the year-ago quarter on a reported basis and 10% on a FX-neutral basis. However, the figure fell 6.2% sequentially.
Year-over-year revenue growth was driven by the growing adoption of its managed payments. The number of sellers migrated to managed payments exceeded 18 million in the reported quarter. Notably, managed payment offering processed 90% of on-platform volumes globally in the third quarter.
eBay’s Promoted Listings delivered a robust performance by generating revenues of $207 million, which grew 12% on a reported and 9% on a FX-neutral basis from the prior-year quarter.
However, the company witnessed a year-over-year decline of 5% in the active buyer base, which stood at 154 million at the end of the third quarter. Further, the active seller number remained flat at 19 million.
eBay witnessed declining gross merchandise volume (“GMV”) in the third quarter, which remained an overhang.
Nevertheless, the company’s initiatives toward strengthening managed payment offerings remain major positives. Further, eBay remains optimistic regarding growth initiatives, based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data.
The company’s total GMV of $19.5 billion in the reported quarter exhibited a year-over-year decline of 10% and 12% on a reported and an FX-neutral basis, respectively. The company witnessed weak momentum across its mobility business in the third quarter. Also, a shift in the consumer preferences toward leisure activities and travels led to diminishing volume in the reported quarter.
The reported GMV missed the Zacks Consensus Estimate of $21.04 billion.
Notably, eBay’s GMV is entirely generated by the Marketplace platform after the sale of StubHub. Marketplace GMV is categorized into two parts.
U.S. GMV totaled $8.97 billion, which accounted for 46.1% of total GMV, down 8% from the year-ago quarter.
International GMV was $10.5 billion, which accounted for 53.9% of total GMV. It fell 12% on a year-over-year basis.
Revenues in Detail
eBay’s revenues are classified into two types:
Net Transaction: The company reported net transaction revenues of $2.35 billion in the quarter under review, accounting for 94% of the total revenues. Further, the figure was up 12% from the year-ago quarter. Notably, net transaction revenues are entirely generated by the Marketplace platform.
Marketing Services and Other: eBay generated $151 million of total marketing services and other revenues (6% of total revenues), down 6% from the year-ago quarter.
Operating Details
In the third quarter, eBay’s gross margin was 72.9%, contracting 590 basis points (bps) year over year.
Operating expenses of $1.2 billion rose 3.8% year over year. As a percentage of net revenues, the figure contracted 310 bps to 46.4% from the year-ago quarter.
The non-GAAP operating margin was 31.7% in the third quarter, contracting 270 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash equivalents and short-term investments were $5.3 billion, down from $6.9 billion as of Jun 30, 2021.
Long-term debt was $7.7 billion at the end of the reported quarter compared with $8.3 billion at the end of the last reported quarter.
The company generated $661 million of cash from operating activities in the third quarter, down from $1.07 billion in the second quarter.
Its free cash flow stood at $502 million in the reported quarter.
The company repurchased $2.3 billion worth of shares and paid out dividends of $116 million in the reported quarter.
Guidance
For fourth-quarter 2021, eBay expects net revenues of $2.57-$2.62 billion. On a FX-neutral basis, year-over-year growth in revenues is anticipated to be 3-5%. The Zacks Consensus Estimate for revenues is pegged at $2.65 billion.
Non-GAAP earnings per share are anticipated to be between 97 cents and $1.01. Notably, the Zacks Consensus Estimate for the same is pegged at 98 cents.
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eBay (EBAY) Q3 Earnings & Revenues Beat Estimates, Rise Y/Y
eBay Inc. (EBAY - Free Report) reported third-quarter 2021 non-GAAP earnings of 90 cents per share, which beat the Zacks Consensus Estimate by 1.1%. The bottom line grew 9% year over year but declined 9.1% sequentially.
Net revenues of $2.5 billion surpassed the Zacks Consensus Estimate of $2.45 billion. Further, the figure increased 111% from the year-ago quarter on a reported basis and 10% on a FX-neutral basis. However, the figure fell 6.2% sequentially.
Year-over-year revenue growth was driven by the growing adoption of its managed payments. The number of sellers migrated to managed payments exceeded 18 million in the reported quarter. Notably, managed payment offering processed 90% of on-platform volumes globally in the third quarter.
eBay’s Promoted Listings delivered a robust performance by generating revenues of $207 million, which grew 12% on a reported and 9% on a FX-neutral basis from the prior-year quarter.
However, the company witnessed a year-over-year decline of 5% in the active buyer base, which stood at 154 million at the end of the third quarter. Further, the active seller number remained flat at 19 million.
eBay witnessed declining gross merchandise volume (“GMV”) in the third quarter, which remained an overhang.
Nevertheless, the company’s initiatives toward strengthening managed payment offerings remain major positives. Further, eBay remains optimistic regarding growth initiatives, based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data.
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Details
The company’s total GMV of $19.5 billion in the reported quarter exhibited a year-over-year decline of 10% and 12% on a reported and an FX-neutral basis, respectively. The company witnessed weak momentum across its mobility business in the third quarter. Also, a shift in the consumer preferences toward leisure activities and travels led to diminishing volume in the reported quarter.
The reported GMV missed the Zacks Consensus Estimate of $21.04 billion.
Notably, eBay’s GMV is entirely generated by the Marketplace platform after the sale of StubHub. Marketplace GMV is categorized into two parts.
U.S. GMV totaled $8.97 billion, which accounted for 46.1% of total GMV, down 8% from the year-ago quarter.
International GMV was $10.5 billion, which accounted for 53.9% of total GMV. It fell 12% on a year-over-year basis.
Revenues in Detail
eBay’s revenues are classified into two types:
Net Transaction: The company reported net transaction revenues of $2.35 billion in the quarter under review, accounting for 94% of the total revenues. Further, the figure was up 12% from the year-ago quarter. Notably, net transaction revenues are entirely generated by the Marketplace platform.
Marketing Services and Other: eBay generated $151 million of total marketing services and other revenues (6% of total revenues), down 6% from the year-ago quarter.
Operating Details
In the third quarter, eBay’s gross margin was 72.9%, contracting 590 basis points (bps) year over year.
Operating expenses of $1.2 billion rose 3.8% year over year. As a percentage of net revenues, the figure contracted 310 bps to 46.4% from the year-ago quarter.
The non-GAAP operating margin was 31.7% in the third quarter, contracting 270 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash equivalents and short-term investments were $5.3 billion, down from $6.9 billion as of Jun 30, 2021.
Long-term debt was $7.7 billion at the end of the reported quarter compared with $8.3 billion at the end of the last reported quarter.
The company generated $661 million of cash from operating activities in the third quarter, down from $1.07 billion in the second quarter.
Its free cash flow stood at $502 million in the reported quarter.
The company repurchased $2.3 billion worth of shares and paid out dividends of $116 million in the reported quarter.
Guidance
For fourth-quarter 2021, eBay expects net revenues of $2.57-$2.62 billion. On a FX-neutral basis, year-over-year growth in revenues is anticipated to be 3-5%. The Zacks Consensus Estimate for revenues is pegged at $2.65 billion.
Non-GAAP earnings per share are anticipated to be between 97 cents and $1.01. Notably, the Zacks Consensus Estimate for the same is pegged at 98 cents.
Zacks Rank & Other Stocks to Consider
Currently, eBay carries a Zacks Rank #2 (Buy).
AutoNation, Inc. (AN - Free Report) , Revolve Group, Inc. (RVLV - Free Report) and JD.com, Inc. (JD - Free Report) are some other top-ranked stocks in the broader Retail-Wholesale sector. While AutoNation sports a Zacks Rank #1 (Strong Buy) at present, Revolve and JD.com carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for AutoNation, Revolve and JD.com are pegged at 19.08%, 20.71% and 26.89%, respectively.