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eBay Inc. (EBAY - Free Report) reported fourth-quarter 2021 non-GAAP earnings of $1.05 per share, which beat the Zacks Consensus Estimate by 6.1%. The bottom line grew 24% year over year and 16.7% sequentially.
Net revenues of $2.613 billion surpassed the Zacks Consensus Estimate of $2.611 billion. Further, the figure increased 5% from the year-ago quarter on a reported basis as well as on a FX-neutral basis. The top line rose 4.5% sequentially.
Year-over-year top-line growth was driven by accelerating transaction revenues. eBay’s Promoted Listings contributed well by generating revenues of $227 million, which grew 5% on a reported and 4% on a FX-neutral basis from the prior-year quarter.
However, the company witnessed a year-over-year decline of 9% in the active buyer base, which stood at 147 million at the end of the fourth quarter. The active seller number fell 8% to 17 million in the reported quarter.
eBay also witnessed declining gross merchandise volume (“GMV”) in the fourth quarter, which remained an overhang.
Notably, the company remains optimistic about its growth initiatives, based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data. Its deepening focus toward strengthening the advertising business also remains noteworthy.
The company’s total GMV of $20.7 billion in the reported quarter exhibited a year-over-year decline of 10% and 11% on a reported and an FX-neutral basis, respectively. This was primarily due to a year-over-year decline of 8% and 19% in the company’s B2C and C2C GMVs, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $19.9 billion.
Notably, total GMV is categorized into two parts.
U.S. GMV totaled $9.7 billion, which accounted for 46.9% of the total GMV, down 2% from the year-ago quarter.
International GMV was $11 billion, which accounted for 53.1% of the total GMV. It fell 16% 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 $2.45 billion in the quarter under review, accounting for 93.8% of the total revenues. The figure was up 6% from the year-ago quarter.
Marketing Services and Other: eBay generated $163 million of total marketing services and other revenues (6.2% of total revenues), down 4% from the year-ago quarter.
Operating Details
In the fourth quarter, eBay’s gross margin was 73.4%, contracting 450 basis points (bps) year over year.
Operating expenses of $1.2 billion fell 3% year over year. As a percentage of net revenues, the figure contracted 410 bps to 47.1% from the year-ago quarter.
The non-GAAP operating margin was 31.6% in the fourth quarter, contracting 10 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash equivalents and short-term investments were $7.3 billion, up from $5.3 billion as of Sep 30, 2021.
Long-term debt has been unchanged at $7.7 billion at the end of the reported quarter compared with the last reported quarter.
The company generated $475 million of cash from operating activities in the fourth quarter, down from $661 million in the third quarter.
Its free cash flow stood at $372 million in the reported quarter.
The company repurchased $3 billion worth of shares and paid out dividends of $107 million in the reported quarter.
Guidance
For first-quarter 2022, eBay expects revenues of $2.43-$2.48 billion. On a FX-neutral basis, the year-over-year decline in revenues is anticipated to be 5-7%. The Zacks Consensus Estimate for revenues is pegged at $2.63 billion.
Non-GAAP earnings per share are anticipated to be between $1.01 and $1.05. The Zacks Consensus Estimate for the same is pegged at 99 cents per share.
For 2022, the company expects revenues of $10.3-$10.5 billion, suggesting growth of 0-3% on a FX-neutral basis from 2021. The Zacks Consensus Estimate for revenues is pegged at $11.04 billion.
Non-GAAP earnings per share are anticipated to be between $4.20 and $4.40. Notably, the Zacks Consensus Estimate for the same is pegged at $3.96 per share.
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eBay (EBAY) Q4 Earnings & Revenues Beat Estimates, Rise Y/Y
eBay Inc. (EBAY - Free Report) reported fourth-quarter 2021 non-GAAP earnings of $1.05 per share, which beat the Zacks Consensus Estimate by 6.1%. The bottom line grew 24% year over year and 16.7% sequentially.
Net revenues of $2.613 billion surpassed the Zacks Consensus Estimate of $2.611 billion. Further, the figure increased 5% from the year-ago quarter on a reported basis as well as on a FX-neutral basis. The top line rose 4.5% sequentially.
Year-over-year top-line growth was driven by accelerating transaction revenues. eBay’s Promoted Listings contributed well by generating revenues of $227 million, which grew 5% on a reported and 4% on a FX-neutral basis from the prior-year quarter.
However, the company witnessed a year-over-year decline of 9% in the active buyer base, which stood at 147 million at the end of the fourth quarter. The active seller number fell 8% to 17 million in the reported quarter.
eBay also witnessed declining gross merchandise volume (“GMV”) in the fourth quarter, which remained an overhang.
Notably, the company remains optimistic about its growth initiatives, based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data. Its deepening focus toward strengthening the advertising business also remains noteworthy.
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 $20.7 billion in the reported quarter exhibited a year-over-year decline of 10% and 11% on a reported and an FX-neutral basis, respectively. This was primarily due to a year-over-year decline of 8% and 19% in the company’s B2C and C2C GMVs, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $19.9 billion.
Notably, total GMV is categorized into two parts.
U.S. GMV totaled $9.7 billion, which accounted for 46.9% of the total GMV, down 2% from the year-ago quarter.
International GMV was $11 billion, which accounted for 53.1% of the total GMV. It fell 16% 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 $2.45 billion in the quarter under review, accounting for 93.8% of the total revenues. The figure was up 6% from the year-ago quarter.
Marketing Services and Other: eBay generated $163 million of total marketing services and other revenues (6.2% of total revenues), down 4% from the year-ago quarter.
Operating Details
In the fourth quarter, eBay’s gross margin was 73.4%, contracting 450 basis points (bps) year over year.
Operating expenses of $1.2 billion fell 3% year over year. As a percentage of net revenues, the figure contracted 410 bps to 47.1% from the year-ago quarter.
The non-GAAP operating margin was 31.6% in the fourth quarter, contracting 10 bps year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash equivalents and short-term investments were $7.3 billion, up from $5.3 billion as of Sep 30, 2021.
Long-term debt has been unchanged at $7.7 billion at the end of the reported quarter compared with the last reported quarter.
The company generated $475 million of cash from operating activities in the fourth quarter, down from $661 million in the third quarter.
Its free cash flow stood at $372 million in the reported quarter.
The company repurchased $3 billion worth of shares and paid out dividends of $107 million in the reported quarter.
Guidance
For first-quarter 2022, eBay expects revenues of $2.43-$2.48 billion. On a FX-neutral basis, the year-over-year decline in revenues is anticipated to be 5-7%. The Zacks Consensus Estimate for revenues is pegged at $2.63 billion.
Non-GAAP earnings per share are anticipated to be between $1.01 and $1.05. The Zacks Consensus Estimate for the same is pegged at 99 cents per share.
For 2022, the company expects revenues of $10.3-$10.5 billion, suggesting growth of 0-3% on a FX-neutral basis from 2021. The Zacks Consensus Estimate for revenues is pegged at $11.04 billion.
Non-GAAP earnings per share are anticipated to be between $4.20 and $4.40. Notably, the Zacks Consensus Estimate for the same is pegged at $3.96 per share.
Zacks Rank & Stocks to Consider
Currently, eBay carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the retail-wholesale sector are AutoNation (AN - Free Report) , Asbury Automotive Group (ABG - Free Report) and Dollar Tree (DLTR - Free Report) . While AutoNation and Asbury Automotive currently sport a Zacks Rank #1 (Strong Buy), Dollar Tree carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AutoNation has gained 37.8% over a year. The long-term earnings growth rate for AN is currently projected at 23.55%.
Asbury Automotive has gained 9.3% over a year. The long-term earnings growth rate for ABG is currently projected at 18.52%.
Dollar Tree has gained 37.7% over a year. The long-term earnings growth rate for DLTR is currently projected at 12.18%.