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eBay Inc. (EBAY - Free Report) reported second-quarter 2024 non-GAAP earnings of $1.18 per share, which beat the Zacks Consensus Estimate by 4.4%. The bottom line increased 15% year over year.
Net revenues of $2.57 billion surpassed the Zacks Consensus Estimate by 1.7%. The figure increased 1% from the year-ago quarter on a reported basis and 2% on an FX-neutral basis.
Strengthening momentum across advertising offerings of EBAY was a tailwind.
eBay’s first-party advertising products generated revenues of $384 million, up 12% on an FX-neutral basis from the prior-year quarter.
Total advertising offerings yielded $398 million in revenues, which grew 8% year over year on a FX-neutral basis.
EBAY has gained 28.8% on a year-to-date basis, outperforming the industry’s growth of 14.1%.
However, the weakness in third-party advertising products, which generated $14 million in revenues in the reported quarter, was a negative. The figure declined 49% year over year on a FX-neutral basis.
The weakening momentum among active buyers was concerning. EBAY’s active buyer base, which stood at 132 million at the end of the second quarter, remained flat on a year-over-year basis. The figure lagged the consensus mark by 0.03%.
The active buyer count stood at 131 million, excluding contributions from GittiGidiyor, TCGplayer and Goldin acquisitions.
Nevertheless, the growing gross merchandise volume (GMV) contributed well.
EBAY’s total GMV of $18.42 billion in the reported quarter exhibited year-over-year growth of 1% on a reported and FX-neutral basis.
The reported GMV surpassed the Zacks Consensus Estimate of $18.1 billion.
The total GMV is categorized into two parts. U.S. GMV totaled $8.8 billion, accounting for 47.8% of the total GMV. The figure increased 1% year over year. International GMV was $9.62 billion, accounting for 52.2% of the total GMV. The same grew 1% on a year-over-year basis.
Operating Details
In the second quarter, eBay’s gross margin was 71.4%, which contracted 30 basis points (bps) year over year.
Operating expenses of $1.29 billion fell 1.2% year over year. As a percentage of net revenues, the figure contracted 120 bps from the year-ago quarter to 50.1%.
The non-GAAP operating margin was 27.9% in the second quarter, expanding 100 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash equivalents and short-term investments were $5.2 billion, up from $3.9 billion as of Mar 31, 2024.
Long-term debt was $6.17 billion at the end of the second quarter, the same as the figure reported at the end of the first quarter.
EBAY generated $367 million in cash from operating activities in the second quarter, down from $615 million in the previous quarter.
The company’s free cash flow was $278 million in the reported quarter.
eBay repurchased $1 billion worth of shares and paid out dividends of $135 million in the reported quarter.
Guidance
For third-quarter 2024, eBay expects revenues of $2.50-$2.56 billion. On an FX-neutral basis, revenue growth is anticipated to be 1-3%. On a spot-rate basis, the same is expected between 0% and 2%. The Zacks Consensus Estimate for revenues is pegged at $2.53 billion.
The non-GAAP operating margin for the third quarter of 2024 is expected between 26.8% and 27.5%.
GMV for the third quarter is likely to be $17.8-$18.2 billion.
Non-GAAP earnings per share are anticipated between $1.15 and $1.20. The Zacks Consensus Estimate for the same is pegged at $1.13.
Zacks Rank & Other Stocks to Consider
Currently, EBAY sports a Zacks Rank #1 (Strong Buy).
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EBAY's Q2 Earnings & Revenues Surpass Estimates, Rise Y/Y
eBay Inc. (EBAY - Free Report) reported second-quarter 2024 non-GAAP earnings of $1.18 per share, which beat the Zacks Consensus Estimate by 4.4%. The bottom line increased 15% year over year.
Net revenues of $2.57 billion surpassed the Zacks Consensus Estimate by 1.7%. The figure increased 1% from the year-ago quarter on a reported basis and 2% on an FX-neutral basis.
Strengthening momentum across advertising offerings of EBAY was a tailwind.
eBay’s first-party advertising products generated revenues of $384 million, up 12% on an FX-neutral basis from the prior-year quarter.
Total advertising offerings yielded $398 million in revenues, which grew 8% year over year on a FX-neutral basis.
EBAY has gained 28.8% on a year-to-date basis, outperforming the industry’s growth of 14.1%.
However, the weakness in third-party advertising products, which generated $14 million in revenues in the reported quarter, was a negative. The figure declined 49% year over year on a FX-neutral basis.
The weakening momentum among active buyers was concerning. EBAY’s active buyer base, which stood at 132 million at the end of the second quarter, remained flat on a year-over-year basis. The figure lagged the consensus mark by 0.03%.
The active buyer count stood at 131 million, excluding contributions from GittiGidiyor, TCGplayer and Goldin acquisitions.
Nevertheless, the growing gross merchandise volume (GMV) contributed well.
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Details
EBAY’s total GMV of $18.42 billion in the reported quarter exhibited year-over-year growth of 1% on a reported and FX-neutral basis.
The reported GMV surpassed the Zacks Consensus Estimate of $18.1 billion.
The total GMV is categorized into two parts. U.S. GMV totaled $8.8 billion, accounting for 47.8% of the total GMV. The figure increased 1% year over year. International GMV was $9.62 billion, accounting for 52.2% of the total GMV. The same grew 1% on a year-over-year basis.
Operating Details
In the second quarter, eBay’s gross margin was 71.4%, which contracted 30 basis points (bps) year over year.
Operating expenses of $1.29 billion fell 1.2% year over year. As a percentage of net revenues, the figure contracted 120 bps from the year-ago quarter to 50.1%.
The non-GAAP operating margin was 27.9% in the second quarter, expanding 100 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash equivalents and short-term investments were $5.2 billion, up from $3.9 billion as of Mar 31, 2024.
Long-term debt was $6.17 billion at the end of the second quarter, the same as the figure reported at the end of the first quarter.
EBAY generated $367 million in cash from operating activities in the second quarter, down from $615 million in the previous quarter.
The company’s free cash flow was $278 million in the reported quarter.
eBay repurchased $1 billion worth of shares and paid out dividends of $135 million in the reported quarter.
Guidance
For third-quarter 2024, eBay expects revenues of $2.50-$2.56 billion. On an FX-neutral basis, revenue growth is anticipated to be 1-3%. On a spot-rate basis, the same is expected between 0% and 2%. The Zacks Consensus Estimate for revenues is pegged at $2.53 billion.
The non-GAAP operating margin for the third quarter of 2024 is expected between 26.8% and 27.5%.
GMV for the third quarter is likely to be $17.8-$18.2 billion.
Non-GAAP earnings per share are anticipated between $1.15 and $1.20. The Zacks Consensus Estimate for the same is pegged at $1.13.
Zacks Rank & Other Stocks to Consider
Currently, EBAY sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader retail-wholesale sector are The Gap (GPS - Free Report) , Amazon (AMZN - Free Report) and Best Buy (BBY - Free Report) . While The Gap sports a Zacks Rank #1, Amazon and Best Buy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Gap has gained 11.2% in the year-to-date period. The long-term earnings growth rate for GPS is currently estimated at 3.38%.
Shares of Amazon have gained 19.6% in the year-to-date period. The long-term earnings growth rate for AMZN is currently projected at 29.60%.
Best Buy has gained 11.5% in the year-to-date period. The long-term earnings growth rate for BBY is currently anticipated at 5.07%.