eBay Announces Q3 Results

• Revenue of $2.5 billion, up 5% on an as-reported basis and up 5% on an FX-Neutral basis
• Gross Merchandise Volume of $18.0 billion, up 2% on an as-reported basis and roughly flat on an FX-Neutral basis
• GAAP and Non-GAAP earnings per diluted share of $2.46 and $1.03, respectively, on a continuing operations basis
• GAAP and Non-GAAP operating margin of 18.2% and 26.4%, respectively
• Returned $783 million to shareholders in Q3, including $651 million of share repurchases and $132 million paid in cash dividends

eBay Inc., a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its third quarter ended September 30, 2023.

"We delivered another quarter of solid results, and have accelerated the pace of innovation across eBay," said Jamie Iannone, Chief Executive Officer at eBay. "The strategic investments in our marketplace and the team's strong execution are driving increased customer satisfaction, especially in focus categories. In the face of macroeconomic uncertainty, we continue to make meaningful progress against our ambitious vision to reinvent the future of ecommerce for enthusiasts." 

"In Q3, we met or exceeded expectations across all of our key financial metrics," said Steve Priest, Chief Financial Officer at eBay. "Our strong balance sheet and operational rigor enable us to adapt to the evolving changes in this dynamic macro environment. We will continue to be prudent with cost efficiencies, saving to invest for the future, while remaining good stewards of capital for our shareholders. I'm proud of our teams for laying the groundwork for long-term, sustainable growth."

Third Quarter Financial Highlights

• Revenue was $2.5 billion, up 5% on an as-reported basis and up 5% on a foreign exchange (FX) neutral basis.
• Gross Merchandise Volume (GMV) was $18.0 billion, up 2% on an as-reported basis and roughly flat on an FX-Neutral basis.
• GAAP net income from continuing operations was $1.3 billion, or $2.46 per diluted share.
• Non-GAAP net income from continuing operations was $545 million, or $1.03 per diluted share.
• GAAP and Non-GAAP operating margin was 18.2% and 26.4%, respectively.
• Generated $862 million of operating cash flow and $777 million of free cash flow from continuing operations.
• Returned $783 million to shareholders, including $651 million of share repurchases and $132 million paid in cash dividends.

Business Highlights

Revenue Initiatives

• eBay's first-party advertising products, primarily driven by Promoted Listings, delivered $345 million of revenue in the third quarter, up 39% on an as-reported basis and up 36% on an FX-Neutral basis.
• The company's total advertising offerings generated approximately $366 million in revenue in the third quarter, representing roughly 2.0% of GMV.

Strategic Initiatives

• Following the success of the eBay Guaranteed Fit program in the U.S., the company launched similar programs in the U.K. and Germany, enabling tens of millions of Motors Parts & Accessories shoppers to buy auto parts with confidence.
• eBay Motors partnered with several renowned car builders to produce over 70 pieces of content for @eBay's TikTok channel, building awareness of eBay Guaranteed Fit and engaging with the #CarTok community.
• The company introduced a new consignment service, which gives users direct access to expert sellers who will list and sell their luxury items on their behalf. Launching initially for designer handbags, the service is expected to expand next year to include additional luxury categories, including jewelry and watches.
• eBay expanded Authenticity Guarantee for fine jewelry to the U.K. and hosted The Authenticity Lab, a first-of-its-kind multi-sensory experience for sneakerheads in London.
• During the quarter, eBay authenticated its millionth trading card: a Magic: The Gathering All Hallow's Eve (Legends) card.
• eBay also expanded its vault offering for collectors with a new submission service for trading cards, which allows collectors to submit graded trading cards valued at $250+ from their personal collections directly to the eBay vault, regardless of where they were purchased.
• eBay launched the first phase of its magical listing experience to all mobile app users in the U.S., U.K. and Germany, enabling sellers to use generative AI (GenAI) to instantly populate item descriptions.
• The company also launched two GenAI features in the eBay Motors app, providing upgrade recommendations and engine code lookup for a more personalized shopping experience.
• eBay and self-professed "Air Fryer King" Nathan Anthony opened the U.K.'s first air fryer restaurant in Shoreditch, offering a 12-plate tasting menu of dishes cooked using only refurbished air fryers from eBay to highlight the value and quality of refurbished kitchen technology.
• The company launched eBay Lokal in Germany, a new buying and selling experience for purchasing and selling products within local neighborhoods. Through this initiative, eBay has significantly enhanced the visibility and discoverability of locally available items in search and across the entire German platform, including the introduction of a new central page dedicated to local search and browsing.
• eBay France launched a repair platform to help customers extend the lifespans of their household appliances, gardening equipment, tools and high-tech products. The service includes diagnostics, repair tutorials and access to experts through chatbot and video assistance.

Impact

• eBay announced the recipients of its fourth annual Up & Running Grants program, which annually awards 50 U.S. sellers with $10,000 each plus customized mentorship, training and tools to scale and grow their businesses.
• The eBay Foundation announced its 2023 Global Give grantees, awarding nearly $3 million to 32 nonprofit grantees across the globe.
• eBay Australia announced the Circular Fashion Fund, supported by the Australian Fashion Council. The initiative offers 200,000 AUD in funding for Australian start-ups specializing in circular fashion solutions.
• During the quarter, eBay for Charity contributed $40 million globally.
• The company was recognized as a Top Corporate Philanthropist by the Silicon Valley Business Journal and San Francisco Business Times.

Other Selected Financial and Operational Results

• Operating margin – GAAP operating margin decreased to 18.2% for the third quarter of 2023, compared to 23.9% for the same period last year. Non-GAAP operating margin decreased to 26.4% for the third quarter of 2023, compared to 28.9% for the same period last year.
• Taxes – The GAAP effective tax rate for continuing operations for the third quarter of 2023 was 21.4%, compared to (29.9)% for the third quarter of 2022. The non-GAAP effective tax rate for continuing operations for the third quarter of 2023 was 16.5%(1).
• Cash flow – The company generated $862 million of operating cash flow and $777 million of free cash flow from continuing operations during the third quarter of 2023.
• Capital returns – The company repurchased $651 million of its common stock, or nearly 15 million shares, in the third quarter of 2023. The company's total repurchase authorization remaining as of September 30, 2023 was approximately $1.7 billion. The company also paid cash dividends of $132 million during the third quarter of 2023.
• Cash and cash equivalents and non-equity investments – The company's cash and cash equivalents and non-equity investments portfolio totaled $5.4 billion as of September 30, 2023.

Business Outlook

eBay is providing the following guidance for continuing operations for the fourth quarter and full year 2023.

Dividend Declaration

• eBay's Board of Directors has declared a cash dividend of $0.25 per share of the company's common stock. The dividend is payable on December 15, 2023 to stockholders of record as of December 1, 2023.

Listen to the earnings call here

Source : eBay, Inc.

Image : George Sheldon / Shutterstock.com (769619905)

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