eBay Posts Resilient Q4 And Full-Year Trading

• Revenue of $2.6 billion, up 2% on an as-reported basis and up 3% on an FX-Neutral basis
• Gross Merchandise Volume of $18.6 billion, up 2% on an as-reported basis and nearly flat on an FX-Neutral basis
• GAAP and Non-GAAP earnings per diluted share of $1.40 and $1.07, respectively, on a continuing operations basis
• GAAP and Non-GAAP operating margin of 16.0% and 26.7%, respectively
• Returned $379 million to shareholders in Q4, including $250 million of share repurchases and $129 million paid in cash dividends
• In February 2024, the Board of Directors declared a cash dividend for the first quarter of 2024 of $0.27 per share, an 8% increase from the prior quarterly dividend. The Board also authorized an additional $2.0 billion stock repurchase program, increasing the company's remaining stock repurchase authorization to $3.4 billion

eBay Inc., a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its fourth quarter and full year ended December 31, 2023.

"Last year, we made significant progress toward our vision to reinvent the future of ecommerce for enthusiasts," said Jamie Iannone, Chief Executive Officer at eBay. "Our organic GMV growth improved year-over-year during each quarter of 2023, while navigating a challenging macroeconomic environment. Our results demonstrate the strength of our strategy, and I'm proud of our accelerated pace of innovation as we work to fundamentally enhance the customer experience on eBay."

"I'm pleased that we met or exceeded expectations across our key financial metrics in Q4," said Steve Priest, Chief Financial Officer at eBay. "Our fortress balance sheet and durable financial model enabled us to invest in our strategic pillars while protecting earnings growth and delivering robust capital returns. I'm proud of the strong execution throughout 2023 and I'm confident our strategy will drive long-term shareholder value."

Fourth Quarter Financial Highlights

• Revenue was $2.6 billion, up 2% on an as-reported basis and up 3% on a foreign exchange (FX) neutral basis.
• Gross Merchandise Volume (GMV) was $18.6 billion, up 2% on an as-reported basis and nearly flat on an FX-Neutral basis.
• GAAP net income from continuing operations was $728 million, or $1.40 per diluted share.
• Non-GAAP net income from continuing operations was $560 million, or $1.07 per diluted share.
• GAAP and Non-GAAP operating margin was 16.0% and 26.7%, respectively.
• Generated $123 million of operating cash flow and reported $(3) million of free cash flow.
• Returned $379 million to shareholders, including $250 million of share repurchases and $129 million paid in cash dividends.

Full Year Financial Highlights

• Revenue was $10.1 billion, up 3% on an as-reported basis and up 4% on an FX-Neutral basis.
• GMV was $73.2 billion, down 1% on an as-reported and FX-Neutral basis.
• GAAP net income from continuing operations was $2.8 billion, or $5.21 per diluted share.
• Non-GAAP net income from continuing operations was $2.3 billion, or $4.24 per diluted share.
• GAAP and Non-GAAP operating margin was 19.2% and 27.4%, respectively.
• Generated $2.4 billion of operating cash flow and $2.0 billion of free cash flow.
• Returned $1.9 billion to shareholders, including $1.4 billion of share repurchases and $528 million paid in cash dividends.

Business Highlights

Revenue Initiatives

• eBay's first-party advertising products delivered $368 million of revenue in the fourth quarter, up 33% on an as-reported basis and up 30% on an FX-Neutral basis.
• The company's total advertising offerings generated $393 million of revenue in the fourth quarter, representing 2.1% of GMV.

Strategic Initiatives

• In Q4, eBay opened its newest authentication center in Japan. The Tokyo-based hub provides an added layer of trust, enabling the company to authenticate luxury items on a global scale.
• In the Motors Parts & Accessories category, eBay rolled out a multi-warehouse shipping optimization API to U.S. sellers, allowing buyers to see more accurate estimated delivery dates when purchasing from sellers with multiple warehouses.
• During the quarter, eBay Motors introduced predictive maintenance for users with cars in My Garage. Leveraging eBay's database of more than 100 million vehicles, this capability offers AI-driven auto part recommendations based on a specific vehicle's mileage.
• eBay announced a commercial agreement and investment in sports trading card company COMC. The deal expands COMC's technology-based listing and management model and offers collectors a more extensive selection and improved listing capabilities.
• During the quarter, eBay completed the global rollout of its enhanced background removal tool, which leverages AI to effortlessly remove visual background "noise" from product images.
• eBay launched a new generative AI-powered social caption generator, making social sharing easier for sellers.
• The company introduced combined shipping with eBay International Shipping, enabling buyers to purchase multiple items from one seller and pay reduced shipping costs.

Impact

• eBay published its fourth annual Task Force for Climate Related Financial Disclosure report, showing eBay's continued commitment to climate disclosure, assessment and planning.
• eBay was included in the Dow Jones Sustainability World and North American Indices for the fifth consecutive year, recognizing the company for its commitment to sustainability and responsible business.
• eBay for Charity contributed more than $43 million globally in Q4 and nearly $162 million throughout 2023.
• In Q4, the eBay Foundation hosted its second annual Giving Week encouraging eBayers around the world to donate, volunteer and connect with local communities. In a single week, employees donated more than $660 thousand to more than a thousand different causes in 25 countries.
• In 2023, the eBay Foundation granted more than $19 million to nonprofit organizations advancing inclusive entrepreneurship. 

Fourth Quarter and Full Year 2023 Financial Highlights (presented in millions, except per share data and percentages)

Other Selected Financial and Operational Results

• Operating margin – GAAP operating margin decreased to 16.0% for the fourth quarter of 2023, compared to 22.5% for the same period last year. Non-GAAP operating margin decreased to 26.7% for the fourth quarter of 2023, compared to 29.9% for the same period last year.
• Taxes – The GAAP effective tax rate for continuing operations for the fourth quarter of 2023 was 29.4%, compared to 19.1% for the fourth quarter of 2022. The non-GAAP effective tax rate for continuing operations for the fourth quarter of 2023 was 16.5%(1).
• Cash flow – The company generated $123 million of operating cash flow and reported $(3) million of free cash flow from continuing operations during the fourth quarter of 2023.
• Capital returns – The company repurchased $250 million of its common stock, or 6 million shares, in the fourth quarter of 2023. The company's total repurchase authorization remaining as of December 31, 2023 was approximately $1.4 billion. The company also paid cash dividends of $129 million during the fourth quarter of 2023.
• Cash and cash equivalents and non-equity investments – The company's cash and cash equivalents and non-equity investments portfolio totaled $5.1 billion as of December 31, 2023.

Business Outlook

eBay is providing the following guidance for the first quarter 2024.

Dividend Declaration

• eBay's Board of Directors has declared a cash dividend of $0.27 per share of the company's common stock. The dividend is payable on March 25, 2024 to stockholders of record as of March 11, 2024.

(1) We use a non-GAAP effective tax rate for evaluating our operating results. Based on our current long-term projections, we are using a non-GAAP tax rate of 16.5%. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.

Source : eBay, Inc

Image : George Sheldon / Shutterstock.com / 769619905

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