eBay Reports Better Than Expected Q1 Results

• Revenue of $3.0 billion, up 42% on an as-reported basis and up 38% on an FX-Neutral basis
• Gross Merchandise Volume of $27.5 billion, up 29% on an as-reported basis and up 24% on an FX-Neutral basis
• GAAP and Non-GAAP EPS per diluted share of $0.82 and $1.09, respectively, on a continuing operations basis
• GAAP and Non-GAAP operating margin of 27.9% and 33.0%, respectively
• Returned $414 million to shareholders in Q1, including $292 million of share repurchases and $122 million paid in cash dividends

eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its first quarter ended March 31, 2021.

"We delivered another strong quarter for the company and an excellent start to the year for our buyers and sellers. We generated tremendous volume and earnings, with revenue growth the highest it has been since 2005," said Jamie Iannone, Chief Executive Officer at eBay. "Last July, I laid out our vision for a Tech-led reimagination of eBay and our results prove this long-term strategy is working. While we have more work to do, we are confident we are on a path of continued growth in the years ahead."

First Quarter Financial Highlights

• Revenue was $3.0 billion, up 42% on an as-reported basis and up 38% on a foreign exchange (FX) neutral basis.
• Gross merchandise volume (GMV) was $27.5 billion, up 29% on an as-reported basis and up 24% on an FX-Neutral basis.
• GAAP net income from continuing operations was $569 million, or $0.82 per diluted share.
• Non-GAAP net income from continuing operations was $758 million, or $1.09 per diluted share.
• Generated $938 million of operating cash flow and $855 million of free cash flow from continuing operations.
• Annual active buyers grew by 7%, for a total of 187 million global active buyers.
• Annual active sellers grew by 8%, for a total of 20 million global active sellers.(1)

Business Highlights

Revenue Initiatives

• eBay continues to scale its management of payments globally, with over 52% of global on-platform volume processed through managed payments during the quarter. The company exited Q1 with over 4 million sellers migrated globally and over 80% of the payments migration completed in the U.S. eBay also launched the new experience for sellers in France, Italy and Spain.
• As a result of the managed payments migration, eBay simplified checkout flows and reduced unpaid items by approximately 80% on fixed price transactions during the quarter.
• Promoted Listings delivered close to $224 million of revenue in Q1, up 64% on an as-reported basis and up 58% on an FX-Neutral basis.

Tech-led Reimagination of the Platform

• In Q1, eBay saw significant growth in its core categories. In the U.S., sneakers valued above $100 grew at a triple digit rate year-over-year yet again, and growth in luxury watches accelerated from 16% in Q4 to 38% in Q1.
• Another core category eBay focused on during the quarter was Trading Cards. During Q1, in the U.S., GMV for Trading Cards was over $1 billion dollars and active buyers in the category doubled. The company also announced a new image listing tool for top-selling trading cards. The new tool leverages computer vision technology to scan the card, which streamlines listing creation and can reduce time to list by up to 75%.
• eBay expanded its Certified Refurbished experience in the U.S. to over 150 brands, and launched Certified Refurbished in the U.K., Canada and Germany with more than 100 brands.
• Keeping with its commitment to be the partner of choice to sellers, eBay launched a new unified listing experience that offers a cohesive design across all platforms to simplify the listing flow and enhance seller benefits.
• eBay's ongoing SEO efforts, particularly in its core categories, added roughly one point of active buyer growth in Q1. Free traffic to browse pages continues to grow, and in sneakers eBay saw almost double the amount of traffic and close to triple the amount of new buyers coming to eBay through SEO.
• The company launched a Store Preview feature for sellers to view their storefront before publishing, building seller confidence and easing the transition to the new experience.
• eBay announced a new coded coupons tool for sellers to create custom discount codes for their buyers to share publicly on eBay.com or privately through their own marketing channels. Sellers can also print their coded coupons to include in shipped packages, helping drive repeat purchases from their buyers.
• eBay launched Terapeak Sourcing Insights, a new tool that helps sellers with a qualifying stores subscription analyze trending categories, top products, and signals what inventory is most likely to sell.
• The company simplified its shipping badges in the U.S. and Germany, providing buyers with a new, clean and concise view of shipping speed and cost.

Impact

• The company launched its first Recommerce Report which revealed that, according to eBay's latest survey of its sellers, 87% of U.S. respondents say that they have sold pre-owned goods in 2020, and almost three-quarters of sellers surveyed began selling pre-owned goods last year for supplemental income.
• In Q1, eBay announced a $25 million investment in the Clear Vision Impact Fund to bolster small and medium sized businesses that are based in, or support, underserved communities nationally.
• eBay announced the recipients of its Up & Running Grants, a new program focused on ensuring today's small businesses are here tomorrow. Fifty sellers from across the U.S. have been selected to receive grant packages, inclusive of $10,000 in funding and education resources.
• The company continued to support the U.K.'s National Health Service, delivering more than 2 billion PPE items to primary care workers in the U.K. utilizing eBay's technology.
• The company published its first Task Force on Climate-Related Financial Disclosures (TCFD) report reinforcing its increased momentum toward climate transparency and action.
• During the quarter, eBay raised over $35 million through eBay for Charity.
• The company increased employee matching gift limits through the eBay Foundation from $2,500 to $10,000 per year.
• The company also contributed to Asian Americans Advance Justice and supported employee giving during Black History Month and the Lunar New Year.

Other Selected Financial and Operational Results

• Operating margin – GAAP operating margin increased to 27.9% for the first quarter of 2021, compared to 26.5% for the same period last year. Non-GAAP operating margin increased to 33.0% in the first quarter of 2021, compared to 31.6% for the same period last year.
• Taxes – The GAAP effective tax rate for continuing operations for the first quarter of 2021 was 21.5%, compared to 23.8% for the first quarter of 2020. The non-GAAP effective tax rate for continuing operations for the first quarter of 2021 was 17.3%, compared to 16.5% for the first quarter of 2020.
• Cash flow – The company generated $938 million of operating cash flow and $855 million of free cash flow from continuing operations during the first quarter of 2021.
• Capital returns – The company repurchased approximately $292 million of its common stock, or more than 5 million shares, in the first quarter of 2021. The company's total repurchase authorization remaining as of March 31, 2021 was $5.7 billion. The company also paid cash dividends of $122 million during the first quarter of 2021.
• Cash and cash equivalents and non-equity investments – The company's cash and cash equivalents and non-equity investments portfolio totaled $3.9 billion as of March 31, 2021.

Business Outlook

eBay is providing the following guidance for continuing operations for Q2 2021.

Dividend Declaration

eBay's Board of Directors has declared a cash dividend of $0.18 per share of the company's common stock. The dividend is payable on June 18, 2021 to stockholders of record as of June 1, 2021.

Source : eBay

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