eBay Earnings Report Fourth Quarter and Full 2019

eBay Inc. this week reported financial results for its fourth quarter and full-year ended December 31, 2019.

“I am proud of how well our teams have executed over the past year and the innovative solutions we have provided for our buyers and sellers. As we enter 2020, our priorities are clear – we will continue to drive revenue through our growth initiatives, deliver more seller tools, improve the buyer experience by leveraging our structured data foundation, all while driving more margin expansion. We believe these efforts will position us for sustainable, profitable long-term growth and I am excited by the opportunities ahead.”

 

Scott Schenkel, interim Chief Executive Officer of eBay Inc.

Fourth Quarter Financial Highlights

  • Revenue was $2.8 billion, down 2% on an as-reported basis and remaining flat on a foreign exchange (FX) neutral basis. Gross merchandise volume (GMV) was $23.3 billion, down 5% on an as-reported basis and down 4% on an FX-Neutral basis.
  • Active buyers grew by 2% across eBay’s platforms, for a total of 183 million global active buyers.
  • Marketplace platforms delivered $2.2 billion of revenue, down 3% on an as-reported basis and down 1% on an FX-Neutral basis, and $22.0 billion of GMV, down 5% on an as-reported basis and down 4% on an FX-Neutral basis.
  • StubHub platforms drove revenue of $321 million, up 2% on both an as-reported and an FX-Neutral basis, and GMV of $1.3 billion, down 5% on both an as-reported and an FX-Neutral basis.
  • Classifieds platforms delivered revenue of $269 million, up 3% on an as-reported basis and up 6% on an FX-Neutral basis.
  • GAAP net income from continuing operations was $558 million, or $0.69 per diluted share.
  • Non-GAAP net income from continuing operations was $661 million, or $0.81 per diluted share.
  • Generated $811 million of operating cash flow and $672 million of free cash flow from continuing operations.

Full Year Financial Highlights

  • Revenue was $10.8 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis. GMV was $90.2 billion, down 5% on an as-reported basis and down 2% on an FX-Neutral basis.
  • GAAP and Non-GAAP operating margin was 21.5% and 28.2%, respectively, delivering on margin accretion commitments.
  • Repurchased approximately $5.0 billion of its common stock and paid $473 million in cash dividends.

eBay Business Highlights

  • The company announced a definitive agreement for eBay to sell StubHub to viagogo for a purchase price of $4.05 billion in cash. The sale is expected to close by the end of the first quarter of 2020, subject to closing conditions.
  • eBay announced its intent to acquire Cox Automotive Media Solutions as part of the eBay Classifieds Group in Australia, creating a strong local automotive offering that makes it easier to buy, sell, and review cars.
  • The transition to eBay’s managed payments continued its momentum and delivered significant benefits to sellers and buyers. Since launch, the company has processed more than $2 billion of GMV for almost 25,000 sellers.
  • In Q4, Promoted Listings delivered $136 million of revenue, up 73% on an as-reported basis and up 75% on an FX-Neutral basis. Over 1.1 million sellers promoted more than 320 million listings in the quarter.
  • eBay was again a mainstream shopping destination during the 2019 holiday season. The marketplace ranked as the second most visited site in the U.S. by SimilarWeb and realized strong Cyber Five results in international markets led by Germany.
  • A new stand-alone eBay Motors app launched for iOS and Android in the U.S. in Q4, offering a powerful tool for buying and selling vehicles directly from consumers’ mobile devices. With more than 7 million cars sold to date and a vehicle sold every 3 minutes, eBay is one of the world’s largest marketplaces for automotive enthusiasts and general car buyers looking for great value and selection.
  • Sneaker selling fees were eliminated for the first time in North America on any sneakers sold at $100 or more. The move reinforces eBay’s leadership in sneaker resale, which is further demonstrated by the nearly 6 million sneakers sold on eBay in North America in 2019.
  • Seller Initiated Offers has grown to over 1 million offers per day with flexible pricing and easy-to-use experience.
  • The loyalty program for eBay’s off-platform Korean business, Smile Club, reached more than 2 million members in 2019; the program provides member benefits like monthly coupons, dedicated customer service and free shipping on eligible items.
  • eBay’s Buy APIs reached a major milestone, surpassing $1.0 billion in cumulative GMV. This milestone is the result of a journey that began three years ago to modernize eBay’s API stack to support the fast-evolving global eCommerce space.
  • eBay for Charity also reached a major milestone ahead of its 2020 goal, raising more than $1.0 billion for charities globally since the program’s inception.

Other Selected Financial and Operational Results

  • Operating margin – GAAP operating margin decreased to 21.9% for the fourth quarter of 2019, compared to 23.7% for the same period last year. Non-GAAP operating margin increased to 29.3% in the fourth quarter of 2019, compared to 29.2% for the same period last year.
  • Taxes – The GAAP effective tax rate for continuing operations for the fourth quarter of 2019 was 11.9%, compared to (47.9)% for the fourth quarter of 2018. The non-GAAP effective tax rate for continuing operations for the fourth quarter of 2019 was 13.6%, compared to 16.4% for the fourth quarter of 2018.
  • Cash flow – The company generated $811 million of operating cash flow from continuing operations and $672 million of free cash flow during the fourth quarter of 2019.
  • Capital returns – The company repurchased approximately $1.0 billion of its common stock, or approximately 28 million shares, in the fourth quarter of 2019. The company’s total repurchase authorization remaining as of December 31, 2019 was $2.2 billion, which the Board of Directors increased in the first quarter of 2020 by an additional $5.0 billion with no expiration. The company also paid cash dividends of $113 million during the fourth quarter of 2019.
  • Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $3.8 billion as of December 31, 2019.

eBay Business Outlook

  • First-quarter 2020 — The company expects net revenue between $2.55 billion and $2.60 billion, representing Organic FX-Neutral growth of (1)% – 1%, with GAAP earnings per diluted share from continuing operations in the range of $0.50 – $0.53 and non-GAAP earnings per diluted share from continuing operations in the range of $0.70 – $0.73.
  • Full-year 2020 — The company expects net revenue between $10.72 billion and $10.92 billion, representing Organic FX-Neutral growth of 1% – 3%, with GAAP earnings per diluted share from continuing operations in the range of $2.18 – $2.28 and non-GAAP earnings per diluted share from continuing operations in the range of $2.95 – $3.05.
  • 2020 guidance assumes our current portfolio, including StubHub, is in place for the entire year.

Board Declares Dividend

eBay’s Board of Directors has declared a cash dividend of $0.16 per share of the company’s common stock. The dividend is payable on March 20, 2020 to stockholders of record as of March 2, 2020.

Full eBay Earnings Report and Full Disclosure Information

This report is an abbreviated version of the earnings report and is not intended for investment decision purposes. For the complete earnings report and all legal disclosures, please follow this link.

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