eBay sign at San Jose HQ

Are eBay’s Q3 Earnings Results Really “Better Than Expected”?


eBay today reported financial results for its third quarter which ended September 30, 2021. Below you can see the full announcement from eBay including a statement from CEO Jamie Iannone. In the announcement from eBay they have titled the results as better than expected, however upon reading, in my opinion, the results don’t sound great.

While there are many different factors to take into consideration for what would make a ‘successful’ Q3, there are some key metrics that are crucial to what would be deemed as marketplace success. When you read that eBay is reporting GMV down 10% and annual active buyers are down 5% it makes you question just how successful has Q3 been for eBay.

In pre-market trading following the release of the Q3 earnings report the eBay stock price took a dive by 5% signaling that the market was perhaps also not buying the “Better than expected” line that eBay was proposing.

Is this part of the big direction shift and refocus that Jamie Iannone has been talking about, or is this an attempt at smoke and mirrors to make things look better than they actually are? Take a look at the details in the full release down below and let us know.

“Our team delivered another strong quarter, once again meeting or surpassing our expectations for all key business metrics, making further progress on our multi-year strategy,”

“Our Q3 results, driven by the near completion of our managed payments migration, expansion of our advertising portfolio, and volume growth in our focus categories, demonstrate that our strategic playbook continues to work. I’m proud that we’ve been able to increase customer satisfaction, build trust, and drive steady innovation, all while continuing to set and make progress toward our ambitious goals tied to climate action.”

Jamie Iannone, Chief Executive Officer, eBay.

eBay Third Quarter Financial Highlights

  • Revenue was $2.5 billion, up 11% on an as-reported basis and up 10% on a foreign exchange (FX) neutral basis.
  • Gross merchandise volume (GMV) was $19.5 billion, down 10% on an as-reported basis and down 12% on an FX-Neutral basis.
  • GAAP net income from continuing operations was $283 million, or $0.43 per diluted share.
  • Non-GAAP net income from continuing operations was $591 million, or $0.90 per diluted share.
  • Generated $661 million of operating cash flow and $502 million of free cash flow from continuing operations.
  • Returned $2.4 billion to shareholders in Q3, including $2.3 billion of share repurchases and $116 million paid in cash dividends.
  • Annual active buyers declined by 5%, for a total of 154 million global active buyers.
  • Annual active sellers were flat at 19 million global active sellers.(1)

eBay Business Highlights

  • eBay updated its capital allocation plans for 2021 by increasing its estimated share buyback from $5.0 billion to $7.0 billion.
  • In October, the company announced its ambitious greenhouse gas (GHG) target was approved by the Science Based Targets initiative (SBTi). The company committed to reduce its own (scope 1 and scope 2) emissions 90% by 2030 from a 2019 base year, in line with limiting global temperature warming to 1.5°C, the most ambitious designation available through the SBTi process and aligned with the Paris Agreement. eBay also commits to reduce value chain (scope 3) emissions from downstream transportation and distribution by 20% in the same timeframe.
  • eBay has also committed to being carbon neutral for its offices and data centers (scope 1 and 2) by the end of 2021, making it one of the first ecommerce companies to do so. With this commitment eBay will continue to prioritize reducing its footprint and will offset any remaining emissions to be carbon neutral from this year forward.

Revenue Initiatives

  • eBay continues to scale its management of payments to all sellers globally and remains on track to complete the transition this year. In Q3, more than 90% of global on-platform volume was processed through managed payments and eBay exited the quarter with over 18 million sellers migrated globally.
  • With eBay managing payments, the company aims to further enhance the customer experience and remove friction for sellers. During the quarter, the company accelerated the timing of payouts to trusted sellers in the U.K., who will now get paid on the next business day after confirming the buyer’s payment.
  • Promoted Listings delivered over $207 million of revenue in Q3, up 12% on an as-reported basis and up 9% on an FX-Neutral basis.
  • eBay expanded its advertising portfolio with the launch of Promoted Listings Advanced and Promoted Listings Express. Currently in beta, Promoted Listings Advanced is a cost-per-click model where sellers determine their daily budget, choose how much a click is worth to them then pay for each click. Additionally, Promoted Listings Express allows sellers to boost visibility of auction listings for a one-time fee regardless of whether the item is sold.

Tech-led Reimagination of the Platform

  • eBay continues to expand its Authenticity Guarantee program, launching sneaker authentication in Germany during the third quarter. The company also added 30 brands to its catalog and improved search engine optimization performance for top sneaker brands.
  • The company introduced Price Guide and Collection for trading cards, new features designed to provide a single destination for enthusiasts to view, manage and track the value of their trading card portfolios on eBay. To date, close to 4 million cards purchased on and off eBay have been added to customer collections. In addition, close to a quarter million buyers have used the Price Guide tool in search to visualize trends for their favorite trading cards.
  • To further support trading card sellers, the company adjusted its eBay Money Back Guarantee policies to better align with their return policies.
  • eBay’s Certified Refurbished products are also seeing growth, with top brands like Samsung, Dyson and KitchenAid joining the program in the U.S. in Q3.
  • The company launched a new seller refurbished experience for cell phones that standardizes item condition grading, vets sellers and backs purchases with one year warranties, offering buyers more trusted products at great values.
  • eBay’s coded coupons continue to drive repeat purchases in the new stores experience. Since April, more than 2.5 million buyers have made a repeat purchase to a store through seller funded coupons.


  • To continue to deliver on the company’s commitment to climate action, eBay announced agreements with McDonald’s Corporation and Lightsource bp to purchase power from what will be Louisiana’s largest solar project. Once complete, the project will generate over 600,000 megawatt-hours (MWh) of clean energy annually, equivalent to the average annual consumption of 59,000 US homes.
  • As part of the eBay Foundation’s commitment to supporting inclusive entrepreneurship, this summer the company kicked off its annual employee grantmaking initiative: Global Give, through which a total of $3 million in grants will be awarded to nonprofit organizations that are dedicated to meeting the needs of historically marginalized entrepreneurs.
  • eBay for Charity contributed approximately $35 million globally in Q3, up 11% year-over-year.

(1) All sellers who successfully closed a transaction on our platforms within the previous 12-month period. Sellers may register more than once, and as a result, may have more than one account.

Third Quarter 2021 Financial Highlights (presented in millions, except per share data and percentages)
Third Quarter
20212020Change $Change %
eBay Inc.
Net revenues$2,501$2,258$24311%
GAAP – Continuing Operations
Income (loss) from continuing operations$283$605$(322)53%
Earnings (loss) per diluted share from continuing operations$0.43$0.86$(0.43)50%
Non-GAAP – Continuing Operations
Net income$591$584$71%
Earnings per diluted share$0.90$0.82$0.089%

Other Selected Financial and Operational Results

  • Operating margin – GAAP operating margin decreased to 26.5% for the third quarter of 2021, compared to 29.3% for the same period last year. Non-GAAP operating margin decreased to 31.7% in the third quarter of 2021, compared to 34.4% for the same period last year.
  • Taxes – The GAAP effective tax rate for continuing operations for the third quarter of 2021 was 34.7%, compared to 20.1% for the third quarter of 2020. The non-GAAP effective tax rate for continuing operations for the third quarter of 2021 was 17.8%, compared to 14.5% for the third quarter of 2020.
  • Cash flow – The company generated $661 million of operating cash flow and $502 million of free cash flow from continuing operations during the third quarter of 2021.
  • Capital returns – The company repurchased approximately $2.3 billion of its common stock, or approximately 31 million shares, in the third quarter of 2021. The company’s total repurchase authorization remaining as of September 30, 2021 was $5.0 billion. The company also paid cash dividends of $116 million during the third quarter of 2021.
  • 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 September 30, 2021.

Business Outlook

eBay is providing the following guidance for continuing operations for Q4 2021.

In billions, except per share data and percentagesQ4 2021 Guidance
Revenue$2.57 – $2.62
Organic FX-Neutral Y/Y Growth3 – 5%
Diluted GAAP EPS$0.72 – $0.76
Diluted Non-GAAP EPS$0.97 – $1.01

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 December 17, 2021 to stockholders of record as of December 1, 2021.

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