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eBay (EBAY) Q1 Earnings & Revenues Beat Estimates, Rise Y/Y

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eBay Inc. (EBAY - Free Report) reported first-quarter 2021 non-GAAP earnings of $1.09 per share, beating the Zacks Consensus Estimate by 1.9%. The bottom line also improved 59% year over year and 26.7% sequentially.

Net revenues of $3.02 billion surpassed the Zacks Consensus Estimate of $2.97 billion. Further, the figure increased 42% from the year-ago quarter on a reported basis and 38% on a FX-neutral basis. Also, the figure rose 5.4% sequentially.

Year-over-year growth in the top line was primarily driven by solid momentum across the Marketplace platform. Further, accelerating gross merchandise volume (“GMV”) of the company contributed significantly to the performance.

Additionally, the growing adoption of its managed payments remained a major positive. The number of sellers migrated to managed payments exceeded 4 million in the reported quarter, out of which more than 80% was done in the United States. Notably, managed payment offering processed 52% of on-platform volumes globally in the first quarter.

Further, eBay’s Promoted Listings delivered robust performance by generating revenues of $224 million, which grew 64% on a reported basis and 58% on a FX-neutral basis from the prior-year quarter.

Additionally, the company witnessed year-over-year growth of 7% in the active buyer base, which stood at 187 million at the end of the first quarter. Notably, strong momentum across new and reactivated customers was a tailwind.

Coming to the price performance, eBay has returned 40% over a year, outperforming the industry’s growth of 11.9%.

The company’s initiatives toward strengthening managed payment offerings remain major positives. Further, eBay remains optimistic regarding growth initiatives, which are based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data.

 

 

GMV Details

The company’s total GMV of $27.5 billion in the reported quarter exhibited year-over-year growth of 29% and 24% on a reported and a FX-neutral basis, respectively. Further, the figure surpassed the Zacks Consensus Estimate of $26.2 billion.

Notably, eBay’s GMV is entirely generated by the Marketplace platform after the sale of StubHub.

Marketplace GMV is categorized into two parts.

U.S. GMV totaled $10.4 billion, which accounted for 37.8% of total GMV, up 36% from the year-ago quarter.

International GMV was $17.1 billion, which accounted for 62.2% of total GMV. It grew 25% on a year-over-year basis.

Revenues in Detail

eBay’s revenues are classified into two types:

Net Transaction: The company reported net transaction revenues of $2.7 billion in the quarter under review, accounting for 90.4% of the total revenues. Further, the figure was up 44% from the year-ago quarter. Notably, net transaction revenues are completely generated by the Marketplace platform.

Marketing Services and Other: eBay generated $291 million of total marketing services and other revenues (9.6% of total revenues), which was up 27% from the year-ago quarter.

eBay Inc. Price, Consensus and EPS Surprise

 

eBay Inc. Price, Consensus and EPS Surprise

eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote

Operating Details

In the first quarter, eBay’s gross margin was 72.8%, contracting 360basis points (bps) year over year.

Operating expenses of $1.4 billion contracted 500 bps as a percentage of net revenues from the year-ago quarter.

Non-GAAP operating margin was 33% in the first quarter, expanding 140 bps year over year.

Balance Sheet & Cash Flow

As of Mar 31, 2021, cash equivalents and short-term investments were $3.4 billion, down from $3.8 billion as of Dec 31, 2020.

Further, long-term debt was $5.9 billion at the end of the reported quarter compared with $7.7 billion at the end of the last reported quarter.

The company generated $1.04 billion of cash from operating activities in the first quarter, up from $758 million in the previous quarter.

Its free cash flow stood at $855million in the reported quarter.

Further, the company repurchased $292 million worth of shares and paid out dividends of $122 million in the reported quarter.

Guidance

For second-quarter 2021, eBay expects net revenues of $2.98-$3.03 billion. On a FX-neutral basis, year-over-year growth in revenues is anticipated to be 8-10%. The Zacks Consensus Estimate for revenues is pegged at $2.93 billion.

Non-GAAP earnings are anticipated to be 91-96 cents per share. Notably, the Zacks Consensus Estimate for the same is pegged at $1.00 per share.

Zacks Rank & Stocks to Consider

Currently, eBay carries a Zacks Rank #3 (Hold).

AutoNation, Inc. (AN - Free Report) , Revolve Group, Inc. (RVLV - Free Report) and Americas CarMart, Inc. (CRMT - Free Report) are some better-ranked stocks in the broader Retail-Wholesale sector. While AutoNation sports a Zacks Rank #1 (Strong Buy), Revolve and Americas CarMart carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for AutoNation, Revolve and Americas CarMart are pegged at 12.25%, 14.62% and 13.55%, respectively.

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