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eBay Inc. (EBAY - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.05 per share, which beat the Zacks Consensus Estimate by 1.9%.
Notably, the bottom line remained flat sequentially but declined 2% year over year.
Net revenues of $2.48 billion surpassed the Zacks Consensus Estimate of $2.46 billion. However, the figure decreased 6% from the year-ago quarter on a reported basis and 5% on a FX-neutral basis. Further, it was down 5% from the prior quarter.
This was attributed to softness in transactional activities on eBay’s platform and sluggish marketing services. Further, eBay’s Promoted Listings generated revenues of $222 million, which was down 1% on a reported and 2% on a FX-neutral basis from the prior-year quarter.
Additionally, the company witnessed a year-over-year decline of 13% in the active buyer base, which stood at 142 million at the end of the first quarter.
eBay also witnessed declining gross merchandise volume (“GMV”) in the first quarter, which remained an overhang.
Weakening momentum in online shopping, as a result of normalization to pre-pandemic levels, remained a major headwind.
Nevertheless, the company remains optimistic about its growth initiatives, based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data. Its deepening focus on strengthening the advertising business also remains noteworthy.
The company’s total GMV of $19.41 billion in the reported quarter exhibited year-over-year declines of 20% and 17% on a reported and an FX-neutral basis, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $19.34 billion.
Notably, total GMV is categorized into two parts.
U.S. GMV totaled $9.3 billion, which accounted for 48.1% of the total GMV, down 14% from the year-ago quarter.
International GMV was $10.1 billion, which accounted for 51.9% of the total GMV. It fell 24% 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 $2.35 billion in the quarter under review, accounting for 94.8% of the total revenues. The figure was down 5% from the year-ago quarter.
Marketing Services and Other: eBay generated $128 million of total marketing services and other revenues (5.2% of total revenues), down 21% from the year-ago quarter.
Operating Details
In the first quarter, eBay’s gross margin was 72.2%, contracting 480 basis points (bps) year over year.
Operating expenses of $1.1 billion fell 7.5% year over year. As a percentage of net revenues, the figure contracted 70 bps to 44.4% from the year-ago quarter.
The non-GAAP operating margin was 32.4% in the first quarter, contracting 490 bps year over year.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash equivalents and short-term investments were $5.6 billion, down from $7.3 billion as of Dec 31, 2021.
Long-term debt was $6.6 billion at the end of the reported quarter, down from $7.7 billion at the end of the last reported quarter.
The company generated $629 million of cash from operating activities in the first quarter, up from $475 million in the fourth quarter.
Its free cash flow stood at $546 million in the reported quarter.
The company repurchased $1.25 billion worth of shares and paid out dividends of $129 million in the reported quarter.
Guidance
For second-quarter 2022, eBay expects revenues of $2.35-$2.40 billion. On a FX-neutral basis, the year-over-year decline in revenues is anticipated to be 9-7%. The Zacks Consensus Estimate for revenues is pegged at $2.52 billion.
Non-GAAP earnings per share are anticipated to be between 87 cents and 91 cents. The Zacks Consensus Estimate for the same is pegged at 99 cents.
For 2022, the company lowered its revenues expectations from $10.3-$10.5 billion to $9.6-$9.9 billion, suggesting a decline of 6-3% on a FX-neutral basis from that reported in 2021. The Zacks Consensus Estimate for revenues is pegged at $10.39 billion.
The company also revised the guidance for non-GAAP earnings per share downward from $4.20-$4.40 to $3.90-$4.10. Notably, the Zacks Consensus Estimate for the same is pegged at $4.34.
DICK’s is scheduled to release fourth-quarter fiscal 2021 results on Mar 8. It has gained 48.7% over a year. The long-term earnings growth rate for DKS is currently projected at 11.7%.
Lowe’s is slated to report fourth-quarter fiscal 2021 results on Feb 23. It has gained 28.1% over a year. The long-term earnings growth rate for LOW is currently projected at 13.8%.
Dollar Tree is slated to report fourth-quarter fiscal 2021 results on Mar 2. It has gained 27% over a year. The long-term earnings growth rate for DLTR is currently projected at 12.2%.
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eBay (EBAY) Q1 Earnings Beat Estimates, Revenues Dip Y/Y
eBay Inc. (EBAY - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.05 per share, which beat the Zacks Consensus Estimate by 1.9%.
Notably, the bottom line remained flat sequentially but declined 2% year over year.
Net revenues of $2.48 billion surpassed the Zacks Consensus Estimate of $2.46 billion. However, the figure decreased 6% from the year-ago quarter on a reported basis and 5% on a FX-neutral basis. Further, it was down 5% from the prior quarter.
This was attributed to softness in transactional activities on eBay’s platform and sluggish marketing services. Further, eBay’s Promoted Listings generated revenues of $222 million, which was down 1% on a reported and 2% on a FX-neutral basis from the prior-year quarter.
Additionally, the company witnessed a year-over-year decline of 13% in the active buyer base, which stood at 142 million at the end of the first quarter.
eBay also witnessed declining gross merchandise volume (“GMV”) in the first quarter, which remained an overhang.
Weakening momentum in online shopping, as a result of normalization to pre-pandemic levels, remained a major headwind.
Nevertheless, the company remains optimistic about its growth initiatives, based on enhancing the seller experience by offering innovative seller tools and delivering a better buyer experience by utilizing structured data. Its deepening focus on strengthening the advertising business also remains noteworthy.
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Details
The company’s total GMV of $19.41 billion in the reported quarter exhibited year-over-year declines of 20% and 17% on a reported and an FX-neutral basis, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $19.34 billion.
Notably, total GMV is categorized into two parts.
U.S. GMV totaled $9.3 billion, which accounted for 48.1% of the total GMV, down 14% from the year-ago quarter.
International GMV was $10.1 billion, which accounted for 51.9% of the total GMV. It fell 24% 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 $2.35 billion in the quarter under review, accounting for 94.8% of the total revenues. The figure was down 5% from the year-ago quarter.
Marketing Services and Other: eBay generated $128 million of total marketing services and other revenues (5.2% of total revenues), down 21% from the year-ago quarter.
Operating Details
In the first quarter, eBay’s gross margin was 72.2%, contracting 480 basis points (bps) year over year.
Operating expenses of $1.1 billion fell 7.5% year over year. As a percentage of net revenues, the figure contracted 70 bps to 44.4% from the year-ago quarter.
The non-GAAP operating margin was 32.4% in the first quarter, contracting 490 bps year over year.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash equivalents and short-term investments were $5.6 billion, down from $7.3 billion as of Dec 31, 2021.
Long-term debt was $6.6 billion at the end of the reported quarter, down from $7.7 billion at the end of the last reported quarter.
The company generated $629 million of cash from operating activities in the first quarter, up from $475 million in the fourth quarter.
Its free cash flow stood at $546 million in the reported quarter.
The company repurchased $1.25 billion worth of shares and paid out dividends of $129 million in the reported quarter.
Guidance
For second-quarter 2022, eBay expects revenues of $2.35-$2.40 billion. On a FX-neutral basis, the year-over-year decline in revenues is anticipated to be 9-7%. The Zacks Consensus Estimate for revenues is pegged at $2.52 billion.
Non-GAAP earnings per share are anticipated to be between 87 cents and 91 cents. The Zacks Consensus Estimate for the same is pegged at 99 cents.
For 2022, the company lowered its revenues expectations from $10.3-$10.5 billion to $9.6-$9.9 billion, suggesting a decline of 6-3% on a FX-neutral basis from that reported in 2021. The Zacks Consensus Estimate for revenues is pegged at $10.39 billion.
The company also revised the guidance for non-GAAP earnings per share downward from $4.20-$4.40 to $3.90-$4.10. Notably, the Zacks Consensus Estimate for the same is pegged at $4.34.
Zacks Rank & Stocks to Consider
Currently, eBay carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are DICK’s Sporting Goods (DKS - Free Report) , Lowe’s Companies (LOW - Free Report) and Dollar Tree (DLTR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DICK’s is scheduled to release fourth-quarter fiscal 2021 results on Mar 8. It has gained 48.7% over a year. The long-term earnings growth rate for DKS is currently projected at 11.7%.
Lowe’s is slated to report fourth-quarter fiscal 2021 results on Feb 23. It has gained 28.1% over a year. The long-term earnings growth rate for LOW is currently projected at 13.8%.
Dollar Tree is slated to report fourth-quarter fiscal 2021 results on Mar 2. It has gained 27% over a year. The long-term earnings growth rate for DLTR is currently projected at 12.2%.