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eBay Inc. (EBAY - Free Report) reported third-quarter 2022 non-GAAP earnings of $1.00 per share, which beat the Zacks Consensus Estimate by 7.5%. The bottom line increased 11% year over year.
Net revenues of $2.38 billion surpassed the Zacks Consensus Estimate of $2.31 billion. However, the figure decreased 5% from the year-ago quarter’s figure on a reported basis and 2% on an FX-neutral basis.
This was attributed to the softness in transactional activities on eBay’s platform and sluggish marketing services. EBAY witnessed a year-over-year decline of 11% in the active buyer base, which stood at 135 million at the end of the third quarter.
eBay witnessed a declining gross merchandise volume (GMV) in the third quarter, which remained an overhang.
Nevertheless, strengthening momentum across advertising offerings of EBAY was a tailwind.
eBay’s Promoted Listings generated revenues of $249 million, up 19% on a reported and 27% on an FX-neutral basis from the prior-year quarter’s respective levels. This drove the momentum across EBAY’s first-party advertising products.
Moreover, total advertising offerings yielded $290 million revenues, which grew 14.6% on a year-over-year basis.
EBAY’s total GMV of $17.7 billion in the reported quarter exhibited year-over-year declines of 11% and 5% on a reported and an FX-neutral basis, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $17.4 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.7 billion, accounting for 49.1% of the total GMV, down 7% from the year-ago quarter’s level.
International GMV was $9.02 billion, accounting for 50.9% of the total GMV. It fell 15% on a year-over-year basis.
Revenues in Detail
eBay’s revenues are classified into two types.
Net Transaction: eBay reported net transaction revenues of $2.26 billion in the quarter under review, accounting for 94.9% of the total revenues. The figure was down 4% from the year-ago quarter’s level.
Marketing Services and Other: eBay generated $121 million of total marketing services and other revenues (5.1% of total revenues), down 20% from the year-ago quarter’s level.
Operating Details
In the third quarter, eBay’s gross margin was 72.8%, contracting 10 basis points (bps) year over year.
Operating expenses of $1.2 billion rise 0.3% year over year. As a percentage of net revenues, the figure expanded 250 bps to 48.9% from the year-ago quarter’s level.
The non-GAAP operating margin was 28.9% in the third quarter, contracting 280 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash equivalents and short-term investments were $3.5 billion, up from $3.2 billion as of Jun 30, 2022.
Long-term debt was $6.579 billion at the end of the reported quarter, flat with the last reported quarter’s level.
EBAY generated $735 million of cash from operating activities in the third quarter, down from $577 million in the second quarter.
Its free cash flow stood at $633 million in the reported quarter.
eBay repurchased $301 million worth of shares and paid out dividends of $120 million in the reported quarter.
Guidance
For fourth-quarter 2022, eBay expects revenues of $2.42-$2.50 billion. On an FX-neutral basis, the year-over-year decline in revenues is anticipated to be 4-1%. The Zacks Consensus Estimate for revenues is pegged at $2.47 billion.
Non-GAAP earnings per share are anticipated between $1.03 and $1.09. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
For 2022, EBAY revised its revenue guidance to $9.71-$9.79 billion, suggesting a decline of 4-3% on an FX-neutral basis from the number reported in 2021. Previously, eBay projected revenues between $9.6 billion and $9.9 billion. The Zacks Consensus Estimate for revenues is pegged at $9.71 billion.
eBay raised guidance for non-GAAP earnings per share from $3.95-$4.10 to $4.07-$4.13. The Zacks Consensus Estimate for the same is pegged at $4.04 per share.
DICK’s is scheduled to release third-quarter 2022 results on Nov 22. The stock has lost 3.1% on a year-to-date basis. The long-term earnings growth rate for DKS is currently projected at 5%.
Home Depot is slated to report third-quarter 2022 results on Nov 15. The stock has lost 32.1% on a year-to-date basis. The long-term earnings growth rate for HD is currently projected at 11.2%.
Ross Stores is slated to report third-quarter 2022 results on Nov 17. The stock has lost 18.4% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.
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eBay (EBAY) Q3 Earnings Beat Estimates, Revenues Dip Y/Y
eBay Inc. (EBAY - Free Report) reported third-quarter 2022 non-GAAP earnings of $1.00 per share, which beat the Zacks Consensus Estimate by 7.5%. The bottom line increased 11% year over year.
Net revenues of $2.38 billion surpassed the Zacks Consensus Estimate of $2.31 billion. However, the figure decreased 5% from the year-ago quarter’s figure on a reported basis and 2% on an FX-neutral basis.
This was attributed to the softness in transactional activities on eBay’s platform and sluggish marketing services. EBAY witnessed a year-over-year decline of 11% in the active buyer base, which stood at 135 million at the end of the third quarter.
eBay witnessed a declining gross merchandise volume (GMV) in the third quarter, which remained an overhang.
Nevertheless, strengthening momentum across advertising offerings of EBAY was a tailwind.
eBay’s Promoted Listings generated revenues of $249 million, up 19% on a reported and 27% on an FX-neutral basis from the prior-year quarter’s respective levels. This drove the momentum across EBAY’s first-party advertising products.
Moreover, total advertising offerings yielded $290 million revenues, which grew 14.6% on a year-over-year basis.
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Details
EBAY’s total GMV of $17.7 billion in the reported quarter exhibited year-over-year declines of 11% and 5% on a reported and an FX-neutral basis, respectively.
Nevertheless, reported GMV surpassed the Zacks Consensus Estimate of $17.4 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.7 billion, accounting for 49.1% of the total GMV, down 7% from the year-ago quarter’s level.
International GMV was $9.02 billion, accounting for 50.9% of the total GMV. It fell 15% on a year-over-year basis.
Revenues in Detail
eBay’s revenues are classified into two types.
Net Transaction: eBay reported net transaction revenues of $2.26 billion in the quarter under review, accounting for 94.9% of the total revenues. The figure was down 4% from the year-ago quarter’s level.
Marketing Services and Other: eBay generated $121 million of total marketing services and other revenues (5.1% of total revenues), down 20% from the year-ago quarter’s level.
Operating Details
In the third quarter, eBay’s gross margin was 72.8%, contracting 10 basis points (bps) year over year.
Operating expenses of $1.2 billion rise 0.3% year over year. As a percentage of net revenues, the figure expanded 250 bps to 48.9% from the year-ago quarter’s level.
The non-GAAP operating margin was 28.9% in the third quarter, contracting 280 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash equivalents and short-term investments were $3.5 billion, up from $3.2 billion as of Jun 30, 2022.
Long-term debt was $6.579 billion at the end of the reported quarter, flat with the last reported quarter’s level.
EBAY generated $735 million of cash from operating activities in the third quarter, down from $577 million in the second quarter.
Its free cash flow stood at $633 million in the reported quarter.
eBay repurchased $301 million worth of shares and paid out dividends of $120 million in the reported quarter.
Guidance
For fourth-quarter 2022, eBay expects revenues of $2.42-$2.50 billion. On an FX-neutral basis, the year-over-year decline in revenues is anticipated to be 4-1%. The Zacks Consensus Estimate for revenues is pegged at $2.47 billion.
Non-GAAP earnings per share are anticipated between $1.03 and $1.09. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
For 2022, EBAY revised its revenue guidance to $9.71-$9.79 billion, suggesting a decline of 4-3% on an FX-neutral basis from the number reported in 2021. Previously, eBay projected revenues between $9.6 billion and $9.9 billion. The Zacks Consensus Estimate for revenues is pegged at $9.71 billion.
eBay raised guidance for non-GAAP earnings per share from $3.95-$4.10 to $4.07-$4.13. The Zacks Consensus Estimate for the same is pegged at $4.04 per share.
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) , Home Depot (HD - Free Report) and Ross Stores (ROST - Free Report) , each currently 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 third-quarter 2022 results on Nov 22. The stock has lost 3.1% on a year-to-date basis. The long-term earnings growth rate for DKS is currently projected at 5%.
Home Depot is slated to report third-quarter 2022 results on Nov 15. The stock has lost 32.1% on a year-to-date basis. The long-term earnings growth rate for HD is currently projected at 11.2%.
Ross Stores is slated to report third-quarter 2022 results on Nov 17. The stock has lost 18.4% on a year-to-date basis. The long-term earnings growth rate for ROST is currently projected at 10.5%.