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EBAY's Q2 Earnings & Revenues Surpass Estimates, Up Y/Y
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eBay Inc. (EBAY - Free Report) reported second-quarter 2023 non-GAAP earnings of $1.03 per share, which beat the Zacks Consensus Estimate by 4%. The bottom line increased by 5% year over year.
Net revenues of $2.54 billion surpassed the Zacks Consensus Estimate of $2.51 billion. The figure increased by 5% from the year-ago quarter’s figure on a reported basis and 6% on an FX-neutral basis.
Strengthening momentum across the advertising offerings of EBAY was a tailwind.
eBay’s Promoted Listings generated revenues of $341 million, up 47% on a reported basis and 49% on an FX-neutral basis from the prior-year quarter’s respective levels. This fueled momentum across EBAY’s first-party advertising products.
Total advertising offerings yielded $367 million in revenues, which grew 33.5% on a year-over-year basis.
Softness in eBay’s Marketplace platform and weakening momentum among active buyers were concerns. EBAY witnessed a year-over-year decline of 4% in its active buyer base, which stood at 132 million at the end of the second quarter. The figure came below the consensus mark of 133 million.
The active buyer count stood at 131 million, excluding contributions from GittiGidiyor and TCGplayer acquisitions.
eBay witnessed a declining gross merchandise volume (GMV) in the reported quarter, which remained an overhang.
Nevertheless, eBay’s deepening focus on infusing AI technology into its platform to deliver an enhanced customer experience is expected to drive customer momentum in the near term.
EBAY has gained 19.1% on a year-to-date basis, underperforming the industry’s growth of 35%.
EBAY’s total GMV of $18.21 billion in the reported quarter exhibited year-over-year declines of 2% and 1% on a reported and an FX-neutral basis, respectively.
The reported GMV surpassed the Zacks Consensus Estimate of $18.08 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.7 billion, accounting for 47.8% of the total GMV, down 3% from the year-ago quarter’s level.
International GMV was $9.5 billion, accounting for 52.2% of the total GMV and it fell 1% on a year-over-year basis.
Operating Details
In the second quarter, eBay’s gross margin was 71.7%, which contracted by 90 basis points (bps) year over year.
Operating expenses of $1.3 billion rose 5.7% year over year. As a percentage of net revenues, the figure expanded 40 bps to 51.3% from the year-ago quarter’s level.
The non-GAAP operating margin was 26.9% in the second quarter, contracting 180 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash equivalents and short-term investments were $4.5 billion, up from $4 billion as of Mar 31, 2023.
Long-term debt was $7.72 billion at the end of the second quarter, which remained flat compared with that in the prior quarter.
EBAY generated $605 million in cash from operating activities in the second quarter, down from $841 million in the first quarter.
Its free cash flow was $492 million in the reported quarter.
eBay repurchased $250 million worth of shares and paid out dividends of $133 million in the reported quarter.
Guidance
For third-quarter 2023, eBay expects revenues of $2.46-$2.52 billion. On an FX-neutral basis, the year-over-year growth in revenues is anticipated to be 2%-4%. On a spot rate basis, the same is expected between 3% and 6%. The Zacks Consensus Estimate for revenues is pegged at $2.48 billion.
Non-GAAP operating margin is expected to be between 25.8% and 26.5%.
GMV for the third quarter is likely to be within the band of $17.6-$18 billion.
Non-GAAP earnings per share are anticipated to be between 96 cents and $1.01. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
Zacks Rank & Stocks to Consider
Currently, eBay carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce sports a Zacks Rank #1 (Strong Buy), while Akamai Technologies and AvidXchange each carry a Zacks Rank #2 (Buy).
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EBAY's Q2 Earnings & Revenues Surpass Estimates, Up Y/Y
eBay Inc. (EBAY - Free Report) reported second-quarter 2023 non-GAAP earnings of $1.03 per share, which beat the Zacks Consensus Estimate by 4%. The bottom line increased by 5% year over year.
Net revenues of $2.54 billion surpassed the Zacks Consensus Estimate of $2.51 billion. The figure increased by 5% from the year-ago quarter’s figure on a reported basis and 6% on an FX-neutral basis.
Strengthening momentum across the advertising offerings of EBAY was a tailwind.
eBay’s Promoted Listings generated revenues of $341 million, up 47% on a reported basis and 49% on an FX-neutral basis from the prior-year quarter’s respective levels. This fueled momentum across EBAY’s first-party advertising products.
Total advertising offerings yielded $367 million in revenues, which grew 33.5% on a year-over-year basis.
Softness in eBay’s Marketplace platform and weakening momentum among active buyers were concerns. EBAY witnessed a year-over-year decline of 4% in its active buyer base, which stood at 132 million at the end of the second quarter. The figure came below the consensus mark of 133 million.
The active buyer count stood at 131 million, excluding contributions from GittiGidiyor and TCGplayer acquisitions.
eBay witnessed a declining gross merchandise volume (GMV) in the reported quarter, which remained an overhang.
Nevertheless, eBay’s deepening focus on infusing AI technology into its platform to deliver an enhanced customer experience is expected to drive customer momentum in the near term.
EBAY has gained 19.1% on a year-to-date basis, underperforming the industry’s growth of 35%.
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Details
EBAY’s total GMV of $18.21 billion in the reported quarter exhibited year-over-year declines of 2% and 1% on a reported and an FX-neutral basis, respectively.
The reported GMV surpassed the Zacks Consensus Estimate of $18.08 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.7 billion, accounting for 47.8% of the total GMV, down 3% from the year-ago quarter’s level.
International GMV was $9.5 billion, accounting for 52.2% of the total GMV and it fell 1% on a year-over-year basis.
Operating Details
In the second quarter, eBay’s gross margin was 71.7%, which contracted by 90 basis points (bps) year over year.
Operating expenses of $1.3 billion rose 5.7% year over year. As a percentage of net revenues, the figure expanded 40 bps to 51.3% from the year-ago quarter’s level.
The non-GAAP operating margin was 26.9% in the second quarter, contracting 180 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash equivalents and short-term investments were $4.5 billion, up from $4 billion as of Mar 31, 2023.
Long-term debt was $7.72 billion at the end of the second quarter, which remained flat compared with that in the prior quarter.
EBAY generated $605 million in cash from operating activities in the second quarter, down from $841 million in the first quarter.
Its free cash flow was $492 million in the reported quarter.
eBay repurchased $250 million worth of shares and paid out dividends of $133 million in the reported quarter.
Guidance
For third-quarter 2023, eBay expects revenues of $2.46-$2.52 billion. On an FX-neutral basis, the year-over-year growth in revenues is anticipated to be 2%-4%. On a spot rate basis, the same is expected between 3% and 6%. The Zacks Consensus Estimate for revenues is pegged at $2.48 billion.
Non-GAAP operating margin is expected to be between 25.8% and 26.5%.
GMV for the third quarter is likely to be within the band of $17.6-$18 billion.
Non-GAAP earnings per share are anticipated to be between 96 cents and $1.01. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
Zacks Rank & Stocks to Consider
Currently, eBay carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce sports a Zacks Rank #1 (Strong Buy), while Akamai Technologies and AvidXchange each carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce shares have gained 70.7% in the year-to-date period. The long-term earnings growth rate for CRM is currently projected at 19.25%.
Akamai shares have gained 9.5% in the year-to-date period. The long-term earnings growth rate for AKAM is currently projected at 10%.
AvidXchange shares have increased 21.1% in the year-to-date period. The long-term earnings growth rate for AVDX is currently projected at 22.90%.