We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
eBay Inc. (EBAY - Free Report) reported third-quarter 2023 non-GAAP earnings of $1.03 per share, which beat the Zacks Consensus Estimate by 3%. The bottom line increased 3% year over year.
Net revenues of $2.5 billion were in line with the Zacks Consensus Estimate. The figure increased 5% from the year-ago quarter on a reported basis and 5% on an FX-neutral basis.
Strengthening momentum across the advertising offerings of EBAY was a tailwind.
The company’s Promoted Listings generated revenues of $345 million, up 39% on a reported basis and 36% on an FX-neutral basis from the prior-year quarter’s respective levels. This fueled momentum across its first-party advertising products.
Total advertising offerings yielded $366 million in revenues, which grew 26.2% on a year-over-year basis.
Softness in eBay’s Marketplace platform and weakening momentum among active buyers were concerns. It witnessed a year-over-year decline of 3% in its active buyer base, which stood at 132 million at the end of the third quarter. The figure came in line with the consensus mark.
The active buyer count stood at 131 million, excluding contributions from GittiGidiyor and TCGplayer acquisitions.
Nevertheless, the company’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 lost 8.5% on a year-to-date basis, underperforming the industry’s growth of 44.2%
EBAY’s total GMV of $17.99 billion in the reported quarter exhibited year-over-year growth of 2% on a reported basis and roughly flat on an FX-neutral basis.
The reported GMV surpassed the Zacks Consensus Estimate of $17.84 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.64 billion, accounting for 48% of the total GMV, down 1% from the year-ago quarter’s level.
International GMV was $9.35 billion, accounting for 52% of the total GMV, up 4% on a year-over-year basis.
Operating Details
In the third quarter, eBay’s gross margin was 71.8%, which contracted by 100 basis points (bps) year over year.
Operating expenses of $1.34 billion rose 15% year over year. As a percentage of net revenues, the figure expanded 470 bps to 53.6% from the year-ago quarter’s level.
The non-GAAP operating margin was 26.4% in the third quarter, contracting 250 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash equivalents and short-term investments were $4.7 billion, up from $4.5 billion as of Jun 30, 2023.
Long-term debt was $6.97 billion at the end of the third quarter, down from $7.72 billion in the prior quarter.
EBAY generated $862 million in cash from operating activities in the third quarter, up from $605 million in the second quarter.
Its free cash flow was $777 million in the reported quarter.
The company repurchased $651 million worth of shares and paid out dividends of $132 million in the reported quarter.
Guidance
For fourth-quarter 2023, eBay expects revenues of $2.47-$2.53 billion. On an FX-neutral basis, the year-over-year change in revenues is anticipated in the band of (1)%-2%. On a spot rate basis, the same is expected within the range of (2)%-1%. The Zacks Consensus Estimate for revenues is pegged at $2.59 billion.
Non-GAAP operating margin is expected to be between 26.1% and 26.7%.
GMV for the fourth quarter is likely to be within the band of $17.9-$18.3 billion.
Non-GAAP earnings per share are anticipated to be between $1.00 and $1.05, indicating a decline in the band of 6-2%. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
For 2023, eBay expects revenues of $10.02-$10.08 billion. On an FX-neutral basis, the year-over-year growth in revenues is anticipated in the band of 3%-4%. On a spot rate basis, the same is expected within the range of 2%-3%. The Zacks Consensus Estimate for 2023 revenues is pegged at $10.14 billion.
Non-GAAP operating margin is expected to be between 27.3% and 27.4%.
GMV for 2023 is likely to be within the band of $72.5-$72.9 billion.
Non-GAAP earnings per share are anticipated to be between $4.17 and $4.22, indicating growth in the band of 1-3%. The Zacks Consensus Estimate for the same is pegged at $4.17 per share.
Image: Bigstock
EBAY's Q3 Earnings Surpass Estimates, Revenues Rise Y/Y
eBay Inc. (EBAY - Free Report) reported third-quarter 2023 non-GAAP earnings of $1.03 per share, which beat the Zacks Consensus Estimate by 3%. The bottom line increased 3% year over year.
Net revenues of $2.5 billion were in line with the Zacks Consensus Estimate. The figure increased 5% from the year-ago quarter on a reported basis and 5% on an FX-neutral basis.
Strengthening momentum across the advertising offerings of EBAY was a tailwind.
The company’s Promoted Listings generated revenues of $345 million, up 39% on a reported basis and 36% on an FX-neutral basis from the prior-year quarter’s respective levels. This fueled momentum across its first-party advertising products.
Total advertising offerings yielded $366 million in revenues, which grew 26.2% on a year-over-year basis.
Softness in eBay’s Marketplace platform and weakening momentum among active buyers were concerns. It witnessed a year-over-year decline of 3% in its active buyer base, which stood at 132 million at the end of the third quarter. The figure came in line with the consensus mark.
The active buyer count stood at 131 million, excluding contributions from GittiGidiyor and TCGplayer acquisitions.
Nevertheless, the company’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 lost 8.5% on a year-to-date basis, underperforming the industry’s growth of 44.2%
eBay Inc. Price, Consensus and EPS Surprise
eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote
GMV Details
EBAY’s total GMV of $17.99 billion in the reported quarter exhibited year-over-year growth of 2% on a reported basis and roughly flat on an FX-neutral basis.
The reported GMV surpassed the Zacks Consensus Estimate of $17.84 billion.
The total GMV is categorized into two parts.
U.S. GMV totaled $8.64 billion, accounting for 48% of the total GMV, down 1% from the year-ago quarter’s level.
International GMV was $9.35 billion, accounting for 52% of the total GMV, up 4% on a year-over-year basis.
Operating Details
In the third quarter, eBay’s gross margin was 71.8%, which contracted by 100 basis points (bps) year over year.
Operating expenses of $1.34 billion rose 15% year over year. As a percentage of net revenues, the figure expanded 470 bps to 53.6% from the year-ago quarter’s level.
The non-GAAP operating margin was 26.4% in the third quarter, contracting 250 bps year over year.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash equivalents and short-term investments were $4.7 billion, up from $4.5 billion as of Jun 30, 2023.
Long-term debt was $6.97 billion at the end of the third quarter, down from $7.72 billion in the prior quarter.
EBAY generated $862 million in cash from operating activities in the third quarter, up from $605 million in the second quarter.
Its free cash flow was $777 million in the reported quarter.
The company repurchased $651 million worth of shares and paid out dividends of $132 million in the reported quarter.
Guidance
For fourth-quarter 2023, eBay expects revenues of $2.47-$2.53 billion. On an FX-neutral basis, the year-over-year change in revenues is anticipated in the band of (1)%-2%. On a spot rate basis, the same is expected within the range of (2)%-1%. The Zacks Consensus Estimate for revenues is pegged at $2.59 billion.
Non-GAAP operating margin is expected to be between 26.1% and 26.7%.
GMV for the fourth quarter is likely to be within the band of $17.9-$18.3 billion.
Non-GAAP earnings per share are anticipated to be between $1.00 and $1.05, indicating a decline in the band of 6-2%. The Zacks Consensus Estimate for the same is pegged at $1.03 per share.
For 2023, eBay expects revenues of $10.02-$10.08 billion. On an FX-neutral basis, the year-over-year growth in revenues is anticipated in the band of 3%-4%. On a spot rate basis, the same is expected within the range of 2%-3%. The Zacks Consensus Estimate for 2023 revenues is pegged at $10.14 billion.
Non-GAAP operating margin is expected to be between 27.3% and 27.4%.
GMV for 2023 is likely to be within the band of $72.5-$72.9 billion.
Non-GAAP earnings per share are anticipated to be between $4.17 and $4.22, indicating growth in the band of 1-3%. The Zacks Consensus Estimate for the same is pegged at $4.17 per share.
Zacks Rank & Stocks to Consider
EBAY currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the retail-wholesale sector are American Eagle Outfitters (AEO - Free Report) , Best Buy (BBY - Free Report) and Amazon (AMZN - Free Report) . While American Eagle Outfitters currently sports a Zacks Rank #1 (Strong Buy), Best Buy and Amazon carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters shares have gained 32% year to date. It has a long-term earnings growth rate of 15.76%.
Best Buy shares have lost 18.8% on a year-to-date basis. The company has a long-term earnings growth rate of 6.14%.
Amazon shares have rallied 69.2% on a year-to-date basis. AMZN has a long-term earnings growth rate of 28.5%.