Is The Growth Well Planned For Commerce Leader, eBay?

  • Oct 26, 2019 AEDT
  • Team Kalkine
Is The Growth Well Planned For Commerce Leader, eBay?

Global commerce leader, eBay Inc. includes marketplace, classifieds and StubHub platforms, helping buyers and sellers, millions around the world, to connect with each other. The platforms are powered with technologies and services designed to enable sellers to organise as well as offer their inventory for sale. At the same time, these technologies and services enable buyers to locate and purchase the inventory.

At eBay, buyers get access to products of various categories such as new, used, common, unique, luxurious and trendy. eBay supports sellers in growing their business and flourish. On a global scale, the company, which was founded in the year 1995, has the goal of emerging as the preferred destination for discovering great value and unique selection.

eBay is a NASDAQ listed company, and its shares have grown exponentially since 2 January 2019 till date. The shares of eBay have given a YTD return of ~ 23%. On 24 October 2019, the shares closed at a price of US$35.62.

Let us look at some of the important announcements recently made by the company.

Leadership Transition:

On 25 September 2019, eBay Inc. (NASDAQ: EBAY) announced the appointment of Scott Schenkel as interim Chief Executive Officer, after Devin Wenig stepped down from the position of the company’s CEO and President. Meanwhile, the company will look for its next Chief Executive Officer, considering internal and external candidates for the position.

Since 2015, Mr Schenkel has served the company as its Senior Vice President and Chief Financial Officer, responsible for handling all the functions related to finance, analytics and information technology, and the Classifieds business. Prior to this appointment, Mr Schenkel served as Senior Vice President and CFO of eBay Marketplace for a 6-year period. At this division, he was tasked with supervising finance, analytics, strategy as well as innovation.

eBay also announced the appointment of Andy Cring as interim Chief Financial Officer, who is the current VP of Global Financial Planning and Analysis. Since his appointment at the company in the year 2013, Mr Cring has been positioned as the VP, financially overseeing technology, marketing, operations and other functions at the company.

Q2 2019 Results (ended 30 June 2019):

  • During Q2 2019, eBay delivered GAAP net income from continuing operations worth US$403 million and Non-GAAP net income of US$589 million;
  • The company generated US$744 million in operating cash flow and US$607 million of free cash flow from continuing operations;
  • In Q2, the focus remained on establishing an active buyer base. The company also focused on providing its customers with an outstanding experience and boosting growth initiatives;
  • During the period, number of active buyers increased by 4% across its platforms;
  • Total number of global active buyers in Q2 2019 was 182 million;
  • Marketplace platforms contributed revenue worth US$2.2 billion and US$21.5 billion of gross merchandise volume (GMV);
  • On an as-reported basis, there was an increase of 1% in the Marketplace revenue;
  • On an as-reported basis, GMV declined by 5%;
  • StubHub platforms revenue increased by 7% to US$264 million;
  • Through Classifieds platforms, the company generated revenue of US$271 million, which represented a rise of 5% on an as-reported basis.

Growth Initiatives in Q2 2019:

  • eBay accelerated the adoption of its new payments platform during the quarter. 6,000+ sellers chose the program.
  • PayPal integration for all registered U.S. sellers was finalised during the quarter.
  • The offering in Germany is under progress and is expected to be live by end-2019, awaiting regulatory consent.
  • The company continued to ease the purchasing experience and make the platform more effective for sellers.

  • A cash dividend of US$0.14 per share was declared during the period.

Q3 2019 Results:

For the quarter ended 30 September 2019, the company reported

  • Revenue of US$2.6 billion (expected to be in between US$2.61 billion and US$2.66 billion, as per outlook given in the second quarter results update).
  • In Q2 2019 result announcement, the company gave guidance of US$0.40 to US$0.44 for GAAP earnings per diluted share from continuing operations for the third quarter. Also, for non-GAAP earnings per diluted share (continuing operations), eBay expected to report US$0.62 to US$0.65. However, during the third quarter of 2019, GAAP EPS per diluted share was reported at US$0.37 and Non-GAAP EPS per diluted share stood at US$0.67.
  • Shareholders received US$1.1 billion, including share repurchase (US$1 billion) and cash dividend (US$115 million) in Q3.
  • Operating cash flow stood at US$1.0 billion, while free cash flow was reported at US$913 million.

2019 Outlook: For 2019, the company expects to register revenue in the range of US$10.75 billion to US$10.80 billion, while GAAP earnings per diluted share is anticipated to fall in the category of US$1.97 to US$2.02 and non-GAAP earnings per diluted share between US$2.75 and US$2.78 (from continuing operations).

eBay in Australia:

eBay is the number 1 shopping destination in Australia. eBay started its operations in Australia in the year 1999 and sales were majorly via auctions with people flocking to eBay for unusual, collectable items. With time, the company has evolved as a retail powerhouse.

Some Interesting facts about eBay.com.au:

  • Harmon Kardan amplifier was the first product that was sold on this site.
  • In August 2014, Ford organised the highest-selling charity auction, where two limited-edition FPV GT were sold for A$393,700.
  • A man from Perth sold his entire assets (car, house and motorbike) on this site.
  • There are more live listings than the number of people in Australia.
  • Till eBay’s 15th birthday in Australia, Apple iPhone 5 was the leading electronic search item.
  • There has been a drastic increase in the number of eBay millionaires. As per eBay, in the period between 2006 and 2014, the number of millionaires increased by 500%.

Developments of eBay Australia in 2019:

  • Partnership with Coles:

In March 2019, eBay Australia entered into a partnership with retail giant Coles Group Limited (ASX: COL), allowing the eBay users to shop from Coles’ perishable and non-perishable everyday items like pre-packed fresh food, pantry, personal care as well as household items via ebay.com.au.

  • eBay organised a grand shopping event during June 2019, exclusively for eBay Plus members and provided the biggest savings and best deals ever on the site.
  • As per a release on 30 September 2019, the eBay Plus members would be able to save A$49 on their first shop and a 5% discount on every Coles on eBay shop, providing greater value to the users. Coles is also introducing delivery windows to its offerings, aimed towards delivering items to buyers at their doorstep in the selected time frame. Moreover, Coles is boosting the number of products available for eleven million unique monthly visitors.

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