eBay’s sales, revenue and profit all slip in Q3
October 21, 2015 04:34 PM
In its first quarter following the PayPal spinoff, eBay Inc. reports the gross value of sales on its marketplaces declined 2.1% to $19.60 billion during the third quarter compared with $20.03 billion in the same period a year ago. Net revenue and income also declined.
Fluctuations in the value of foreign currencies played a part, eBay says. When looking at GMV totals on a neutral currency basis, eBay says GMV increased 6%.
In the United States, GMV increased a modest 2.6%. On a neutral currency basis, international GMV increased 7%.
EBay’s Q3 results include PayPal financial results from July 1 to July 17, when the company split was finalized.
“We drove solid results in the quarter in which we completed a complex separation,” says Devin Wenig, eBay’s president and CEO. In discussing the results on a call with analysts, Wenig said the results are in line with what eBay expected in its first reporting quarter after the separation. "We still have a lot of work ahead of us in order to reposition our business and to deliver the level of performance that we aspire to achieve, but our Q3 results are a step in the right direction," he said.
"The vagaries of currency accepted, this is still a disappointing outcome for eBay, especially so in a period when it has been promoting itself off the back of its 20-year anniversary, and when rivals are posting better numbers," says Neil Saunders, CEO of Conlumino, a retail research and consultancy, adding: "In some ways the results demonstrate the sound thinking behind reducing eBay to a more focused business that can concentrate on investing in, and evolving, its marketplaces rather than being distracted by payments or business services."
During the quarter eBay marked its 20th birthday, added a "seller hub" tool that centralizes services for professional sellers on the marketplace, launched a new presence across the mobile web and eBay mobile apps, and announced the sale of its eBay Enterprise services unit to a group of investment firms for $925 million. Full quarter revenue from eBay Enterprise is included in eBay Inc.’s Q3 report. That sale is not yet complete. During the quarter eBay also sold part of its stake in Indian marketplace Snapdeal and divested its stake in Baixing, an online classifieds business in China.
For the third quarter ended Sept. 30, eBay reports:
- The value of merchandise sold worldwide on eBay, excluding vehicles, was approximately $19.60 billion, down 2.1% from $20.03 billion a year earlier. 42% of GMV closed on mobile devices.
- Net revenue for eBay marketplaces in the third quarter was $2.09 billion, down 2.8% from $2.15 billion for the same period in 2014.
- Net income of $539 million, down 19.9% from $673 million a year earlier.
- EBay marketplaces had 159 million active buyers in the third quarter compared with 151 million a year earlier.
- 54% of net transaction revenue was from outside the United States versus 57% a year earlier.
For the nine months ended Sept. 30, eBay reports:
- The value of merchandise sold worldwide on eBay, excluding vehicles, was approximately $59.81 billion. A year-ago number was not immediately available.
- Net revenue for eBay marketplaces of $6.27 billion, down 3.1% from $6.47 billion for the same period in 2014.
- Net income of $1.25 billion versus a loss of $977 million a year earlier.
Wenig also reiterated eBay's renewed focus on small to medium-sized sellers. "The ability to acquire unique inventory through unique sellers, both consumers and small- and medium-sized businesses, is square in the center of where we're focused," he said. For more on eBay’s direction independent of PayPal, read the story “Can Devin Wenig make eBay cool again?” from the June 2015 issue of Internet Retailer magazine.