eBay's Earnings, Revenue, And Growth Jump
By Bob Johns
The online commerce and payment giant reports double-digit increases in key areas.
Online giant eBay reported its 2013 Q3 results yesterday in a conference call, and the results were stellar in all areas. Overall revenue for the quarter ending September 30 rose 14 percent over a year ago to $3.9 billion. GAAP operating margins increased from 19.6 percent to 20.5 percent, with GAAP earnings increasing 16 percent.
The company’s strong earnings are due to a combination of revenue from the core online commerce business, PayPal, eBay Enterprise, Marketplaces, and other technology assets. Cross-border trade, some of which we highlighted in a recent Integrated Solutions For Retailers article, accounted for $11 billion in revenue. According to Tom Donahoe, president, CEO, and director at eBay Inc., commerce accounted for $52 billion of volume, up 21%. Revenue was up 14% and non-GAAP EPS was up 17%. Both, PayPal and eBay marketplaces saw double-digit growth in new users, with 36% being acquired via mobile. Showing their continued focus on expanding global markets, Donahoe says, “Mobile continues to drive our commerce revolution. Go to London, Moscow, Sydney, San Francisco, or New York and mobile is transforming how commerce happens. Consumer behaviors and expectations are rapidly changing around the world and the pace of commerce innovation is accelerating.”
The strong quarter merely reaffirmed eBay’s goal of going from $175 billion in commerce in 2012 to $300 billion in 2015. These numbers do not seem entirely out of reach. “Our scale and experience, the strength of our global commerce platforms, our technology assets and our mobile commerce capabilities strongly position us to be a leader in the commerce revolution under way. In the past 12 months we have enabled $200 billion of commerce volume, a 20 percent increase in a fairly lackluster macro environment. That growth demonstrates the strength of our core businesses and our power as a partner, not a competitor, to merchants, brands and retailers.” A significant portion of the commerce growth is coming from mobile, with eBay and PayPal expected to combine for $40 billion in volume this year.
PayPal continues to expand, which is one of the reasons Amazon is getting into the space. The service added 5 million new active accounts and generated total payment volume (TPV) growth of 25 percent, resulting in a 19 percent increase in revenue to $1.6 billion. The Merchant Services arm increased TPV by 30 percent, showing growing acceptance of PayPal as an online payment processor.
eBay Marketplaces increased revenue by 12 percent to $2.0 billion. Like PayPal, Marketplaces gained a significant number of active users (3.9 million) during the quarter. Gross merchandise volume (GMV), excluding vehicles, increased 13% to $18 billion. There are now over 500 million listings on Marketplace, which shows how successful the company’s initiatives have been to increase consumer selling, especially on the mobile side.
Not to be left out, eBay Enterprise accounted for $238 million in revenue in the quarter. Clients of eBay Enterprise enjoyed 13 percent growth due to many of the products available through the company. Over the coming quarters, eBay expects eBay Enterprise products to be increasingly adopted by merchants looking to become truly omni-channel.
Overall, the company is enjoying rapid growth in a sluggish economy by maintaining a diverse array of products. Whether it be online auctions, direct sales, fulfillment, or merchant services, eBay wants to be the company handling transactions from end to end.