Market Overview

eBay Conference Call Highlights

Share:

Shares of eBay (NASDAQ: EBAY) are up 1.5 percent following its second-quarter earnings release.

Below are some highlights and key takeaways from the company's conference call.

Growth:
• We enabled $62 billion of commerce volume in the second quarter, up 26 percent.
• Mobile attracted 6.6 million new buyers in Q2, and cross-border trade was up 26 percent.
• Revenue was up 13 percent in Q2, and non-GAAP EPS was up nine percent.
• eBay and PayPal both generated double digit customer growth with PayPal surpassing more than 150 million active registered accounts.
• As I said before, the proxy fight in Q1 gave us the chance to engage with our largest shareholders and hear what's most important to them.
• First, they see significant value creation in our plans and want us to execute.
• Second, they want us to aggressively pursue our announced $5 billion share buyback.
• Third, they believe that synergies make eBay and PayPal better together for now, but they want us to continue to be open minded to alternatives. We agree with all three points.
• We are blessed with two great businesses and will continue to aggressively drive growth for PayPal and eBay
• PayPal had a great quarter.
• For the first half of the quarter, eBay was performing in line with our expectations.
• In local, eBay announced plans with Argos in the UK to expand Click & Collect to approximately 650 stores.
Data Breach:
• Then in early May, we discovered unauthorized access to our corporate networks.
• We succinctly found that an eBay database had been compromised. This database contained non-financial information on eBay users including encrypted passwords.
• Buyers, representing approximately 85 percent of affected volume have reset their passwords.
• But some of these buyers have not yet returned to their previous activity levels.
• I'm proud of the way the eBay team which is dealing with these challenges is working to get the business back on track.
Earnings:
• eBay's commerce ecosystem continued to gain share and enabled $62 billion of volume, up 26 percent, at a take rate of 7.1 percent for the quarter.
• Revenue increased 13% and non-GAAP EPS was $0.69, up nine percent.
• We generated $1.2 billion of free cash flow, and we executed $1.7 billion of our stock buyback program and had $2.2 billion left in our authorization for further repurchases.
• In Q2, we generated net revenues of $4.4 billion, up 13 percent.
• Organic revenue growth was 10% in the quarter.
• Second quarter non-GAAP EPS was $0.69, up nine percent, which was driven by solid top-line growth, good productivity.
• We generated free cash flow of $1.2 billion in the quarter.
• CapEx was six percent of revenue, lower than full-year expectations due to investment timing.
• We continue to expect full-year CapEx to be seven percent to nine percent of revenue.
• We ended the quarter with cash, cash equivalents and non-equity investments of $12.4 billion, including approximately $2.6 billion in the U.S.
Conclusion:
• We continue to leverage the power of our closed loop transaction data to help merchants grow and deliver better experiences for our customers.
• In summary, we faced unexpected challenges in the first half, but our teams remain focused on execution and doing what's best for our customers, and strong execution will continue to be our focus in the second half.
• Meanwhile, we'll continue to invest for the long term, strengthening our core commerce platforms and positioning our company to win.

Posted-In: Earnings News Guidance

 

Related Articles (EBAY)

View Comments and Join the Discussion!

Alibaba To Delay IPO Until September

Markets Edge Lower; Morgan Stanley Earnings Top Estimates