EBay Reports Second Quarter 2013 Results

eBayEBay’s revenue for the second quarter ended June 30, 2013, increased 14% to $3.9 billion, compared to the same period of 2012. The company reported second quarter net income of $640 million, or 49 cents per diluted share. Earnings per diluted share declined on a year-over-year basis due to a gain on the divestiture of a business in 2012, says eBay.

Total company Enabled Commerce Volume (ECV) grew 21% for the quarter, to $51 billion. Cross-border trade in the second quarter was $11 billion, representing 22% of the company’s total ECV. Mobile attracted 3 million new customers in the quarter, and is growing more than 90%, says eBay.

John Donahoe (President and CEO, eBay): We had a strong second quarter, with $51 billion of enabled commerce volume across Marketplaces, PayPal and eBay Enterprise driving double-digit revenue and earnings growth. Macroeconomic headwinds in Europe and Korea will continue to be a challenge in the second half of the year. But our core businesses are strong and we continue to attract millions of new customers each quarter through mobile innovation.

PayPal revenues increased 20% to $1.6 billion. PayPal gained 4.7 million active registered accounts in the period and ended the quarter with 132 million, a 17% increase. PayPal’s net total payment volume (TPV) grew 24% to $43 billion. PayPal Here is currently live in six countries, while growing domestic merchant coverage by signing agreements with more than 50 merchant acquirers to facilitate usage of PayPal over the Discover network.

Marketplaces revenues were $2 billion, increasing 10% (or 12% excluding the gain from the resolution of an indirect tax dispute in 2012). Marketplaces gained 3.5 million active users in the period and ended the quarter with 120 million, a 14% increase. Gross merchandise volume (GMV), excluding vehicles, increased 13% to $18 billion. Fixed price GMV grew 17% globally and represented 69% of total GMV. U.S. GMV, excluding vehicles, increased 16% to $7.3 billion driven by mobile and momentum in the parts & accessories and home & garden categories. International GMV, excluding vehicles, increased 11% to $11 billion.

GSI Commerce was renamed eBay Enterprise, and contributed $246 million in revenue for the second quarter, an 11% increase. Its enterprise commerce platform generated $815 million in global ecommerce (GeC) merchandise sales, a 21% increase.

Financial Results Highlights

  • Operating margin — Operating margin decreased to 19.3% for the second quarter of 2013, compared to 20.5% for the same period last year.
  • Taxes — Effective tax rate for the second quarter of 2013 was 15%, compared to 19% for the second quarter of 2012.
  • Cash flow — The company generated $1.0 billion of operating cash flow and $658 million of free cash flow during the second quarter of 2013.
  • Stock repurchase program — The company repurchased approximately $466 million of its common stock in the second quarter of 2013.
  • Cash and cash equivalents and non-equity investments — EBay’s cash and cash equivalents and non-equity investments portfolio totaled $11.7 billion at June 30, 2013 up from $11.5 billion at December 31, 2012.

Business Outlook

  • Third quarter 2013 — EBay expects net revenues in the range of $3,850 – $3,950 million with earnings per diluted share in the range of 49 to 51 cents.
  • Full year 2013 — The company expects net revenues in the range of $16,000 – $16,500 million with earnings per diluted share in the range of $2.21 – $2.26.

[Image courtesy: eBay]

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