SAN JOSE – eBay Inc., a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its second quarter ended June 30, 2022.
“Once again I am pleased to report another strong quarter. Our team delivered better than expected financial results across the board while continuing to make significant progress on our long-term initiatives,” said Jamie Iannone, Chief Executive Officer of eBay. “Our focus category strategy is working, and payments and advertising are driving further growth. eBay is in a stronger position today than it was when we entered the pandemic. Despite rising inflation and an uncertain macro environment, we remain on track to deliver on our 2022 commitments.”
Second Quarter Financial Highlights
- Revenue was $2.4 billion, down 9% on an as-reported basis and down 6% on a foreign exchange (FX) neutral basis.
- Gross merchandise volume (GMV) was $18.5 billion, down 18% on an as-reported basis and down 14% on an FX-Neutral basis.
- GAAP net loss from continuing operations was $536 million, or $(0.96) per diluted share primarily driven by the change in fair value of our equity investments.
- Non-GAAP net income from continuing operations was $554 million, or $0.99 per diluted share.
- GAAP and Non-GAAP operating margins of 21.7% and 28.7%, respectively.
- Generated $577 million of operating cash flow and $466 million of free cash flow from continuing operations.
- Sold a portion of our shares in Kakao Bank for $242 million and a portion of our shares in Adyen for $129 million.
- Returned over $1.4 billion to shareholders, including approximately $1.3 billion of share repurchases and $121 million paid in cash dividends.
Business Highlights
- eBay joined an investment consortium led by The Chernin Group (TCG), which made a strategic investment in Funko. As part of this investment, Funko and eBay are entering into a commercial agreement under which eBay will become the preferred secondary marketplace for Funko, and the companies will partner on creating exclusive product releases.
- eBay acquired KnownOrigin, a non-fungible token (NFT) marketplace that provides artists a place to create unique, authentic, digital collectibles, in the form of NFTs. An early pioneer in the NFT space, KnownOrigin’s innovative technology, and talented team, together with eBay’s reach and reputation, will empower a new wave of NFT creators, sellers, and buyers.
- eBay announced it is taking steps to close GittiGidiyor, the company’s marketplace business in Turkey. The company regularly reviews its business operations globally and made this strategic decision based on the ongoing dynamics in the market. While the closure of GittiGidiyor will not have a material impact on eBay’s revenue and operating income going forward, there are approximately 3 million active buyers included in the company’s Q2 active buyer count from the Turkish marketplace.
Revenue Initiatives
- eBay’s first-party advertising products, primarily driven by Promoted Listings, delivered $232 million of revenue in the second quarter, up 2% on an as-reported basis and up 6% on an FX-Neutral basis.
- The company’s total advertising offerings generated approximately $275 million in revenue in the second quarter, representing roughly 1.5% of GMV.
- The company expanded its Buyer FX program to include additional payment options, allowing more flexibility for eBay buyers to purchase in the currency of their choice and further reducing transactional friction for customers.
- During the quarter, eBay rolled out Klarna invoicing and installment payment methods to buyers in Germany.
Tech-Led Reimagination of the Platform
- The company opened the eBay vault, a state-of-the-art facility and digital marketplace for collectors. The vault is now open for single, graded trading cards and graded, pack-pulled autograph cards for $500+, enabling collectors to streamline and secure their assets. The eBay vault is the latest in a series of significant innovations eBay has introduced to its enthusiasts, bringing together physical and digital capabilities that make collecting more advanced than ever.
- Through a strategic partnership with Professional Sports Authenticator (PSA), eBay expanded its Authenticity Guarantee program for trading cards to include graded trading cards sold on eBay for $500+.
- eBay also expanded its Authenticity Guarantee program for sneakers and handbags to Australia and the U.K. In Australia, the company also hosted eBay’s Museum of Authentics which showcased a collection of rare sneakers and partnered with Afterpay’s Australian Fashion Week to engage influencers and highlight the marketplace’s authentication services for luxury handbags.
- In April, eBay Motors held the first ever New York Auto Parts Show, designed to demonstrate how car enthusiasts can build, fix or maintain their dream car. In the face of unprecedented supply chain challenges, the show debuted a line of “Re-Concept cars” assembled in partnership with some of the industry’s top builders and biggest stars, demonstrating the best ‘new’ car on the road can start with the one that already exists.
- In April, the company expanded its eBay Refurbished program across multiple condition grades for tablets, smartwatches, laptops, desktops, and more. Hundreds of thousands of items will be added to the program this year, enabling eBay to meet consumer needs at every price point, without sacrificing quality and trust. The expansion included the launch of eBay Refurbished in Canada, giving buyers access to like-new products ranging from moderate wear to pristine condition, all backed by a one- or two-year warranty.
- The company piloted eBay Live beta, a dedicated shopping platform that gives people a new way to browse and buy products in a live, interactive environment. The new beta technology combines entertainment with instant purchasing on one of the world’s largest marketplaces.
- eBay collaborated with Snapchat to create a quick, easy way to share eBay listings to Snapchat right from the eBay app. With just a few taps, users can create a Snapchat-ready design with listing details, an image, and a clickable link back to the eBay listing.
- eBay announced a partnership with U.K. reality show Love Island and is now the show’s first-ever pre-loved fashion partner.
Impact
- eBay published its 2021 Impact Report detailing progress toward its 2025 and 2030 economic empowerment and sustainability goals. For the first time, the company also released its methodology for calculating the environmental and financial benefits of keeping products in circulation, preventing them from immediate disposal in landfill or incineration.
- eBay released its sixth annual Diversity, Equity, and Inclusion (DE&I) Report outlining how the company has remained committed, open and transparent, acknowledging both the wins and the areas in need of improvement.
- eBay, in partnership with GLIDE, hosted its 21st and grand finale Power of One Charity Auction Lunch with Warren Buffett. The auction made history with a record-breaking bid of over $19 million, bringing the total funds raised to more than $53 million over almost two decades to support GLIDE’s transformative programs and services that lift people out of poverty, hunger, and homelessness.
- eBay for Charity contributed nearly $56 million globally during the quarter, up 52% year-over-year.
- Through the company’s matching gifts program, the eBay Foundation matched over $0.5 million in employee donations and volunteer time to causes and communities around the world.
- During the quarter, eBay received three Women’s Choice Awards Best Company for Diversity, Best Company for Women, and Best Company for Millennials. The company was also recognized as one of LinkedIn’s Top Companies in Retail, and received the Early Talent Award by Handshake, recognizing eBay’s early career program.
| Second Quarter 2022 Financial Highlights (presented in millions, except per share data and percentages) | ||||
| Second Quarter | ||||
| 2022 | 2021 | Change | ||
| eBay Inc. | ||||
| Net revenues | $ 2,422 | $ 2,668 | $ (246) | (9) % |
| GAAP – Continuing Operations | ||||
| Income (loss) from continuing operations | $ (536) | $ 294 | $ (830) | ** |
| Earnings (loss) per diluted share from continuing operations | $ (0.96) | $ 0.43 | $ (1.39) | ** |
| Non-GAAP – Continuing Operations | ||||
| Net income | $ 554 | $ 675 | $ (121) | (18) % |
| Earnings per diluted share | $ 0.99 | $ 0.99 | $ — | — % |
| ** | Not meaningful |
Other Selected Financial and Operational Results
- Operating margin – GAAP operating margin decreased to 21.7% for the second quarter of 2022, compared to 27.4% for the same period last year. Non-GAAP operating margin decreased to 28.7% in the second quarter of 2022, compared to 32.8% for the same period last year.
- Taxes – The GAAP effective tax rate for continuing operations for the second quarter of 2022 was 26.3%, compared to 26.6% for the second quarter of 2021. The non-GAAP effective tax rate for continuing operations for the second quarter of 2022 was 16.5%(1).
- Cash flow – The company generated $577 million of operating cash flow and $466 million of free cash flow from continuing operations during the second quarter of 2022.
- Capital returns – The company repurchased approximately $1.3 billion of its common stock, or roughly 25 million shares, in the second quarter of 2022. The company’s total repurchase authorization remaining as of June 30, 2022, was $3.4 billion. The company also paid cash dividends of $121 million during the second quarter of 2022.
- Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $4.5 billion as of June 30, 2022.
Business Outlook
eBay is providing the following guidance for continuing operations for the third quarter and full year 2022.
| In billions, except per share data and percentages | Q3 2022 Guidance | The full Year 2022 Guidance |
| Revenue | $2.29 – $2.37 | $9.6 – $9.9 |
| Organic FX-Neutral Y/Y Growth | (5)% – (2)% | (6)% – (3)% |
| Diluted GAAP EPS | $0.63 – $0.69 | $(1.98) – $(1.83) |
| Diluted Non-GAAP EPS | $0.89 – $0.95 | $3.95 – $4.10 |
Dividend Declaration
- eBay’s Board of Directors has declared a cash dividend of $0.22 per share of the company’s common stock. The dividend is payable on September 16, 2022, to stockholders of record as of September 1, 2022.
(1) We use a non-GAAP tax rate for evaluating our operating results. Based on our current long-term projections, we are using a non-GAAP tax rate of 16.5%. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.
Quarterly Conference Call and Webcast
eBay Inc. will host a conference call to discuss second quarter 2022 results at 2:00 p.m. Pacific Time today. Investors and participants can access the call by dialing (888) 655-9638 in the U.S. and (289) 514-2913 internationally. The passcode for the conference line is 7435074. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company’s Investor Relations website at https://investors.ebayinc.com. In addition, an archive of the webcast will be accessible for at least three months through the same link.
eBay Inc. uses its Investor Relations website at https://investors.ebayinc.com as a means of disclosing material non-public information and complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor this website, in addition to following our press releases, SEC filings, public conference calls, and webcasts.