SAN JOSE – eBay Inc., a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its third quarter ended September 30, 2022.
“Our third quarter results demonstrate significant progress against our long-term objectives and exceeded expectations for all key business metrics,” said Jamie Iannone, Chief Executive Officer at eBay. “I’m proud of our team and community for remaining resilient in the face of a challenging macroeconomic environment. With the investments we’ve made in our tech-led reimagination, we’re able to provide even more opportunity and value to our customers during these difficult times.”
Third Quarter Financial Highlights
- Revenue was $2.4 billion, down 5% on an as-reported basis and down 2% on a foreign exchange (FX) neutral basis.
- Gross Merchandise Volume (GMV) was $17.7 billion, down 11% on an as-reported basis and down 5% on an FX-Neutral basis.
- GAAP net loss from continuing operations was $70 million, or $(0.13) per diluted share, primarily driven by the change in the fair value of our equity investments.
- Non-GAAP net income from continuing operations was $552 million, or $1.00 per diluted share.
- GAAP and Non-GAAP operating margins of 23.9% and 28.9%, respectively.
- Generated $735 million of operating cash flow and $633 million of free cash flow from continuing operations.
- Sold eBay’s remaining shares in Adyen for approximately $120 million.
- Returned over $421 million to shareholders, including $301 million of share repurchases and $120 million paid in cash dividends.
Business Highlights
- Recently, eBay completed the acquisition of TCGplayer, a leading technology platform for collectibles and one of the largest online marketplaces for trading card games, for a total deal value of approximately $295 million in cash. This acquisition complements eBay’s focus category strategy and furthers the company’s commitment to trading card enthusiasts – providing eBay with strategic omnichannel capabilities like order fulfillment and cart optimization, maintaining its position as a desirable platform for trading card sellers, and enhancing the overall experience for all customers.
- eBay acquired the fitment group of companies, a leader in delivering the tools and support to help online automotive and power sports parts and accessories sellers thrive. myFitment’s technology and platform provide powerful, easy-to-use, and affordable solutions that will elevate the user experience within parts and accessories, helping sellers to drive sales and avoid costly returns.
Revenue Initiatives
- eBay’s first-party advertising products, primarily driven by Promoted Listings, delivered $249 million of revenue in the third quarter, up 19% on an as-reported basis and up 27% on an FX-Neutral basis.
- The company’s total advertising offerings generated over $290 million in revenue in the third quarter, representing roughly 1.6% of GMV.
- During the quarter, eBay expanded Klarna availability to buyers engaged in cross-border transactions in Germany.
- The company announced faster payment options for sellers, enabling on-demand payouts to a debit card within 30 minutes or less for a fee.
Tech-Led Reimagination of the Platform
- In collaboration with the Gemological Institute of America (GIA), eBay expanded its Authenticity Guarantee program to new and pre-owned fine jewelry sold for over $500. This marks the expansion of eBay’s authentication service to its fifth category, which currently includes sneakers, watches, handbags, and trading cards.
- eBay updated its Authenticity Guarantee service for sneakers, recently expanding the program’s eligibility to more sneakers, offering new protections for eligible items, aligning final value fees, and partnering with FedEx to provide free shipping labels for sellers to ship sneakers to authentication centers.
- eBay celebrated the launch of the eBay vault during MLB All-Star Weekend with the first-ever trading cards draft, called Vault Stars. The event brought together baseball personalities, Chase Utley and Alanna Rizzo, as they coached and encouraged actor Miles Teller through the creation of his ultimate card lineup to send to the eBay vault. The exclusive event was held in downtown Los Angeles and garnered more than 1 billion media impressions.
- To further the company’s marketing efforts around trading cards, eBay expanded its presence at New York Comic Con to showcase the eBay vault and continued Live Commerce pilots highlighting brands like Funko and Metazoo.
- The company continued to increase trust in the Motors Parts & Accessories category, building on several quarters of improvements to the P&A fitment experience like modernizing its taxonomy and integrating fitment-based technologies into search, merchandising, and advertising recommendations. eBay is now able to make fitment more pervasive throughout the end-to-end experience, including adding highly visible trust signals throughout the buyer journey in the U.S. and Canada and reducing the number of steps required to find parts. The company also expanded the adoption of My Garage, leading to more personalized shopping on every visit.
- eBay Motors kicked off a cross-country tour to explore America’s unique car cultures. The ‘Parts of America’ tour is taking eBay Motors to twelve automotive enthusiast events across the country — from car meets and cruises to tractor pulls and rock crawls. At each stop, eBay Motors features one-of-a-kind vehicles that bring to life the local car culture and the passionate builders behind these remarkable rides. To date, the tour has attracted nearly 300,000 attendees and generated more than 500 million impressions across social media and press coverage.
- eBay partnered with MTV U.K. to revive “Pimp My Ride” — an automotive makeover show from the 2000s — for a six-part YouTube series. The collaboration highlights how economical and environmentally friendly it can be to upcycle and buy pre-loved car parts and accessories on eBay.
- The company continued to invest in simplifying the listing process for sellers, recently completing the migration of all desktop sellers to one unified listing experience globally, which eliminates multiple legacy tools and enables faster innovation.
- To further support sellers in building their brand and increasing buyer engagement, eBay upgraded its video and photo capabilities. Sellers can now upload videos to their storefronts and listings to showcase themselves and their merchandise in a new, engaging way. eBay also increased the number of listing photos from 12 to 24 at no additional cost in all categories except vehicles.
- During the quarter, eBay drove site-wide conversion improvements as a result of technology investments, including new AI capabilities in search and SEO improvements to drive better growth across the platform and increase visibility on search engines.
- In September, the company hosted eBay Open 2022 in the U.S., U.K., and Germany to facilitate seller learning and connections, and to announce new tools to drive buyers and velocity to listings. Features include the eBay vault, 3D True View, eBay Live, the expansion of the Authenticity Guarantee, increased shipping options, photos, and video upgrades, and payment improvements.
Impact
- eBay announced the recipients of its third annual Up & Running Grant program, which annually awards 50 notable U.S. sellers with $10,000 each plus customized mentorship, training, and tools to scale and grow their businesses.
- eBay published its Southeast Asia Small Online Business Trade Report, detailing how small online businesses across six Southeast Asia countries — Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam — can reach consumers in hundreds of export markets each year through eBay’s global marketplace.
- Through Global Give, the eBay Foundation issued grants to 50 nonprofit organizations that support inclusive entrepreneurship in communities around the world.
- eBay for Charity contributed more than $33 million globally during the quarter, down 7% year-over-year.
| Third Quarter 2022 Financial Highlights (presented in millions, except per share data and percentages) | ||||
| Third Quarter | ||||
| 2022 | 2021 | Change | ||
| eBay Inc. | ||||
| Net revenues | $ 2,380 | $ 2,501 | $ (121) | (5) % |
| GAAP – Continuing Operations | ||||
| Income (loss) from continuing operations | $ (70) | $ 283 | $ (353) | ** |
| Earnings (loss) per diluted share from continuing operations | $ (0.13) | $ 0.43 | $ (0.56) | ** |
| Non-GAAP – Continuing Operations | ||||
| Net income | $ 552 | $ 591 | $ (39) | (7) % |
| Earnings per diluted share | $ 1.00 | $ 0.90 | $ 0.10 | 11 % |
| ** Not meaningful |
Other Selected Financial and Operational Results
- Operating margin – GAAP operating margin decreased to 23.9% for the third quarter of 2022, compared to 26.5% for the same period last year. Non-GAAP operating margin decreased to 28.9% in the third quarter of 2022, compared to 31.7% for the same period last year.
- Taxes – The GAAP effective tax rate for continuing operations for the third quarter of 2022 was (29.9)%, compared to 34.7% for the third quarter of 2021. The non-GAAP effective tax rate for continuing operations for the third quarter of 2022 was 16.5%(1).
- Cash flow – The company generated $735 million of operating cash flow and $633 million of free cash flow from continuing operations during the third quarter of 2022.
- Capital returns – The company repurchased $301 million of its common stock, or nearly 7 million shares, in the third quarter of 2022. The company’s total repurchase authorization remaining as of September 30, 2022, was more than $3.1 billion. The company also paid cash dividends of $120 million during the third quarter of 2022.
- Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $4.8 billion as of September 30, 2022.
Business Outlook
eBay is providing the following guidance for continuing operations for the fourth quarter and full year of 2022.
| In billions, except per share data and percentages | Q4 2022 Guidance | The full Year 2022 Guidance |
| Revenue | $2.42 – $2.50 | $9.71 – $9.79 |
| Organic FX-Neutral Y/Y Growth | (4)% – (1)% | (4)% – (3)% |
| Diluted GAAP EPS | $0.76 – $0.82 | $(2.74) – $(2.68) |
| Diluted Non-GAAP EPS | $1.03 – $1.09 | $4.07 – $4.13 |
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 December 16, 2022, to stockholders of record as of December 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 third-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 for 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.