EBay sales drop 10% in third quarter, revenue grows 11%

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EBay sales are down 10% in the third quarter of 2021 (July, August, September), year over year, while revenue is up 11%. The company processed 90% of the payment volume on its platform and saw 12% more revenue from sponsored ads in the third quarter.

One would have expected eBay to provide a 2-year comparison of Q3 sales, given the pandemic effect in 2020, to see how Q3 2021 compares to Q3 2019.

Same number of sellers chasing active buyers: eBay said annual active sellers were stable at 19 million global active sellers, while annual active buyers fell 5%, to a total of 154 million active buyers global.

Here’s an excerpt from eBay’s third quarter earnings press release:

eBay Inc. Reports Better Than Expected Third Quarter 2021 Results
Third quarter revenue of $ 2.5 billion; GMV of $ 19.5 billion.

  • Revenue of $ 2.5 billion, up 11% as reported and 10% currencies neutral
  • Gross cargo volume of $ 19.5 billion, down 10% on a reported basis and down 12% on an exchange rate neutral basis
  • GAAP and non-GAAP EPS per diluted share of $ 0.43 and $ 0.90, respectively, based on continuing operations
  • GAAP and non-GAAP operating margin of 26.5% and 31.7%, respectively
  • Returned $ 2.4 billion to shareholders in the third quarter, including $ 2.3 billion in share buybacks and $ 116 million paid in cash dividends

eBay Inc. (Nasdaq: EBAY), a global trading leader that connects millions of buyers and sellers around the world, today released financial results for its third quarter ended September 30, 2021.

“Our team had another strong quarter, once again meeting or exceeding our expectations for all key business metrics, making further progress in our multi-year strategy,” said Jamie Iannone, CEO of eBay. “Our third quarter results, driven by the near completion of our managed payments migration, expansion of our advertising portfolio and volume growth in our priority categories, demonstrate that our strategic strategy continues to work. I am proud that we have been able to increase customer satisfaction, instill trust and foster constant innovation, while continuing to set ourselves and progress towards our ambitious climate action goals.

Third Quarter Financial Highlights

  • Revenue was $ 2.5 billion, up 11% on a reported basis and 10% on a neutral exchange rate (FX) basis.
  • Gross cargo volume (GMV) was $ 19.5 billion, down 10% on a reported basis and 12% on an exchange rate neutral basis.
  • GAAP net income from continuing operations was $ 283 million, or $ 0.43 per diluted share.
  • Non-GAAP net income from continuing operations was $ 591 million, or $ 0.90 per diluted share.
  • Generated $ 661 million in operating cash flow and $ 502 million in free cash flow from continuing operations.
  • Returned $ 2.4 billion to shareholders in the third quarter, including $ 2.3 billion in share buybacks and $ 116 million paid in cash dividends.
  • Annual active buyers declined 5%, to a total of 154 million active buyers worldwide.
  • Annual active sellers remained stable at 19 million active sellers worldwide. (1)

Company highlights

  • eBay has updated its capital allocation plans for 2021 by increasing its estimated share buyback from $ 5.0 billion to $ 7.0 billion.
  • In October, the company announced that its ambitious greenhouse gas (GHG) target had been approved by the Science Based Targets (SBTi) initiative. The company is committed to reducing its own emissions (scope 1 and scope 2) by 90% by 2030 compared to the 2019 baseline, in accordance with the limitation of global temperature warming to 1.5 ° C, the most ambitious designation available through the SBTi process and aligned with the Paris Agreement. eBay is also committed to reducing the value chain (scope 3) emissions from transport and downstream distribution by 20% within the same timeframe.
  • eBay has also pledged to be carbon neutral for its offices and data centers (scope 1 and 2) by the end of 2021, making it one of the first e-commerce companies to do so. With this commitment, eBay will continue to prioritize reducing its footprint and will offset any remaining emissions to be carbon neutral starting this year.

Revenue initiatives

  • eBay continues to expand its payment management to all sellers around the world and remains on track to complete the transition this year. In the third quarter, over 90% of global volume on the platform was processed through managed payments and eBay ended the quarter with over 18 million sellers migrated globally.
  • With eBay’s payment management, the company aims to further improve the customer experience and eliminate friction for sellers. During the quarter, the company accelerated the schedule for payments to trusted sellers in the UK, which will now be paid the next business day after confirming payment from the buyer.
  • Sponsored ads generated more than $ 207 million in revenue in the third quarter, up 12% on an as-posted basis and 9% on a currency neutral basis.
  • eBay has expanded its advertising portfolio with the launch of Promoted Listings Advanced and Promoted Listings Express. Currently in beta, Promoted Listings Advanced is a cost-per-click model where sellers determine their daily budget, choose the value of a click for them, and then pay for each click. Additionally, Promoted Listings Express allows sellers to increase the visibility of auction listings for a one-time fee whether or not the item is sold.

Technological reimagining of the platform

  • eBay continues to expand its authenticity guarantee program, launching sneaker authentication in Germany in the third quarter. The company also added 30 brands to its catalog and improved search engine optimization performance for top sneaker brands.
  • The company introduced the Collectible Card Price Guide and Collection, new features designed to provide a one-stop destination for enthusiasts to view, manage and track the value of their collectible card portfolios on eBay. To date, nearly 4 million cards purchased on and off eBay have been added to customer collections. Additionally, nearly a quarter of a million shoppers have used the price guide tool to view trends for their favorite collectible cards.
  • To further support collectible card sellers, the company has adjusted its eBay Money Back Guarantee policies to better align them with their return policies.
  • EBay’s certified refurbished products are also seeing growth, with major brands like Samsung, Dyson and KitchenAid joining the program in the United States in the third quarter.
  • The company launched a new seller refurbishment experience for cellphones that standardizes item condition classification, verifies sellers and supports purchases with a one-year warranty, providing buyers with more products. reliable at great prices.
  • EBay’s coded coupons continue to drive repeat purchases in the new store experience. Since April, more than 2.5 million shoppers have made a new purchase at a store using seller-funded coupons.

Impact

  • To continue to deliver on the company’s commitment to climate action, eBay announced agreements with McDonald’s Corporation and Lightsource bp to purchase power from what will be Louisiana’s largest solar project. When completed, the project will generate more than 600,000 megawatt hours (MWh) of clean energy per year, equivalent to the average annual consumption of 59,000 US homes.
  • As part of the eBay Foundation’s commitment to supporting inclusive entrepreneurship, the company this summer launched its annual employee grantmaking initiative: Global Give, through which a total of $ 3 million in Grants will be awarded to nonprofit organizations that are dedicated to meeting the needs of historically marginalized entrepreneurs.
  • eBay for Charity contributed about $ 35 million globally in the third quarter, up 11% year-over-year.

(1) All sellers who have successfully concluded a transaction on our platforms during the last 12 months. Sellers can register multiple times and therefore can have more than one account.

Declaration of dividend

EBay’s board of directors declared a cash dividend of $ 0.18 per common share of the company. The dividend is payable on December 17, 2021 to shareholders of record on December 1, 2021.

See the full press release, including tables and tips, on the eBay site.

Update 10/27/2021: More news has come out of the post-benefit call, check out the EcommerceBytes blog for more details.

Ina Steiner

Ina Steiner
Ina Steiner is co-founder and editor of EcommerceBytes and has worked in e-commerce since 1999. She is a widely cited authority on market selling and is the author of “Turn eBay Data Into Dollars” (McGraw-Hill 2006). Her blog was featured in the book “Blogging Heroes” (Wiley 2008). Follow her on Twitter at @ecommercebytes and send topical tips to [email protected]. See the disclosure at EcommerceBytes.com/disclosure/.

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