eBay (Nasdaq: EBAY) recently reported a lackluster second quarter that beat analyst estimates for earnings but missed the revenue estimates. Its outlook was also disappointing.
eBay’s Financials
eBay’s Q2 revenues grew just 9% over the year to $2.6 billion, below the Street’s expectations of $2.66 billion and the company’s revenue guidance range of $2.64-$2.68 billion. Net income was $638 million or $0.64 per share. Non-GAAP net income was up 17% to $533 million, or $0.53 per diluted share, above analyst estimates of $0.51.
By segment, revenue from its Marketplace grew 9% to $1.8 billion. StubHub revenues grew 5% to $240 million. Marketing services and other revenue increased 10% to $563 million including Marketplace revenue of $298 million (up 6%) and Classifieds revenue of $259 million (up 18%).
Among operating metrics, eBay’s active buyers rose 4% to 175 million at the end of the quarter. It reported that the gross merchandise value transacted on the marketplace platform was up 11% to $22.6 billion. GMV for Stubhub improved 5% to $1.1 billion.
During the quarter, eBay repurchased $1 billion of its common stock. The company’s total repurchase authorization remaining as of June 30, 2018, was $5.7 billion. The company’s cash and cash equivalents and non-equity investments portfolio totaled $8.6 billion at the end of the quarter.
For the third quarter, eBay forecast revenues of $2.64-$2.69 billion or a growth of 5%-7%. It expects GAAP EPS in the range of $0.37-$0.41 and non-GAAP EPS in the range of $0.54-$0.56. The market was looking for revenues of $2.73 billion and an EPS of $0.56.
eBay’s New Offerings
During the quarter, eBay launched a new feature called Interests that tailors consumers’ shopping experience based on their passions, hobbies, and style. Shoppers select what they’re interested in, and the new feature customizes their homepage with themes and items chosen just for them.
