eBay releases third quarter 2021 financial report, performance exceeds expectations

l Revenue of US$2.5 billion, an increase of 11% year-on-year, and 10% year-on-year excluding the impact of exchange rate changes

Total transaction volume was US$19.5 billion, down 10% year-on-year. Excluding the impact of exchange rate changes, it was down 12% year-on-year .

GAAP diluted earnings per share from continuing operations were $0.43 and $0.90, respectively .

The operating profit margins calculated based on and not based on GAAP were 26.5% and 31.7%, respectively .

Returned $2.4 billion to shareholders in the third quarter , including $2.3 billion in share repurchases and $116 million in cash dividends

October 28, 2021 – eBay Inc. (NASDAQ: EBAY), a global commerce leader connecting hundreds of millions of buyers and sellers around the world, today announced financial results for the third quarter ended September 30, 2021.

"Our team delivered another strong quarter, again meeting or exceeding our expectations across all key business metrics and making further progress on our multi-year growth strategy," said Jamie Iannone, CEO of eBay Inc. "Our third quarter results, driven by the near completion of our managed payments transition, an expanded advertising portfolio, and volume growth in key categories, demonstrate that our growth strategy is working. I am proud that we are improving customer satisfaction, building trust, and driving steady innovation, while continuing to set and move toward ambitious goals related to climate action."

Third Quarter Financial Highlights

l Revenue was $2.5 billion, an increase of 11% year-on-year, and 10% year-on-year excluding the impact of exchange rate changes.

Total transaction volume (GMV) was US $ 19.5 billion, down 10% year-on-year. Excluding the impact of exchange rate changes, it was down 12% year-on-year.

l Net income from continuing operations, calculated on a GAAP basis, was $283 million, or $0.43 per diluted share.

l Net income from continuing operations not calculated on a GAAP basis was $591 million, or $0.90 per diluted share.

Operating cash flow from continuing operations was $661 million, and free cash flow from continuing operations was $502 million.

Returned $2.4 billion to shareholders in the third quarter , including $2.3 billion in share repurchases and $116 million in cash dividends.

The number of active buyers decreased by 5% in the year , and the total number of active buyers worldwide was 154 million .

The number of active sellers remained the same at 19 million . (Note: All sellers who have successfully completed a transaction on the eBay platform in the past 12 months. These sellers may have registered more than once and therefore may have more than one account.)

Business Highlights

eBay updated its 2021 capital allocation plan, increasing its estimated share repurchase size from $5 billion to $7 billion.

In October, eBay announced that its ambitious greenhouse gas (GHG) emissions targets were endorsed by the Science Based Targets Initiative (SBTI). eBay pledged to reduce its (scope 1 and 2) emissions by 90% by 2030 from a 2019 base year to match the goal of limiting global warming to 1.5 degrees Celsius, the most ambitious goal ever developed through the SBTI process and aligned with the Paris Agreement. eBay also pledged to reduce downstream transportation and distribution value chain (scope 3) emissions by 20% over the same time frame.

eBay has also committed to becoming 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 carbon footprint and will offset any remaining emissions starting this year to achieve carbon neutrality.

Revenue Plan

eBay continues to scale managed payments for all sellers globally and remains on track to complete the transition this year. In the third quarter, more than 90% of transactions on the global platform were processed through managed payments. At the end of the third quarter, more than 18 million sellers worldwide had completed the transition to managed payments.

Through eBay ’s managed payments, the company aims to further enhance the customer experience and eliminate friction for sellers. In the third quarter, eBay accelerated the time it takes to pay trusted sellers in the UK, who will now receive payment the next business day after confirming payment from the buyer.

In the third quarter, the Promoted Listings paid promotion service achieved revenue of more than $207 million, a year-on-year increase of 12%, and a year-on-year increase of 9% excluding the impact of exchange rate changes .

l eBay has expanded its advertising portfolio with the launch of Promoted Listings Advanced and Promoted Listings Express. Currently in testing, the Advanced Promoted Listings service uses a pay-per-click model where sellers determine their daily budget, choose how much a click is worth to them, and then pay for each click. In addition, Promoted Listings Express allows sellers to increase the visibility of their auction listings for a one-time fee, regardless of whether the item is sold.

Technology-oriented platform reshaping

eBay continued to expand its Authenticity Guarantee program, launching an authentication service for sneakers in Germany in the third quarter. eBay also added 30 brands to its catalog and improved SEO performance for top sneaker brands.

eBay launched Price Guide and Collections for Trading Cards, which are designed to provide a single destination for enthusiasts to view, manage and track the value of their trading card portfolios on eBay. To date, nearly 4 million trading cards purchased on and off eBay have been added to customer collections. In addition, nearly 250,000 buyers have used the Price Guide tool to conduct searches to see trends for their favorite trading cards.

To further support trading card sellers, eBay has adjusted its eBay Money Back Guarantee policy to better align it with its Return Policy.

eBay is also seeing growth in sales of Certified Refurbished products, with top brands like Samsung, Dyson and KitchenAid set to join the program in the U.S. in the third quarter.

eBay launched a new Refurbished experience for mobile phone sellers that standardizes item condition grading, vetted sellers, and backs purchases with a one-year warranty, giving buyers more trustworthy, high-value products .

eBay ’s coded coupons continue to drive repeat purchase activity in the new store experience. Since April, more than 2.5 million buyers have made a repeat purchase in a store through a seller-funded coupon.

Influence

In a continuing effort to deliver on the company ’s commitment to climate action, eBay announced an agreement with McDonald’s and solar company Lightsource BP to purchase electricity from the largest solar project in Louisiana. Once completed, the project will generate more than 600,000 megawatt-hours of clean energy per year, equivalent to the average annual consumption of 59,000 U.S. households.

As part of the eBay Foundation ’s commitment to supporting inclusive entrepreneurship, the company this summer launched Global Give, an annual employee grantmaking program that will award $3 million in grants to nonprofits working to meet the needs of historically marginalized entrepreneurs.

In the third quarter, eBay for Charity contributed approximately $35 million worldwide, an increase of 11% year-over-year .

Other financial and operating results

l Operating profit margin: The operating profit margin calculated based on US GAAP in the third quarter of 2021 decreased to 26.5%, compared with 29.3% in the same period last year. The operating profit margin not calculated based on US GAAP in the third quarter of 2021 decreased to 31.7%, compared with 34.4% in the same period last year.

Taxes: The effective tax rate for continuing operations calculated on a GAAP basis was 34.7% for the third quarter of 2021 , compared to 20.1% for the third quarter of 2020. The effective tax rate for continuing operations not calculated on a GAAP basis was 17.8% for the third quarter of 2021, compared to 14.5% for the third quarter of 2020.

l Cash flow: eBay's operating cash flow from continuing operations in the third quarter of 2021 was US$661 million, and free cash flow from continuing operations was US$502 million.

l Capital Return: eBay repurchased approximately $2.3 billion of common stock in the third quarter of 2021, with a total of approximately 31 million shares repurchased. As of September 30, 2021, eBay has been authorized to repurchase a total of $5 billion in shares. In the third quarter of 2021, eBay also distributed $116 million in cash dividends.

l Cash, cash equivalents and non-equity investments: As of September 30, 2021, eBay's cash, cash equivalents and non-equity investment portfolio totaled US$5.1 billion.

Business Outlook

eBay Inc. provides the following guidance for continuing operations for the fourth quarter of 2021:

Net revenue is expected to be between $2.57 billion and $2.62 billion, with an organic growth rate of 3% to 5% excluding the impact of currency fluctuations.

GAAP diluted earnings per share from continuing operations are expected to be in the range of $0.72 to $0.76 .

Non-GAAP diluted earnings per share from continuing operations are expected to be in the range of $0.97 to $1.01 .

Declare a dividend

eBay Inc.’s Board of Directors has declared a cash dividend of $0.18 per share of common stock, payable on December 17, 2021 to shareholders of record as of December 1, 2021.

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