eBay releases first quarter 2021 financial report, performance exceeds expectations

"Our company delivered another strong quarter and a great start to the year for buyers and sellers. We generated tremendous sales and profitability, with revenue growth reaching its highest level since 2005," said Jamie Iannone, CEO of eBay. "Last July, I outlined my vision for a technology-driven company re-invention, and our results demonstrate that this long-term strategy is working. While there is more work to do, we believe we are on a path for continued growth into the future. "

First Quarter Financial Highlights

Revenue was $3 billion, up 42% year-over-year, and 38% year-over-year excluding the impact of exchange rate changes.

The total transaction volume ( GMV) was US$27.5 billion, a year-on-year increase of 29%. Excluding the impact of exchange rate changes, the year-on-year increase was 24%.

Net income from continuing operations, calculated on a GAAP basis, was $569 million, or $0.82 per diluted share.

Net income from continuing operations, not calculated on a GAAP basis, was $758 million, or $1.09 per diluted share.

Operating cash flow from continuing operations was $938 million, and free cash flow from continuing operations was $855 million.

The number of annual active buyers increased by 7%, reaching a total of 187 million active buyers worldwide.

The number of annual active sellers increased by 8%, and the total number of active sellers worldwide reached 20 million.

Business Highlights

Revenue growth initiatives

eBay continues to scale managed payments globally, with more than 52% of transactions processed through managed payments globally in the first quarter. At the end of the first quarter, eBay had more than 4 million sellers globally migrated to managed payments, with more than 80% of U.S. sellers having completed the migration. eBay also launched a new payment experience in France, Italy and Spain.

The launch of managed payments has enabled eBay to streamline the checkout process and reduce unpaid items in fixed-price transactions by approximately 80% in the first quarter.

In the first quarter, the Promoted Listings paid promotion service achieved revenue of nearly US$224 million, a year-on-year increase of 64%, and a year-on-year increase of 58% excluding the impact of exchange rate changes.

Technology-oriented platform reshaping

In the first quarter, eBay Inc.'s core categories achieved significant growth. In the U.S., athletic shoes over $100 again achieved triple-digit year-over-year growth, and luxury watches accelerated from 16% in the fourth quarter to 38% in the first quarter.

Another core category that eBay focused on in the first quarter was trading cards. In the first quarter, the total transaction volume of trading cards in the United States exceeded $1 billion, and the number of active buyers in this category doubled. eBay also announced the launch of a new image listing tool for best-selling trading cards. This new tool uses computer vision technology to scan cards and simplifies the process of creating image pages, which can reduce the time to create page listings by up to 75%.

eBay Inc. is expanding its Certified Refurbished experience to more than 150 brands in the U.S. and launching Certified Refurbished to more than 100 brands in the U.K., Canada and Germany.

eBay Inc. is committed to being the partner of choice for sellers and has launched a new unified listing experience that provides a unified design across all platforms to simplify the listing process and improve seller benefits.

eBay's search engine optimization (SEO) efforts, particularly in its core categories, added about one percentage point to active buyer growth in the first quarter . Free traffic from browsing the web continued to grow, with traffic to sneakers nearly doubling, and new buyers coming to eBay through SEO nearly tripled.

eBay has launched a Store Preview feature for sellers to view their store before listing, build seller confidence and ease the transition to the new experience.

eBay Inc. has announced a new coded coupon tool for sellers to create customized discount codes and share them publicly on eBay.com or privately through their own marketing channels. Sellers can also print their own coded coupons and include them in shipped packages to help drive repeat purchases.

eBay Inc. has launched a new tool, Terapeak Sourcing Insights, to help subscribed store sellers analyze category trends, best-selling products, and indicate which inventory is most likely to sell.

eBay Inc. has simplified its shipping badges in the United States and Germany, giving buyers new, clear and concise information about delivery speeds and costs.

Influence

eBay released its first Recommerce Report, which showed that according to eBay’s latest survey of sellers, 87% of U.S. respondents said they had sold second-hand items in 2020, and nearly three-quarters of the sellers surveyed started selling second-hand items last year to earn extra income.

In the first quarter, eBay announced a $25 million investment in the Clear Vision Impact Fund to support small and medium-sized businesses located in underserved communities across the United States.

eBay has announced the recipients of its Up & Running Grants, a new program designed to ensure today’s small businesses can survive. Fifty sellers from across the U.S. have been selected to receive grants that include $10,000 in funding and educational resources.

eBay continues to support the UK’s National Health Service, using eBay’s technology to deliver more than 2 billion items of personal protective equipment to community healthcare workers in the UK.

eBay Inc. has released its first Task Force on Climate-related Financial Disclosures (TCFD) report, building on growing momentum for climate transparency and action.

In the first quarter, eBay raised more than $35 million through its eBay for Charity Fund.

eBay increased its employee matching gift limit from $2,500 to $10,000 per year through the eBay Foundation.

eBay has also donated to Asian Americans Advancing Justice and supported employee donations during Black History Month and the Lunar New Year.

Other financial and operating results

Operating margin: GAAP operating margin increased to 27.9% in the first quarter of 2021, compared to 26.5% in the same period last year. Non-GAAP operating margin increased to 33.0% in the first quarter of 2021, compared to 31.6% in the same period last year.

Taxes: The GAAP effective tax rate for continuing operations was 21.5% for the first quarter of 2021, compared to 23.8% for the first quarter of 2020. The non-GAAP effective tax rate for continuing operations was 17.3% for the first quarter of 2021, compared to 16.5% for the first quarter of 2020.

Cash Flow: eBay's operating cash flow from continuing operations was $938 million, and free cash flow from continuing operations was $855 million in the first quarter of 2021.

Capital Returns: eBay repurchased approximately $292 million of common stock in the first quarter of 2021, totaling more than 5 million shares. As of December 31, 2021, eBay had a total authorized balance of $5.7 billion. In the first quarter of 2021, eBay also paid $122 million in cash dividends.

Cash, Cash Equivalents and Non-Equity Investments: As of December 31, 2021, eBay's cash, cash equivalents and non-equity investment portfolio totaled $3.9 billion.

Business Outlook

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

Net revenue is expected to be between $2.98 billion and $3.03 billion, with an organic growth rate of 8% to 10% excluding the impact of currency fluctuations.

GAAP diluted earnings per share from continuing operations are expected to be in the range of $0.67 to $0.72.

Non-GAAP diluted earnings per share from continuing operations are expected to be in the range of $0.91 to $0.96.

Declare a dividend

eBay Inc.’s Board of Directors has declared a cash dividend of $0.18 per share of its common stock, payable on June 18, 2021, to shareholders of record as of June 1, 2021.

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