Ebay: GSI Merchandise Revenues Up Double-Digits

Ebay reported revenues at its GSI Commerce business slipped 1 percent to $236 million from $237 million, but the segment’s global e-commerce (GeC) merchandise sales grew 13 percent to $807 million from $715 million.

GSI’s marketing services fee business produced $50 million of revenue.

According to its statement, GSI enabled its clients to grow faster than the e-commerce market as measured by the 16 percent-store sales growth, but revenue was pressured by a reduction in take rate. The company expects GSI’s integrated omnichannel product portfolio, including complementary eBay Inc. assets, to be increasingly adopted by merchants seeking opportunities to grow their businesses while seamlessly meeting the needs of their consumers.

Companywide, eBay Inc. reported that revenue for the first quarter ended March 31, 2013, increased 14 percent to $3.7 billion, compared to the same period of 2012. The company reported first quarter net income on a GAAP basis of $677 million, or $0.51 per diluted share, and non-GAAP net income of $829 million, or $0.63 per diluted share. The year-over-year increase in first quarter GAAP and non-GAAP earnings per diluted share was driven primarily by strong top-line growth.

Downloads of eBay Inc.’s suite of mobile apps expanded the company’s overall commerce footprint, surpassing 162 million since launch in the third quarter of 2008. eBay Inc. gained approximately 2.8 million new customers in the period through mobile, driving double-digit growth in active users at both PayPal and Marketplaces. Total company enabled commerce volume (ECV) grew 19 percent totaling $49 billion (ECV equals Marketplaces GMV, PayPal Merchant Services TPV, and GSI GeC Merchandise Sales not earned on eBay or paid for via PayPal or Bill Me Later).

“We had a strong first quarter, with accelerating user growth across both Marketplaces and PayPal, and with GSI enabling their retail clients to grow faster than ecommerce,” said John Donahoe, eBay Inc. President and CEO. Technology is creating a commerce revolution, and we are in the forefront with strong mobile leadership and a focus on helping retailers and brands engage consumers anytime, anywhere.”

The company’s PayPal business delivered strong first quarter performance with revenue increasing 18 percent to $1.5 billion. PayPal gained 5 million active registered accounts in the period and ended the quarter with 128 million, a 16 percent increase. PayPal’s net total payment volume (TPV) grew 21 percent to $41 billion, driven by consumer and merchant use of PayPal both on and off eBay. PayPal continues to invest in growing its addressable market, product development, customer engagement and consumer awareness. The company’s mobile payment solution for small business, PayPal Here, became available for sale at more than 2,700 SoftBank locations across Japan and the iPad version of the product was launched in the U.S. PayPal also announced the chip and PIN version of PayPal Here in the U.K. which it plans to roll out this summer. PayPal’s offline initiatives are now live in almost 20,000 major retail locations in the U.S.

The company’s Marketplaces business also delivered strong first quarter performance with revenue increasing 13 percent to $2.0 billion. Marketplaces gained 3.9 million active users in the period and ended the quarter with 116 million, a 13 percent increase. Gross merchandise volume (GMV), excluding vehicles, increased 13 percent to $18 billion, reflecting the continued improvements to eBay’s core technology designed to make it easier and faster for consumers to shop and buy. Sold items increased 12 percent. Fixed price GMV grew 17 percent globally and represented 68 percent of total GMV. U.S. GMV, excluding vehicles, increased 16 percent as mobile engagement and momentum in fashion and tickets were key drivers of growth. International GMV, excluding vehicles, increased 11 percent to $11 billion. Marketplaces continues to invest in innovation and expanding its addressable market both locally and globally.

•     Operating margin – GAAP operating margin increased to 21.3% for the first quarter of 2013, compared to 19.9% for the same period last year. Non-GAAP operating margin increased to 27.4% in the first quarter, compared to 26.9% for the same period last year.
  
•     Taxes – The GAAP effective tax rate for the first quarter of 2013 was 16%, compared to 17% for the first quarter of 2012. For the first quarter of 2013 and 2012, the non-GAAP effective tax rate was 20% for both periods.
  
•     Cash flow – The company generated $937 million of operating cash flow and $638 million of free cash flow during the first quarter of 2013.
  
•     Stock repurchase program – The company repurchased approximately $476 million of its common stock in the first quarter of 2013.
  
•     Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $11.5 billion at both March 31, 2013 and December 31, 2012.

•     Second quarter 2013 – eBay expects net revenues in the range of $3,800 – $3,900 million with GAAP earnings per diluted share in the range of $0.46 – $0.48 and non-GAAP earnings per diluted share in the range of $0.61 – $0.63.
  
•     Full year 2013 – eBay expects net revenues in the range of $16,000- $16,500 million with GAAP earnings per diluted share in the range of $2.23 – $2.29 and non-GAAP earnings per diluted share in the range of $2.70 – $2.75.