Ebay reported that revenue for the third quarter ended September 30, 2014 increased 12 percent to $4.4 billion, compared to the same period in 2013. GAAP earnings of $673 million or $0.54 per diluted share, and Non-GAAP earnings of $848 million or $0.68 per diluted share, were driven by accelerating enabled commerce volume growth and double-digit revenue growth.

Ebay Inc.s enabled commerce volume (ECV) increased 27 percent in the third quarter to $63 billion. Mobile ECV advanced 67 percent to $14 billion representing 21 percent of volume. Ebay Inc. mobile downloads since inception exceeded 282 million, attracting 7.3 million new customers in the quarter. Cross-border trade grew 27 percent, representing $14 billion, or 22 percent, of total company ECV.

Rapidly changing competitive environments in commerce and payments underscore the opportunities for Ebay and PayPal, and highlight how each business will benefit from the focus and agility of being an independent company, said Ebay Inc. President and CEO John Donahoe. PayPal had another strong quarter, and its mobile payments leadership and momentum continued with mobile volume up 72 percent to $12 billion. PayPal is on track to process 1 billion mobile transactions in 2014. And Ebay continues to focus on enhancing its competitive position, improving the experience for buyers and sellers and investing in consumer engagement. As we prepare to separate Ebay and PayPal in 2015, our teams are focused on strong execution to ensure each business is set up for long-term success.

PayPal net total payment volume (TPV) grew 29 percent with Merchant Services volume up 37 percent and on-Ebay volume up 9 percent. Revenue grew to $2.0 billion. PayPal gained 4.4 million new active registered accounts to end the quarter at 157 million, up 14 percent. Global on-Ebay penetration increased to 80.5 percent. Mobile payment volume grew 72 percent to $12 billion, representing 20 percent of TPV. Active accounts acquired on mobile were 2.9 million. Newly rebranded PayPal Credit grew 29 percent. PayPal also rolled out new product innovations like its One Touch offering making it simpler and easier to check-out and pay with PayPal.

Ebay Marketplaces gross merchandise volume (GMV) grew 9 percent, with the U.S. up 7 percent and international up 11 percent. Revenue grew to $2.2 billion. Marketplaces gained 3.4 million new buyers to end the quarter with 152 million active buyers, up 13 percent. The selection of items available on Marketplaces grew to over 800 million listings, including both platform and non-platform offerings, reflecting the success of improved selling initiatives, particularly on mobile. Marketplaces mobile volume grew 41 percent to $7 billion. Fixed price sales grew 15 percent and now represent 79 percent of the total sales on the platform.

Ebay Enterprise gross merchandise sales (GMS) grew 14 percent. Revenue grew to $259 million. Enterprise enabled its clients to grow same-store sales 13 percent.
Other Selected Financial and Operational Results

  • Operating margin – GAAP operating margin decreased to 17.9 percent for the third quarter of 2014, compared to 20.5 percent for the same period last year. Non-GAAP operating margin decreased to 23.7 percent in the third quarter, compared to 26.8 percent for the same period last year.
  • Taxes – The GAAP effective tax rate for the third quarter of 2014 was 15.9 percent, compared to 21.1 percent for the third quarter of 2013. For the third quarter of 2014 and 2013, the non-GAAP effective tax rate was 19.2 percent for both periods.
  • Cash flow – The company generated $1.4 billion of operating cash flow and $0.9 billion of free cash flow during the third quarter of 2014.
  • Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $15.1 billion at September 30, 2014, up from $12.8 billion at December 31, 2013.

Business Outlook
Fourth quarter 2014 – The company expects net revenues in the range of $4.85 – $4.95 billion with GAAP earnings per diluted share in the range of $0.73 – $0.76 and non-GAAP earnings per diluted share in the range of $0.88 – $0.91.

Full year 2014 – The company is reducing full year revenue guidance to $17.85 – $17.95 billion.