Ebay Inc. reported that Ebay Enterprise, formerly GSI Commerce, contributed $238 million in revenue for the third quarter, a 5 percent increase over the year-ago level. Ebay Enterprise's clients grew same-store sales 13 percent, decelerating sequentially, but Ebay said they were broadly in line with e-commerce growth rates.
On a conference call with analysts, Bob Swan, eBay’ CFO, said Ebay Enterprise’s revenue gain was driven by solid volume growth, offset by a lower take rate, client mix, and channel mix. Merchandising sales grew 12.8 percent to $787 million.
“Marketing services and other revenue growth was impacted by the replatforming and branding efforts to consolidate nine companies into one,” added Swan. “Segment margin came in at 5 percent, down 110 basis points, due to take rate reduction and business mix.”
John Donahoe, Ebay’s president and CEO, noted that at its customer summit in September, Ebay Enterprise announced a new suite of commerce technologies, including its recently-launched platform. Ebay Enterprise also partnered with PayPal, also owned by Ebay, to pilot a free, 2-day shipping program with nine retailers.
“Launched earlier this month, initial results are strong, showing increased share of checkout and sharp uptakes in conversion,” said Donahoe. “Share of checkout is significantly greater than competing offers on sites where both exist. This is a great example of how we can leverage our portfolio to deliver compelling offers and experiences to merchants and consumers.”
Companywide, Ebay’s revenues increased 14 percent to $3.9 billion, compared to the same period of 2012. Third quarter net income increased 17.0 percent to $837 million, or 64 cents per share, driven primarily by strong top-line growth.
Results came in slightly ahead of Wall Street’s consensus target of 63 cents per share, but its fourth-quarter outlook disappointed. Ebay said it expects earnings in a range of 79 to 81 cents a share on revenues of $4.6 billion in the quarter. Wall Street was expecting eBay to deliver revenue of at least $4.64 billion, with earnings of 83 cents per share in the fourth quarter. The company attributed the softer forecast to the pending $800 million acquisition of digital-payments platform Braintree, which is expected to close during the fourth quarter.
