 By Silicon
el 16-Apr-2008 | Ebay (EBAY): Revenue and EPS beat consensus, but outlook only in-line despite strong quarter. Core marketplace business showed good strength in listings, revenue, and GMV, but active users grew only 1% year over year. eBay needs to get this metric moving in the right direction soon, or the turnaround will not be sustainable. Business in UK and US hurt by weak economy. PayPal and Skype ahead of expectations. Outlook for Q2 revenue and EPS only in-line with consensus, which may worry investors. Full-year guidance slightly above consensus despite significant upside this quarter.
Key Metrics:
- Revenue: $2.19 billion, up 24%, well ahead of consensus and guidance of +16%).
- Adjusted EPS: $0.42, vs. $0.38 consensus. Revenue strong, sales and marketing lower than expected.
- eBay Marketplace Revenue: $1.48 billion, up 19%
- Gross Merchandise Value (GMV): $16.04 billion, up 12% (vs. 11% est)
- Active Users: 84mm, up 1%. THIS IS A DISAPPOINTMENT.
- Total listings: Approximately 647 million, up 10%
- PayPal: $582 million, up 32%
- Skype: $126 million, up from $113mm in Q4
- Outlook:
- June: Guidance in line with current consensus despite strong quarter.
- 2008: Guidance slightly ahead of current consensus: $8.7-$9.0 billion revenue vs. $8.79 consensus, $1.70-$1.75 EPS guidance vs. $1.68 consensus. This will likely spook some analysts.
Release
Webcast (5PM/2PM)
SAI EBAY Financial Model
CONFERENCE CALL NOTES
CEO Donahoe:
Making breaks with past (translation: Meg Whitman)
- -easier and safer to use
- -improve buyer experience, auctions and incentives
- -extend PayPal's leadership
Marketplace off to good start, core business and StubHub
PayPal very strong: +32%, ebay Paypal up 17%, off-ebay 61%
Skype user metrics strong (but revenue decelerating rapidly).
MARKETPLACE
Fee changes...rebalanced pricing model to encourage greater selection
Moving forward toward BestMatch search
For first time, rewarding sellers who provide best buyer experience
LOTS of feedback from sellers...we tweaked, moved to category specific pricing.
How are changes impacting? "Encouraged"
- Global listings growth improved to 10%, no loss conversions
- Early progress BestMatch
- Some evidence buyer experience getting better, sellers getting better at customer satisfaction
eBay becoming easier safer, etc. to use. Some sellers say has improved. BUT...we still have a lot more work to do. We will make additional changes through year. Improve trust, better finding experience, etc.
Donahoe good: Realistic, acknowledges lots of work to do. Encouraging. Should inspire confidence. Breath of fresh air.
PayPal...international strong. Merchant services (off eBay) +69%. Continues to accelerate in Europe.
Skype: Does not say he's putting it on block (unfortunately)
Bob Swan (CFO):
GMV growth driven by pricing changes, but negatively hit by economy in US and UK
Operating margin as expected.
$632mm cash flow, up 32%
Classifieds +60% y/y
Marketing services now 15% of Marketplace revenue
Skype decelerating, but still growing nicely.
GUIDANCE:
Raising outlook, but cautious about environment.
Adjusting for FOREX and share repo, guidance similar to Q4 (i.e., no increase despite strong quarter).
Our changes may hurt business short-term, guidance captures this.
Q&A
Please elaborate on economic impact:
Some of our growth in GMV was cross-border trade. Toward end of quarter, saw slowing.
What is impact of economic slowdown?
First, the changes. Only 6 weeks in. We're encouraged: increased listings, etc.
Economy: traffic held up, but we're not immune.
Couponing:
Using it for biggest buyers to encourage multiple categories, re-incent those who are slowing.
BestMatch: Sellers with good feedback getting more exposure, this leads to higher conversion rates.
Skype:
Will be testing synergy this year. (And then, please o please just sell it)
Yawn...descending into irrelevance. A good evening to all.
PREVIEW
eBay's stock has rallied off low on stronger-than-expected listings
growth. The company's recent fee changes to its core marketplace appear
to have helped--despite the screams of buyers--but the proof will be in
the actual sales figures (cutting listing fees should obviously
stimulate more listings, but these may not be sustainable and may not
have translated to conversions).
ebayuserchart.gif: Paste this image in your site, Myspace, Facebook, Ebay copy this code...
 In
our opinion, however, the most important metric for eBay proper will be
Active Users. As the accompanying chart (from the WSJ) shows, eBay's
user growth has fallen to near zero. If the company is to turn its core
business around, it has to find a way to draw more users (buyers and
sellers) to the site. If it can't do this, the near-term listings
growth is irrelevant.
PayPal is a different business, and its performance should be solid.
Same for Skype, which we hope will soon be sold. Guidance should
increase for the balance of the year, as eBay always lowballs guidance.
(If it doesn't increase, the company will have missed its own
expectations).
Key Metrics:
- Revenue: $2.06 billion, up 17% (above company guidance of +16%). FX will add at least 500 basis points.
- EPS: $0.39 (high end of guidance, at least a penny of upside)
- eBay Marketplace Revenue: $1.35 billion (Doug Anmuth, Lehman)
- Gross Merchandise Value (GMV): $15.8 billion, up 11% (Goldman)
- Active Users: 87mm, up 5% (acceleration)
- Total listings: Approximately 650 million
- PayPal: Lehman Brothers' analyst Doug Anmuth estimates revenue of $550 million, up 27%
- Skype: $120 million-ish (up from $113mm in Q4)
Read 7 times
|
Hello, Guest
Online: 67 visitors
+ fotos
Having a little bit of buyer’s remorse there, eBay? According to TechCrunch, eBay may be looking to sell off StumbleUpon after acquiring the company a mere 18 months ago for $75 million. An anonymous source claims that eBay has hired Deutsche bank to help them find the right buyer. No asking price has been mentioned [...]
[..] 
Yesterday Viacom told us that the bottom dropped out the ad market last quarter, and that the future was so hazy it wasn't going to make any more predictions about ad sales. Today we g [..] 
