Online auction and e-commerce company eBay (EBAY 36.34, -0.84) trades about 2.3% lower today as last night’s mostly in-line Q2 print, guidance reaffirm and news of a buyback addition failed to impress.
As is a commonly watched metric, investors were also eyeing gross merchandise value (GMV) growth at EBAY this period. For the quarter ended June 30, GMC was $21.5 billion, increasing 3% on an as-reported basis and 5% on a foreign exchange (FX) neutral basis.
Looking a bit more in-depth, EBAY’s Marketplace platforms delivered $20.5 billion of GMV and $1.9 billion of revenue. Marketplace GMV was up 3% on an as-reported basis and 6% on an FX-Neutral basis as the continued expansion of new user experiences and marketing efforts aided results, leading to revenue growth of 4% on an as-reported basis and 7% on an FX-Neutral basis. StubHub drove GMV of $1.0 billion, down 5%, and revenue of $236 million, up 5%, driven by a softer U.S. events landscape compared to last year, but partially offset by strong international growth. Classifieds accelerated growth in the quarter, delivering revenue of $219 million, up 6% on an as-reported basis and 11% on an FX-Neutral basis, primarily driven by healthy traffic growth and strong user engagement.
Now getting back to the results, EBAY delivered in-line earnings and revenues of $0.45 and $2.33 billion, respectively. Revenue increased 4% on an as-reported basis and 7% on an FX-neutral basis this period. Operating margins dipped slightly, with non-GAAP operating margin down to 27.3% in Q2, compared to 29.1% for the same period last year.
In Q2 EBAY added two million active buyers across its platforms, for a total of 171 million global active buyers.
Looking ahead, EBAY sees mostly in-line EPS between $0.46-0.48 for Q3 on revenues in the range of $2.35-2.39 billion. For the full year 2017, the company continues to expect net revenues between $9.3-9.5 billion for Organic FX-Neutral growth of 6% - 8%. Additionally, the company sees earnings of $1.98-2.03 for the year.
Jointly, EBAY announced its Board authorized an additioanl $3.0 billion stock repurchase program. In Q2, EBAY repurchased about $507 million in common stock.
As marketplace results continue to accelerate and EBAY’s marketing campaign continues to yield results, the company should keep steadily moving along. Should GMV growth slow or interest in new buyer experiences wane, then EBAY could be in trouble. The reaction to earnings seems to suggest investors at the very least expected this result as a modest decline from yesterday’s all-time highs still has the stock +21% YTD.