By Leena Rao
eBay’s (EBAY) Q4 and full-year 2012 earnings hit yesterday afternoon, with revenue for the fourth quarter ended December 31, 2012 increasing 18 percent to $4 billion, compared to the same period of 2011. The company reported fourth-quarter net income on a GAAP basis of $751 million, or $0.57 per diluted share, and net income on a non-GAAP basis of $927 million, or $0.70 per diluted share. Net income was up 22 percent for the quarter.
Analysts expected eBay to post earnings of $0.69 cents a share, on revenue of $3.98 billion.
eBay says the increase in non-GAAP earnings per diluted share was driven by double-digit user growth across the portfolio, strong gains in mobile adoption, and accelerating growth in the company’s Marketplaces business, reflecting a 19 percent increase in U.S. gross merchandise volume (GMV), excluding vehicles.
For the full year, revenue increased 21 percent to $14.1 billion, compared to 2011. The company reported net income on a GAAP basis of $2.6 billion, or $1.99 per diluted share, and net income on a non-GAAP basis of $3.1 billion, or $2.36 per diluted share. eBay says that it enabled more than $175 billion of commerce volume (ECV) in 2012, representing growth of 18 percent. ECV is the total commerce and payment volume across all three business units consisting of Marketplaces GMV, PayPal merchant services net total payment volume, and GSI global ecommerce (GeC) merchandise sales.
“We had a great finish to an excellent year, with fourth quarter results exceeding our expectations,” said eBay’s president and CEO John Donahoe in a release. “eBay Marketplaces in particular had a terrific fourth quarter, with growth in the U.S. accelerating three points, outpacing ecommerce.”
“Mobile continues to rewrite the commerce playbook, and we continue to be a mobile commerce and payments leader,” Donahoe added. “eBay mobile finished the year with $13 billion in volume – more than double the prior year – and PayPal mobile handled almost $14 billion in payment volume, more than triple the prior year. In 2013, we expect each to exceed $20 billion.”
PayPal’s active account growth accelerated to 15% and ended the year with approximately 123 million registered accounts. PayPal added nearly 2 million accounts a month in the fourth quarter, representing the company’s fastest active account growth rate in years.
Payment volume increased 24 percent, producing revenue growth of 24 percent, thanks to merchant and consumer adoption coupled with geographic expansion. PayPal’s mobile payment volume reached nearly $14 billion in 2012, up more than 250 percent over the prior year, as more consumers used their smartphones and tablets to pay online.
The company’s Marketplaces business delivered a record $2 billion revenue in the fourth quarter. Active user growth was up because of mobile site enhancements designed to streamline the shopping experience on eBay and emerging markets. Mobile commerce volume in 2012 grew more than 120 percent to $13 billion driven primarily by increased adoption of eBay’s mobile apps and increased engagement from product innovation. eBay’s suite of mobile apps attracted more than 4 million new customers in 2012.
GSI revenue for the quarter increased 10 percent to $398 million driven primarily by a 17 percent increase in GeC merchandise sales. Same-store sales grew 19 percent.
The theme of the quarter (and the year) for eBay was mobile. eBay and PayPal had a very mobile holiday this year. PayPal said that Black Friday global mobile payments volume were up 193 percent from last year and eBay’s total mobile volume in the U.S. was up 153 percent on the day. Thanksgiving also saw similar jumps in spending for the company.
Beyond just being the holiday shopping season for eBay and PayPal, the fourth quarter also brought a few new product additions to the marketplace, including a redesign. The company expanded its same-day shipping service called eBay No to New York, and partnered with FedEx on shipping for merchants.
At the start of the quarter, PayPal CEO David Marcus continued the company’s reorganization and restructuring. The company also rolled out a number of payments pilots in international markets, including mobile check-ins. Additionally, PayPal debuted a branded cash loading card, called the PayPal My Cash Card, which allows users to load up their PayPal accounts using cash instead of bank transfers.