eBay Watch: 59% Earnings Growth, Skype Reaches 10 Million Concurrent Users

A number of key developments to note for eBay (EBAY) watchers:

eBay Reports 59% Earnings Growth

eBay reported Q3 results. You can download their results presentation and press release here. (See conference call transcript here.)

I might as well have written my predictions today. For eBay Marketplaces, I predicted listings down 7.5%, GMV growth 12% and revenue growth 22%. Actuals came in at down 5%, 14% and 26% respectively - slightly better than I expected. For PayPal, I predicted TPV growth of 33% with 62% growth in Merchant Services and 16% growth On-EBAY. Actuals came in at 34%, 61%, and 18% respectively - pretty much spot on. And for Skype, while the impairment charge took central stage, the business produced $98 million in revenue - very slightly below where I was expecting.

Overall, the businesses showed very robust growth. Consolidated revenues where up 30% from last year and earnings where up 59% (helped by a one-off tax benefit). FCF was up 32% to $510 million and eBay repurchased another $500 million of its shares.

eBay shares traded up nearly 10% in after-hours immediately following the release but slowly gave back gains over the course of after-hours trading. A very similar pattern occurred following Q2 results only to see the share trade higher the following few days.

Skype Reaches 10 Million Concurrent Users

While everybody was busy awaiting eBay's Q3 results, Skype passed an important milestone.

Despite competitive pressures, and coming in a few days behind my original prediction, Skype reached 10 million concurrent users on Tuesday. So for the first time since Skype's launch 1510 days ago, 10 million users were logged into the Skype cloud at the same time.

Recall that from eBay's Q3 earnings report we know that Skype has 246 million registered user accounts. However, we also know many of these are inactive or duplicate accounts for a single user. For this reason, peak concurrent users is a much better metric by which to measure Skype's user growth.

With this in mind, if we graph the peak concurrent users over time, we see that even though slope of the curve has decreased, we are still deep in a period of high user growth.