eBay Q2 Earnings Recap: PayPal And MarketPlace Continue To Deliver

| About: eBay Inc. (EBAY)

eBay (EBAY) reported 2Q12 results yesterday after the close.


  • Revenue: $3.39 billion vs $3.36 billion consensus
  • EPS: $0.56 per share vs $0.55 consensus
  • Q3 guide: $3.3-3.4 billion, vs $3.41 billion

Both revenue and EPS came in better than expected and grew 23% y/y and 16% y/y respectively, as the company continues to deliver solid execution across its business segments.

Payment revenue was $1.36 billion, +27% y/y on a FX-neutral basis, and TPV reached $34.5 billion, +23% FX-neutral basis, driven by continued expansion of PayPal, which added more than 1 million active accounts to 113 million over the quarter.

PayPal's POS adoption was strong. As I mentioned in my earnings preview, 15 new retailers in addition to Home Depot (HD) have agreed to accept PayPal as a payment method and two of them, Abercrombie & Fitch (ANF) and Jos.A.Bank, are already live. ANF introduced PayPal's POS in over 900 stores in just four weeks to get ready for back-to-school season and Jos.A.Bank expanded its pilot to a full national rollout in over 550 stores. In addition, Office Depot (ODP) implemented POS, PayPal Online, and PayPal Mobile. PayPal Here also generated strong interest after entering four markets, including a joint-venture with SoftBank in Japan, and recently introduced the app for both iPhone and Android.

Market Places revenue reached $1.81 billion, +14% y/y on a FX-neutral basis and gross merchandise volume achieved the strongest growth since 2006. International non-vehicle GMV was especially strong, + 16% on FX-neutral basis, due to strong sales in UK, China, and Korea.

Mobile continues to show robust growth. According to management, mobile volume is expected to double in 2012. eBay's mobile app has been downloaded 90 million times and is gaining momentum among both buyers and sellers. Sellers are listing 2 million items on mobile devices each week and 600K new customers made first purchase via mobile app during the quarter.

Bottom line, this quarter was solid given the strong performance from both PayPal and Market Place. Management's $3.3-3.4 billion revenue and $0.53-0.55 EPS guidance are both shy of consensus $0.55 EPS on $3.41 billion in revenue given the macro headwind the company faces in all of its operating regions.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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