eBay revenue grew 29% in the first quarter year-over-year to $3.3 billion, and net income grew 20% to $570 million. The company released first quarter 2012 earnings on Wednesday, and eBay CEO John Donahoe sounded upbeat on a post-earnings conference call with Wall Street analysts.
The CEO said eBay’s PayPal unit was focused on innovation and said the eBay Marketplaces business had turned the corner, shifting from “defense” to “offense.” He also said there would be a “steady stream of product enhancements on eBay” this year.
With Skype no longer a direct part of its operating portfolio, Donahoe and eBay CFO Bob Swan devoted time discussing the company’s GSI unit in addition to the Marketplaces and PayPal units. But there was no direct mention of Magento, another fairly recent and significant acquisition, and very little discussion of its X.commerce cloud-based commerce initiative consisting of a platform for developers that encompasses eBay, PayPal and Magento.
In discussing eBay Q1 earnings in a research note on Wednesday evening, Wall Street analyst Mark Mahaney of Citi said, “All in, the simple point here is that eBay’s underlying metrics remain robust but we are bit puzzled by the fact that such robust metrics growth hasn’t translated into a stronger Non-Vehicles GMV growth rate as yet.”
eBay Marketplaces
eBay added more than 2 million new active users in the first quarter of 2012 to 102.4 million, the largest increase in 3 years, according to Donahoe. Active user growth was driven by U.S., UK and Australia.
eBay’s revenue from Marketplaces was up 13% year-over-year on an FX-neutral basis in the quarter to $1.728 billion, with 59% of that revenue coming from its international business. And, of that revenue, 82% came from “Transaction Revenue,” the remaining from “Marketing Services Other Revenue.”
Gross Merchandise Volume also grew 13% (FX-neutral) to $16.2 billion. Fixed-price GMV, which represented 61% of total GMV in the first quarter, grew 18% globally year-over-year to $11 billion, while auctions (28% of total GMV) grew only 3% year-over-year to $5 billion. Vehicles GMV fell 8% to $1.9 billion (it makes up 10% of eBay Marketplaces GMV).
US non-vehicle GMV grew 13% to $6.37 billion. U.S. growth was driven by Fashion, Tickets, and Parts Accessories categories. International non-vehicle GMV also grew 13% to $9.84 billion, with APAC (Asia Pacific) and UK strong, and Germany stable.
Free shipping represented 45% of transactions in the first quarter, up 15 points year-over-year.
Top Rated Sellers
Top Rated Sellers now account for 50% of GMV in the U.S. and experienced “same-store” sales growth of 22%. “And interestingly,” Donahoe said, “we made the decision in Q1 to raise the bar to qualify the top-rated seller even more, adding in return policies and certain shipping speed expectations and tracking expectations. And so we’ll continue to use that benefit of the carrot to allow those sellers on eBay to provide retail-like, fantastic consumer experiences to be the ones that will really succeed and grow.”
Marketplace Changes
Donahoe sounded excited when he talked about a “nice series of product enhancements” during the year. “You’re going to see some really good stuff around the checkout experience on eBay. We’re finally going to, given the fact that we own eBay and PayPal, we’re going to improve the checkout experience on eBay. You’re going to see some search improvements. You’re going to see some fun areas in discovery.”
He said there would be “more to come on a steady stream of product enhancements on eBay.”
Donahoe also said the company has plans to “do some things” in the collectibles category, and he said, “Sporting Goods and Baby Goods are two sort of subcategories, where we’re working hard to bring the right inventory on and provide a good experience.”
eBay will roll out a new search platform this year. “Historically, the search on eBay has been matching keyword match in the title. And that’s really how we recall search on eBay. What Cassini will now do is, we’ll search the entire listing for search terms and match the search query with that. So we think that will improve the accuracy and comprehensiveness of search recall.”
The full release is available on the EcommerceBytes Blog.
