eBay(EBAY)2023-07-27 01:38Financial Data and Key Metrics - Gross merchandise volume (GMV) was 2.54 billion, outpacing GMV growth by 6 points [17][32] - Non-GAAP earnings per share (EPS) was 492 million, up 6% year-over-year [39] - Advertising revenue reached 2% penetration of GMV, with total ads growing 35% and first-party ad revenue growing 49% [25][36] Business Line Data and Key Metrics - Focus categories grew roughly 7 points faster than the remainder of the marketplace, led by motors, parts, and accessories (P&A), which grew mid-single digits year-over-year [18][33] - eBay Refurbished maintained double-digit growth, contributing significantly to focus category outperformance [33] - The company launched Authenticity Guarantee for streetwear in the U.S., expanding to brands like Adidas, Jordan, and Nike, with plans to include luxury brands like Gucci and Louis Vuitton later in the year [19] - The Certified by Brand program, with over 20 participating brands, enhanced trust in listings for watches, jewelry, and handbags [19][20] Market Data and Key Metrics - U.S. GMV was down 4% organically, while international GMV grew 1% on an FX-neutral basis, benefiting from cross-border trade [33][34] - Active buyers were 132 million, down 1 million quarter-over-quarter, but new and reactivated buyers grew year-over-year for the fourth straight quarter [34][35] - Enthusiast buyers remained stable at 16 million, with average annual spend per enthusiast at 383 million to shareholders through share repurchases and dividends in Q2, with $2.3 billion remaining under the current buyback authorization [39][43] - The acquisition of Certilogo is expected to enhance the company's capabilities in fashion authentication and support the circular economy [20][73] Q&A Session Summary Question: How do the three strategic pillars (relevant experiences, scalable solutions, magical innovation) impact the P&L? - The pillars are expected to drive buyer growth, increase spend per buyer, and amplify ROI on the platform. Relevant experiences have already shown improvements in customer satisfaction and GMV, while scalable solutions like eBay International Shipping are opening up cross-border trade opportunities. Magical innovations, such as AI-driven features, are enhancing customer experiences and unlocking more inventory for sellers [45][46][47] Question: What is driving the margin decline, and are these factors temporary or structural? - The margin decline is driven by eBay International Shipping, M&A, FX fluctuations, and reinvestments in the business. While some factors like FX and M&A are temporary, others like reinvestments are structural and aimed at driving long-term growth [50][52][53] Question: How is the company addressing non-focus categories to ensure stability? - The company is leveraging its focus category strategy to lift overall marketplace performance, including non-focus categories. Investments in scalable solutions like eBay International Shipping and AI-driven features like Magical Listing are benefiting all categories [55][56][57] Question: What is the impact of eBay International Shipping on U.S. GMV? - The program is still ramping up in the U.S., but early results show positive reception from sellers, with improvements in shippable listings and conversion rates. The program is expected to open up more cross-border trade opportunities [59][60] Question: How is the company performing in attracting millennials and Gen Z buyers? - The company is seeing success in attracting younger buyers through initiatives like Authenticity Guarantee for streetwear and full-funnel marketing. New and reactivated buyer growth has been positive, particularly in categories like P&A [61][62] Question: How is the company navigating the competitive environment, especially with China drop shippers? - The company is leveraging its platform's value proposition, with used goods growing faster than new. Cross-border trade is also showing strength, supported by initiatives like eBay International Shipping and payments infrastructure improvements [64][65][66] Question: What is driving the strong performance in first-party ads, and what is the M&A strategy? - First-party ad growth is driven by product innovation and seller adoption, with Promoted Listings Standard and Advanced contributing significantly. The company is focused on strategic M&A to support long-term growth, such as the acquisition of Certilogo to enhance fashion authentication [69][70][72][73] Question: What is the outlook for GMV growth in 2024? - The company is confident in its strategy and expects to return to positive GMV growth in 2024, driven by focus categories and continued investments in innovation [75][78] Question: Why is the company being more reserved with buybacks, and will it monetize the Adevinta stake? - The company remains committed to returning 125% of free cash flow to shareholders through buybacks and dividends. Specific details on the Adevinta stake were not disclosed, but the company will continue to prioritize shareholder value [80] Question: What is the supply situation in the P&A category? - Supply is strong in the P&A category, with over 500 million listings. The company is focused on improving the buyer experience through features like fitment guarantees and AI-driven tools [82][83]