eBay reported financial results for its first quarter, ended March 31, 2008. I picked out the things I found most interesting, below, and added a few comments in italics. Note this is not an investment blog, and you should use eBay filings if you want to ensure you get the full story about its financials.
eBay profits were up 22 percent in Q1-08, year-over year. The company said revenue growth was driven primarily by Marketplaces net transaction revenues, the ongoing expansion at PayPal, Skype and the company's global classifieds business. (Interesting they mentioned classifieds prominently.)
eBay posted Q1-08 revenue of $2.19 billion, up $424 million (24%) from the same period last year. Net income on a GAAP basis was $460 million, up 22 percent from the same quarter last year.
The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites, had $1.48 billion in revenue, equating to 19% year-over-year growth. Revenue growth was driven primarily by advertising, classifieds and StubHub. Net revenues generated outside the U.S. were 55% of total Marketplaces net revenues for the quarter. Gross merchandise volume was $16.04 billion for the quarter, an increase of 12% over the first quarter of 2007.
eBay breaks out "Marketing Services and Other Revenue" for the first time. Marketplace Net Transaction Revenue = $1.267 billion, Marketplace Marketing Services and Other Revenue = $216 million (a 56% increase year over year) = $1.48 billion in total Marketplace revenue. I wish eBay broke out its ad revenue numbers.
This reclassification is interesting. According to a slide in the conference call presentation, it consists of Ad revenues; Revenues from lead referral arrangements; Revenues from third party arrangements; Interest earned on certain PayPal customer account balances. (What are third party arrangements, anyone know?)
PayPal had $582 million in net revenue, an increase of 32% year-over-year. Net total payment volume (TPV) for the quarter was $14.42 billion, an increase of 34% year-over-year. The net revenue and net TPV growth was driven primarily by the continued strong growth of Merchant Services globally and increased penetration on eBay internationally. Growth in global active accounts increased to 60.2 million, representing 17% year-over-year growth. Globally, PayPal will continue to focus on greater penetration into the Marketplaces business and the acquisition of new merchants.
Contrast the 19% growth in Marketplaces versus 32% growth in PayPal.
eBay's new President and CEO John Donahoe said in the company's press release, "This was a very strong financial quarter for the company. The results reflect the strength provided by our diverse portfolio of businesses. Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come."
Interesting factoids:
The company's global portfolio of classifieds businesses reported a 101% increase in unique visitors year over year, with an average of 70 million monthly unique visitors.
The company completed the reorganization of select North American and European functional groups to align more closely with strategic priorities.
Growth in active users each quarter year-over-year is declining:
Q4-06 14%; Q1-07 10%; Q2-07 7%; Q3-07 4%; Q4-07 2%; Q1-08 1%
Conversely, number of listings did well in the first quarter. This is likely attributable to change in fee structure with lower listing fees, but higher commission fees - wish it was broken out by category!:
Q1-07 2%; Q2-07 (6%); Q3-07 (5%); Q4-07 4%; Q1-08 10%
Gross Merchandise Volume growth year-over-year is stable, between 12 - 14%. (see eBay's charts for more detailed data).
And the percentage of Fixed Price trading as a percentage of GMV remained flat at 42%.
The new revenue category I mentioned above - called "Marketing Services and Other Revenue," is explained in a footnote:
Beginning with the first quarter of 2008, we reclassified revenue generated primarily from our Marketplaces non-gross merchandise volume based businesses (which includes Shopping.com, Rent.com and our classified websites) from "Net Transaction Revenues" to "Marketing Services and Other Revenues" in order to more closely align our net transaction revenue presentation with our key operating metrics. "Marketing Service and Other Revenues" also includes amounts previously reflected under "Advertising and Other Revenue." Prior period amounts have been reclassified to conform to the current presentation. Consolidated revenues, as well as total segment revenues, are unchanged
Here's a link to the release.
