eBay Q3 2020 Earnings boosted by pandemic buyers

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eBay earnings came out yesterday and were met by some with less than resounding satisfaction… until eBay rushed around trying to explain that their forecasts in Q2 included the Classifieds business but the actual Q3 results excluded it as it’s in the process of being flogged off. So when the dust settled and everyone was on the same page, eBay Q3 2020 Earnings showed revenue up 25% at $2.6 billion, with Non-GAAP net income from continuing operations was $604 million, or $0.85 per diluted share.

Annual active buyers grew by 5% to 183 million global active buyers and eBay Q3 2020 earnings reported GMV of $25.0 billion, up 22% year on year.

“I’m pleased with the third quarter results. On an apples to apples basis, we delivered results that exceeded expectations on both the top and bottom lines. Our third quarter performance reflects the strength of our newly focused strategy coupled with the enormous untapped potential of our marketplace. As we continue our multi-year journey to become the best global marketplace to buy and sell, I am proud of the progress our team is making toward our tech-led reimagination.”
– Jamie Iannone, CEO eBay

Based on the improved revenue and earnings outlook for Q4 and full year 2020, eBay has raised its full year guidance for continuing operations with revenue for the full year expected to be around $10.04 – $10.11 billion and non GAAP earnings per share in the range of $3.34 – $3.40.

340,000 sellers have now been migrated to managed payments and over the past quarter 20% eBay sales went through managed payments. At a rough guess there are something like 25 million sellers worldwide (300,000 in the UK) so for 20% of sales to go to 340,000 sellers some pretty big merchants have been migrated. eBay have already announced the Q1 2021 expansion plans to France, Italy and Spain, along with eBay managed payments support for eBay for Charity sellers in the US and UK.

Promoted Listings delivered $186 million of revenue in Q3, up 79% – if you are finding yourself spending ever more on Promoted Listings then you’re probably not alone as it’s a right money spinner for eBay.

This year eBay have seen a ton of new buyers and strong GMV, but this could be mainly attributed to the global pandemic. The real question is, now that eBay are once again seeing double digit growth, will they be able to hold on to the new buyers and continue strong growth after the winter when hopefully the world will get the health emergency under control.

4 Responses

  1. Chris, the real question is what the heck Jamie’s “tech-led reimagination” really means for EBAY.

    Is there a real development pipeline to embrace social commerce, create a modern UX and bring organic traffic and engagement, as well as fresh SMEs to the platform?

    -or-

    Is it more management-speak for the Board having chosen someone innocuous who will oversee a draining of cash flows by increasing bites of every transaction (Promo Listings, Payments)?

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