eBay outperforms investor expectations in Q1 earnings
eBay have announced their quarterly results and they’re not as bad as everyone expected sending their share price up 4% in after hours trading.
While profits are a very tidy $550 million, in reality that’s down about 6% from last year, but in fairness we all know that eBay has historically performed OK and PayPal has raced in to save the day and delight investors.
Now the PayPal family silver has been flogged off, eBay has to stand by their own performance and we know that they’ve struggled for the past two years with Google dumping many of their pages in search results – hence why they are heavily invested in encouraging sellers to add structured data (Item Specifics and Product Identifiers) and why they’ve resurrected user generated content (Reviews) after a 10 year absence.
Gross Merchandise Volume (GMV) came in at about $20.5 billion, roughly level with the same period last year. More importantly, active buyers are up 3.8% to 162 million.
On the back of the results, eBay upped their full year revenue forecast to $8.6 billion to $8.8 billion from their previous $8.5 billion-$8.8 billion estimate.
What do the results mean for you?
eBay restated their focus on small businesses, but it’s essential that they carry through their plan to revitalise the marketplace.
Part of their plans is to focus on products instead of listings. They need product identifiers to establish that your listing is the same as your competitors, submit product feeds to Google and to correlate product reviews to listings.
We often hear sellers complain that sales are down. If that’s you then the first thing to check is how good are your listings. Are you Item Specifics and Product Identifiers present and correct. If you search for your own listings using Item Specifics do you find them (don’t rely on title keywords, look on your mobile and use the “Refine” options to make sure your products are displayed to buyers.
It’s good news that eBay are pleasing investors. Investors like returns on their money (they got $0.47 per diluted share, less than last year but more than expected). For investors to get a return eBay have to make money and the main way they make money is when you make sales.
If there is a worry it’s that Stubhub and Classifieds both performed well and they don’t make sales for marketplace sellers. But their revenues were only $177 million and $186 million respectively – a drop in the ocean of eBay’s total $2.1 billion revenue.