eBay Releases Mixed Q4 and Full Year 2021 Earnings Report – Stock Dives
eBay released its fourth quarter and full year 2021 earnings report today, which includes the important holiday peak season.
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“Rounding out a very strong year, I’m proud of our team for delivering yet another solid quarter. By investing in our strategy to drive sustainable growth, we increased customer satisfaction, improved the seller and buyer experience, and returned value to our shareholders. During the quarter, we completed our multi-year payments transition, and generated growth in both our advertising business and focus categories. As we continue to accelerate our strategy, we are well positioned for future growth.”Jamie Iannone, Chief Executive Officer of eBay
The company released Q4 and full-year 2021 highlights, as well as several business and operational highlights as part of its earnings report.
While the company called its report “Better Than Expected,” there is weakness in the report as well with eBay again having to admit a significant loss of active buyers and sellers and Q4 GMV down and full-year flat.
- Annual active buyers declined by 9%, for a total of 147 million global active buyers.
- Annual active sellers declined by 8%, for a total of 17 million global active sellers.
eBay stock tanked over 10% immediately following this earning report.
eBay Fourth Quarter Financial Highlights
- Revenue was $2.6 billion, up 5% on an as-reported basis and up 5% on a foreign exchange (FX) neutral basis.
- Gross merchandise volume (GMV) was $20.7 billion, down 10% on an as-reported basis and down 11% on an FX-Neutral basis.
- GAAP net loss from continuing operations was $893 million, or $(1.47) per diluted share.
- Non-GAAP net income from continuing operations was $647 million, or $1.05 per diluted share.
- GAAP and Non-GAAP operating margin of 26.3% and 31.6%, respectively.
- Generated $475 million of operating cash flow and $372 million of free cash flow from continuing operations.
- Returned $3.1 billion to shareholders, including $3.0 billion of share repurchases and $107 million paid in cash dividends.
eBay Full Year Financial Highlights
- Revenue was $10.4 billion, up 17% on an as-reported basis and up 15% on an FX-Neutral basis.
- GMV was $87.4 billion, flat on an as-reported basis and down 3% on an FX-Neutral basis.
- GAAP net income from continuing operations was $252 million, or $0.38 per diluted share.
- Non-GAAP net income from continuing operations was $2.7 billion, or $4.02 per diluted share.
- GAAP and Non-GAAP operating margin were 28.1% and 33.4%, respectively.
- Generated $3.1 billion operating cash flow and $2.6 billion of free cash flow from continuing operations.
- Repurchased approximately $7.0 billion of common stock and paid $466 million in cash dividends.
eBay Business Highlights
- Following the completion of the payments migration, the company updated its definition of GMV to align with customer money flows on its platforms. eBay’s GMV now includes all paid transactions on its platforms inclusive of shipping fees and taxes. The company also restated its historical metrics to reflect the updated definition.
- The company completed the sale of 80.01% of eBay Korea to Emart for approximately $3.0 billion and retained 19.99% interest, valued at approximately $725 million as of the end of the quarter.
- eBay also completed the sale of approximately 135 million shares of its Adevinta stock to Permira for over $2.3 billion, reducing eBay’s ownership of Adevinta to 33%.
- eBay acquired Sneaker Con’s authentication business, Sneaker Con Digital, with operations in the US, UK, Canada, Australia and Germany. With the acquisition, the company has increased the scale and flexibility of its operations while further empowering its community to buy and sell footwear with total confidence.
- eBay completed its transition to a modern payments platform by migrating all remaining sellers off of the legacy system. As a result, managed payments delivered $2.0 billion in revenue in 2021 and the company vested in and exercised the first tranche of the Adyen warrant, worth nearly $1.1 billion as of December 31, 2021.
- Promoted Listings delivered approximately $227 million of revenue in Q4, up 5% on an as-reported basis and up 4% on an FX-Neutral basis.
- The company’s advertising offerings surpassed $1 billion in revenue for the year.
Tech-Led Reimagination of the Platform
- During the quarter, eBay expanded its authentication of luxury watches to the UK and Germany. The company also began authenticating cross-border sneaker transactions into the US and cross-border luxury handbag imports from Japan.
- eBay saw faster GMV growth in focused categories that now represent approximately 20% of global volume. The company’s sneaker business continued to grow at double digits globally, and its luxury watches and handbags categories saw double-digit growth in the US.
- eBay debuted its new 3D true view technology for sneakers, which enables sellers to showcase the actual item they are selling with a proprietary, interactive, 360-degree view. This experience helps buyers shop with confidence by presenting a virtual representation of the item viewable from every possible angle and in true-to-life detail.
- eBay’s Certified Refurbished program expanded to over 320 brands as of the end of 2021. The program saw increased customer satisfaction and positive double-digit growth as a result of higher trust.
- Building on the success of its Certified Refurbished program, the company announced eBay Refurbished, a new destination where buyers can discover like-new products from brands like Apple, Samsung and Dyson, all backed with a one- or two-year warranty.
- Following the launch of videos in the eBay app, eBay further enabled video playback on desktop and mobile web in the US, Canada, UK, Germany and Australia. To date, the company has seen hundreds of thousands of listings add video content.
- Building on the company’s long-standing commitment to small businesses, eBay announced the recipients of its second Up & Running grants program. Fifty US business sellers will each receive $10,000 in grant packages.
- eBay was recognized again for its commitment to environmental and corporate responsibility through inclusion on the Dow Jones Sustainability Index (DJSI) World and North America Indices and Investors Business Daily’s list of 100 Best ESG Companies.
- eBay for Charity had a record-breaking year raising more than $145 million in 2021, up 18% year-over-year.
This evening, eBay will hold its earnings call with Wall Street analysts.
We will check this call for additional details and information that may be relevant for eBay sellers and most importantly, if it will continue to lean on its “high-value” customer strategy to explain away the loss of active buyers.
For full details on the eBay fourth quarter and full year 2021 earnings report, please visit the eBay investor relations site here.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.