eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of buyers and sellers around the world, today is announcing that its business is performing significantly better than expectations shared in its earnings release on April 29, 2020. Due to the magnitude of this change, eBay is providing the following information as a one-time update:
- Strength in global gross merchandise volume (GMV) seen in April has continued through May, and the Company now expects full Q2 volume growth rates to land between 23% and 26% as compared to the prior year period.
- All major verticals are accelerating significantly compared to previous quarters, including Home & Garden, Electronics, Fashion, Auto Parts and Collectibles.
- Demand strength is driven by increased organic traffic, better marketing efficiency, and higher platform conversion.
- Active buyer growth is accelerating, with approximately 6 million new and reactivated buyers added in April and May.
- More sellers are joining eBay through efforts like Up & Running. Since March 2020, tens of thousands of small business sellers have been added to the platform.
- Classifieds revenues are performing at the high end of previous expectations disclosed on the Q1 earnings call with automotive subscription revenues recovering as dealerships reopen across international markets.
Buyer and Seller Investments
To further engage new and existing buyers, eBay is making additional investments in marketing and technology to retain new buyers and increase purchase frequency. In addition, expanded consumer seller promotions are encouraging more buyers to sell which historically has increased customer lifetime value on the platform.
eBay continues to provide sellers the platform, solutions and support needed to grow their business and thrive. The Company is deploying investments in order to support sellers during this time, including:
- The Company has declared June “Sell on eBay” month. Significant efforts are underway to drive the trial of eBay’s powerful selling platform. In the US, first-time sellers are invited to sell completely free on eBay. The promotion lasts throughout the month and is valid on up to 5 sales.
- Up & Running programs continue to expand around the world. In addition to the previously announced markets (US, UK, Canada, Greece, Ireland, Italy, Israel and Russia), eBay also launched Up & Running adaptations in Mexico and Brazil in May.
- The Company is continuing its listing promotion through the end of July in the US with 50,000 additional free fixed price listings per month for store sellers and 200 additional free listings per month for non-store sellers.
- The Company extended seller performance protections, established at the onset of COVID-19, through July 19, 2020.
Supporting Our Communities
eBay remains committed to living its purpose, empowering people and creating economic opportunity for all. In support of this commitment:
- Today, eBay is announcing a donation of over $1.3 million, split between the NAACP Legal Defense Fund and Equal Justice Initiative in an effort to take action against systemic racism and injustice.
- Last month, eBay Foundation announced that it had committed an additional $10 million to support COVID-19 relief worldwide. The additional funding round is the largest in its history and comes at a vital time for communities and small businesses adversely impacted by the pandemic. Many of these funds have been granted to organizations supporting underrepresented groups and Black-owned businesses, including ICA Fund Good Jobs, Kiva, LISC, and Start Small, Think Big. eBay Foundation will also be supporting inclusive entrepreneurship and community rebuilding efforts through an employee program called the Global Give, which will provide substantial grants to organizations serving underrepresented entrepreneurs.
- In May, eBay released the 2019 Impact Report, which encompasses the Company’s environmental, social and governance work throughout the past year and reports progress to-date on pre-established goals. Notably, among eBay’s impact goals, through eBay for Charity the Company achieved its 2020 impact goal ahead of schedule, raising $1 billion for charities worldwide. Additionally, from 2018 to 2019, eBay decreased emissions by 16%, while increasing renewable energy supply by 24%, bringing eBay to 64% renewable energy globally — on track against a goal to source 100% renewable energy by 2025.
Guidance
Due to the dynamics highlighted above, the Company is updating its Q2 2020 guidance previously announced on April 29, 2020. The Company now expects:
| Prior | Current | Delta | |||
| Apr 29, 2020 | June 4, 2020 | ||||
| Low | High | Low | High | Midpoint | |
| Revenue (in billions) | $2.38 | $2.48 | $2.75 | $2.80 | +$0.34 |
| Y/Y Growth | (2)% | 2% | 13% | 16% | +14 pts |
| Organic FX-Neutral Y/Y Growth | 2% | 6% | 17% | 19% | +14 pts |
| Non-GAAP EPS | $0.73 | $0.80 | $1.02 | $1.06 | +$0.27 |
| Y/Y Growth | 10% | 21% | 54% | 60% | +41 pts |
The Company is not updating full year guidance at this time, but management currently expects that full year performance will likely be above the ranges announced on April 29, 2020. The Company expects to update full year guidance in connection with its Q2 2020 earnings announcement after evaluating business dynamics in June.
