EBay outperformed its second-quarter projections with revenues of $2.7 billion. Shares rose 7% in extended trading, the global online retailer announced on Wednesday.
This is an increase of 2% on an as-reported basis and 4% on a foreign exchange neutral basis, primarily driven by gross merchandise volume of $22.6 billion, down 4% on an as-reported basis.
At a time of tremendous competition from Amazon, Facebook, and Google, eBay reported that first-party advertising “continued to show impressive growth.” In the second quarter, more than 940,000 sellers gained $89 million in advertising revenue to promote more than 250 million listings.
“We remained focused on building our active buyer base, delivering outstanding customer experiences, and accelerating our growth initiatives in the second quarter,” explained Devin Wenig, president and CEO of eBay. “Managed payments continues to exceed expectations,” he said, “while first-party advertising is providing significant benefits to sellers and new features are making our marketplace easier to use.”
EBay has taken two actions in the past several weeks to strengthen its portfolio.
First, the company reached a commercial agreement with Paytm Mall in India to bring eBay’s global inventory onto one of the largest marketplaces. The agreement involves eBay making an investment in Paytm Mall of about 5.5%, Wenig said.
Second, eBay has reached an agreement to sell its flash-sale German business, brand4friends.
Since taking over as CEO of eBay in 2015, Wenig has struggled to revitalize the company, after a split with PayPal. Activist investors Elliot Management and Starboard Value acquired eBay stakes, and in January Elliott proposed changes, including the possible sale of the ticket marketplace StubHub.
During the second quarter, eBay delivered GAAP net income from continuing operations of $403 million, or $0.46 per diluted share. and non-GAAP net income from continuing operations of $589 million, or 0.68 per diluted share.
The company also generated $744 million of operating cash-flow and $607 million of free cash-flow from continuing operations while also repurchasing about $1.5 billion of its common stock and paying $120 million in cash dividends in the quarter.
EBay projected third-quarter adjusted profit from continued operations of 0.62 to 0.65 cents per share, and revenues of $2.61 billion to $2.66 billion.
On Thursday afternoon, eBay was trading at $40.26 a share, a gain of $1.24 at 3.1%. The opening high for eBay on Thursday was $41.10.
Ki Price/Getty Images for Ebay