Annual profits

eBay Sales, eBay Revenue, and eBay Annual Profits

eBay Inc. said its gross merchandise volume, which is the value of all goods sold on the site, fell 18% to $18.55 billion in the second quarter of 2022. The online marketplace said it ended the second quarter with 138 million active buyers, down 12% from a year earlier.

Still, analysts and industry watchers have viewed eBay’s earnings positively. Second-quarter earnings beat Wall Street expectations, and eBay said it now expects third-quarter sales to be between $2.29 billion and $2.37 billion. That’s more than analysts’ average projection of $2.3 billion in the quarter ending September.

EBay said the higher-than-expected profits were the result of its focus on its so-called targeted category strategy, which involves selling high-end products such as watches and sneakers. In June, the company unveiled the 31,000-square-foot EBay Vault, a temperature-controlled facility where collectors can store valuables, monitor their market value, and sell them to other buyers. The move pits EBay against sites such as The RealReal Inc., a members-only consignment store for luxury goods

“We are seeing significant outperformance in targeted categories globally,” eBay CEO Jamie Iannone said in a call with analysts.

eBay Rankings No. 5 in the Online Marketplace Database 2022 Digital Commerce 360.

eBay expects further drop in GMV

Despite the success of the Focused Categories strategy, the company lowered its full-year guidance for GMV to between $72.7 billion and $74.7 billion. That’s down from the $73.2 billion to $75.2 billion he had forecast earlier.

The market attributed the drop in GMV to problems in Europe, noting that US GMV rose 15% from the second quarter of 2019, while international GMV fell 3% over the same period.

“European markets were more significantly affected given their proximity to (the war) in Ukraine,” Stephen Priest, eBay’s chief financial officer, told analysts.

Focus on focus categories

The idea behind Targeted Categories is to increase revenue for collectibles buyers, who are considered more frequent buyers than traditional eBay customers. eBay has started offering authentication services for things like trading cards and jewelry, hoping to be seen as the safest place for what it calls “passionate buyersto indulge their passions.

“The vast majority of our avid shoppers buy in targeted categories, and their spending levels remain above $3,000 a year,” Iannone told analysts.

These high spending levels also drove eBay’s Q2 acquisition of KnownOrigin. KnownOrigin is a non-fungible token (NFT) platform that allows artists and collectors to create, buy, and resell NFTs through blockchain-supported transactions.

Industry observers expressed their approval of the strategy.

“Earlier this year, we saw eBay focus on the ‘passionate buyers’ who are a big part of their business,” Suzi Tripp, vice president of information at consulting firm Brooks Bell, told Digital Commerce 360. “A focus on luxury items and addressing buyer concerns about authenticity by leveraging expert verification and authenticity guarantees has served eBay well this quarter. They know who their most influential segments are and are working tirelessly to create experiences that will keep them coming back for more.

EBay told analysts it has 17 million enthusiastic buyers, which it defines as shoppers with at least six shopping days and more than $800 in annual spend.

Changes on eBay

In other Q2 2022 news, eBay:

  • eBay has joined an investment consortium led by The Chernin Group (TCG), which has made a strategic investment in Funko. As part of this investment, Funko and eBay enter into a commercial agreement. Thanks to him, eBay will become Funko’s favorite secondary market. The companies will team up to create exclusive product releases.
  • eBay has announced the closure of GittiGidiyor, the company’s marketplace in Turkey. The shutdown will not have a significant impact on eBay’s revenue and operating income going forward, the company said.
  • The company’s total advertising offerings generated approximately $275 million in revenue in the second quarter. This represents approximately 1.5% of GMV.

How is eBay doing financially?

During the second quarter ended June 30, eBay announced:

  • EBay’s revenue was $2.4 billion. This represents a decline of 9% on a reported basis and 6% on a FX neutral basis.
  • Gross merchandise volume (GMV) of $18.5 billion. This represents a decline of 18% on an as reported basis and 14% on a currency neutral basis.
  • GAAP net loss from continuing operations of $536 million.

Percentage changes may not add exactly to dollar figures due to rounding.

Bloomberg News contributed to this report.

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