EBay Inc. reported that the value of goods sold on its mobile commerce platform increased 70 percent in first quarter ended March 31, 2014 and now represent 19 percent of its e-commerce volume. Total revenue at the company increased 14 percent to $4.3 billion, compared to the same period in 2013.
The company said total company enabled commerce volume (ECV) increased 24 percent in the first quarter to $58 billion. Mobile downloads since inception exceeded 240 million and attracted 6.5 million new customers in the quarter. Cross-border trade grew 24 percent, representing $13 billion, or 22 percent, of total company ECV.
"We delivered a strong first quarter, with enabled commerce volume up 24 percent and revenue up 14 percent," said eBay Inc. President and CEO John Donahoe. "We are committed to delivering sustainable shareholder value and focusing on what matters most to our investors. We are executing our growth plans, capitalizing on the synergies in our portfolio and aggressively executing our $5.0 billion share buyback program. Today, we also announced a non-cash tax charge to facilitate repatriation of $6.0 billion net in foreign earnings, increasing our available U.S. cash and enhancing our financial flexibility."
PayPal net total payment volume (TPV) grew 27 percent with Merchant Services volume up 32 percent and on-eBay volume up 15 percent. Revenue grew to $1.8 billion. PayPal gained 5.8 million new active registered accounts to end the quarter at 148 million, up 16 percent. Global on-eBay penetration increased to 78.9 percent. PayPal continued to invest in its credit offerings, providing flexibility for consumers and merchants while improving its ability to manage transaction expense and reinvest in the business to accelerate growth.
EBay Marketplaces gross merchandise volume (GMV) grew 12 percent, with the U.S. up 11 percent and International up 13 percent. Revenue grew to $2.2 billion. Marketplaces gained 4.7 million new buyers to end the quarter with 145 million active buyers, up 14 percent. Top rated sellers in the company's three largest markets grew their same-store-sales 19 percent and offered free shipping on 53 percent of transactions across those markets. The selection of items available on Marketplaces grew to over 650 million listings, including both platform and non-platform offerings, reflecting the success of improved selling initiatives, particularly on mobile.
EBay Enterprise gross merchandise sales (GMS) grew 16 percent. Revenue grew to $269 million. Enterprise enabled its clients to grow same-store sales 11 percent. eBay's Magento business, which primarily services small to medium-sized businesses, was integrated into eBay Enterprise's offerings, providing merchants of all sizes a highly flexible end-to-end solution.
First Quarter 2014 Financial Highlights (presented in millions, except per share data and percentages)
First Quarter 2014 2013 Change eBay Inc. Net revenue $4,262 $3,748 $514 14% Enabled commerce volume (ECV) $58,495 $47,091 $11,404 24% GAAP Net income (loss) $(2,326) $677 $(3,003) (443%) Earnings per diluted share $(1.82) $0.51 $(2.33) (454%) Non-GAAP Net income $899 $829 $70 8% Earnings per diluted share $0.70 $0.63 $0.07 11% Business Units Payments Net revenue $1,845 $1,548 $297 19% Net total payment volume (TPV) $52,006 $41,040 $10,966 27% Marketplaces Net revenue $2,155 $1,957 $198 10% Gross merchandise volume (GMV) $20,545 $18,307 $2,238 12% Enterprise Net revenue $269 $248 $21 8% Gross Merchandise Sales (GMS) $936 $807 $129 16% Other Selected Financial and Operational Results
Operating margin ?GAAP operating margin decreased to 20.6% for the first quarter of 2014, compared to 21.3% for the same period last year. Non-GAAP operating margin decreased to 26.9% in the first quarter, compared to 27.4% for the same period last year. Taxes ?The GAAP effective tax rate for the first quarter of 2014 was 366%, compared to 16% for the first quarter of 2013. The company recorded a discrete tax charge of approximately $3.0 billion taken on $9.0 billion of foreign earnings from the prior years that were previously not subject to U.S. tax. This increases available U.S. cash by approximately $6.0 billion (net of the tax charge) providing greater U.S. financial flexibility. Excluding the effect of this discrete tax charge, our effective tax rate for the quarter would have been 18%. The remaining two percentage point increase in the company's GAAP effective tax rate compared to the same period of the prior year was due to an increase in current year foreign earnings subject to U.S. tax and the expiration of the federal R&D credit. For the first quarter of 2014 and 2013, the non-GAAP effective tax rate was 21% and 20%, respectively. Cash flow ?The company generated $1.2 billion of operating cash flow and $968 million of free cash flow during the first quarter of 2014. Stock repurchase programs ?The company repurchased 33.1 million shares of its common stock for approximately $1.8 billion in the first quarter of 2014. As of March 31, 2014, the company's remaining share repurchase authorization was $3.8 billion. Cash and cash equivalents and non-equity investments ?The company's cash and cash equivalents and non-equity investments portfolio totaled $11.9 billion at March 31, 2014, down from $12.8 billion at December 31, 2013. As previously announced, the company has settled its proxy fight with investor Carl Icahn. Icahn has withdrawn both his proposal to separate the company's PayPal business and his two nominees to the company's Board of Directors. The company has agreed to appoint David Dorman as an independent director to its Board of Directors. This will expand the number of independent directors on the board to 10. Business outlook
Second quarter 2014 ?The company expects net revenues in the range of $4,325 - $4,425 million with GAAP earnings per diluted share in the range of $0.51 - $0.53 and non-GAAP earnings per diluted share in the range of $0.67 - $0.69. Full year 2014 ?The company now expects net revenues in the range of $18,000 - $18,500 million with GAAP earnings per diluted share in the range of $0.04 - $0.09 and non-GAAP earnings per diluted share in the range of $2.95 - $3.00.
