EBAY - Earnings call transcript Q2 2019

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Operator

Good afternoon. My name is Sheryl, and I will be your conference operator today. At this time, I would like to welcome everyone to the eBay Q2 2019 Earnings Conference Call. All lines have been placed on mute to prevent any back background noise. After the speakers' remarks, there will be question-and-answer session. Instructions]. [Operator you. Thank

President, Vice you begin may Joe Investor conference. your Billante, Relations,

Joe Billante

XXXX. us. you for to of Thank afternoon. And the for quarter call Good conference joining welcome release eBay's second earnings

Devin FX-neutral rates Joining the revenue Wenig, represent Officer; me Scott's call. comparisons, Scott Chief slide All providing our mentioned and they and indicate Officer. Schenkel, the remarks Scott's presentation today call to and our and accompany in Chief unless on Devin President year-over-year Executive We're a growth Financial GMV are commentary during otherwise.

both broadcast the This through call presentation is investors.ebayinc.com. the also conference available website eBay call on being the are of internet, and the Investor at section Relations and

our for news You latest can website Relations Investor visit the Company and updates.

webcast three at the accessible In same link. archive will months the addition, least of for through be an

remind our begin, conference this measures we course we like Before I'd performance. that related during the some of you will non-GAAP to discuss call, to

the of nearest can You to slide measures call. in the GAAP comparable reconciliation accompanying conference the find presentation this these measures

regarding eBay management forward-looking consolidated results but expectations, growth risks future including statements current based the our our and on assumptions, the to and for of its quarter expected forecasts future uncertainties. of make addition, limited statements not XXXX, third These performance and statements and will are Inc. that include full-year and are In financial the subsidiaries, involve and business.

in a may this Our of for from discussed call actual results differ those materially reasons. variety

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call the over turn to Devin. me let that, With

Devin Wenig

everyone. afternoon and Joe, good Thanks,

this our initiatives, for is and great experience, a grow immediate plan growth and Our advertising customer base, buyer our year active payments. deliver to scale

of in seller unique better executed growth managing growth, selection As continued build tangible while the marketplace, QX, the customer opportunities. good and creating that made on are delivered our strengths In intermediating buyer we new that plan. we we active value and consumer marketplace, experience, to scale control to increasingly and improvements; both and payments. our ads experience We we and we

portfolio efficiency to making In investments fund our on progress drove addition, we overview. while our

GMV our X% XX%. and quarter, X%, the Marketplace platform up to grew For total volume StubHub active these grew revenue GMV Classified results, our while was down $XXX revenues flat, million. platform up buyer base Underlying was our X%, was X%, was at in

returned Scott detail go $X.X our results billion more repurchases shortly. through also financial in into to We will and dividends. investors capital share on

me our sold let spend, context GMV low We've on less stable and redeploying growth. provide but First, in ROI marketing core resulting short some term, business. the buyer and been active reducing item in

We're focus seeing enhancements, maintained certain lapsed new in acquisition, a more conversion also of customer part evolving brand. marketing improvements driving healthy and while of for and targeted reduced we've product Although growth to higher we've our in buyer our by due types promotion. driven incentives, customers, on and

to levers churn. effective have and our drive We effort reduce acquire frequency and expanding our buyers to

a number on more set discover data of product unique that value improved ways selection. listings transform intuitive into previously of we leveraging existing buyers new experience and By can by the pages listings, results. unstructured launched we QX, In buyer the increasing

with We and fast released also an consumer outlet, top brands shipping. our from experience recently brand products aggregates all free that

to And of year, more we instantly major more track are receive this in labels experience able now our our to returns and returns. introduced out to U.S. changes last markets than their Following one-third started QX. buyers rolling

for drive information to for discounts. more their We contribute making catalog. volume in provided by dramatically sellers identify new leveraging Trending sellers seller we easier by capabilities Your while buyers better improvements, introduced ways more We and protection help to Interests. seller pricing, to also offering extended and which abusive Offers complete structured to And to building listings, it simplified buyers, Again including offer ways expanded better find Buy take Buyers, product conversion, significant to action against this

evolving sales cover number challenge the year, will small At for By more the sales business the the states, it'll U.S. of collect grow to tax. is start GMV. active majority a landscape than U.S. legislation our rapidly in requiring only handful the of internet One sellers and emerging to the marketplaces XX states tax. end had the of for that of year,

In QX, And the than challenge. more impacted U.S. mitigate taking by measures this X business active point. we're this to

until pressure However, results sales is rolled U.S. this internet headwind lap to we tax landscape. likely further a out fully

was drove promotions as highlights. performance we some stable Korea, by in international the notable points such relatively in our improvement through at of X Smile Looking Day. loyalty quarter with In markets. supported platform, Overall GMV Big investments core our

macroeconomic Our while acquisition continues UK, marketing strong were gain Japan in down European investments. slightly to markets share, and primarily to buyer due pressure to continued due the

part in growth to revenue payments. Our to continues and outpace acceleration due advertising GMV in

experience. listings the $XXX,XXX Listings over and plan expand Listings XXX these ago. choosing increasingly Over drove are seeing conversion balancing QX, XXX% sellers For in while and over quarter. the of $XX We capabilities up Promoted million from Promoted a Sellers to revenue, strong million in to velocity. impact promoted always year are further, invest buyer ads, on in the

year with We towards billion over our expect revenue track in ad revenue the ad on time. well more goal of and in total we’re to $X a million than $XXX end

PayPal. buyers the saving are fees able on with eBay year on their Sellers business to through their X,XXX in experience are Google Apple and million conversion we the over continue to over Most adoption of pay payments, now For good Pay sellers processed cards, credit last payment launch the simplified QX, $XXX see seeing in are end their managed payments and participating in place. payments payments in managed accelerated late managing the one using QX of U.S. eBay we’ve sellers for day. they by and Pay, Since

we’re to subject forward track, year. end of intend scale. confident our realizing and $X be the regulatory in to and Germany, and by the income we managed approval, We're on look operating in to live revenue in In plan we at billion $XXX million payment

QX first StubHub, At favorable sales series market increased including acceleration conversion, the playoffs. benefited growth, for the active from buyer NHL conditions, party NBA and and longer volume

World from strong and final a League markets, World offset the Cup Cup. international Men's our Women's helped Champions lapping In pressure

program we loyalty and we improved a continue leading launched for more top service new integration with reduced buyers, improve to margins. and addition, to costs fulfillment In technology

to Turning Classifieds.

and building double-digit the our playbook vertical in to this businesses. In growth, market-leading our in motors platform by rapidly categories growth the leading horizontal extended engagement, growth. our on platform scale marketplaces customer execute generated experiences strategy. We another complemented motors and our based position momentum and both including motors quarter In revenue to horizontal we scale has QX, and continue UK, to execution acquired In of real of Germany, leadership estate. advertising organic of increasing offering in continues drive our expanded is our

of over synergies X million to revenue continued of to eBay deliver QX Classifieds. while to GMV $XX growth in with substantial integration eBay point Core over

reviewing role in review. create portfolio value and StubHub portfolio. focused update value. on me We're the our on in you underway significant shareholder making let and progress Review path of and our determining to the Now, is best we're actively Classifieds forward

are announcing today we addition that our to strengthening further at two work, ongoing In actions aimed other portfolio.

Mall which Paytm Mall's of the bring commercial First, of our largest in millions provide with hundreds will one with we’ve a reached Mall, Paytm Paytm on open a on to and global store will inventory. Paytm India. our access global inventory to to agreement customers eBay marketplaces of

Paytm collaboration, approximately As an is part this in of for stake Mall making of eBay X.X%. a investment

an to core reached this our opportunities the sell focus flash on agreement sale brandsXfriends. business we've the our team in Divesting business. German allow business to German will Second,

savings margins. through Later our management this continuing our drive this approach in year, throughout in to communicate we’ll initiatives. improvement growth year, are growth Finally, margin cost and further we disciplined drive reinvesting to

now, summary, value. opportunities growth customer executing In deliver scaling are to experiences we driving shareholder our meaningful outstanding and plan while

me give results. details more you our quarterly over on it turn financial to let to Scott Now,

Scott Schenkel

Thanks, Devin.

with earnings presentation. remarks the four my with prepared starting on begin our of I'll slide QX financial highlights

shareholders generated QX, accretion, total in margin In $X.X we we revenue, non-GAAP million $XXX and flow, these to results, have repurchases Based EPS, and billion confidence dividends. $X.XX cash earnings through non-GAAP of returned outlook. of XXXX billion increased our of X $X.X free operating we have on of points

full EPS year. growth organic and rates raising We our for are reaffirming guidance revenue the GAAP and non-GAAP FX-neutral

buyer increasing active spend five. Moving existing In to maintaining to up modest we million QX, XXX of quarter, base a X buyers, in buyer Similar offsetting churn. increased marketing targets total slide total to lapsed on million, buyer stable the by active and increase which growth is a by new X%. we're our that buyers

GMV, while slide up generated $X.X difficulty] to one billion U.S. Turning year-on-year enabled of QX. X%. In flat $XX.X billion X% versus GMV, we The down six. [technical point $XX.X of QX, international billion, delivered

We revenue, up seven. $X.X million of of and X% up transaction of revenues services and net slide billion, generated X%. We $X.X on other revenue billion revenue marketing to organically. Moving $XXX delivered

to eight. Turning slide

by tax, fluid marketplace flat minus U.S. number versus Specific X% small a GMV tax. in platform to evolving. that quarter. January, seller in landscape in basis, marketplace of tax, driven a the rapidly sales states had and requiring internet the platform from Our on was to internet collect than X time, sales points we and point more from X% active nexus. highlighted QX, marketing, At year-on-your was reduction that a continued on regardless of minus legislation the was or GMV prior marketplaces sales

January, seeing states had As marketplace By faster laws. on will execute more XX in many We're the states and to, are to of marketplaces more required QX, states growth enact collect we higher point than mostly tax, second collection more impact drove with And compressed in live seeing In this half, with have items. June, reduction year-over-year expected. nine a priced effective three timelines. we sales now we in U.S. originally be than dates enacted the

dynamic the for the likely year. of this rest continue expect We to and accelerate

Total based up X%, marketplace UK grew promotion. The points by International the and higher from GMV driven somewhat growth by Smile X%, Marketing by Transaction on points. point driven point prior growth Day X Big triple-digit category services continues than in decelerating X X $X.X QX, pressure, made approximately and X acceleration party quarter. Promoted revenue mix sales. minus a was Korea, points, and in X%, Korean X revenue X%, GMV contributed other deceleration X driven by billion, our and between of factors, Listings, approximately X up in GMV. point offset first two and the decelerating was which is our which revenue being X points macroeconomic effects, revenue accelerating grew gap versus revenue

to third U.S. product. party cost over dollar third-party the as gains towards points, X ad shift was ad from program, leverage continues Our currency and decline due efforts and our in business from partially we Marketplace XX%, primarily up non-strategic margin first-party offset hedging year-on-year by Promoted Listings stronger payments. placements continued investments our away to a

GMV Moving rate GMV. Since in June In million our penetration intermediated of intermediated of X.X%. to of QX, on with nine slide we $XXX we've payments. September, launch $XXX million the

approximately Google new Pay buyers chose demonstrating are choice. the they of their and In desire to cards, Pay June, Our for increased with pay the time. Apple on credit two-thirds platform

rate to now towards is make Our our as steady financial $X run continue billion we annualized progress over well targets. of GMV

Turning StubHub StubHub more mentioned. as accelerating GMV conditions to strength grew a X revenue event on acceleration, of rate the market a points revenue and in X-point million QX. tripled, from points take volume, revenue of QX. by offset XX. initiatives X%, our Transaction MS&O delivering price partially favorable grew accelerating $XX than X%, grew Devin X%, lower in X slide changes from by driven mix.

access -party and to revenue buyers exclusive inventory. Most first unique is of which sales, provides MS&O StubHub’s

party for potential driven MS&O by for purchase and are operates segment X dollars, have points, at offset a In Both lower which operational margins. increase the tickets. StubHub’s addition, first revenue from partially up nascent, margin growth. significant leverage was stronger X%, U.S. of includes sales, insurance but

Segment grow year-on-year continues slide performance flat in digits, in both in XX%, to classifieds flat Classifies QX. was as UK. marketing leverage our with margin revenue double Germany Revenue and motors ongoing a in operating by platforms to and XX. Moving dollar. stronger strong for offering the by U.S. offset is driven investments grew XX%,

operational which XX.X%, QX, XX which driven In all comments spending was investing margin Turning our dollar, drivers. XXXX, cost on versus delivered of in U.S. will we remaining to expenses in slide non-GAAP grow year, points operating focus continue my up XXX while by major of last stronger is the as margins XX points categories. we I and to impacting a payments. basis dynamics of basis

of driven site and in Cost and StubHub's point, by in expense decreased partially point and QX previously, that marketing a operations. Korea offset acquisition discussed revenue we've sales reduction first-party increased Japan. of year-over-year, sales X by cost by driven our X marketing

Product productivity. were down quarter such to resources continue from ads. down point G&A even we of development significant costs as Xth and consecutive X productivity, payments increased year-on-year, over opportunities was into our invest strategic as

Our drive disciplined execution continues to leverage.

benefited consecutive growth quarter by $X.XX from up share in Moving double-digit payments. to of versus expansion, slide partially repurchase prior expansion. fifth and year, program the our EPS XX. non-GAAP delivered EPS, EPS our margin of investment offset our XX% EPS on We

our cost now lapping mostly was and driven down confirm versus lapping by for strong EPS driven warrant quarter is by primarily year. gain we a a GAAP acquiring which control. and Giosis’ agreement, was last as XX% decrease guidance can by versus in EPS $X.XX, created in Adyen. GAAP the tax April Favorability The

GAAP you presentation. earnings press measures our reconciliation always, and find can of As a detailed non-GAAP to financial release in

$XXX slide taxes driven cash and by up strong growth. free generated of On as operational as XXX%, well in the of QX, million CapEx XX, we timing cash flow,

XX. Slide to Moving

million, and a to to continuing dividend changed. diversified in executed Our to our $XXX aggressively capital shares, of targets payment allocation capital not our shareholders strategy commitment and key buy return second and while and our demonstrating back have tenants confidence We've manner. disciplined

$XX.XX price remaining. we billion. amounting to nearly share, of ended average quarter the QX, billion authorization repurchased repurchase In $X.X $X.X shares share XX of an million at with per We

billion. ended we $X.X with investments and debt For billion $X.X quarter, and the of cash of

through XX. of and the progress half and I'd to since separation. specific we've remind the like to Turning capital allocation you made slide XXXX, for our plans first

we've nearly announced XXXX quarterly net billion, cash repurchases share over half. planned, XX% $X than worth billion dilution, two XXX% that We and we’ve of a $XX.X initiated of time. in our flow the of representing As back Since to outstanding and of shares of bought first more dividend payments. separation, made $X a we've which repurchase amounts billion in free shares

times debt EBITDA. X.X and remain gross below debt times targets leverage midterm Our net X

debt refinancing. pay to expect in without We down $X.X of QX billion

long-term expect be to $X billion, net between our its and BBB We over $X the maintaining billion debt while plus rating.

to look dynamics On at I slide closer out call of outlook our QX $XX XX, for impacting million want and before full the U.S. not growth F-neutral of dollars we but estimates. lower and organic earnings of non-GAAP quarter, are -- The couple approximately guidance, sale approximately dollar will our not this and revenue but rest or by rate the stronger brandsXfriends in year QX year, revenue our revenue million. that $XXX a full-year by and our

between For FX basis. on $X.XX and growing neutral billion, X% QX, an we billion $X.XX organic are X% projecting to revenue

$X.XX We to XX% expect to growth. representing per of non-GAAP share, $X.XX EPS XX%

driven net benefit is program. by share our growth EPS primarily of the repurchase

operational margin be addition, offset by investments growth intermediation. will our including in In payment expansion

We are range in of GAAP per EPS expecting $X.XX $X.XX QX. in to the share

tax expansion For to continues billion, the to XX%. of margin to X% the Operating guidance's revenue the $XX.XX at FX-neutral effective maintaining organic of to year, rate X%. $XX.XX non-GAAP slightly billion XX% range full growth XX% and rate in to XX% decreases

at to modestly $X.X rate, non-GAAP cost to X% disciplined $X.X does billion We QX, as improved a revenue. control. leverage increasing to volume Cash go-forward per flow based $X.XX are stronger guidance X% to billion CapEx remains full-year of our EPS tax share, on $X.XX a and

EPS full-year to share, capitation tax lower Finally, increasing we rate. to lower driven by are modestly a cost $X.XX control, per $X.XX GAAP stock-based and

growth, of revenue organic FX-neutral XX% shareholders. total exchange, $X.X value In X% expansion point with to we expanding through and margin capital summary, capital EPS deliver and billion growth we double-digit margins, EPS revenue of the entered XXXX over non-GAAP continue focused Halfway shareholder growth non-GAAP year, return plan on this to delivering growth, more on return. foreign modest X net strong in through

We continue provide with world investments allocators, provide return disciplined a as to continuing the assets acquisitions to selection balancing our while that strategic operate buyers around that shares and for repurchase investors. better capital and and divest value

this holding We continue for beyond, to row. organic and quarter be and confident and FX-neutral GAAP raising guidance EPS year in revenue growth a the second non-GAAP in

quarter Looking in XXXX earnings done we’ve further call the we’ll during out, our past. third preview as

to happy your questions. Operator? be we’d now, And answer

Operator

instructions] [Operator question Please from Sachs. first The ahead. Heath go Terry comes Goldman of

line Your open. is

Heath Terry

technology kind for look GMS particularly structured the a separate in you're sort and marketing know could wondering disaggregate of we the Great. it that that the sort help relates pages. also data, new efforts you behind product Thanks. but for to those we’ve should of at I efficiencies the How growth, as while us the ongoing of I of efficiencies versus of that, seeing impact marketing. around about we the talked was improvement if When some making drivers which you’re

Just net us kind can pluses you wondering of that. the see a give effect, minuses bit more and little of behind hoping just we the

Scott Schenkel

offset on same. elaborate I’ll comment maybe if more Heath, a accelerated the U.S., product points, speaking, then we bit we numbers the focus and Devin Generally side. or overall, on can just less Yes. the on so if maybe out. dynamics tease a of out our did that by that underlying, internet tax you the But and U.S. really better, bit partially the laid I some the out little sales quarters of export was

sales number my point as are internet little we Underneath future. make that in bit, And year-over-year U.S., at also was to reduction making costs. remarks haven't than year-over-year, but you that, the then, think ecosystem aggregate good marketing did and the by redeploy called if I prepared from deceleration bit cut a out look we large yet a and by as driven and is the in reallocate I of feel spend series but QX, little product look you changes the picture versus that year-over-year, and more really the a moved If we tax. the about marketing in in bigger difference a a --

Devin Wenig

exactly mean, I had have this control, would. which point sight confidence Yes. said the our It's some year. that guess, that we is at add reason as tax, it's out of line is GMV our to year sales I will roll And is suppressed in it playing just I'd next of is roll it out, marketing, it out internet now. right which and we will

So, explainable we know never those Underlying are hitting development stride never product And controllable. product in some now had had and process. improving. they to are good We've extent We've the more things, marketplace buyers. The is another more inventory. our that right we is healthy.

a there the in we would said confidence we marketplace, lot have and said. of I had because as a in the and why I short-term is early what can happen year. out So playing that's exactly of health It's core understand the strength suppression GMV, in

Scott Schenkel

Yes.

The pressure. some I'd other I there internationally out, Heath is as is thing add called

quarter-to-quarter. really bit by are driven UK, a mix, down Korea. the That's of by We from downside little point a bit offset a benefit from partially little of

as of product including through out. those. sales to the work the changes that a forward, in are continue to we And we'll continue amplify, so, internet there get year. of we into we as play, those And to hopefully second implied made the lot our will dynamics go continue that And half play tax dynamics and guidance, that is

Operator

Sandler comes question of ahead. Ross from Please Barclays. go next Your

is open. line Your

Ross Sandler

margin. question marketplace just on Guys, a segment Great. the

more your or you sale hear kind that classifieds in see? a medium where and question the then, still of efficiency, of just that a you portfolio how the like I bps, spin on low for XXX do review, guess, expense So, XXs. it's versus pieces, of it's natural just doing thoughts been the that's And long on in separate in second improving upside idea selling curious there whole about country-by-country entity. in of to out the lift see margin to term,. kind terms much do kind going the potentially

Just any you. on that? thoughts Thank

Scott Schenkel

Yes.

first off So, margin. on

term. short Let me comment in the

So, had nice marketplaces. quarter this in margin we expansion

half continued talked called that year, of can driven the but course the in as second we've the normalizes might you think, you over remember I half in expect and roughly last second quarter, is this of marketing from out by I That versus there the first out, margin year. dynamic half those second expansion exchange, we've been about point half the X.X the of foreign quarter. a year, calling differences

So, marketplaces. in and the and leverage margin reallocating there half about. some up will will won't we've second spoken But, of ways focusing as and we to the of expect show much be that continue be that marketing in it that to in year -- the rationalizing

So, cost well marketing as control. I going would expect continued just benefits some forward as ongoing

you term, the to least -- more front. at October at answer and in then earnings I'll an definitive So, longer bit XXXX on call the and that talk in a medium we'll about give longer of

Devin Wenig

something And to we're not let to process what's we're then, until is We'll just portfolio the going when or word review, but not Ross about a to the going just about say there going say, people on. say know on anything it.

Operator

May next ahead. comes from Please go question of Your Citi. Mark

open. is line Your

Mark May

you. Thank

very impact. had the significant believe made On back few the a I it assuming you ramp you you've are there have that's the some half or of implemented then, guys timeframe, been with states than guess X% are changes. sales guide? How Google search greater thinking internet in have that the in talked what X% about May-June But the in now pretty about your starting impact, I algo up year. tax, And

what if have that. past, out data impacted And far. been just so you've eBay may that Some anything seen Obviously negatively has in by years suggests over Thanks. the happened. this curious the there

Devin Wenig

ahead. Go

Scott Schenkel

now, states internet we're That what will implied the is of this we'll to plays I it's we're -- it, for take second, of that what impact and impact certainly said, other the disfavored, into that say, more you're guidance and out the small it is out to and it will it say states sure in to matter, also some rolling is how of the then and But favoring it. more exactly better. would assuming, as disproportionate but sort fade we're it lapping background, will will just U.S. are And end right as our are the up in on replacement. marketplace larger not replacement continue and that's it business through It's small just of guidance impact or basically tax a There this we opportunity shrink in implied worse in strong policy the XXX% as is penetration and was retailers to not being out start businesses. reach grow, our which then which -- businesses. get the businesses favoring and out, is there we're certainly a a inventory the going a is that peak that happen, international roll businesses think may sales U.S. gets what I on and dynamics is going implicit that probably is on U.S. before in around substituting. seeing, because I'll gets QX is

seeing because federal a we small and again had we said. internet we say and what will And I'll we're what is that sales continue that a say you'll legislation on exactly exemption. hear to call tax what me feared So, business for had

search change in material timeframe the algo May-June seen from the a On Google. in we haven't change,

Operator

of Please comes Your Suisse. next go from ahead. Ju question Credit Stephen

open. is line Your

Stephen Ju

and you opposed got careful that's sense on we talked by times, one being the I as Devin the and chunk guess, sellers are time program set rollout way. extraordinarily the that or think you one guys moving almost of the payments I Scott, to broken with the to last we into

you quarter. have added about what looks X,XXX XXX last sellers versus So, like

you So, once should be do we the this that progressively take transfer easier, incremental formally this process is start you And expect the the getting more more easier? to in difficult? doing to transfer more seller assume to Germany,

GMV of tax guidance, position to additionally, that friction. offer the XXXX the due us some And said separately, is a in not deceleration to as you're from year this sales you marketing but self-inflicted and

So, next like thinking did GMV no be longer for this year U.S. and of Thanks. should type for with in it retail or further the even is GMV for a year? hoping we revenue, your the disconnect marketplaces growth line growth

Devin Wenig

On payments, I a interesting. couple think that are of dynamics

five on first today of of restriction So, year and the a that's be today -- fade one-year years anniversary rollout will the all, will where from away. is the

us pick So, the expect you to pace. can up

I think, some some the it there been product build, need it of under because has no been is OA faster capped the go anyway. has to we're of

to see begin conversion, we we here pace. hoped. from today, XX seller they’re As that have up experience. pleased months everything roll start sellers are really Sellers choice, to pick seeing will buyers particularly up us seeing I'm with unified you to the seeing And are are would good and accounts money, saving

execution. payments the pleased I'm So, very with

And it's interesting. very buyer on side, the

compared buyers Scott's remarks roughly. the rest that has seeing of the We're that marketplace. been that XX% PayPal to You now PayPal choice. rolled approximately rolled they are on PayPal in out, of penetration heard want of double with that's almost out, showing after And

wallets with their for are voting and are choice. buyers choosing So, they

pace. will So, us to up expect you the pick

In say we we're But October. what what just be we'll talk above sustainable probably year, guidance. in that that's ecommerce. at great say GMV, we next obviously retail growth you where we’ll And time, ‘XX business think the about long-term the margins, and rate. -- terms growth obviously, a business of of these We’ll and below a not which somewhere rate all giving sustainable think is the is we

Scott Schenkel

of be Yes. into for Steve, dynamic other And after next remember, revenue our payments that business. the year will scaling and year the

year we've that past. the like that And addition will the in looks in what we'll can in first-party that you so, than about the talked perspective, to revenue in while later get higher reasonably dynamics GMV a into ads a from the guidance be expect

we pretty XXXX. the October of we think end I talking and year and So, we've now when work of good about start got between revenue the the do feel on a about lot to

Operator

go Please from Your next Salmon comes BMO Markets. ahead. question Capital Dan of

line is Your open.

Dan Salmon

I'll advertising driver go and Listings. other to Promoted and the

mentioned you sellers you've sort quarter. rollout sellers XXX,XXX it last to good Devin, to May XXX,XXX in standing. was a think, think broader I I of all expanded But, now I you announced think from that in

Is a Just understand on should where number curious of seller, that if you to we can well as expect help sellers and we and any accelerate start using that might guidance side, then, continued when of little color the the can just out that? just feel of us the we be wind-down announcement And Promoted that could as Listings helpful. on expect trough flip Any would better. the to bit impact result to add can timeline ads? to a of there a you the us maybe help but a see specific add out not color third-party you that -- be

Devin Wenig

Yes.

On the good yes, call-out. it's part, a first

said of think demand. sides growing that I last funnel. we business first is ads the party It's and quarter both supply

that density sellers them value advertise we a of eBay we've eBay, up proposition. very in their could we value is they growth it. more in opened and strong. I can spend proposition supply, on and that as which platforms. a a ads, out mean, tools, the -- have see so is data it we're playing them, actually the ad the choice, on just and have sellers, are ad look giving on that that's using we're to actually sellers they have ROI advertise on and giving an We seeing good they very way we that And them the think what better at For they they think for in we're calculate other like more that understand compelling we really

Open next we'll I called have say to customers of It And a have very week, should an should that. of that about we and seller event also exciting that week have and thousands have to week. eBay next the large more our and be us ads for coming about things. point say other to we'll out we future more

there. we those And not in expand results, of confident side, the as organic we're merchandising. that the ads is get cannibalizing and the we in and on you if obviously, results that buyer also, exposure browse search will, can And there both

was expansion. which a and the buy as quarter this both of outstanding growth really result sell the side side the So,

Scott Schenkel

to the first-party To is second acceleration. highly terms with question that down of is your just Yes. timeline, third-party I’d wind in correlated point

and in going ads the conversions acceleration of ads efficiency ads terms those are are what First-party in be we those place, experience. how where and to user change of of the

can And the so some the that wind-down do math, break would these expect continue third-party of you, head the dynamics. growth forward. understand I last had out but to we the we will as rates we've for to underlying couple You acceleration continue quarters. in you over

Operator

from comes ahead. Please Colin Baird. question of Your go Sebastian next

Your line is open.

Colin Sebastian

that those plan you I of efforts, called And or is you that given initiatives to of over the buyer term then, any guess, near something expansion a shipping, control kind holidays? longer Devin, Thanks. time, is spend term effort? some and in same to of address of if pilot higher the fulfillment And you're still seeing updates just on at opportunities you're hoping of that any more efforts ahead to from out the churn. the with what marketing address going for the some particular and

Devin Wenig

strong, skew buyers, a are Thanks who women new acquisition, buyer encouraging. better seeing shopping are on On very focused new towards we We're for now reducing millennial; customers eBay, buyer brand question, we're Many to which coming outstanding Colin. us. with customer those the really of are is frequency, on churn. seeing

Some cohorts, the of have than side our positive those existing on CLV. lower cohorts but they're of spend right all

we is long-term a the can hope something happy soon. into that's and we're that, frequency And we frequency plan, isn't very that that's So, is focused and that and Right we're now, dialed drive marketing. with do product that, my hope driving on see. very we can both we're what that

of buyer is some now. implicit And steady in that On to nothing fulfillment, the right over our several growth that we've say seen quarters. last

think to I tuned. stay it's worthwhile

Scott Schenkel

cheaper. U.S. site question, Colin I'd from three essentially to the And international or country just fulfillment U.S., fulfillment coordinated constantly that leverage global of sold And most talked in is about the as to talking been days free and that we a size our the What and of XX% fees less. we've in on ready what's with are with helping items trio U.S. lower different to markets, our are two-thirds the in in inventory specific services to on provide position negotiated our say sellers scale on we've the of sellers respect arrive fulfillment. we with international, what And because shipping comes about look at in this nearly basis

I user the types enhance think of those guaranteed via So, delivery is experience. metrics to intent the program, of improve the further program further to

Operator

go ahead. Your of from RBC. Mahaney question Mark comes Please next

Your line open. is

Mark Mahaney

Thanks.

in attention are constantly on channels. greater marketing quarters put year you've lower reducing? kind normalizes that of being lower into you some sales have efficiencies, up this leverage long going nice on but to any basis, marketing? a year-over-year have next and You ROI in this of optimized, removing and about ROI it's what talked optimization year? marketing or is been finding there a think, all I And then transition at that level realized is a your those I of in your Thank channels you. spend marketing of How color two

Devin Wenig

worth worth bringing to marketing simple curve the of The honestly. quite and the happy last particularly it was the that we and activity, markets, we've we we that. started it it, things the ROI of like saw as value measure sales if coming disciplined we're of saw would returns like fact of with Yes. we it profile. always that The on customers trying wasn't cohort allocators. But through those channels their a aggressively we as promotions, on in spend limit. is, pushed things answer were pushing coupons the quite back, buyers acquiring And And and sitewide have cohorts, been we're kind year, going lot kept and lower

lot and into traffic. and is some last channels Google marketing reduction we're channels, always diversifying search a may push them particular, pushing trying from year. also may diversifying the curve of over from really it more, -- bring we're we're direct have in to us we're but new channels, into trying always efficiency this be and time. So, of affiliate lower there channels, early our In trying grow we ROI to on a social channels, And diversifying we're

mix best traffic very One of compared strong attributes of of direct is to paid it's business the traffic. our

for the brand, rest keep ROI and the of dynamic So, working removing low that's advertising somewhat the keep keep we'll spend we'll lapping the been the the year from February about channels. in March. since other we've or And talking and last year,

Scott Schenkel

Hey, Mark.

me on that pull a out together question. couple just prepared Let my of but to in based them call just your remarks, things came out

off, those in more both call classifieds StubHub in the and this First the prepared dynamics. marketing spent quarter, out in and we margin remarks

have reduction mute so, company And you that's one that the going would dynamic. seen. the to, That's at level,

The in second and the core in and other business. more it contra Japan within fact on marketplaces further further marketing then call businesses. Korea which dynamic spend that contra the mutes is down eBay actually marketplaces expenses

it's the a and And core dynamics so, are about Korea. muted we're platform ex-Japan a and Company lot bit and talking at ex-StubHub, the of level on ex-classifieds

the remarks try the in and So in presentation and prepared from what through in the queue. navigate just to and you ultimately see

Mark Mahaney

Thank you.

Operator

DA Your Please next question from ahead. of Thomas Davidson. comes Forte go

is line Your open.

Thomas Forte

thought I Thank could Facebook of what the you. fit how an can payment interesting X.X there, you think you quite quarter Libra. initiative future? to know that's kind by I eBay's in during So, that were going eBay to into potentially opportunity because you Facebook announced the and wanted be that in participate options

Devin Wenig

for interchange, blockchain opportunity going are security a and been some businesses. a transparency and definite. costs. and the the I've tangent, and believer I secure improve at a lot reduce the following don't are for particularly I'm settlement And think times systems blockchain the a distributed a improve that database still the settlement they costs, on in is to answer quite times that can of and public that lot short without not pay for pay crypto is, serve reduce needs for small People settlement clearing that at time.

So, we're advocates about the possibility.

prevented things the down the the XX% that's is currency retail from volatility. any day. nobody pay to really And of crypto a with is One up going that moves and having with penetration

pegged further. to their opportunity costs costs sellers for the a the to currency, because to opportunity our of and currency with running got We're their to could up basket is because we is build So, -- intermediation, lower costs with is lower Libra buyers further. even for their The it's this that that’s stable. ever even fee payment potential lower going

Facebook, that. not of behalf advocates on It work. them think let customers. lead Libra I is that speculative, we'll we're may may or regulatory I participants as understand I So, think by the Libra led But scrutiny. our is

Operator

ahead. Your comes Merrill go next Post from question Lynch. of Please Justin

line Your is open.

Justin Post

advertising if opportunity. Scott, the you. you I Thank revisit could wondered

is you Where billion bit Do think think, a being billion when you you think And GMV, today? go little about over a I then are to dollars lot on higher? $X of $X reiterated you. is billion. higher. $X you is Amazon total room X% conservative, a there ad Thank

Scott Schenkel

the let's everyone. frame $XXX in mix prepared continue above is, think, that way say get remind Devin million. the first. look, $X it, remarks expand Well, I'd with his I'll I I said to guess, to billion of We’ll first-party which

next revenue. reported we'll will to ads aggregate, keep shows talking it a there that's but the unwind the get about to is think it MS&O third-party and user in our up to and $XXX why grow, I know, you ads think capabilities. that expand And here And billion million lower number. And transaction in a sure balance continue I as overall in two our the is good experience. or continuing year making we

they're the our are sellers having to people and get in $X we'll that let's the with we we being, ads a the balance destroyed fronts, them to will and looking on and get find billion, extremely and that for, searches worth serve the what when all that So, convert can in. a are get experience sure continue on soon that We're do they to and we’ll as make $X be that can. possibly product billion that doesn't as invest relevant pushing that

Devin Wenig

we'll please. one operator, question, Hey, more take

Operator

be will of question go ahead. last Securities. from Arounian Please Wedbush Your Ygal

line Your is open.

Ygal Arounian

question. the taking for Thanks guys. Hey,

pages. in noted the pages you to unstructured you release, and So, press transformed structured, launched that that listings product new from listing

it have on guys strategy listings. maybe said you that. different there was specific had roll something than more ongoing anything pages that just else? the follow-up that, to to buyer out lower churn. So, hear it you on driving modest, I was Is more Thanks. it marketing product but I there was the quick color wanted or then, one was around And existing the to was spend know,

Devin Wenig

bottom I still part, the evolve The we part like up. of characteristics What's attributes bottom the has our continue convert is that's really it's our data here we here what progressing color. and and On in we've and the And the memory, attach attributes, a that's better, catalog they and approach, up, the really product aspects, to see are, structured and up and phone, those I'm first attachment to in buyer products. what are is the to in searches about think important. been products, those very is descriptions The both and as have of those listings down important it's more because better. they top the richness top bottom down also excited been about really that

we our big driving in see are continue you'll on that it up say contribute. and about make us pleased to conversion. in the our on and easier forward structured will we buyer mandating, And the are search really encouraging then, But next listings. and to excited side, more those products week time. So, again, And pick at more better And we more sellers having that and seller engine about event. those and search attributes to to And our we're over way incorporating some for that's have catalog the aggressively add cases more data. sellers

buyers year sorry. a China. of of what Mainland, is, in Mainland, reflecting in we churn, of is Oh, We're those out buyer some existing China. some had experiments lapping And that on part ago

that. reflects increased difference churn platform a material So, that some our core not But of -- markets. it any doesn't it's of in on

Operator

over remarks. closing to the for turn call the I presenters will now

Devin Wenig

set all we're our on side. think I

close So, I you think very can much. we call. the Thank

Operator

conference call. This today's concludes

You may disconnect. now

eBay (EBAY) 17 Jul 192019 Q2 Earnings call transcript