EBAY - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the eBay Inc.

Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like Joe conference Relations. Billante, Please ahead, now speaker to Thank hand go Mr. today, VP sir. to would over the your you. I of Investor

Joe Billante

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

our our me Financial Interim Joining Schenkel, Officer. on Officer; Executive call the Chief today Chief and Scott are Interim Andy Cring,

Andy's section commentary through providing the during call, We're to a at available Relations presentation which site the Web accompany Investor of slide eBay is the investors.ebayinc.com.

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

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

and in Additionally, represent indicate GMV Andy's remarks unless mentioned year-over-year otherwise. growth and rates FX-neutral Scott comparisons, they all revenue

conference In unknown forecast actual statements performance differ our our for future call make without statements materially of results including, a known will financial forward-looking limitation, this and reasons. forward-looking from our regarding and These uncertainties, involve expected management and may statements variety results. risks and

periodic operating can other factors our today. earlier uncertainties, find risks, our and results XX-Q, Form on and in earnings more most affect could You release from XX-K that information recent Form reports our about and

update of to XX, and duty we XXXX, You should intend information. not presentation undertake rely on any no forward-looking October this is do statements. All information as in and not this

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

Scott Schenkel

times it important and assessment confirm the during not we period our of forward what back afternoon, be Good this change make and opportunity to what everyone. is In to transition. where different. Joe. identify I'm needs take step change, clear-eyed are, have to Thanks, excited does to of company of

is million with access inventory sizes that the over a eBay Sellers does XXX not where can marketplaces consumers great them. of largest value buyers, at to all have shop one clear. low-cost unique compete world's with global remains value. proposition Our of partner

priorities Our near-term are unchanged.

advertising growth growing the our buyer We capabilities, are commitments, of delivering payments, our seller improving including initiatives and base. XXXX and

are In an addition, we plans review completed to margins. implementing operating expand have and

are we the company review for executing to Lastly, a best the long-term. position portfolio

beyond, we changes the investments in to reassessing best underlying deliver how For the match our them health way. sellers we XXXX of to authentically marketplace's needed and improve an are and for eBay buyers and business, ensuring serve to

We will discuss further this call. earnings the at January

on XXX revenue Classifieds to X%, our our up was grew total regards organic buyer volume was X%, X%, base up down With million. to X%, platform QX GMV these was Underlying revenue at results and our X%. active performance, flat, was while GMV down grew StubHub Marketplace platform our

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

make continue drove million initiatives Advertising from progress. revenue, up momentum of where meaningful a growth in $XXX XXX% ago. Our sustained QX, year to Promoted Listings over

recommendations, revenue Over integrated in, was one million manage quarter. where to than listings our adoption the Listing more This increased Promoted performance. experience, sellers and can XXX sellers partly in mobile million promoted due opt

growth and the conversion and our grow in formats. our for incremental Listings opportunity product for addition, and gains, sellers. vary balancing is while ability rates see to improved we we adoption number more results, relevance ad that through In search ads in buyers conversion and to There appear of Promoted untapped

in achieving levers in revenue. of us give advertising billion of confidence our All $X these goal total

share for in Since billion launched In payments, in we of intermediating in on adoption and of bank XX,XXX our have U.S. more X% our the them into feedback approximately we Germany. positive to was sellers. money. the limit while $X.X accelerating on processed directly to rails, account pays experience them continue the their our recently is to that payment processed over close simple the site September, saving accelerating ago, more Sellers on Moving volume than a payments began payments in operating we agreement. year U.S., over

have SEPA payment in and Direct over choices, we is expand Amex, methods globally. commonly as be used more which enabled buyers, Debit, payment will time we including Germany. For added More

and our We in a at million will realize are revenue growth operating contributor on revenue, track of with be the $X of plan billion XXXX. income meaningful in to and to $XXX initiative scale, second-half this

that buyers. we interact specific Sellers directly continue individual success. eBay payments, to with addition drive eBay ability to In to on have capabilities customer to and are ads unique and deliver the

ways adoption increased saw offers potential targeting carts. more abandoned who to seller-initiated drive as added sellers we example, for For customers conversion by

behavior We added buyer have also abusive control. of in outside and against major their sellers markets events protections for

expanded requirements toolkit VAP we we Seller with helped we suite comply significant capabilities disruption. when identify from Germany, sellers In sell, inventory. acquired have major Hub what Terapeak. new sellers addition, by while In markets of that price and and how our integrating to In a avoiding features now to

of are buyers for new migrate grew growing row. X% One QX, Acquisition features focused new several launched purchase, and customers the lapsed the most continues exposed after to and we main improvements serve In eBay our customer past have action due is first to app more over experience. active calls with buyers at we users base. the we to new popular important quarter to and sellers months. spend seventh user the by more best In of growth to encouraging aggressive buyer and their downloads driver, is to ways a marketing be the QX, we in that

of Related are to unique largest inventory power organize to path ago sets of unstructured marketplaces experiences. a compelling years to few the one of started continuing on a long-term world's the and business, we health the

efforts experiences for list showcasing or of been sale. catalog to progress this spectrum will and our full a specific not to are reenergize we to they engaging ID. product dataset, sellers where value. home, made, further We'll rich aspects our when on While progress is easier create in With has for in to we relevant the update you changed product your like January. provide categories continue fashion approach and details particularly make aspects items it This have

at is Moving on internet U.S. from initiatives, one hit sales tax. to headwind continuing impact our the

expect impact taken California, in take out-of-state with particularly law have GMV In laws As to large three effect, small Texas, effect. the purchasing are the no government to more has businesses are nexus, other was grow U.S. dollar QX, higher prices low checkout we QX and headwind States and as points, local in items. new are nine tax than and that and of seeing Buyers to officials chosen less marketplaces collect. requiring at

unique it platform, whom affecting disproportionately is businesses, not this sellers to small sell While eBay. our on impact on is of many

quarter. at low marketing Korea, was a saw In focus on U.K. Looking competitors confidence program. with efficiency. our is and levels down driving match ROI, significantly investments we versus their loyalty set the rather we slightly performance our market, marketplaces, chose last lower consumer to increased than In our QX which couponing improved we softer international overall at in all investment

to our million. due we the our Program We are this to double year Japan, GMV acquired X of Club Smile successful program Korean on acceleration track In to in members marketing in QooXX. Loyalty almost businesses saw number

headwind softness double-digit artists the and fewer NFL start At as more pressured international offset and and landscapes by strong theater our performance StubHub, to were solid markets. top shows QX than growth season in summer. active concerts in was a This this

In dynamics, selection. more revenue more initiatives first growth addition our party value buyers outpace increased to but it these landscape sales GMV, gave help importantly and

platforms, build as to our Turning well. at continues portfolio Both we our including Motors.co.uk., markets. many in rates and of grow into U.K. are on German healthy acquisitions leading position classifieds, a performing our

across Recently, to we lower at or our global display have of double-digit yields some including and rates. Canada our motor's Looking half our roughly horizontal seen verticals headwinds portfolio base strong advertising in revenue continue platforms, of grow representing from Australia.

operating our on portfolio you and update me let reviews. Now,

and been conducting share As team. has review previously our we update. board our like leadership the extensive cost This plan that aligned a to and in we update structure, operating Today, provide of with committed resulted communicated, to I'd fall. an review an in have

next us over maintain robust grow will at critical The margin structure incremental plans initiatives. years. customer deliver will all impact three to our We cost and different enabling the while elements of and are levels,

building XXXX. the gains gross, deliver delivered two-points XXXX, point to one investments margin we of on rating and net are by intend net in both another We two points

before our review, portfolio in our our an on ongoing board sharing are earnings role next of discipline team update the and anticipate the evaluating release. StubHub classifieds and leadership a manner. We Regarding the portfolio businesses StubHub in

shareholder value. the the classifieds progress, year, have be this but determined an not and believes portfolio, we actions considering Rest For expect board update have options. made will to by to long-term assured, are maximize share will the long-term outcome we the did

delivering scaling we we ads market driven and In our an evolve way. In empower XX multi-trillion deliver play, and our This day. purpose review on near-term, customers summary, will shared operating the we our long-term, our for the implementing substantial eBay in eBay opportunity for payments, In remains and our the to optimizing XX,XXX XXXX every exist economic look our years plans portfolio. it to dollar focus motivates commitments, the and authentically create culture in business our and employees people will opportunity. to has

turn to on financial to results. details me Andy let our quarterly Now, provide more it over

his Interim this thrilled in say at years during many for he's the eBay his worked prior and he step company. during I'm Before time begins, CFO. to, let that I critical me leadership directly and We've dedication agreed appreciate the together to and as

Andy?

Andy Cring

billion my In of QX, highlights non-GAAP $X.XX our cash shareholders you, earnings million I dividends. the begin Thank and slide of on will repurchases $X.X through financial have EPS, $X.X QX and prepared of we we four of returned flow, free with presentation. total Scott. revenue, generated remarks $XXX starting to billion

to first-half spend of active million, Consistent our in X%. to quarter, year, by by existing buyers by slide total we on new which towards we've has buyer up the increased in maintained lapsed more, buyer million a increase of return. stable with modest by growth offset X the acquisition, total a base focusing buyer five, and Moving marketing a by active been on the $XXX

will more allocate buyer forward, spend lifetime and Moving value driving of new customer towards retention increasing we cohorts.

delivered in year-on-year, versus The QX. $X.X Turning GMV, points generated of billion, international decelerating U.S. while up X%, X% to slide down $XX.X two down billion, six, X%. we enabled billion $XX.X QX,

up of seven, billion slide revenue, net we other friends. $X.X from inclusive marketing up on sale X%, of $X.X for We of brands and revenue $XXX to services of headwind transaction billion, revenues organically. revenue, generated down of two-point X%, X% Moving and a delivered the million

from improvements eight, GMV from deceleration experience, of QX, GMV Internet evolving of decelerating in modest platform X% headwinds was one-point reduction slide our U.S. by marketplace the down two third-party tax, versus our sales to X% marketing ads. was reduced and points prior conversion with flat Turning the down buyer quarter. including in quarter-on-quarter offset

On headwind we a internet out accounts that year will This dynamic it to basis, taper tax increase lapse and of year-on-year will of believe XXXX. as rolled end impact XXXX the and we sales QX. off sustain into we that points over three states in towards for the in expect

driven mind, is to quarter. category Transaction a revenue the than further, made Total International X%, being decelerating covered mix the decelerating at and GMV. revenue gap points, GMV up higher from promoted revenue and increase primarily than GMV. six of more grow revenue billion $X.X continue our and from half second-half six GMV two than grew payment's Today, by continues X% point as the listings, grew one by of initiative triple between in X% scales growth and will transaction marketplace earlier. deceleration, point factor it's prior to and a less difference up two points one-point digit was points in expected than Scott point XXXX. over level and driven of higher effects. The we one Keep factors, which a the

the our Marketing of other seven strategy XX%, the our coming minus from from placements QX, points was continuation four the revenue versus first ad moving party third-party product. brands ad and for listings of Services points promoted towards decelerating and sale with friends,

in than revenue $XXX advertising total be million. expect XXXX to to more continue We

due Marketplace up investments to was continued leverage cost payments in year-on-year marketing, margin advertising. primarily offset by and reduce partially XX%, our and

until of quarter. the that September rate and September, a Moving intermediate was to we of launch $X.X over million third XXXX. over remain penetration over the year, $XXX near billion slide on nine of we've expect level in payments, since the In July to in end our U.S. X% GMV of this last

party delivering deceleration Transaction driven $XX the two revenue provides MS&O higher to a and third year-on-year slide are changes which StubHubs for for flat, StubHub revenue one-point mentioned. was and event of revenue primarily by potential mix. of Both GMV buyers more flat MS&O was has to rate QX. Most segment straight XX, revenue for a decelerating exclusive in the was six a by inventory unique pricing tripled Turning StubHub quarter, flat, points purchase million significant grew tickets. first factors than from from and Scott offset points X% sales, volume, have StubHub growth. decelerating partially from nascent XX% revenue insurance margin is year-on-year. QX. and access take

and of Moving XX, X%, was margin Scott reductions. from horizontal leverage points advertising display marketing platforms XX%, to classifieds in year-on-year, primarily up revenue driven as grew two our covered. slide four some points decelerating for lower operating Segment yields by classifieds

versus margin of Cost year-over-year payments and points of which last Despite XX and and cost FX slide XX increased cost first revenue to of by from side up investment operations, the continued and basis stronger we drivers. U.S. pressure points year. operating sales Turn step-up. In our non-GAAP dollar. basis XX XX.X%, Korea is in party QX, driven delivered major

decelerated, costs investments were marketing, operational in and in increased and sales leverage, driven payments and partially payments and XX Japan. points basis our by marketing by year-on-year basis primarily for development XXX QX points, productivity. investments advertising, was to operating risk G&A reduction by up on initiative reviews. basis support in points XX investments marketplaces mostly Product cost the offset and portfolio in our platform offset driven by from management up expense

improved we offsetting XX, EPS, our our prior double-digit non-GAAP of non-GAAP slide consecutive year, EPS XX% of growth by to program EPS our share investments expansion. up $X.XX and quarter EPS, payments. Non-GAAP and cost the driven delivered versus Moving primarily sixth controls, was repurchase

versus brands our driven Favorability by and and EPS gain offset share the a sale the a warrant, mostly current of changes in driven GAAP Flipkart versus our year. continued GAAP on rate cost EPS friends, severance of was lower in and quarter for prior guidance XX% lapping The control. the partially $X.XX, by the of in primarily the the decrease last tax July audient count. year costs, by for divestiture stake, was reduced down is value the

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

up driven cash capital XXX% generated we capital by $XXX XX, free timing, On working million slide of in QX, lower cash expenditures. lower primarily taxes, and

billion shares, our slide Moving million, not key dividend cents XX, shareholders share, In commitment a disciplined of aggressively repurchased $X shares repurchase while continuing we at the changed. confidence to targets and capital strategy price our QX, tenants and to to We've with have authorization and ended billion. to allocation average diversified in We and XX nearly our third return buyback executed an $XXX manner. quarter $XX.XX share payment per a demonstrating $X.X of million amounting of to remaining. capital

$X.X at billion investments of debt planned. as and $X.X debt including For and the $X.X with cash we billion, down ended billion quarter, of paying

billion for between slide and are negative $X.XX between projecting QX, to guidance X% FX-neutral $X.XX organic revenue billion, representing growth and we on X%. positive Turning XX,

continued income representing $X.XX the is We lower on a the and U.S. per $X.XX expect of our non-GAAP stronger cash by growth. of benefit offset EPS our dollar, X% lower to reduced driven partially investments primarily growth and EPS payments. modestly effect to from share X% rate, tax balances repurchase a of program share, our in

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

billion FX-neutral to the X% billion guide in of rate growth maintaining revenue to full-year $XX.XX organic X%. range our is $XX.X For the of

to and lower non-GAAP modestly control. and cost based rate on discipline $X.XX raising a $X.XX per EPS continued QX to cents are tax full-year stronger share We guide our

of margin year. XX% effective the We expect non-GAAP operating XX% approximately tax be and to rate to XX% for

$X.XX are to to to and to cash flow of range billion guidance we've our of of We CapEx narrowed increasing the the $X.XX X% X% range revenue.

year to GAAP costs, stock in audient to by warrant and XXX rate. the Similar our value partially of we our cost EPS the of for a we updating Finally, perspective last compensation, lower context the of full-year to lower XXXX performance. XXX share driven initial by range this tax offset per based at the control, give are severance expectations changes would on helpful thought in time, it and some to be modestly XXXX

year original free more the We rate growth original drive organic the plan our delivering flow. non-GAAP higher EPS with growth, on EPS quarters modest we guidance to than end of entered GAAP a guidance, margins, revenue revenue and this grow the and our Through year, and three of at generating cash higher commitments, growing expand margin FX-neutral double-digits. are

drive look our expand we key to forward to EPS. and through As initiatives, grow expect growth margins revenue XXXX, we modest

in deliver few years. this advertising track on initiatives of a the growth are in Our combined $X and payments revenue next to billion

we year. benefiting total point. by be benefit, rates expect for And internet revenue growth in to approximately of million We two the estimate XXXX the of In in to advertising that expect of the second-half total business year-on-year. revenue $XXX overall approximately tax sales by revenue coming two payments growth a impact points most points almost approximately we negatively one

U.S. business. combination the of million for brands sale in expect a revenue and of dollar headwinds stronger also $XXX full-year We friend's the from of XXXX a impact the nearly of

in line the comprehensive of expense a Turning mentioned, margin, with assessment communicated in completed We've operational we've to lines Scott all as across the the business. review February. executed timeline

effective corporate marketing and functional optimization, best-in-class focus Our and expansion technology costs, product margin more procurement. on plan relies investments, continued

including with operating combined investments margin three the operating we providing to points delivered and points have expansion while initiatives. in funding while three payments will to of key We When results, capacity advertising. accretion us expect years, over these next our of continue incremental anticipated net XXXX margin plans to two key deliver invest

higher approximately as combination rate growth of EPS, we XXXX audits Looking past for on U.S. won't tax based balances dollar, cash stronger headwinds likely points from settlement expect seven of at repeat. a lower interest a less the and income in concluded tax

will allocation below targets will of X.X in on We capital return within tenants with continue times we shareholder January. debt leverage line capital times in additional shareholders color provide and and return and our our midterm plans EBITDA, three to debt net to gross

second-half above, in on dynamics organic in Our single preliminary low that with higher in year the expectation in should the growth portfolio the the grow will are that be mentioned than today's first-half. FX-neutral digits. Keeping based mind revenue the of

to and likely making while in expansion We continue dynamics the margin investments Combined digits, will capabilities. significant growth expect to points earlier. single our payments of in mentioned headwind low these advertising the EPS seven of inclusive lead

continue to flow shareholders a dividends expect generating share free we and Finally, strong cash cash and buybacks. to returning through

give detailed call more We earnings January on process. per will as our normal our XXXX guidance

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

Operator

[Operator your of from Sebastian line first from Instructions] And the Baird. comes question Colin

open. is line Your

Colin Sebastian

related guess, $XXX as I terms of customer guys. you full payments, to benefit could well investment rank required. the the initiatives and operating level if priority the we're year of review, the operational then that hoping generally margin Thanks, includes in as Great. million curious from out income

Andy Cring

Yes, margin of Colin, thanks, payments. I'll that. impact take year the first include the out the part Yes, does rate of

income, accretion that If does the you to impact. billion $XXX in But expect roughly a comes about income, the incremental, rate. we of two include of on that Op $X margin of revenue take points the XX% at that's a an million

Scott Schenkel

the would I initiatives -- and a but seller could overlay investments as be first to of on those have our do question amount plan as or take in working We'll the looking customers. will finalized our the are towards and that we're speaking our focused our to about what I behind all XXXX, specific And Devin up structured the on say, of going plan and delivery eBay payments ads, on I be are -- would of investment, I be the key pain also those say look question, we talked resources consume we priority fair and else at don't growth platforms. of aspects do broadly also working of around Live second and a yet, Yes, data we'll solve we and covered, on event. to short-term an buyer to managed on points then priorities, kind guess,

list speaking, but thinking finite a XXXX, how have it. don't broadly for about that's, we So, we're

Colin Sebastian

Okay.

roll So is delivery on the next the to first-half schedule still year? out managed of

Scott Schenkel

we're that. working so Yes, on

of We're different what As that of been if aspects months, we've managed do the at we're to as solve right. delivery broadly looking number you the customers and talked try a thinking are about about speaking, what think working resolve over pain customer last on, we've aspects is trying problems. couple to points,

value sure we forward. -- already have they it's access making it's expand forward. that as we're We shipping we as look illuminate move making and them we'll a pilot. faster to to have that sellers And we lower For for alternatives. for that sure pilots going ongoing, cost those buyers, have That's

Colin Sebastian

Scott. All right, thanks,

Operator

Eric your from question And the Sheridan UBS. comes next of from line

Your is open. line

Eric Sheridan

all give a QX likely way would move early sense just it, of us you've a sense better pressure, comp you you sort that of it on platform, the how might that so of against of in Thanks sales so business, you're it of QX-QX, headwinds Thank year the that sellers the how delve it buyer pressure outrun get of to that? seeing slope made overcoming much. terms invest much. could the I comments little to terms points mention Can the initiatives you some some can you outrun how the in of what growth, some And seen headwinds. in next the against could we I of wanted you build so know the the topic from pain the of listing how is if internet the new on the where is in through next year. and of in in to to might you're

Scott Schenkel

question, for Thanks the sure. Eric. Yes,

take Let me here. construct kind of the just

and U.S., XX% been business across called few sales have of a of business rolled off, and the buyers remember the does disadvantage, U.S. small prices hurt while feeling pressure, that where internet the X% their out the pay items. create as it doesn't So, we've that And the kind country we're see is so fundamentally past is up over tax it have they more year, the quarters, to Marketplace first laws headwind. a the last the to what when do that's have competitive sellers for whose

less sellers really new they're that really items. is added. just because less and it's buyers, at items being like, the brining buyers about flow, were the that listing second, higher why it's sales abandon about depending So wait dollar "Oh, It's on we in for a where cart checkout see particularly is it more?" tax

lack competitive like but by Now, doesn't second, And period if which because remember and out one different to said, a them as different that magnitude state cetera, but time rolling I just of abandonment, better different behaviors. will, are little to Andy and this a it way we're a as state create seeing a states, sales is, out it of of a it. let that talk is fundamentally user we disadvantage, as et say rolls tax, the depending behaviors, I'll assess for for I state, state bit of in the across the out rolls to on cart

Andy Cring

XX were of October ones, we of And a the in point points. point quarter what of additional live, you I'd Eric, impact and the today were than that took from of in second think over And 'XX three a we indicated on couple of additional U.S. third XX an states there about California the One, terms said what things. in to how more went big the to that a Texas. quarter third couple just slope, little including came of as states, and Okay. to in that a in live quarter the in

indication a roughly quarter. year-over-year to the U.S. how of impact, clearly impacting about the in points three and of fourth in the of had next year guide that think the So you the that'll the the full two full-year. that the that's impacting give And impact then what and terms in quarter XXXX load little discussion business of around impact, first the revenue quarters fourth with impact included through will an have playing I for

Eric Sheridan

thank Great, you.

Operator

line next Your Barclays. the from Ross Sandler from comes question of

open. Your line is

Ross Sandler

timeline year. putting A StubHub portfolio, be the that, guys. so said Hey to this you going you're review, question the but on ECG a isn't strategic part happening on of

operating is revenue your Are a is So than is walk you again basis complicated? than would one different and can why sense, grow parties, few like more year year. there no those next other taxing of for and like outlook second of more things, on delay lot will next same through that are what at makes on your a entities, headwind margin XXX typically kind faster which larger It us the of the StubHub points income. any EPS seems EPS that function the but it be slower longer ECG And started kind color you would being a given the whole process and intricate take of countries, more time? of

can Thank those So just you. that, that'll factors? us through walk great. Again you be

Scott Schenkel

our willingness to record team pretty level back take and at leadership Ross, have sense you and of if we're the Look, assets Yes, first shareholders. it portfolio, assess track for think a the continually proud step our divesting where I'll I one. level the of Board makes

of as we the that all earnings you comment case announcement culminate in integrated only with an here people call, comment would how and expect, carefully anyone call think I this business, by I dynamics Classifieds. carefully into, this done systems is As you done processes, the the gets also on StubHub next and that are And mentioned. further should and in strategic can dynamics by bit and the diligently. we've of businesses assessing little the for it no and competitive operational every and out,

Andy Cring

basis our rate, of the rate, range in at with FX, range. Okay. OI&E to the little of tax income, probably handle And tax each little normal if of detail. QX ongoing points, which this is the year XX.X% the a is XX.X%. midpoint finish somewhere We'll more below rate tax XX% drivers, On those primarily about on three I'll guide the that deliver just interest on XXX we and key

so that there's impact small from And included. a

billion year on a we'll about In $X.X OI&E, earnings the cash, an and impact billion. large will terms income, growth we we've $X on relatively reduction balances, target year, with entered that a basis. year-over-year about close the That's therefore all exit interest close to been talking have to of of in cash and that

And XX into in of we our dollar Fx, some hedges in results had strengthening muted through impact of year given in if will hedge P&L. gains recall this then has the currencies the you'll to roll been year piece place. late we hedge benefit the final The we not XX advance. of XXXX last in forward the months be those And the somewhat as

So combination things you of to growth. growth those will and revenue the the as margin get kind EPS down mute but three expansion of

Operator

next from Terry question comes Sachs. from Goldman line your of Heath the And

Your is open. line

Heath Terry

if value sense, And you looking I driving a kind in just transition ROI the short that having? in Great, what say of business pretty function how StubHub, that thanks. you And in have some leverage impacting GMV? last investing would give about in a digital wondering to limitations developments doing quarter. impact you either of could relative in from it or at line you then marketing And sales there do rates I that in and is a the points XXX the see the there negatively? was positively the conversion or as just are something of growth one basis in you in preventing or else. ticketing just on is know us been of further think a leverage significant bit quarter, that will marketing

Scott Schenkel

the really turn, just XXX talked what amount learn of about, XXXX, raised and cohorts and really in of lower that spend as course mature. talked that time our they the contra, in about of Look, latter the XXXX the basis lot about type A particularly removing up we've we'd of would of as ending during bring of past. had kind Yes, in as first how that and amount, re-leveling marketing boundaries of the ROI, was to we And particularly points. for 'XX, this and CLV year, and half try 'XX over on we pushing we ROIs

to look spend, As our and spend about at we seeing, how where is, to then year-to-year. think of at really and expand. continue and diversify also as at a we take returns future we really critically from what always look do, everything down And type search, marketing the might the we'll paid we're -- brand look

message haven't more on in don't had effective? outlook, we deceleration but just And make so spend, that there, who it's quality going much really and pressurizing our year to next this repeat be we extent. takeout around social how to iterate don't branding the that paid brand We expect at do to how high less as we're thus do question. look we do GMV where made our our brand to I efforts the to a But optimizing, and as search marketing of we really How as much to the optimize year progress we really around spend, would've and some our continue an we do deploy we do to spend do be efforts, our sharpen liked.

On the of Since top absolutely, or quarter-to-quarter, digital a in competitive more, the XX% on is really yes, this capabilities. have we of battle. is business, the it's the to ticketing, U.S. stay

seamless et an the think done for have Sukhinder as ticketing. performer, and they've in as the I ticketing excellent think digital excellent cases. possible team pressures job of an depending pretty And honestly, and done venue, quite cetera. at integrating digital the the frankly And the it making job seamless most on compensating at I it's league,

Heath Terry

much. very you Thank Great.

Operator

And question from Credit line Stephen your Ju of the next comes Suisse. from

is Your open. line

Stephen Ju

Okay, thank you.

the like accelerated. payment using of looks rails it has your So, number sellers

should faster the person and will to So of to at be the stability from move here. looking secondarily, you CEO? next hire this this of comfort anything platform, we Thanks. that Board assume greater wondering you if can even is the profile And around point a the looking the signaling as about the is that share

Scott Schenkel

We've out. talked Yes, GMV Quite we look, frankly, over has year Germany amazing. first about, actually off quite a Look, as about accelerated of we've it's Since talked $X in billion we've we and you great called the successfully. on U.S. feel adoption, payments. as our launched about seen ago enabled as execution.

a You XX,XXX know is lot. sellers

year. little limit a months, months to can until that do next -- we agreement, bit six six processed we've continue when the Now, for preparing or over to and we till seven to next up we actually we'll really we're get the in the end of that. the ramp we in next Germany July that of to And the after months. to operating the nine longer, ramp get to

bank a money, saving account not the directly to into I simpler feedback, all that's like. right. remains them sellers what's mean experience feedback The and them their love paying Look, strong.

of out adding we really to SEPA as the of called our to forms this offer consumers. being to like more in Debit, so choices be Germany, position like Direct And we for we're payment being able more globally continue expand going for and

what company on we towards for, beyond. sure we XXXX will numbers making it success now I'll and running deliver the we discretion is be investors. doing is the you And to for making search it's looking In to the our look, heads for out about looking priorities to the to the be we're company. we're for and sure we look down and just worried say, going our focus Specific right will committed on the board, a up that that guys Board XXXX, interim, and set as that then,

Stephen Ju

Thank you.

Operator

line next Your of the Justin of America. from Post with question Bank comes

line Your is open.

Justin Post

the part StubHub, the consider too, did some thinking a secondly, an just might about been valuation next kind major as Thank that? growth have growth Great. think about A thinking then the you the could you here? on how of re-acceleration just They from StubHub thinking marketing you asset don't you GMV issues pullback about sales update. do do mention see I are couple has questions, have And will a you. that and Do level you of you know there, year. that We're you for see you international in drivers of tax focus off, deceleration.

Scott Schenkel

Yes.

on GMV a be acceleration. applying little early it's look, XXXX So, to

and called Andy and countries and script those product sure best that a loyalty of et out we I and cetera. and marketing we're can number to just we point programs, know, in with beyond You the we working specific make dynamics investments XXXX that do for and in plans to my script

respects, the StubHub business, we As tickets like got about show user every think It's a that it's the good base many experience game an share. in really a seller different every those, as right? continue evolve. every And to that for at to it's through nice we dynamics. amazing got way and an and got a think look and almost uniquely StubHub, amazing it's we country I every league venue in

And so, next you wonderful we or that the of standalone and continue we update part and as our portfolio a of has to at a opportunities, tons think the X months will a plans. we within asset it's to as grow X will

Justin Post

Great, thank you.

Operator

the BMO And line Salmon your Dan next from question comes of Capital Markets. from

Your line is open.

Dan Salmon

million to Any that, you're expectations looking on am add I a on then likewise, next first party for on remind bit comments on the in revenue third-party again, everyone can and are? in million and on Hey, side, $X good payments. is maybe opposite where little and promoted of and forward-looking us for maybe and just in third-party, and side down the where the reiterated between thanks operating first thanks income trying specifically, to some PayPal to for there that comments in new they how wind yes, I year. afternoon of mix And Can just a to third-party follow-up $XXX just XXXX. advertising you target the of your just what sit on billion payments expectations of but for forward the better understand wind number today color or the on sort down Andy Scott the your payments. you and particular those in bit question. wanted little and XXX listings not XXXX

be any help would So, great. or color

Scott Schenkel

anything let experience. and way me first-off have you at take Andy look user in way we the first, the Look, is then if ads this The else. is,

of to it I don't want user search with all-encompassing called was an search only said, be it think, Interesting but promoted alternative out like we careful sure and only placements become type to the rehash sellers of that. in and comes there's are necessarily of architect if flow, way. that to up of those, the very offer that things to a that a forms opportunity to That monetization each that experience won't listings make from natural results. merchandising listings I that we lot have we how

remain very about party. first we we're excited So -- very

sure two, so further some material provide it's third-party ads, it going first user to of a that that user making else the quickly improves ad how don't as with great that. and meantime, party will ads, and at headwinds reduce look for and getting promoted works the the another ads billion would be or Andy, hurt and advertising that I that on you in our we add anything it a third-party display year there's experience, experience listings number dollars, know unwinds. basis, In if balance even absolutely and to product that doesn't particularly to it will

Andy Cring

between on agreement on company? down, op question wind payments the you're ads. on about the the PayPal talking the Dan, Not

Dan Salmon

Yes, basically, yes, exactly.

Andy Cring

the the we start all I when factored They into been payments. declining come July companies. we'd ramping year will stop agreements time also same you agreement. guidance is know, have been So gave. sharing data that ramp we've the with -- next payments There Those at to is the clear center when between operating as

on of One of sales had back some are information we've the and costs increased kind to centers prepping of data reasons catch is forth. going costs

ramp once clear the while agreement will on op be revenue some significant. little we'll lose So perspective a clearly the and gain we'll we're from the costs op agreement, a bit payments side,

Dan Salmon

you, guys. Thank helpful. very That's

Operator

line And question Thomas from of DA Davidson. your the next Forte comes from

open. Your is line

Thomas Forte

Great. my Thanks taking for question.

two of high So kind I level questions had on eBay.

major consumer there the in or in on cyclicality the how Is recession is business. any and next about economies how the as XX eBay flow months? of more of First your we about pricing, on exists entering counter for electronics, the over potential think impact especially should one through we tariffs second, think should

Scott Schenkel

clearly I Yes, relatively cyclicality. counter I that user base is -- the to think going dictate the think

And would thresholds prices. customs the happen. should mitigate us and we happen. look downturn to obviously the our if we but may reality they lower offering is, differentiated their will sure selection advantages having that of we the tariffs broadly I set the a have relatively alternative in some squarely for Specific that recession, equally, make current in everyone unique tariffs, impact believe should consumers impact view us we consideration think

Thomas Forte

Thank Great. you, Scott.

Scott Schenkel

Thanks, Tom.

Operator

And your Morgan the next of from comes Stanley. question Nowak Brian line from

Your is line open.

Brian Nowak

to one in need couple you the just, the categories one the Thanks picture you How profit after sort really for sort through on think back the big the getting GMV business Second headwinds. of important you about sales to question of I marketplace, in my at a taking of back or to the get first focus bring on have payments, XXX on the scale. long-term? tax expecting questions. of billion growth a one do to revenue million growth X most over U.S. are two what operating of the we

make cadence Thanks. sure the Now, here, didn't want everything? we your guidance can I repurchases? or are start Just of repurchases that about EPS share to there miss think excluding share is to XXXX just I in

Scott Schenkel

backwards? work we don't Why

Andy Cring

Yes.

at but billion billion be and payments until half to And a in a number, 'XX that's XXXX get we a little X the and I'll 'XX helpful. at number. So we should 'XX middle bit if the the what then backwards, instead is about we'll talked scale start ramp we of is

and In number talk times to a I'd returning approximately to about times gross think in and going leverage below guidance, terms of you and a capital guidelines what yet. three past the debt doing mid-term I to debt-to-EBITDA. aggressively. point one I'll share specific been don't repurchase half pretty We're stick we've of the

at back pretty when more buy with January. maintaining count X.X a the billion and we'll clarity provide is you flow cash give range of a of that dividend, you year-end look of possible and profile get cash decent in what it'll of or If up to terms on we business share, the balance share forecasted

Scott Schenkel

look, to And into Yes, think and 'XX the just over quickly on remaining relatively on rapidly focus the should of of happen. markets be as that back on I as ramp the second-half it here, to us we're about markets scale of kind specific let remaining going up back then can 'XX. payments, corridors or course payments, we need work 'XX will our

talking that will my to pretty up that about. go so, expectation numbers we're the And rapidly 'XX is a to

Andy Cring

we that's know the to don't can there new and kind question experiences of speed new and verticals into and about think buyer and seeing have talked and cost those got buyers say I and and alternatives across if forward. with do answer well a particularly won't directly, of offering entire across solving tracking earlier not horizontal this as first the That's vertical it about are latter part managed level we next. talked we of by but seller data lot, things aspects of lower on both as you'll head relatively the moved all of one points, to both products but focus pain then I and that a relates shipment vertical your structured of there payments base having alternatives shortly, platform year the we ecosystem. as then that Brian the I aside, be as help Leave delivery and As verticals, -- into we focus in on is sellers will to that ads form some we've the

Brian Nowak

thanks. Great,

Scott Schenkel

Brian. Thanks,

Operator

from Fitzgerald from next question of Wells your Brian comes And the line Fargo.

open. Your line is

Brian Fitzgerald

helping app across 'XX respect promoted newer? use can adoption this us been and was bunch is then you to color, mentioned, with app when follow-up a Thanks. a the to I'm app? differential call it any or how there. if holiday Any relative the are integrated dynamics on Maybe the give any wondering guys. or listings. with of in looking 'XX, Thanks, how And Growth out to respect season there dynamics out across mobile has things going you is particular mobile to advertising that's mobile the heading great. into just

Scott Schenkel

clear. That's I am for just ads, Brian,

Brian Fitzgerald

Yes. right. That's Yes.

Scott Schenkel

Yes.

expanding XP is the not the the adapt well-received selling capability -- the for has having fly So been for we sellers, sellers that launched manage this well-received. customers, on different been to by to very via mobile obviously very has to app a and ads and those capability managing and quarter their and very what's rapidly

did ads -- just you or did growth of you generally? terms holiday In mean mean the XP for to specific ads

Brian Fitzgerald

Yes, Yes, right. that's right. that's Yes.

Scott Schenkel

in see a there'll with we'll don't what performance think think I trajectory growth QX rate continued at wise. in any QX. I be kind line wise is of Look, and difference, material

Brian Fitzgerald

Appreciate guys. it. Thanks,

Scott Schenkel

for one more got Thanks, Brian. Operator, time we've question.

Operator

line the from question from Bank. final comes And Kunal of Deutsche Madhukar your

line open. Your is

Kunal Madhukar

me Hi. in. Great, thanks for squeezing

continue in longer-term? as us kind you the can way, about business eBay a we you to quick one, you authentically the future, about how help the evolution of growth authentically we'll should in talked about think work Just talked

Scott Schenkel

Yes. Look…

Kunal Madhukar

I of the impact think payments. from

Scott Schenkel

particularly all I I about, our growth efforts but we've the growth below and buyer of items bit and modifying around pain grow short-term laying create delivers ecosystem everything the of and some that points rehash that solving and retail, look think Look, for think business, Yes. a and the marketplaces think at can I at this that and e-commerce some there, but for we to out focus likely not an we above kind objectives that of if we that more to type of we manner, spot capability seller items, can in long-term. talked been for a the

question. the for Thanks

Kunal Madhukar

you. Thank

Operator

thank today's and may participating, this We gentlemen, for disconnect. now and ladies call. you And concludes conference you

eBay (EBAY) 23 Oct 192019 Q3 Earnings call transcript