EBAY - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the eBay Q4 2019 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joe Billante, Vice President of Investor Relations. Thank you. ahead. go Please

Joe Billante

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

our investors.ebayinc.com. commentary and Investor the today are providing Chief through a me the the to interim Relations call, We're Schenkel, Chief eBay accompany which presentation Andy's available Joining Financial Officer. of Executive the website Cring, Andy on Officer; slide our during at interim section Scott call is

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

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

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

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

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

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

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

Scott Schenkel

everyone. afternoon, Good Joe. Thanks,

seller our make focus improve managed execute on advertising, last capabilities, to payments As commitments, of and on operational portfolio and and progress buyer quarter, I initiatives year experience and the reviews. our our growth mentioned was deliver QX our full and

focus for serve to assess would while and we and investments to our beyond, and focus we sellers how our shareholders. deliver -- buyers customers 'XX For ensuring

in these walk detail. of me you through each more Let

XX%, at QX X%. organic XX%, in of was substantially payments. better was EPS managed up strong guide, expected. expectations, to investment ongoing while up our Specific of commitments, Margin X%, our than high inclusive revenue line in the volume over was Non-GAAP our down $X.XX, with at end was our

reached we disciplined to process to sell StubHub for while addition, led In to a $X.XX a favorable following billion deal valuation. a that viagogo

full the we margin outlook. revenue while was while grew allowing earnings drove the double per productivity, high accretion. growth our at X%, X down reinvest was of managed organic XXXX, X% end payments strong For our Non-GAAP and above quarter to in point digits GMV And guidance. year January of us to share was delivering each

to reduce part margin in of Additionally, the actions as plans further review, at least reinvest profitability. net X next expenses over accretion The growth to announced initiatives to and is of points we improved X these our operating expected yield years. of

billion from have $X.X ever approximately outstanding shareholders of we to shares of net our returned XX% we Since PayPal, through buybacks Finally, and first separating dividend. share dilution. repurchased

For X the GMV year, declined headwinds. primarily due to

that reduce activating marketing would not with indicated we high lifetime First, we buyers values. that was

take growth, profitability. While this drive reducing -- higher and GMV and a drove better buyer near-term a rate also

marketplaces faster sellers than and the of and small was their tax. consumer anticipated states and second by rollout happened The sales to implementation on affected Internet behalf. requiring U.S. businesses This remit collect

requirements hopeful national approach rolled to burden small We a fully simplify on take advocating and we businesses. landscape. We a will the until and Internet U.S. sales this out U.S. reduce the tax continue expect lap that remain to headwind compliance are

advertising. managed volume payments X our organic and growth than While revenue came initiatives, dealing points much headwinds, those faster which of with GMV, from grew

XX,XXX our than GMV sellers to managed progress we launch, for $X of payment have Regarding journey we transform Since to our almost payments, make on our on more great continue ecosystem. processed billion rails.

options more million to has discounted in saved date, $XX when on sellers almost participation, pricing and to have get paid. they reward early our been fees, how have While they and

As ramped realizing operating under permitted confident X%, Germany, and $X.X X% the we income billion agreement, operating billion $X faster the in to our of while an we year, incremental revenue in remain limit ramp. approached from in We in exited volume than the U.S. our U.S. XXXX.

revenue QX, sellers of $XXX more drive the to quarter. Promoted million continues growth. XXX than Advertising delivered Over XX%. In X.X up Listings in revenue, million million promoted listings

our and Promoted helped the Listings total million advertising. For of more year, revenue plan in doubled us $XXX than reach

double-digit going to by deeper significant This started acceleration performance lap forward. was Seller we into advertising have Hub, a expect which integration listing we growth ago, from year adoption. and increased While the still supported revenue flows

conversion which remain We business. was our data to advertising a ad billion plan $X with algorithms, enhance addition, to up build utilize on track ranking. structured improved due In search to

the and categories by by making it more of We seller data data the Listing XXXX, structured listings search When contributed of that and uploaded improved data the buyer Over merchandising data. Promoted what buyers improved collection faster. home experience tools. in additional the searching in and structured aspect and sellers increasing data, for algorithms use course and we search. to and fashion from collected and better listings sellers the rich This convert to relevance were see make flows easier these

improved also Seller over of the the year. Hub We course our

where over feature grown engage one deals. per This day was to offers In with million experience. easy-to-use options can launched buyers X the we Seller better seller individual Offers, pricing and automated addition a to Terapeak with an has feature integration, Initiated

our commitments. We that on XXXX delivered are we pleased

XXXX, As we priorities clear. our enter are

margin more revenue to experience deliver foundation expansion. continue drive leveraging data seller initiatives, by improve will our tools, driving our structured buyer the growth We through while more

experience. to we July additional ready and countries an while important to expires, customer -- reach when rapidly corridors our Managed and a delivering payments better scale be scale will operating agreement in milestone will

will For provide spend. ad advertising, optimize their we tools more sellers to

and pricing buyer We experience. expect impacting this will the increase conversion without improve adversely

For expand in improving Hub sellers, we data guidance and capabilities. will Seller while our the insights

also will particularly selling experience, from friction We remove mobile. consumer the on

a for dollar as with items in that For few clear and start definitions. escrow build better categories scale with item such platform will will the and buyers, high payments we condition across capabilities features vertical

will buyer trust through We on focus also in shipment tracking our markets. improving increased international

which of in relevance. experiences search leverage will will all these and data, benefits aspect these of experience ranking recall to will All lead --

also fashion to collect and to data data garden aspect electronics, home population. and the increase We plan in more overall

for will these While experience margin drive marketing better customers, expansion further spend. our and delivering ineffective we costs reducing on by controlling simplifying structure,

For buyer-focused retention between will spending acquisition marketing, frequency. we rebalance and

address. Finally, to I there like are two would topics proactively

guiding We portfolio, our execution, StubHub, like shareholders, value evaluate and to we eBay maximize is including to value regarding creation with shareholder portfolio business opportunities. certainty take First, of simplicity. the speed a consistent long-term each synergies action, value. for objective utilize our in of When we primary to close and principles, set operational

having time to Our team our employees continue while about structure an the excited a to and principles, Board bring. the in continue could might Classifieds middle it update leadership what is with to about our by and about share focus of this appreciate opportunities the we everyone maintain these anticipate of business future be, guiding year. that operate Classifieds We uncertainty of

make better of In the Second, to CEO firm regarding the considering and the is team conducting to has full our we support of customers, is shareholders. external with the and actively serve leadership and internal search, employees a interim, changes and Board, the continue the candidates. support the search a Board process

our and on-platform reprioritized opportunity. on biggest investments we we and the which marketing creation product Over road map, executive focus value the By our leadership reallocated increasing is team, organization regions months, Marketplaces structure. marketing have are see Marketplace the business, simplified our past few elevating largest to global the where we

data clear: remain priorities in and a XXXX that our margin maximizes structured initiatives, shareholder more deliver buyer expansion. top Our improve seller delivering sustainable profitability provide long-term our better of value. these We will all believe foundation, while tools, experiences, balance changes leverage growth growth result

challenge teams forward these the are delivering commitments. to and Our on excited about look

performance. me Now let over details Mr. it more on provide Andy Cring? to to financial turn our

Andrew Cring

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

Moving to Slide buyers on active X.

is marketing than million part have in buyers a from driving driven in and growth XXX year-on-year a X% point We reduced was we engagement buyers, growth. expected. higher churn This that X lower QX active spend with by deceleration representing

to X points Moving decelerating U.S., we In X%, Slide the while versus billion X%, X. QX, $XX.X billion quarter. we down GMV, of we $XX.X prior internationally, the billion, $X.X In down down X%. delivered enabled generated

organically. revenues X $X.X $XXX the of X. Moving X% transaction up delivered of point marketing brandsXfriends. on billion, revenue, X%; of sale and down from to revenue, X%, generated of $X.X other up and inclusive services million billion We revenue of We a headwind net Slide

to X. Turning Slide

a X% points X the in points GMV in sales by X in tax reduced QX, surrounding decelerating driven live in GMV GMV Marketplace from October. the X%, confidence point versus marketing Texas, U.K. Internet X was quarter. points down Internet the marketing impact International XX on-platform of down uncertainty impact from was reduction more points and Brexit primarily from Our California X% worse QX of by and went U.S. a states, X and than was including QX lower sales prior down redistribution spend. platform decelerating as was The spend. X QX, and versus driven continued tax consumer

X over the X nearly mix X Transaction was from in GMV was Promoted The and deceleration. X X driven by revenue growth payments. gap $X.X gap revenue The growth from factors: point prior managed point from points category X%, revenue Total another Marketplaces point in point decelerating effects billion, continued grew a X X%, QX from down the and points nearly Listings, quarter. between continues.

revenue of growth second we than XXXX, half payments fully the forward, Looking scaled. growth until the levels of in significantly remaining contribution GMV to at leading revenue increase to expect higher

and XX managed margin reduction from is XX%, brandsXfriends continued decline X versus year-on-year of leverage, other payments. driven cost and continued down year-on-year, the X third-party and primarily to revenue investment ads. marketing Marketing was sale segment by XX%, Marketplace QX. reduced point our partially by services the decelerating of points The nearly was due up offset points in

year, full $XX.X $X.X GMV, the the revenue, X%. platform and of up generated of billion down For billion X%, Marketplace

pricing for mix. first-party in the delivering fourth provides quarter, more year-on-year has versus was point Slide X. concerts in StubHub weak a to landscapes theater. revenue take decelerating revenue was than access StubHub's MS&O volume, year-on-year changes revenue Most down and inventory higher revenue partially which and which of in Turning insurance from X%, X% sales, by grew straight of QX. represents QX, a -- tickets. the $XX million rate purchase to unique down Transaction landscape mostly buyers MS&O exclusive deceleration X tripled by event from event -- points and offset X and X%, for driven GMV StubHub X% QX. was from

was primarily segment points, down by in and consulting spend. first-party our StubHub XX%, nearly partially by margin business marketing X costs, investments offset driven lower

and year, the X%. billion growing revenue, in StubHub delivered For full down $X.X $X.X GMV, X% billion of

revenue Moving grew to QX, decelerating XX. X%, X Slide In Classifieds points.

businesses mobile. driven German horizontal, strong vertical eBay motors Our our and continued by our growth market-leading double-digit Kleinanzeigen platform,

addition, the across quarter-on-quarter by are strong portfolio. continued in verticals primarily Germany. we horizontal is display markets in driven of across growth The outside headwinds In our delivering deceleration advertising

Segment margin for was Classifieds year-on-year. XX%, point down X

Classifieds revenue, $X.X the full generated year. up X% year, prior the For versus of billion nearly

inventory Turning and full of XX first-party is non-GAAP additional marketing managed in the than of cost delivered XX.X%. offset pressure basis a from major growth inclusive by investment more operating margin points reductions the QX, Korea and XX year-on-year, of drivers. programs of up divestiture and to In we payments StubHub, brandsXfriends. Slide in in and our in point This

Cost of offset primarily year-over-year payments a driven increasing managed partially scaling by down our percentage basis business revenue marketing off-platform promotional over first-party and expense programs, was XXX divestiture our investments on-platform points brandsXfriends. as of year, in prior versus driven a of marketing up spend QX was our and sales by revenue the year-on-year the Marketplace in in X reduction businesses. double-digit Marketplace points and by while inventory

by portfolio managed payments. to investments costs vertical up Product expand X managed G&A development mostly Classifieds XX in points from and and in our investment operating basis offerings. in review payments up our continued driven and point, were costs was

the line XX.X%, our with original For was year, and margin up X XXXX operating full point year in guidance.

QX, we versus and FX benefit. Turning program, managed non-GAAP and repurchase control continued in-period lower share our to EPS efficiencies, by consecutive of was in tax up double-digit our our versus tax rate The October mostly EPS, seventh prior operating a guidance was offset driven payments. in investment by quarter non-GAAP and partially driven Favorability our year, XX% expansion. non-GAAP Slide XX. In of EPS growth EPS by $X.XX delivered primarily the on an cost

lap For in the operating the higher year, versus XX% GAAP expanding EPS deferred non-GAAP program tax down The warrant by the quarter XXXX was EPS with gains repurchases. year. offset GAAP is last rate we repurchase driven our delivered leverage. XX% EPS, share primarily $X.XX, for driven Adyen in a by we and decrease tax partially growth a as associated mostly by adjustment, and share

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

Moving generation, taxes, of free we flow, a finishing nearly $XXX driven generated year-on-year, million strong XX% cash of cash $X.X timing We capital expenditures. lower capital and to down Slide XX. year improved working of QX, increase both mostly In had lower XX%, free and working driven of with billion XXXX cash flow, cash cash by capital taxes. by another

XX. Slide to Moving

tenants and have and strategy changed. not allocation capital Our targets key

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

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

Slide we to July, Turning XXXX. our shared for In allocation capital plan XX. on progress

debt of billion, Xx maintained free billion over our and by performance Looking delivering completed the targets $X of today, EBITDA. cash $X.X year. year-end rating the on flow. for target net we We $X.X have X.Xx delivered initiated And above in ever while cash share ended ratio view set We stated our the our markers at our we of executed billion same debt against our first on repurchases. out BBB gross dividend. below we all and We year to with driven that

The Moving XX. to portfolio, guidance current we XXXX full in assumes our StubHub, is year on are for place Slide guidance entire providing including the year.

as forward. appropriate provide will moving updates We

provide and state, impacted. sales I in negatively months sellers also of collect to were growth In marketplace Throughout our saw little our each more relatively states by impact implemented volume context XXXX, a the tax. on in rates an followed Internet to as want the responsibility followed. tax, drop stable we volume immediate that sales

dates and that recover We states in launch affected early to growth in expect as XXXX of launched January the that shows the recovery. lap we data from states,

expect negative larger the impact tax more where quarters and we Internet Given launching a to in be modestly with sales to lap the off additional these when of the to tax dynamics, second in went states we launched. larger then of Marketplace the as on the earnings taper half start sales states our first impact the XXXX. of of Please in number live Internet U.S. on refer states XXXX, the business appendix for deck details including throughout half timing of

of X% projecting single $XXX offset With consistent sales FX-neutral an year-over-year growing continued billion XXXX decline plus will and an that payments incremental Internet come as-reported low X% and We we billion, digits, minus be in pressure expect X from conversion. as X to with $XX.XX background, and $XX.XX performance of approximately point between expect on X% Underlying managed organic basis. tax to we are to of anticipate million guidance, to basis as X% on this which in points growth an XXXX point ramp from revenue be to Marketplace improvements advertising, volume we our XXXX. the with

XXXX We We revenue expect top growth single-digit $XXX growth, to by and plan the of to dollar deliver XXXX. brandsXfriends expansion low business. in long-term we the expect negatively million our StubHub in of deliver additional and invest operating Classifieds, the U.S. to We compared growth stronger revenue impact to disposition similar anticipate we while margin approximately XXXX. line to

continued versus partially managed and marketing of XX.X% basis year, from corporate focused best-in-class by driven an optimization, of in at investments, margin increase points point will which procurement, XX.X% margin be and for This effective currency XXXX. represents the by expansion functional technology more X product our XX costs and payments We to midpoint expect approximately the offset headwinds. investment

expect the XX.X%. tax of in XX.X% effective We rate non-GAAP range to

be to XXXX, offset. quarterly share. in XX% of regards as increase dilution to Board dividend, to to implies a $X.X XX. With date X In of record January, dividend payment approved of with March shareholders guidance a per share billion of approximately will allocation, it raising payable capital our March The our of $X.XX repurchases our inclusive

additional Our $X expiration. share of repurchase Board has billion also approved with authorization an no

this anticipated, of We capital the the in for assumptions as have proceeds. in you cash made tenets. can deal with use not will in Should that consistent guidance a manner any QX, we StubHub allocation close expect our deploy that

in This is the Growth $X.XX of repurchase X% We margin investment leverage of benefit tax the up share, of projecting higher partially our includes repeat. U.S. impacting from managed dollar less on to lower $X.XX impact modest to points of based certain X combination as a and non-GAAP program. and won't are by share and stronger our X%. interest top XXXX growth, EPS ongoing line benefits payments a balances per income additional offset approximately the rate cash

to We is year to $X.X expect be of which in X% X%. billion, to of per free capital assumes range EPS $X.XX cash projected share. the to expenditures $X.XX GAAP flow Full $X.X billion

Turning to Slide XX.

lapping higher we sales we minus QX, given second to managed note Internet to of revenue tax that payments the $X.XX $X.XX second growth end X% volume plus to agreement projecting basis. half an billion, are operating and billion and will the expect and of half. the growing headwind ramp the revenue reflect the important rates following X% of half our organic that For first compared FX-neutral It's the for performance on between

in investments per of of is offset driven count non-GAAP the benefit share and growth. by primarily share, partially payments. operational X% EPS growth $X.XX growth, managed combined EPS by effect lower expect $X.XX to to We representing X%

partially a tax rate. and less income interest non-GAAP points by of a the on lower there balances, from In combination stronger are dollar of lower cash based headwinds offset addition, U.S. X

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

In a XXXX initiatives experiences, launching market. seller foundation according our digits including beyond. summary, laying delivered We for strong challenged, Listings. triple commitments volume scale within to growth XXXX while second strong better we managed and financial and a ramped including buyer our growth on Promoted payments advertising was in while plan and and We delivered revenue,

lower the delivered We our margin are margin managed to points comprehensive point investment at a additional of executed review and operating of we volume from track on an despite expansion deliver expansion XXXX, years. over payments. in pressure In X X least next X and

to $X dividend, billion first shareholders, stock. to our repurchased of continue ever and return initiating We we our capital

We our our an agreement continue divesting increasing to focus brandsXfriends reorganized favorable and a valuation. the sell make progress review, to and in We've speed Marketplace business, on-platform at our on of deliver outcomes better decision-making. reaching on StubHub portfolio operational leadership teams and to customers

We XXXX entered managed improving buyer priorities: our and payments, tools, data providing focused structured advertising, foundation. more seller top leveraging experiences on our

is As earnings deliver period we shareholder a growth, to growth, lower strategy plan revenue through navigate and margin our a consistent capital value. continued volume expansion of allocation maximize and to

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

Operator

Instructions]. [Operator

comes Goldman of The Terry first from Sachs. Heath question

Heath Terry

of focusing could XXXX. as the information at on the revenue guidance or but we being see was a you I guys core eBay have sales more all Is there we which of around given lot sort the as think, you some kind us as what think you've disaggregate of both you of of of on on, in of the what just Internet which more look I your the the chasing to of on past, to sort having higher sense initiatives us appreciate, the impact having Is wondering the value tax, this if for revenue sort give a a less growth sort kind eBay I impact to way kind the that impact profitable a look guiding core being to that's there guidance described focus eBay or as core you're of you on or year? the of that's experience? businesses and disaggregate that, that, of way

asset. of of well. process an just I you the you've, update sale sort gotten thoughts in lines wondering And the would full business, than of sort sort those of we the further And complication Classifieds bit give sort if side around into the anything as the talked us the around, think then as what less pursuing along could of of as on past, about your of about a was this, a make you've sense of

Andrew Cring

I Classifieds a Sure. it's Heath, of with couple on will answers guidance, Scott the kick think I'll Andy. start then in side. on and

in tried script what different as the point it'll about digit the single very half-to-half. the have Marketplaces, dynamic a and think relatively I being I you in guidance year-to-year to volume out think for low consistent

will some as a elevate point a the more second of half start a half point like you -- QX. of up full of impact at we little of at something basis, year IST IST in first accelerate go and those full little year in we really with you little X XXXX X year impact from look states. out look And on about will ramp or lap of bit a the The of to over the When of that to XXXX. points over X

an of pressure points volume from point X 'XX. So or from IST additional pressure full IST in negative of

that's how about that. think to So

'XX roughly 'XX the on marketing ROI we spend where the And drastically spend. profitable continue be -- revenue how lower impact spend. to the piece, we dynamic, continued the versus continuing have think to of to allocate refine the similar I negative we'll we won't then it some different of point refine And X IST refining feel eliminating we like and impact allocate marketing less how from

Scott Schenkel

creation. leading, Heath, And and is a look, I of the Yes. not, think space. a leading asset the understands, industry. of the it's, the wonderful business shareholder about got if on We've Classifieds, everyone sale this value as in great one

I in it's out I it's of options. not completely that best this creation. we in although our interest platform an of we'll fact, option on reached an doable, update would I think, all at midyear. as any would have value and said, which a people looking our, That's in not divesting line exclude on. unlikely But at platform, really lot that And or pursue option, point, have So by those shareholder with we're maximizing by

Operator

of is from next Sheridan UBS. Your question Eric

Eric Sheridan

on I Maybe along to ROI How to continuing the on two, years? talk the lower You goals optimization your you far exposure marketing against can, if reduce are in the multiple piece. marketing about channels.

'XX XXXX, a better beyond get type you are to sort like you'll into expenditures linearity facing you half then those as in think want of of for to did growth any sense around about and through delivering how accomplish some goals. half, of thoughts half the leaning you forward should the have how year be marketing of the the Just you? XXXX first it with going paid that second that? first as characterized in might marketing X the channels we the of sort or And headwinds component half in how And

Scott Schenkel

approximately is in I'd coming XXXX marketing same costs we this the Scott. in line as Eric, down XXXX. Yes, characterize with is came down

and sure, spend. sense be And makes underlying the include that, would reallocating, be it our reallocating returns in help marketing a well. most think search so But I material will for paid mentioned, we growth, make sense growth as to where we within where but don't it headwinds and reducing we'll that the as expect into

Operator

Baird. comes Your Colin Sebastian question from of next

Colin Sebastian

active follow-up a determine there but guess marketing who spend, you have active number of in categories First, with I pricing the at potential on listing indicated that what that would of could of quarters, other past this terms important are overall efforts shoes. plateauing model KPI work reaccelerating there seeing growth, sneakers, in sequential as then And is of outside the in guys of on specifically and think, a I the specific more since in terms future if that's maybe of you're wondering any activity experiments buyers, buyers? and geared the the health platform an the on

Scott Schenkel

First did certainly sneakers. question of Yes, in terms and look, December. we in interesting what it's on interesting an

experimentation. As and promotions unique our And $XXX. online of markets. sneakers in that history in this was different X know, of different announced you what a And we the selling most set practice one and has types of with that across experimenting marketplace continuation of It's case, sneakers sneakers we December over markets was in of inventory have of there. a in of might out a widest promotion

what so dynamics $XXX, at is ads play where here, look really no final looking value in buyers we're categories. think other trying and we're other in the does you but conversion how dynamics change monetization to including there's first-party accelerated And as fees sneakers about active and for over those at

And so benefits, with date, Listings Promoted to with GMV. we've not sellers, added also seen and but by some buyers listings additional by additional activity only

but And the now it so to here. scale a going what we're at very go as from interesting where consider that and here. then pretty look we see with product, we we'll do right gets interesting small from very And it's But experiment.

Andrew Cring

Yes.

we and can category only we in it's vertical. competitive this that, way the the breadth the depth really have think I X two it's across highlight markets, but thing I'd add a to Scott, to inventory point, of your

feel So active And good then buyers? about that.

Scott Schenkel

buyers, on a thoughts. Look, couple active of

buyers particularly call we indexed the First new course -- new highlighting important. what recently overweighted into active XXXX, always active favored active off, And we've over buyers that's with growth, -- buyer this ecosystem. and is We've buyers active and on been getting of reactivated as buyers. and new

buy look we and the XXXX next that get into buyers that As going or we but ecosystem over -- those -- more. some continue we'll X new into getting and of investing quarters migrate to into new brought spend try them buyers, to last the 'XX, we're in

continuing new QX we per great which into from as year, of bit GMV way, our the generating retained base there year be our less the was it's more news. and buyers -- so making in and you a brought bringing more in well. pivot whole and we some us look about as investments going little expand think, And we in to I by to in expanding last to retained next buyer towards buyers look bunch is, GMV the buyer buyer expect And them those can a but at continue base, into while but the converting to GMV that ways very which, stable, explore

Operator

Your Sandler Ross next is Barclays. of from question

Ross Sandler

Just two questions.

XX detail the Slide the for thanks IST. on So on

that down down up the we starts So forward, X seen that that lapping half improvement are that basically working are that X% there things saying going the and these IST, X% that in guidance of look about that And you've you to recent back is be as XXXX only you're ex your then X%. is if kind look like just other from quarters at we the on to flat in driving quarters? initiatives? assumes couponing Or uptick year are the

is GMV second is growth color in, there two, from half? that So payments kicking great. on Or up? picking that be that'd those Any in

Andrew Cring

Yes.

think it's I It's payments. certainly versus half, from lift -- half an both. improved the increased on an

said, to July As of and from points X in in year. remember, first payments growth we're cap -- get points we're quickly roughly the U.S., that the Germany do And capped and second revenue we on through -- we'll I in get X the quarter. and we'll what can in here

be that you'll revenue going -- have GMV to the coming combined and X in IST. second Scott half. is the of growth working impact to majority we're just the improvement initiatives of things And in points with So the of then out well, X improvements from mentioned that half-over-half -- of addition point the that of some conversion of lapping on and in as

Operator

comes Ju Stephen Crédit next from of Suisse. question Your

Stephen Ju

of understand on ops another how you're have your the under now evolving quarter So rear -- that you Scott, thinking just view. maybe payments in to wanted

to, when in a you guess, scenario fork guys a transition. had articulated hard a past, now contract the I of off gradual more comes I So think

into terms guardrails willing commentary the running what that against you up can percent of can to go, speed has in what directional in you're at the any Second, that thinking So Listings of do? you where bought changed offer terms markets like some now about especially which you're of have the, markets in for sellers has buy-in your the look Korea newer what time and using percent this the may guess, of I now? live some that the been Promoted like West older in versus

Scott Schenkel

July. the term near only the is sense payments Yes, is our going track agreement independent can payments we're the covered between two in I not GMV now sellers don't the U.S. we're the of only we'll I we that and evolution the markets in both gradualness and in a into guardrailed first. markets on do other and view right now. ecosystem couple right go with what in of at in we thoughts will Once Germany, of And expand but the that's with expand hard operating that we're PayPal, and number corridors. on -- the in the

we're than the we half year. we so not, better as the if look track, And of thought on second towards

any utilization. has I maybe business With that. Promoted what on Andy, form from learn Listings getting Promoted actually within which business, I'll regards on-platform sorry, XX% roughly completely the are in much weigh we'll but Listings we Korea see listings to our Promoted of of has let rate. U.S., within a if forward, But some he is percentage on a -- mean, look as And the Marketplaces numbers, Listings, different you higher or take

they a laid to within and would you and iterate as not I we rate Listings move for a to Promoted expect as plans as only that it forward we've user is time can over scale the view experience said we've to the continue what we about marketing And valuable those we expense us also and it's that thing modify think monetization that sellers, sure -- make how the assets of but so out. take a that just versus And requirement.

Andrew Cring

XX%. year, And promoting year, more that QX. over than million percentage the or listings X.X sellers in we represents of and by was sellers in through We terms of million than number number $XXX more of of the grew sellers sellers, exited the items

Scott Schenkel

million. XXX

Andrew Cring

XXX million, sorry.

Operator

comes Edward question KeyBanc Markets. of from next Yruma Capital Your

Edward Yruma

able any I payments, when is questions. noticing earlier over? seller switching any guess a that seeing Any to about a through whether just conversion from embracing you focus? been a one talked you'll in be favorable negative of restart impact of on you And to dynamic historically. eBay. authentically follow-up using verticals greater successful really first change at to had the maybe verticals those trying they're maybe are about Scott, Payments, And more guess of second, in some on then just think kind growth sense you've I the that very

Scott Schenkel

Yes.

no, impact, conversion Payments it's down. on So not

and What with alternatives, their how for their which do easier behavior different simple and them. as that's payments of now sellers is manage you just with answer. makes sort see a have user imagine. payments think series activity, more I Buyers would from their you to connect payments it tools which a listing have of

think on so I is fine. a conversion's net And this both sides the certainly, of equation, positive. And the

much point that the but I about plans they inventory data and is expanded that from think which think the we recently the based to about really only authentically and of. eBay, in time, that today higher made think And indexing And last verticals I we've is we towards to I in. product for we've again, on you as and that that as people as beyond, aspects it in. as it's done, the as script verticals it's work that us how that, on not On way the and structured experiment points XXXX we eBay are XXXX upon think leveraging prioritize authentically about also look look, alluded we've also this that would we the what the more of

most and talk that in collectibles, show searchable in undermine we brands. we have relevant vintage, us, last then as buyers more site lot prior, about year and not that but way is on our the the doesn't search talked think be on just and indexing we cetera, into about how et and results new When over items, only inventory people on ecosystem, how to findable up a about also we time, coming importantly, a interesting

for clearly along plan with the think But the and now, for leaders, focus categories, that's setting over we on Pete right have that us win. and up excellent as to is vertical team 'XX country where an focused the I I forward. more can job on we on that think very of think horizon course planning a -- regional other we So to move really and done the come Jordan

Operator

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

Daniel Salmon

I if follow-up a thanks I see could in just the play Maybe expand one, particular, little you think don't quick seeing Scott, for line on well just have And we why but Classifieds, on that how you might while you the missed search. update as maybe how to about that a it, CEO it may to just as put display on curious a then second, bit, in continues the Germany? advertising out well. but review you're on think headwinds expect time just that the strategic and not in

Scott Schenkel

a best CEO lay interview time but plan we a very absolutely. and of line, time working candidate. actively -- find the search possible or subcommittee to just reemphasize, the the is Look, didn't to Yes, and line, out Board on the a Board and find

combination on, to And the ads up as regards and limits, factors just display headwinds as it's then the in second other market think downstream degree. the changes in and our different extent, called in a in And what to the I going to impact I And the laws particular, In has of well that that's of over privacy think display has are as the that each that's businesses. both to to And a the platform site. across horizontal well effectiveness is done. what our With note showing time, devices, Google as what's important industry. players kind on mobile impacted pretty ads some continuing a Andy consistent shift happening it's of Classifieds, accelerating. lot which of there's countries, a, is some of within out, the it been particularly by, and one and

look, to and head excellent automotive I our out, think continue teams towards as the Kleinanzeigen beyond, in That and we said, well And verticals XXXX Andy think grow. called as that'll an expand job, particularly have done I normalize. as as to

more this a through, concern. tax. don't long-term just the structural so we've I Internet see work It's got something that to of to sales dissimilar And not as

Operator

question of comes from Fargo. Brian next Your Wells Fitzgerald

Brian Fitzgerald

how Can related what's there? With XX% pricings it you conversions can runway a bid? Is question walk much improved actual And up higher driver forward? conversions? Pro strongest growth Promoted Listings but see Stephen's for through Maybe Is the think, it we but less was revenue number to second I going XX% us Listings, of asked question, there there. little differently. and than sequentially,

Scott Schenkel

question. Yes, Brian, it's a great

you and a been ads what up to in conversion. that underlying for script, answered number aspects been that and certainty us it. and the improvements are as the to ecosystem structured Andy to mentioned under what we've of page think fit I about with conversion. those that It's I well that we've things has in of more collecting improve on data might given that alluded it doing a combination the my capability looking people then serve

look -- obviously, you're user that ads little The where and then accretive been other have better. the bit then, fluctuate I at sure prices going have they're a side how these continue to of it, And see to think, finally, make gotten us experience. we to place to

Operator

America. Your Bank next Post comes of from of question Justin

Justin Post

Great. of A couple questions.

And there Obviously, with help you'd maybe decelerated. countries growth better Are Is obviously, part there users earnings. of call product and all here, for that aggressive doing are stock's or aren't grow to second of is, the that that eBay taxes worse? some at you'd out question and with what sales It's call initiatives international. out international any the you issue. are the an value looking helping on First your been core And a strategic options there? you Are eBay review? markets? believe the good your at buybacks big

Andrew Cring

it's Korea in for And with continued Thanks, as pressure Korea, well the uncertainty call just in tracking on mentioned a the think has with U.K. to relatively though, couponing stable we quarter quarters, put The then last around on Korea. pressure the margin, from growth environment Brexit the Internationally, been is competitive the reasons. over rates several our tougher the are performance the I lower basis, happening market and countries macroeconomic. Justin. and X We've for U.K. U.K. what's different primarily out been

Scott Schenkel

first I think to pivot in you whereas market, does, those as mean and in -- I in in how on got market that dynamics. actually that job they're at to money they is situation at and Yes. to tough well. relatively off has iterating think as that on growth make Andy if international, helping a you don't stable off very a doing Japan anyone and Turkey Korea, grow mentioned, a and really is fantastic continue mind that off, I team platform. keeping deliver doing look to else of we platform, And look macro

parts Koreans them. two platform, And which retail-centric business listings applicable payments the call wonderful first-party well that that's the part as paid loyalty loyalty out They've to program there with the as for things million big and over and a great value team's of of every of rest That and to inventory and point offered included at first-party part more of our done capability a really of X are the an with very inventory, bring a done that's excellent capture excellent program Smile of part the set bigger credit One loyalty inventory the kind capability on other programs. great platform. month. job. that this to And job may an Club bring I'd be that is of

job year, profitable while even driving a lower it's growth as managing not than so at and $X doing they that the an some of And at lose overall. may if others billion be the excellent they're same growing rate the

loyalty from program Korea you businesses, And the there, at look combination learned ePlus about talked where there's German a certainly a market. have and We've incorporated German on-platform into the the platform. got aspects and by if we we've --

we the same other wouldn't in the the unique allow past. alluded be On doesn't have to But Royal happen and see this point se U.K., in Mail those. the around unique Royal and what to to and in tracking going allow very the the maybe in today. a U.S., one to Mail, same with U.K. continue We integration it's That'll XXXX going to which any to is you'll eBay. eBay. tracking, that's But on iterate per in than we I

I are will see by ones lot the their most to the -- about there's of to and speaking, that but their confidence platform of a countries board. generally U.K. different receiving country, able they're and in larger so dynamics those But to improve be across going in their consumers where talked And packages item. trust and on-platform the apply when receive will

Yes.

to is a which with why terms core be stock being the eBay So buy, we good the look, it's... part of is buyback. continue And in of aggressive review, the

Scott Schenkel

talked approach Board. in review. iterate Everything's exactly it we we with of you is the the we've we and about, way look is disciplined to it, how at which as to we're The part continue

specific but I at call point, So at wouldn't this anything out we look everything.

Operator

Your last Stanley. of Morgan question from Brian will be Nowak

Brian Nowak

two. have I

of it what what you were observe causing than talked the inventory you then that there about first the about Was churning? to that Just throughout or back Maybe on talk was conversion. higher product GMV, higher some us how that think you by that flat And was saw have it Or payment about churn one see talk conversion into Was the us the challenges higher IST improvements just expected. how number, driving you mentioned going that do I going XXXX? churn? XXXX you're to did consumers in the of to the an you frictions? offset you qualitative And XXXX? higher sort changes buyer that to XQ some Can fix you issue? how

Andrew Cring

with buyer year-on-year. start X% up I'll It's Brian. the actually number,

marketing we the of a last So second QX, increase it's year, just more that I and QX. following churn, we it's continuation in the had spend XXX The to half in in half spent, it's be marketing first the clear, of million It's what don't think anything of And buyers. buyer-driven new special them. cohorts really we're we frequently, this a saw dollars to be is rate. the marketing what higher the and at reactivate attempted out value and less year, less, of on we churning the CLV started buyers where spent attract visited those And those with not buyers. saw worth we to and that buyers became we spent in

retention towards focused some buyers. on higher-value So we've that that's away been why pivoting from and

Scott Schenkel

at especially bounce losing than the they XXXX least is in in we're -- other GMV, a sales at that really, items, that is back, tax, the With people what sales and them electronics high news that are categories headwinds, good they encounter that particularly checkout you not ASP transaction. when tax see higher Internet Yes. away. And coming

is it's And getting GMV a that's there's we've returning, not not far. see what but chunk so so of the you seen in states that worse

really I dynamics don't changing. there so And see the

underlying we've benefits, all point the thing had but above one minor some I others. And to the wouldn't conversion, then

it's I think making it's we and side. well series speaking, dynamics as not the XXXX, look of be in working seller a I some imperative broadly the things look marketplace, at one ecosystem. thing, in efforts in conversion, think, an did as improved as the improve. and And pointing as we of XXXX, ecosystem and to and experience seller we towards buy We're the on to ours, but to tools a improve seller like better overall that try

Operator

allotted Thank This your questions. you for concludes participation. the for time

You disconnect. may now

eBay (EBAY) 28 Jan 202019 Q4 Earnings call transcript