EBay Raises Revenue Guidance, Citing StubHub Success, Data-Driven Focus

Helped by a consistently strong revenue generator in StubHub, eBay has posted its second straight quarter of sales gains, pulling in net revenues of nearly 6%. With the revenue boost, eBay raised its full year 2016 guidance to a range of $1.85 to $1.90 per share. EBay is also investing in high-level analytics to gain a greater understanding of pricing and purchasing behavior.

While the retailer had a dip in net income of 4%, earnings per share beat estimates, growing 2%. The company’s marketplace business pulled in a 1% revenue increase, but the e-Commerce site had help from three factors:

  • A gross merchandise volume (GMV) increase of 4%;


  • A 15% jump in Classifieds sales; and

  • StubHub’s revenue increase of 40%, taking in $225 million.

While the StubHub revenue total is just a drop in the bucket as far as its percentage of eBay’s total revenue goes, the ticket reseller has become a consistent revenue fixture that the marketplace has welcomed since PayPal’s split away in July 2015. Since the split, eBay has been shifting its focus from its traditional auction-laden roots to a fixed-price business to further compete directly with Amazon, and to get more brands to sell on its online marketplace.

As part of a buyback program, eBay repurchased $500 million of its common stock in Q2. The board approved an additional $2.5 billion stock repurchase authorization, with no expiration.

eBay also has aimed to ramp up its own competitive positioning with the acquisition of predictive analytics company SalesPredict, backing up the brand’s increased emphasis on structured data. While Amazon has made its name by using data for product recommendations, eBay will leverage data to understand the price-differentiating attributes of products sold on the site.

“The company will continue to invest behind the structured data initiative, which is improving underlying traffic and conversion rates for the SEO channel, by extending its next phase to approximately 100 million relevant listings by the end of the year and shifting some brand spend to the top of the funnel,” wrote Michael Graham, Managing Director and Senior Internet Analyst at ‎Canaccord Genuity in a note to Barron’s. “We also are encouraged by the continued buyback momentum, and believe it should help create a floor under eBay’s stock.”

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