eBay Inc. (NASDAQ:EBAY) announced strong second-quarter 2017 results on Thursday evening, including an encouraging acceleration from its core marketplace business and broad-based growth in active buyers. Let's take a closer look at how eBay capped the first half of the year, as well as what investors should expect from the company going forward.

eBay office in Berlin


eBay results: The raw numbers


Q2 2017

Q2 2016

Year-Over-Year Growth


$2.328 billion

$2.230 billion


Adjusted net income from continuing operations

$493 million

$496 million


Adjusted EPS




Data source: eBay.

What happened with eBay this quarter?

  • By comparison, eBay's most recent guidance called for lower revenue between $2.28 billion and $2.32 billion, and lower adjusted earnings per diluted share in the range of $0.43 to $0.45.
  • Revenue grew 7% on a constant-currency basis.
  • eBay added 2 million active buyers sequentially from last quarter across its platforms, bringing its total to 171 million.
  • Marketplace gross merchandise volume (GMV) grew 3% as reported -- 6% at constant currency -- to $20.5 billion, which resulted in 4% growth in marketplace revenue -- 7% at constant currency -- to $1.9 billion. This growth was driven by expansion of new user experiences and successful marketing initiatives.
  • Stubhub GMV and revenue each declined 5%, to $1.0 billion and $236 million, respectively, as a "softer U.S. events landscape" was only partially offset by international growth.
  • Classified revenue grew 6% as reported -- 11% at constant currency -- to $210 million, on strong user engagement and increases in traffic.
  • Repurchased 15 million shares during the quarter for roughly $507 million, leaving $479 million remaining under eBay's outstanding repurchase authorization.
  • Generated $699 million in operating cash flow from continuing operations and $517 million of free cash flow during the quarter.
  • Ended the quarter with cash, cash equivalents, and non-equity investments of $13.6 billion.

What management had to say

eBay CEO Devin Wenig elaborated:

In Q2, eBay delivered strong top and bottom line financial results, led by Marketplace acceleration. During the past two years, we have made significant progress to modernize eBay and drive growth by improving the customer experience, creating a product catalog that covers more than half of our inventory, and sharpening the eBay brand.  We are on track and focused on creating an even stronger eBay for years to come.

Looking forward

For the third quarter, eBay anticipates revenue between $2.35 billion and $2.39 billion, good for currency-neutral growth of 6% to 8%. On the bottom line, that should translate to GAAP earnings per diluted share from continuing operations of $0.30 to $0.32 and adjusted earnings per share of $0.46 to $0.48. By comparison -- and though we don't usually pay close attention to Wall Street's near-term demands -- consensus estimates predicted third-quarter adjusted earnings near the high end of that range on revenue of just $2.32 billion.

Finally, for the full year of 2017, eBay reiterated its guidance for revenue between $9.3 billion and $9.5 billion, with GAAP earnings per share of $1.65 to $1.75 and adjusted EPS of $1.98 to $2.03. These ranges were still roughly in line with investors' expectations.

In the end, apart from eBay's light bottom-line earnings guidance for the current quarter -- and keeping in mind its propensity for under promising and over delivering to that end -- there were no real surprises in its report today. With eBay stock up around 25% year to date going into this report, it's equally unsurprising to see shares down only slightly on the news.

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