Check out the latest eBay earnings call transcript.

eBay (NASDAQ:EBAY) released fourth-quarter 2018 results on Jan. 29 after the market closed, detailing solid top- and bottom-line growth, its first-ever dividend, and progress as it shifts its focus to capturing longer-term opportunities in both advertising and payments.

To be fair, eBay has faced pressure from multiple activist investors in recent days, so the timing of its boosted capital returns seems to be no coincidence. Nonetheless, with shares up modestly in after-hours trading as of this writing, let's dig deeper for a better idea of how eBay ended the year and what shareholders should be watching.

eBay building with colorful company logo in front

Image source: eBay.

eBay results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Growth


$2.877 billion

$2.707 billion


GAAP net income from continuing operations

$763 million

($2.597 billion)


GAAP earnings per diluted share




Data source: eBay. 

What happened with eBay this quarter?

  • Adjusted for one-time items, eBay's (non-GAAP) net income from continuing operations climbed 9% year over year to $670 million. Adjusted earnings per share grew 20% to $0.71.
  • These results compare favorably with eBay's latest guidance, which called for revenue between $2.85 billion and $2.89 billion, and adjusted earnings per share of $0.67 to $0.69.
  • Gross merchandise volume (GMV) grew 1% (2% at constant currency) to $24.6 billion.
  • Active buyers grew 4% year over year across eBay's platforms to 179 million, up from 177 million last quarter.
  • Marketplace revenue grew 7% (6% at constant currency), helped by a 1% increase (3% at constant-currency) in Marketplace GMV to $23.2 billion.
  • StubHub revenue grew 2% to $314 million.
  • Classifieds revenue increased 8% (11% at constant currency) to $263 million.
  • In advertising, eBay's promoted listings revenue grew 150%, with 600,000 active sellers promoting over 200 million listings.
  • eBay also continued the multi-year rollout of its managed payments capability that was launched last quarter, intermediating nearly $140 million in GMV in Q4.
  • eBay generated quarterly operating cash flow of $1.2 billion, and free cash flow from continuing operations of $1.1 billion.
  • eBay repurchased $1.5 billion of common stock during the quarter, laving $3.2 billion remaining under its current repurchase authorization as of Dec. 31.
  • In conjunction with its quarterly report, eBay announced a new $0.14-per-share quarterly dividend, with the first to be paid on March 20 to shareholders of record at the close of business on March 1.
  • eBay also increased its share repurchase authorization by an additional $4 billion, calling for share repurchases totaling $5 billion in 2019. 

What management had to say

eBay CEO Devin Wenig stated:

We delivered record earnings for the fourth quarter and full year 2018. In 2019, our focus will be on further improvements to the eBay user experience, while pursuing significant long-term growth opportunities in advertising and payments. We are confident in the strength of our business and future growth prospects, as demonstrated by our decision to institute eBay's first-ever dividend and increase our share repurchase program.

Looking ahead

For the first quarter of 2019, eBay expects revenue between $2.55 billion and $2.60 billion, assuming organic currency-neutral growth of 0% to 2%. On the bottom line, that should translate to adjusted (non-GAAP) earnings per share of $0.62 to $0.64. For perspective, and though we don't usually pay close attention to Wall Street's demands, consensus estimates had predicted lower first-quarter earnings of $0.61 per share on higher revenue of $2.66 billion. 

Finally, for the full year of 2019, eBay anticipates revenue between $10.7 billion and $10.9 billion, marking organic growth of 1% to 3%, with adjusted earnings per share of $2.62 to $2.68. Here again, most analysts watching the stock were modeling lower 2019 earnings of $2.59 per share on higher revenue closer to $11.2 billion. 

As such, some bears will undoubtedly balk at eBay's apparent struggle in finding sustained top-line growth. Bullish investors can take some solace, however, in knowing they'll now collect a dividend each quarter for their patience as eBay works on its budding advertising and payments initiatives. It also helps that eBay is successfully bolstering its earnings in the meantime -- albeit to some extent thanks to its ambitious share repurchase plans.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.