Last night, in addition to reporting strong results, eBay Inc (NASDAQ: EBAY) also provided good guidance, increasing revenue and earnings forecast for the company.- Total revenue growth was 27%, with organic growth being up 21% -- strong numbers
- EPS up 39% -- 3 cents ahead of consensus estimates
- Over $400 million in free cash flow, very solid considering the huge investment in current and new growth opportunities
Skype, its VOIP communications platform, continues to be monetized successfully as it added 24 million new users in the quarter. But more importantly, revenue jumped 87%, hitting $79 million and turned profitable in the quarter. This business has potential to be another free cash flow, with a 196 million user base. Adoption of paid subscription is taking traction.
Marketplaces grew revenue 22% year over year due to higher ASP and its huge 230 million user base. However, overall listings in the US and Germany are weaker than eBay would like. Emphasis on reducing lower-end products and lower-end sellers is negatively affecting listings which is somewhat to be expected and has eBay focusing on higher margins and higher ASPs.
We blogged earlier in the year that eBay was due to take-off again, which is proving correct. Stay with this stock and if you don't own it, I'd consider getting into it.











Reader Comments (Page 1 of 1)
4-19-2007 @ 5:11PM
Tracy said...
I am glad to see someone writing positive about eBay for a change. eBays numbers look very good and profit outlook is good. Down the road eBay will make positive gains every year. Pay-Pal will flourish and gain popularity with more and more vendors. I love paying with Pay-Pal for anything I buy on the internet. It is easier than using a credit card and also very practical. Skype will take off down the road and pay for itself in the long run just like you mentioned. Ebay got up to 35.00 a few days ago and it is normal for there to be a little sell-off. I for one am buying more eBay on the dips. In five years eBay will have doubled. they are a great company.
4-19-2007 @ 10:50PM
chuck said...
Thank you!!!! Finally a writer who has some conjones to take a bullish position on ebay with sound objective reasoning from an investment perspective too! Wow I'm floored. Am I hallucinating!!!! Is this for real or a late April fools joke?????
4-19-2007 @ 11:02PM
rosa said...
Eric is having the last laugh at guess who?
Firemeg - the metronome YAWN
Andrew Horowitz, CFP - CFP who called it wrong
Michael Schneider - ebay fraud pundit
Alex - Goldman/Meg conspiracy theorist
mitchell - IRS chief
My Next Auctions - phil shiller of own website
Gary E. Sattler - running for president on I HATE EBAY platform
4-20-2007 @ 12:16AM
firemeg said...
Sorry, I only have an 8th grade education..
How does Skype revenue of $65 million in Q4 2006 rising to $79 million last quarter mean there was an 87% growth?
Also, on the number of eBay & Paypal users....that number is just lame. Any serious eBayer knows that most eBay users have more than 1 eBay ID.
How many do you have?
http://www.firemeg.com/forum/viewtopic.php?t=110
The average number of ID's per member so far in my non-scientific survey is 7.25 ID's per member. If that was a fact, sitewide, it would mean there were only 31 million users. We'll see how the survey progresses.
Also, don't forget that eBay included China membership in their numbers for Q1. eBay's presence in China is all but GONE after TOM Online's decision to privatize the company.
4-20-2007 @ 7:54PM
Professor_Smith said...
Humour me. How would answering the active user base make a material difference to the Q1 earnings achieving 52%? Even if it was 30% of the total registered user base it wouldn't make a difference.
Also when they report quarterly earnings year over year comparisons for the SAME period. Not the previous quarter Q4.
P.S Do your own home work. Active user info is publicly available if you took initiative. Informed investors do.
Stay in 8th grade.
4-20-2007 @ 9:30PM
firemeg said...
Yeah, duh, I realized that after I posted.
I know that the active numbers are...according to eBay. I do not know, nor does anyone, what the real numbers are.
4-20-2007 @ 11:07PM
jeff_bezos said...
Hi I own Amazon and I don't even know our active user total. All I know is I have $8 billion in revenue :)
So what's your point 8th grader? You going to call me a liar?
4-20-2007 @ 11:10PM
terry said...
Firemeg I will put it in nice round numbers so you can understand and be very happy. Ebay has
1,000,000 active users world wide.
How do I know? I'm a whistle blower.
4-20-2007 @ 11:17PM
Wagoner said...
Im CEO of GM. I run the biggest car company in the world. I sold so many cars that I have lost track. I count sold cars as those shipped to dealers. But are they really sold cars when the end consumer has purchased? Also I offer deep rebates that I lose money on each car sold.
Oh oh that's why we almost went bankrupt!
Firemeg do recalls count as sold?
4-20-2007 @ 11:23PM
barbara said...
terry remove 7 from the total as you inadvertly included the multiple registered accounts from FireMeg. He no longer sells on Ebay.
4-21-2007 @ 6:47AM
firemeg said...
I do still sell on eBay, although now I'm only a PS on two accounts (both bronze level) whereas a year ago I was selling with four PS ID's, one gold, two silver and one bronze.
I'm not calling anyone a liar except eBay management. Part of their conference call was about how many registered and active users eBay Inc. has for eBay, Skype, Paypal etc.
In my unscientific survey - http://www.firemeg.com/forum/viewtopic.php?t=110 - there have been only a few respondents, but it is clear already that these numbers for eBay.com users are in question. If eBay is stretching the truth about total eBay users, they may be doing it for Paypal and Skype users as well. And for active users of those sites. And if they don't mind stretching the truth about user numbers....can you really be sure that their financial numbers are accurate?
4-21-2007 @ 4:32PM
murphy said...
sure everything.. ALL Lies. Infact there is no one buying or selling. It's all made up. It's really a conspiracy to launder illegal money and fund the iraq war.
Happy?
4-21-2007 @ 4:37PM
lisa said...
Gee Firemeg you so smart You are the only person in the whole wide world who knows register users are not active users. Wow Brilliant
FireMeg should be analyst! LOL
4-24-2007 @ 9:12PM
troll_eye_view said...
ebay's 230 million confirmed registered users are from several selling platforms, the active user # of 80 million includes those users who have made at least (1) one bid, or placed an item for sale/auction, this includes according to the head of T&S, that there is less than 0.01% percentage of fraudulent listings.
Okay with appoximately 12 million items listed at any one time, then that would leave LESS THAN 12 thousand listings created with the intent to commit fraud. This # it would seem is low, considering one group of members are/can find more than this amount on any given day. Fudging the #'s is one thing ebay has gotten good at, since Pierre Odimyar left.
Analysts should be asking questions in the upcoming ebay TOWN Hall concerning this # reported by ebay.