Analyst Note| R.J. Hottovy, CFA |
Narrow-moat eBay's updated full-year outlook may have fallen short of market expectations--revenue of $10.04 billion-$10.11 billion and adjusted EPS of $3.34-$3.40 versus CapIQ consensus estimates of $10.2 billion and $3.43--but we took away several positives from its third-quarter update. Total currency-neutral GMV increased 21% to $25.0 billion, including 33% growth in the U.S. and 14% international. This was a slight decrease from last quarter's 29%--partly tied to the expiration of consumer stimulus in the U.S.--but still signals healthy engagement among both new buyers and sellers. We were also encouraged by continued progress with eBay's managed payments (used for 20% of on-platform GMV and representing approximately $130 million in incremental revenue in the quarter) and advertising efforts (that increased 77% to $186 million in revenue), which helped drive revenue growth of 26%, a 40-basis-point increase in the take rate (9.4%) versus last quarter, and a 4 point increase in adjusted operating margins to 30.7%.