eBay’s top line marked 6% growth
eBay’s (EBAY) top line for 2Q16 rose by 6% YoY (year-over-year) to $2.23 billion, clearly exceeding analysts’ expectations of $2.17 billion. The company’s small but fast-growing businesses, including its StubHub and Classified segment, witnessed stellar growth during the quarter.
StubHub recorded sales growth of 40% YoY while the Classifieds revenues rose by 15%. StubHub ended the quarter on a strong note with a gross merchandise volume of $1.1 billion, an increase of 35% YoY.
As stated earlier in this series, eBay generates the majority of its gross merchandise volumes and revenues from international markets. As a result, the ongoing strength of the US (SPY) dollar negatively impacted the company’s revenue growth by 1%.
eBay’s core Marketplace unit showing signs of revival
eBay’s core Marketplace unit accounts for the majority of the company’s revenue. However, the segment witnessed slow growth, as can be seen in the chart above. Its core segment faces several challenges, including stiff competition from Amazon (AMZN), Groupon (GRPN), and e-commerce sites of large retailers such as Walmart (WMT) and Target (TGT).
However, the segment is showing signs of revival thanks to the company’s strategic measures aimed at revamping its core marketplace business, including barcode scanning, vast product offerings, integrating more small sellers, product reviews, and improving its SEO (search engine optimization).