EBay on Wednesday reported that first quarter revenue rose 12% year-over-year on an as-reported basis and 7% on a currency-neutral basis to $2.6 billion, primarily driven by gross merchandise volume growth of 13% (7% currency-neutral) or $23.6 billion. EBay grew its active buyers base by 4% across its platforms, for a total of 171 million global active buyers, according to a company press release.
By geography, the U.S. brought $9.5 billion in GMV, a 7% rise, while international operations also rose 7% to deliver $14.1 billion in GMV, the company said.
Many analysts, however, were disappointed in a lackluster revenue forecast for the second quarter — between $2.64 billion and $2.68 billion. Analysts had projected the company to hit $2.68 billion and strengthen its turnaround plan, Bloomberg reports.
The marketplace disappointed many analysts, but its year-over-year revenue rise was its best in more than four years. Ebay has been moving assertively to defend and grow its global position as a marketplace, which has been challenged by Amazon.
Ebay has made a lot of changes in the process, pushing its sellers to offer fewer auction-based sales, for example, and revamping its website to invigorate discovery. But the company has had to work harder to get onto consumers’ radar, CEO Devin Wenig told analysts on Wednesday.
"[W]e think that there's a big opportunity to close the consumer consideration gap. There should be more people shopping on eBay because it's a great product with great inventory," he said according to a transcript from Seeking Alpha. "And there's some that just don't consider us because they don't know what we do. So we're going to work hard to close that gap."
The marketplace is also doing a lot of experimenting and learning, which has taken its toll on margins. "We're being aggressive and experimental with our promotions, and we're always disciplined," he said. "But we did some promotions this quarter, last quarter, Q1 that we haven't done before, like in the U.S. and in general, we were happy with what we saw and we'll keep experimenting with that."
Executives also addressed analyst questions about Flipkart, which may be on the brink of a Walmart takeover. Flipkart and Ebay last year cemented a relationship when Flipkart bought Ebay’s Indian business, an exclusive deal with three more years to go. "[T]hat is a relationship that makes us both the exclusive importer and exporter of goods on the Flipkart Marketplace. We’re happy with that partnership," Wenig said, saying he refused to "speculate or comment on what Walmart may or may not do."
The company also said its move away from Paypal as its main payment option — the company announced in January that Dutch company Adyen will take over in that role — will help reduce the cost of selling on its marketplaces "via a lower all-in take rate."
Paypal doesn’t seem to be missing the business. On Wednesday, the company reported Q1 revenue growth of 24% to $3.69 billion (22% currency-neutral). The company also projected fiscal year revenue to grow between 16% and 18% at current spot rates and between 15% and 16% on a currency-neutral basis, to a range of $15.2 billion to $15.4 billion.