As eBay moves toward a beta test of its new payments system this summer, the online marketplace reported a 12 percent revenue gain in the first quarter of 2018, to $2.6 billion dollars. That missed analyst expectations of a 17 percent increase, and eBay share price declined in after-hours trading on Wednesday (April 25) following the company’s financial report.
Earlier this year, the company announced that it would displace former subsidiary PayPal in favor of a deal with Netherlands-based payment processor Adyen. The new strategy seeks to put payments between buyers and sellers under the eBay umbrella, a move that company officials have said would lower cost and expand payment options at checkout. The payments change also would give eBay more data about sellers – although details about that aspect of the move, such as what type of data might be accessed, remain unclear.
PayPal will remain a payment option until 2023, according to eBay.
During eBay’s post-earnings conference call Wednesday afternoon, CEO and president Devin Wenig told analysts that the company’s plan to intermediate payments will undergo beta testing “with employees this summer.” No other details were immediately available.
The payments shift comes as eBay strives to position itself as an even more formidable player in eCommerce. To that end, the company expects to close within the next few weeks its acquisition of Giosis’ operations in Japan. The Singapore-based company operates the Qoo10 online shopping platform. The deal will generate $1 billion in gross merchandise volume annually, said eBay CFO Scott Schenkel on the call.
Total gross merchandise volume for eBay hit approximately $23.6 billion in the first quarter of 2018, up 13 percent from the same period last year. Broken down into segments, Marketplace GMV increased about 13 percent year over year, while Stubhub GMV — helped in part by the Super Bowl earlier this year — grew 14 percent. Marketplace revenue reached $22.5 billion, up 11 percent year over year, while Stubhub revenue was $232 million, up 9 percent. The global active buyer base for eBay now stands at 171 million, a year-over-year increase of 4 percent.
Net income for the first quarter increased 2 percent year over year to $548 million.