Tomorrow, the minute before the clock strikes midnight, eBay and PayPal will part ways.
But before eBay says farewell to PayPal, the company confirmed the sale of its enterprise unit for $925 million to a consortium of buyers including Sterling Partners, and Permira Funds.
Those details were shared during the start of eBay’s Q2 earnings call with analysts today (July 16).
The spinoff of its enterprise unit has been anticipated since it was first announced during eBay’s Q1 — a quarter that revealed what most already knew: PayPal was surging, while eBay Marketplace continued to sag. And Q2’s results showed similar results for the two sides of the company. This begs the question that everyone has been asking: How will eBay fare without PayPal?
Well, eBay’s incoming CEO Devin Wenig shared a positive outlook, but not without being straightforward about eBay’s challenges ahead. Most of which are challenges that have existed for some time — like cleaning up the SEO and search navigation issues, and attracting more buyers and sellers to the site. This may include eBay having to “make hard choices along the way,” he said, as the company moves forward without PayPal to give it a boost.
“I’m encouraged by the state of our business,” Wenig said on the call with analysts. “We’ve made solid progress but we have significant work ahead of us.”
eBay’s Marketplaces posted a 3 percent dip in revenue to $2.12 billion, while PayPal posted a 16 percent revenue increase to $2.26 billion. In terms of GMV, eBay Marketplaces dipped 2 percent. A bright spot of the quarter for eBay was the fact that its active buyers grew 6 percent, but attracting new sellers has been a continuous struggle.
As for PayPal, total payment volume grew 28 percent from Q2 the year prior to $66 billion. Merchant services volume on PayPal was up 27 percent but eBay’s volume was down 1 percent. PayPal’s merchant services volume was up 36 percent, while eBay’s merchant services volume was up 6 percent.
“We want to become more of a part of how customers move money,” PayPal’s incoming CEO Dan Schulman said in the call.
Payment volume on eBay Marketplaces was $14.5 billion for the quarter, with accounts for 22 percent of total payment volume. PayPal continued to grow new active accounts by 11 percent to 169 million and processed 1.1 billion transactions in the quarter.
“I am pleased with PayPal’s strong second quarter results. We continue to gain share globally in an incredibly dynamic market and I’m especially proud of our deepening engagement with our customers. As an independent company we will continue to lead the transformation of the payments industry by giving people better ways to move and manage their money,” said PayPal President Dan Schulman in the company’s earnings release.
Overall, eBay posted a net income of $83 million, which was down from last year’s Q2 of $676 million. Revenue for Q2 jumped to $4.38 billion from last year’s $4.1 billion.
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