Categories Analysis, Retail

What to expect when eBay (EBAY) reports Q1 2024 earnings results

The consensus estimate for EPS is $1.20 in Q1

Shares of eBay Inc. (NASDAQ: EBAY) rose over 1% on Monday. The stock has gained 23% in the past three months. The ecommerce player is set to report its first quarter 2024 earnings results on Wednesday, May 1, after market close. Here’s a look at what to expect from the earnings report:

Revenue

eBay has guided for revenue of $2.50-2.54 billion for the first quarter of 2024, which represents an FX-neutral growth of flat to up 2% year-over-year. Analysts are projecting revenue of $2.53 billion for Q1 2024, which compares to revenue of $2.51 billion reported in Q1 2023. In the fourth quarter of 2023, revenue increased 2% on a reported basis and 3% on an FX-neutral basis to $2.6 billion.

Earnings

eBay has guided for adjusted EPS of $1.19-1.23 for Q1 2024. The consensus estimate for EPS is $1.20 in Q1. This compares to adjusted EPS of $1.11 reported in Q1 2023 and $1.07 reported in Q4 2023.

Points to note

eBay has guided for gross merchandise volume (GMV) of $18.2-18.5 billion in Q1 2024, representing an FX-neutral decline of 2% to flat YoY. In Q4, GMV was $18.6 billion, almost flat on an FX-neutral basis.

eBay has benefited from momentum in first-party advertising, the expansion of its financial services offerings, and the launch of eBay International Shipping. Its focus category strategy has also played a significant role in driving growth, with continued strength in Motor Parts & Accessories last quarter. These trends are likely to have continued into the first quarter as well.

Last quarter, the company saw softer discretionary demand due to the inflationary environment but business picked up as customers searched for value to stretch their limited budgets. Categories such as Refurbished, Luxury and P&A contributed the most to GMV growth. Consumer demand remained more resilient in the US versus international markets.

At the start of the year, eBay witnessed relatively uneven demand across its major markets, with weaker-than-expected US retail sales in January. This may weigh on Q1 performance. Although the macro environment might remain challenging, the company expects its investments in focus categories, local markets and other site-wide improvements to help turn GMV growth turn positive on an FX-neutral basis in the third or fourth quarter of 2024.

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