What to expect when eBay (EBAY) reports Q4 2023 earnings

Shares of eBay Inc. (NASDAQ: EBAY) stayed red on Tuesday. The stock has gained 9% over the past three months. The ecommerce company is scheduled to report its earnings results for the fourth quarter of 2023 on Tuesday, February 27, after markets close. Here’s a look at what to expect from the earnings report:

Revenue

eBay has guided for revenue of $2.47-2.53 billion for the fourth quarter of 2023. It expects year-over-year revenue growth to be down 1% to up 2% on an FX-neutral basis. Analysts are projecting revenue of $2.51 billion for Q4 2023. This is relatively flat compared to Q4 2022. In the third quarter of 2023, revenues increased 5% year-over-year to $2.50 billion.

Earnings

eBay has guided for GAAP EPS of $0.70-0.75 and adjusted EPS of $1.00-1.05 for Q4 2023. Analysts are projecting EPS of $1.03 for the fourth quarter. This compares to adjusted EPS of $1.07 reported in Q4 2022. In Q3 2023, adjusted EPS rose 3% YoY to $1.03.

Points to note

eBay has been operating in a challenging environment where demand for discretionary goods has remained under pressure. On its Q3 earnings call, the company had forecast a muted seasonal uptick in volumes for the holiday season based on soft consumer trends, and challenges in Europe.

eBay expects gross merchandise volume, or GMV, to range between $17.9-18.3 billion in Q4 2023. This represents an organic FX-neutral decline of between 4% and 2% year-over-year.

Despite this, eBay has seen momentum in its focus categories, with particular strength in the refurbished and collectibles categories. The company’s efforts to make cross-border trade more seamless are paying off. eBay has also been seeing strength in its advertising business, with a 24% growth in total ad revenue last quarter. First-party ads grew 36% to $345 million in Q3.

At the same time, the company has been seeing a rise in expenses. In order to tackle this, it has been implementing organizational changes, which include job cuts. Last month, eBay announced its decision to reduce its workforce by approx. 9%.