E-commerce software provider Shopify had 275,000 clients at the end of the first quarter, up from just over 162,000 a year earlier.
Sales on the online marketplace held up despite its disclosure during the quarter that hackers had accessed personal information on 145 million eBay customers. EBay also reports gaining 6.6 million mobile customers during the quarter.
The value of merchandise sold on eBay Inc.’s U.S. marketplace, excluding vehicles, increased about 12% year over year in the second quarter, the online marketplace operator said today. EBay also said it attracted 6.6 million new mobile customers during the second quarter, compared with 6.5 million gained in the first quarter of 2014, and that 59% of eBay buyers in the second quarter shopped eBay on more than one screen.
Given that eBay suffered a well-publicized data breach during the second quarter that led it to ask customers to create new passwords, the results were encouraging,” says eBay president and CEO John Donahoe. “PayPal generated another strong quarter while eBay's growth was hampered by its global password reset for all users,” Donahoe says. “We continued our momentum in the four competitive commerce battlegrounds of mobile, local, global and data. We delivered new experiences for PayPal and eBay customers, extended PayPal and eBay into new markets, made it simple and easy for developers to integrate PayPal and offered new ways to help merchants grow.”
EBay in May said hackers had accessed a database storing 145 million encrypted passwords and other “non-financial data,” Including consumers’ names, home addresses, e-mail addresses and phone numbers. The company informed consumers that their personal information may have been compromised and asked them to reset their passwords.
Donahoe told analysts that at least 15% of shoppers registered with eBay had not reset their passwords, and that activity was reduced even among some who had. “Buyers representing approximately 80%, 85% of affected volume, have reset their passwords, but some of these buyers have not yet returned to their previous activity levels,” he said. “So, we are stepping up targeted marketing efforts in the second half to full reengage these and other users who have not yet reset their password.”
Elaborating on the slowdown chief financial officer Bob Swan said “June GMV growth was 7% driven by slower active buyer growth and lower conversion. In light of these events, we have made significant investments to get eBay users reengaged, including couponing, seller incentives and increased marketing spend. We have begun to see some recovery in the first part of July and we are confident we will get these challenges behind us, but it will take a bit longer and we will invest more as we work to get back to double-digit growth.” Swan also pointed to some loss of traffic due to changes Google made to its system for ranking sites in search results, an update that analysts believe may have hurt sites like eBay that do not provide a lot of original content about products.
For the second quarter ended June 30, eBay reported:
- The value of merchandise sold worldwide on eBay, excluding vehicles, was approximately $20.49 billion, up 12.1% from $18.28 billion a year earlier. About 58% of marketplace sales, or approximately $11.88 billion, came from outside the United States, compared with 55% for the same period last year.
- Net revenue for eBay marketplaces this quarter reached more than $2.17 billion, up 8.6% from $2.001 billion last year.
- EBay Marketplaces gained 3.8 million buyers in the first quarter, pushing the number of active buyers to 149 million.
- Active users of eBay’s payment services, which include consumers with PayPal and Bill Me Later accounts, totaled 152.5 million, up 3% from the first quarter of 2014 and 15.0% from the second quarter of 2013. PayPal gained 4 million users in the second quarter.
- PayPal revenue increased 19.8% year over year to $1.95 billion from $1.62 billion. PayPal’s payment volume grew 28.6% to $55.05 billion from $42.81 billion for the same period last year.
- Net revenue from the former GSI Commerce Inc., now named eBay Enterprise, totaled $267 million for the second quarter, up 2.7% from $260 million a year earlier.
- EBay’s net revenue increased 12.6% to $4.37 billion in the second quarter compared with $3.88 billion in the same period last year.
- EBay says it had a net income of $676 million in the quarter. That compares with net income of $640 million in the same period last year.
For the first six months of the year, eBay reported:
- Net revenue of $8.63 billion, up from $7.63 billion for the same period last year.
- A net loss of $1.65 billion compared with net income of $1.32 billion last year. In the first quarter of 2014, eBay paid a $3 billion tax charge for repatriating funds from abroad.
Swan said the repatriation of overseas cash “is not an indication that we are contemplating a large U.S. acquisition.” He said eBay is moving forward on a plan to buy back $5 billion of its stock, a move that tends to drive up a company’s share price, and had already purchased $3.5 billion of eBay shares in the first half of 2014.