eBay Reports Q2 2012 Earnings; PayPal Shines Bright

It’s earnings season again, and eBay has reported its earnings for the second quarter of 2012. Its revenue for Q2 2012 increased to $3.4 billion, up 23% year-over-year. Its net income growth was a bit lower at around 16% year-over-year, primarily due to the impact of increased capital investments and acquisitions.

eBay’s President and CEO, John Donahoe said:

“We delivered a great second quarter, driven by eBay Marketplaces’ best performance in years, strong growth at PayPal and strong same-store-sales growth for GSI’s large retail customers. Our entire company is strong, but we’re particularly pleased with eBay Marketplaces, which delivered its strongest organic growth in gross merchandise volume, excluding vehicles, since 2006. And mobile continues to be a game changer. We now expect eBay and PayPal mobile to each transact $10 billion in volume in 2012 — that’s more than double 2011, a staggering surge in mobile shopping and payments on devices that did not exist just a few years ago. Retail is at an inflection point, and we are helping to reshape how people around the world shop and pay.”

While eBay’s Marketplaces business continued to show impressive growth, PayPal was the business that grabbed the limelight. It ended the quarter with nearly 113.2 million active registered accounts, and continues to be the leader in the online payments space, which is expected to explode in the coming years.

eBay is working aggressively to fend off startups like Stripe, Square and others who are trying to disrupt the payments space. PayPal saw its total payments volume increase 20% to $34.5 billion. Its mobile payments volume has been growing rapidly. With PayPal Here, and PayPal is targeting retailers and merchants primarily in the U.S. and will soon target them across the globe. This week, it also acquired Card.io, which should help it bolster its point-of-sale offerings like PayPal Here.

PayPal could easily become its largest business in terms of net revenue in the coming years, considering the tremendous rate it has been growing at.

eBay ended the quarter with nearly $4 billion in cash and cash equivalents. All in all, a pretty good quarter.

via eBay – SEC

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