International auction and e-commerce site eBay (NASDAQ:EBAY) is set to report third-quarter earnings on Tuesday, Oct. 26. The company has recently been experiencing a bit of a slowdown in customers and in spending on its platform as economies are reopening. Investors are wondering whether this latest report will shed some light on how it's affecting the company and what management has to say about the situation.

Management has already said it is working on a few strategies to increase revenue and profit despite the slowdown. This next report should offer some hints of management's execution of those strategies and the effects of reopening economies on the bottom line. 

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eBay is making more out of less 

eBay makes the vast majority of its revenue by taking a percentage of the sales transactions -- also called gross merchandise volume (GMV) -- on its platform. In eBay's second quarter (ended June 30), GMV decreased by 12% to $22.1 billion from the same quarter last year. Keep in mind that last year's figures were inflated due to the surge in customer activity at the pandemic onset.

Still, despite the decrease in spending on eBay, the company increased revenue. eBay did this by increasing the percentage of revenue (take rate) it keeps from transactions. The take rate in Q2 2021 was up by more than 200 basis points to 11.3% from 9.2% in the same quarter in 2020. That increase boosted revenue to $2.7 billion, up from $2.3 billion the year prior.

It will be interesting to see if eBay can keep revenue elevated while it sheds some of the consumers who joined at the pandemic onset. From the first quarter of 2021 to the second quarter, eBay lost 7 million active buyers. That was a meaningful part of its 166 million total before the loss. The company now boasts 159 million active buyers, but management highlights that these are higher-quality buyers.

eBay has reduced promotional activities that attracted buyers who only spent during promotional periods. Instead, management has shifted its focus to buyers who shop more often and spend more each time they shop.

Wall Street is optimistic about eBay's third quarter

Analysts on Wall Street expect eBay to report revenue of $2.46 billion and earnings per share of $0.89 for the third quarter. If the company hits those estimates, it would be a decrease of 5.8% and an increase of 4.7%, respectively, from last year.

Estimates on Wall Street are on the higher end of the range that management guided for the third quarter. On the revenue side, management estimates revenue between $2.42 billion and $2.47 billion for Q3. And for earnings per share, management has guided in the range of $0.86 and $0.90 for the third quarter.

eBay's stock price was already up 40.5% year to date as of Oct. 6. Therefore, if the company fails to meet expectations, the stock price could fall as a result. Still, it's trading at a forward price to earnings ratio of 17.3. If there is a pullback in the share price following the report, it could be an opportunity for long-term investors to start adding eBay stock to their portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.