Bay Inc. reported increased revenue in the first quarter even though shopping on the online marketplace declined from a year earlier, showing that a renewed focus on advertising and its new payments business can boost sales.

The company also gave a profit and sales forecast for the current quarter that topped analysts’ projections at the high end, reinforcing investor faith in the company’s turnaround strategy being pursued with activist investors. Shares gained as much as 6.9 per cent on the announcement.

As EBay struggles to compete with Amazon.com Inc., Elliott Management Corp. and Starboard Value acquired stakes in the company and agitated for change. Elliott proposed a five-point plan to improve EBay’s performance, including the possible sale of tickets marketplace StubHub and its Classified Group. EBay shares have gained 30 per cent this year since the investors jumped in. In March, EBay appointed two new directors, including an Elliott partner.

Chief Executive Officer Devin Wenig has been trying to accelerate EBay’s growth since he took over the company following its 2015 split from faster-growing payments business PayPal. Wenig sees advertising and EBay’s new payments business as sources for revenue growth.

“The shareholder involvement is inspiring them to operate more efficiently,” said Tom Forte, an analyst at DA Davidson & Co. “It also means initiatives like advertising and payments are having a positive impact. We can’t give the activist shareholders credit for everything.”

The results show EBay’s new revenue sources were able to offset a decline in shopping on the site. Gross merchandise volume -- the value of all goods sold on EBay properties -- decreased 4.2 per cent to US$22.6 billion in the first quarter from a year earlier, the San Jose, California-based company said Tuesday in a statement. Still, company revenue rose 2.4 per cent to US$2.64 billion. Advertising sales contributed over US$65 million, more than double from a year earlier.

Earnings, excluding some costs, were 67 cents per share in the quarter, compared with 53 cents a share a year earlier. Analysts estimated 63 cents.

EBay projected that adjusted profit will be 61 cents a share to 63 cents a share in the current quarter on revenue of US$2.64 billion to US$2.69 billion. Analysts, on average, estimated profit of 60 cents a share on revenue of US$2.65 billion, according to data compiled by Bloomberg.

The online marketplace said it has 180 million active global buyers who spend about US$100 billion on the platform each year.

EBay issued a dividend of 14 cents, unchanged from last quarter. The company plans to return about US$5.5 billion to shareholders this year.