Global commerce platform and payments leader eBay (Nasdaq:EBAY) today
reported that revenue for the fourth quarter ended December 31, 2014
increased 9% to $4.9 billion, compared to the same period in 2013. GAAP
earnings were $936 million or $0.75 per diluted share, and Non-GAAP
earnings were $1.1 billion or $0.90 per diluted share, driven by enabled
commerce volume growth of 21%.
eBay Inc.’s commerce and payments ecosystems continued to increase the
role they play in global commerce with mobile gaining share. Mobile
payment volume grew 58% in the fourth quarter to $45.6 billion for the
full year representing 20% of total volume. Mobile commerce volume grew
30% in the fourth quarter to $27.9 billion for the full year
representing 34% of total volume. In the fourth quarter, cross-border
trade grew 20%, representing 21% of total company ECV.
"In a year of unexpected events and distractions, we ended 2014 with
double-digit revenue growth, solid earnings growth and strong cash flow,
reflecting the fundamental strengths of our company," said John Donahoe,
president and CEO of eBay Inc. "PayPal had another strong quarter,
finishing an excellent year. eBay, while facing challenges, continues to
be a great business and is focused on stabilizing performance and
engaging its core customers. Looking ahead, our plans are on track to
separate eBay and PayPal into independent companies in the second half
of 2015, and we are confident this is the right strategic path for each
business."
PayPal net total payment volume (TPV) grew 24% in the fourth quarter
with Merchant Services volume up 33% and on-eBay volume up 3%. Revenue
grew to $2.2 billion. PayPal gained 4.6 million new active registered
accounts in the quarter and 18.9 million for the full year, up 13% to
162 million. Global on-eBay penetration increased to 80.8%. PayPal
product innovations and investment to make payments simple and easier
resulted in accelerating transaction growth, up 25% in the quarter,
representing more than 3.6 billion transactions for the full year.
eBay Marketplaces gross merchandise volume (GMV) grew 2%, with the U.S.
up 3% and International up 1%. Revenue grew to $2.3 billion.
Marketplaces gained 2.9 million new buyers in the quarter and 14.9
million for the full year, up 11% to 155 million. Traffic was impacted
by both the decline in new users due to SEO changes and the occasional
buyer not returning to our site or being met with increased friction due
to the password reset when they did come. In addition, the rising dollar
negatively impacted export volume in the U.S. We are taking decisive
action to focus the business in an effort to simplify and speed up
decision making while re-aligning the cost structure to create capacity
to invest. We are prioritizing our resources towards our core shoppers
and we are doubling down on areas of strength like our $2 billion GMV
Deals business.
eBay Enterprise gross merchandise sales (GMS) grew 9% in the quarter.
Revenue grew to $443 million. Enterprise enabled its clients to grow
same-store sales 12%. Enterprise signed up more than one thousand new
clients and renewed or extended its relationship with more than 1,700
additional clients in 2014. It continues to expand its omnichannel
capabilities, delivering $1 billion in ship from store sales in 2014,
and broaden Magento's reach and global ecosystem. Enterprise supports
merchants across the entire customer experience journey — from getting
new shoppers into clients’ brick-and-mortar and online stores and
inspiring them to buy — to delivering the goods and turning customers
into loyal repeat buyers.
Looking forward to 2015, we will be simplifying organizational
structures to focus the businesses and ensure that we are set-up to
compete and win. During the first quarter, we plan to reduce our
workforce globally by approximately 2,400 positions which a represents
about 7% of our total workforce across eBay Marketplaces, PayPal, and
eBay Enterprise. We will also be exploring strategic options for eBay
Enterprise, including a sale or IPO. Enterprise is a strong business and
a leading partner for large retailers, managing mission critical
components of their e-commerce initiatives. However, it has become clear
that it has limited synergies with either business and a separation will
allow both to focus exclusively on their core markets, as we create two
independent world class companies.
The company also announced today that it has entered into a standstill
agreement with investor Carl Icahn, the company’s largest active
shareholder. In addition to certain corporate governance provisions to
be adopted by PayPal as an independent company at the time of its
spin-off from eBay Inc., the agreement also appoints Icahn Capital
executive Jonathan Christodoro to eBay Inc.’s current Board of
Directors. On September 30, 2014, eBay Inc. announced that its board of
directors had approved a plan to separate the company’s eBay and PayPal
businesses into two independent publicly traded companies in 2015,
subject to customary conditions. The agreement with Mr. Icahn allows him
to determine which board Mr. Christodoro will serve on at the time of
separation.
In a separate press release today, the company also announced the
appointment of seasoned Wall Street executives Frank Yeary and Perry
Traquina to its board of directors. These appointments bring the total
number of directors to 15, 13 of whom are independent.
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Fourth Quarter and Full Year 2014 Financial Highlights
(presented in millions, except per share data and percentages)
|
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Fourth Quarter
|
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|
|
|
|
Full Year
|
|
|
|
|
|
|
|
2014
|
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2013
|
|
Change
|
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2014
|
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2013
|
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Change
|
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eBay Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$4,921
|
|
$4,530
|
|
$391
|
|
9%
|
|
$17,902
|
|
$16,047
|
|
$1,855
|
|
12%
|
|
Enabled Commerce Volume (ECV)
|
|
$72,005
|
|
$59,607
|
|
$12,398
|
|
21%
|
|
$255,195
|
|
$205,201
|
|
$49,994
|
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24%
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$936
|
|
$850
|
|
$86
|
|
10%
|
|
$(41)
|
|
$2,856
|
|
$(2,897)
|
|
(101)%
|
|
Earnings per diluted share
|
|
$0.75
|
|
$0.65
|
|
$0.10
|
|
15%
|
|
$(0.03)
|
|
$2.18
|
|
$(2.21)
|
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(101)%
|
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Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$1,114
|
|
$1,067
|
|
$47
|
|
4%
|
|
$3,729
|
|
$3,556
|
|
$173
|
|
5%
|
|
Earnings per diluted share
|
|
$0.90
|
|
$0.81
|
|
$0.09
|
|
10%
|
|
$2.95
|
|
$2.71
|
|
$0.24
|
|
9%
|
|
Business Units
|
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Payments
|
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Net revenue
|
|
$2,163
|
|
$1,836
|
|
$327
|
|
18%
|
|
$7,904
|
|
$6,628
|
|
$1,276
|
|
19%
|
|
Net total payment volume (TPV)
|
|
$64,296
|
|
$51,973
|
|
$12,323
|
|
24%
|
|
$227,924
|
|
$179,663
|
|
$48,261
|
|
27%
|
|
Marketplaces
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$2,332
|
|
$2,299
|
|
$33
|
|
1%
|
|
$8,817
|
|
$8,284
|
|
$533
|
|
6%
|
|
Gross merchandise volume (GMV)
|
|
$21,849
|
|
$21,503
|
|
$346
|
|
2%
|
|
$82,954
|
|
$76,432
|
|
$6,522
|
|
9%
|
|
Enterprise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$443
|
|
$407
|
|
$36
|
|
9%
|
|
$1,238
|
|
$1,166
|
|
$72
|
|
6%
|
|
Gross merchandise Sales (GMS)
|
|
$1,927
|
|
$1,771
|
|
$156
|
|
9%
|
|
$4,703
|
|
$4,180
|
|
$523
|
|
13%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Other Selected Financial and Operational Results
-
Operating margin — GAAP operating margin decreased to 21.6% for the
fourth quarter of 2014, compared to 22.6% for the same period last
year. Non-GAAP operating margin decreased to 27.7% in the fourth
quarter, compared to 29.2% for the same period last year.
-
Taxes — The GAAP effective tax rate for the fourth quarter of 2014 was
11.2%, compared to 17.3% for the fourth quarter of 2013. The non-GAAP
effective tax rate for the fourth quarter of 2014 was 18.7% compared
to 19.7% for the fourth quarter of 2013.
-
Cash flow — The company generated $1.6 billion of operating cash flow
and $1.3 billion of free cash flow during the fourth quarter of 2014.
-
Stock repurchase program — The company repurchased approximately $1.2
billion of its common stock in the fourth quarter.
-
Cash and cash equivalents and non-equity investments — The company's
cash and cash equivalents and non-equity investments portfolio totaled
$14.6 billion at December 31, 2014, up from $12.8 billion at
December 31, 2013.
Business Outlook
2015
-
First quarter 2015 — The company expects net revenues in the range of
$4,350 - $4,450 million with GAAP earnings per diluted share in the
range of $0.37 - $0.43 and non-GAAP earnings per diluted share in the
range of $0.68 - $0.71. GAAP earnings include an estimate of
separation and restructuring costs of $210 - $240 million.
-
Full year 2015 — The company expects net revenues in the range of
$18,600 - $19,100 million with GAAP earnings per diluted share in the
range of $2.17 - $2.32 and non-GAAP earnings per diluted share in the
range of $3.05 - $3.15. GAAP earnings include an estimate of
separation and restructuring costs of $350 - $400 million.
In January 2015, the company's board of directors authorized an
additional $2 billion stock repurchase program. Together with the $1
billion remaining under the company’s prior stock repurchase program
authorized in January 2014, the company's total repurchase authorization
as of January 21, 2015 is $3 billion. In addition to offsetting dilution
from its equity compensation programs, the company expects, subject to
market conditions and other factors, to make opportunistic repurchases
of its common stock to reduce outstanding share count. Any share
repurchases under the company’s stock repurchase programs may be made
through open market transactions, block trades, privately negotiated
transactions (including accelerated share repurchase transactions) or
other means.
Quarterly Conference Call and Webcast
eBay Inc. will host a conference call to discuss fourth quarter and full
year 2014 results at 2:00 p.m. Pacific Time today. A live webcast of the
conference call, together with a slide presentation that includes
supplemental financial information and reconciliations of certain
non-GAAP measures to their nearest comparable GAAP measures, can be
accessed through the company's Investor Relations website at http://investor.ebayinc.com.
In addition, an archive of the webcast will be accessible for 90 days
through the same link.
eBay Inc. uses its Investor Relations website at http://investor.ebayinc.com
as a means of disclosing material non-public information and for
complying with its disclosure obligations under Regulation FD.
Accordingly, investors should monitor, in addition to following press
releases, SEC filings, public conference calls and webcasts.
About eBay Inc.
eBay Inc. (NASDAQ: EBAY) is a global commerce and payments leader,
providing a robust platform where merchants of all sizes can compete and
win. Founded in 1995 in San Jose, Calif., eBay Inc. connects millions of
buyers and sellers and enabled $255 billion of commerce volume in 2014.
We do so through eBay, one of the world's largest online marketplaces,
which allows users to buy and sell in nearly every country on earth;
through PayPal, which enables individuals and businesses to securely,
easily and quickly send and receive digital payments; and through eBay
Enterprise, which enables omnichannel commerce, multichannel retailing
and digital marketing for global enterprises in the U.S. and
internationally. We also reach millions through specialized marketplaces
such as StubHub, the world's largest ticket marketplace, and eBay
classifieds sites, which together have a presence in more than 1,000
cities around the world. For more information about the company and its
global portfolio of online brands, visit www.ebayinc.com.
Presentation
All growth rates represent year over year comparisons, except as
otherwise noted. All amounts in tables are presented in U.S. dollars,
rounded to the nearest millions, except as otherwise noted. As a result,
certain amounts may not sum or recalculate using the rounded dollar
amounts provided.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as
“non-GAAP financial measures” by the Securities and Exchange Commission
(SEC): non-GAAP net income, non-GAAP earnings per diluted share,
non-GAAP operating margin, non-GAAP effective tax rate and free cash
flow. These measures may be different from non-GAAP financial measures
used by other companies. The presentation of this financial information,
which is not prepared under any comprehensive set of accounting rules or
principles, is not intended to be considered in isolation of, or as a
substitute for, the financial information prepared and presented in
accordance with generally accepted accounting principles (GAAP). For a
reconciliation of these non-GAAP financial measures to the nearest
comparable GAAP measures, see “Business Outlook,” “Non-GAAP Measures of
Financial Performance,” “Reconciliation of GAAP Operating Margin to
Non-GAAP Operating Margin,” “Reconciliation of GAAP Net Income to
Non-GAAP Net Income and Reconciliation of GAAP Effective Tax Rate to
Non-GAAP Effective Tax Rate” and “Reconciliation of Operating Cash Flow
to Free Cash Flow” included in this press release.
Forward-Looking Statements
This press release contains forward-looking statements relating to,
among other things, the planned separation of eBay Inc.'s Marketplaces
and PayPal businesses, the company’s exploration of strategic
alternatives for the Enterprise business, and the future performance of
eBay Inc. and its consolidated subsidiaries that are based on the
company's current expectations, forecasts and assumptions and involve
risks and uncertainties. These statements include, but are not limited
to, statements regarding the completion and timing of any such
separation, the future performance of the Marketplaces and Payments
businesses on a standalone business if the separation is completed,
expected financial results for the first quarter and full year 2015, the
future growth in the Payments, Marketplaces and Enterprise businesses,
mobile payments and mobile commerce. Actual results could differ
materially from those predicted or implied and reported results should
not be considered as an indication of future performance. There is no
assurance as to the timing of the spin-off or whether it will be
completed. Other factors that could cause or contribute to such
differences include, but are not limited to: whether the operational,
marketing and strategic benefits of the separation can be achieved;
whether the costs and expenses of the separation can be controlled
within expectations; changes in political, business and economic
conditions, any European, Asian or general economic downturn or crisis
and any conditions that affect ecommerce growth; fluctuations in foreign
currency exchange rates; the company's need to successfully react to the
increasing importance of mobile payments and mobile commerce and the
increasing social aspect of commerce; the company's ability to deal with
the increasingly competitive ecommerce environment, including
competition for its sellers from other trading sites and other means of
selling, and competition for its buyers from other merchants, online and
offline; changes to the company's capital allocation or management of
operating cash; the company's need to manage an increasingly large
enterprise with a broad range of businesses of varying degrees of
maturity and in many different geographies; the effect of management
changes and business initiatives; the company's need and ability to
manage other regulatory, tax and litigation risks as its services are
offered in more jurisdictions and applicable laws become more
restrictive; any changes the company may make to its product offerings;
the competitive, regulatory, payment card association-related and other
risks specific to PayPal and PayPal Credit (formerly Bill Me Later),
especially as PayPal continues to expand geographically and introduce
new products and as new laws and regulations related to financial
services companies come into effect; the company's ability to timely
upgrade and develop its technology systems, infrastructure and customer
service capabilities at reasonable cost; the company's ability to
maintain site stability and performance on all of its sites while adding
new products and features in a timely fashion; and the company's ability
to profitably integrate, manage and grow businesses that have been
acquired or may be acquired in the future. The forward-looking
statements in this release do not include the potential impact of any
acquisitions or divestitures that may be announced and/or completed
after the date hereof.
More information about factors that could affect the company's operating
results is included under the captions “Risk Factors” and “Management's
Discussion and Analysis of Financial Condition and Results of
Operations” in the company's most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q, copies of which may be
obtained by visiting the company's Investor Relations website at http://investor.ebayinc.com
or the SEC's website at www.sec.gov.
All information in this release is as of January 21, 2015. Undue
reliance should not be placed on the forward-looking statements in this
press release, which are based on information available to the company
on the date hereof. The company assumes no obligation to update such
statements.
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|
|
eBay Inc.
|
|
Unaudited Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
|
|
(In millions)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
6,328
|
|
|
$
|
4,494
|
|
Short-term investments
|
|
3,770
|
|
|
4,531
|
|
Accounts receivable, net
|
|
797
|
|
|
899
|
|
Loans and interest receivable, net
|
|
3,600
|
|
|
2,789
|
|
Funds receivable and customer accounts
|
|
10,545
|
|
|
9,260
|
|
Other current assets
|
|
1,491
|
|
|
1,310
|
|
Total current assets
|
|
26,531
|
|
|
23,283
|
|
Long-term investments
|
|
5,777
|
|
|
4,971
|
|
Property and equipment, net
|
|
2,902
|
|
|
2,760
|
|
Goodwill
|
|
9,094
|
|
|
9,267
|
|
Intangible assets, net
|
|
564
|
|
|
941
|
|
Other assets
|
|
264
|
|
|
266
|
|
Total assets
|
|
$
|
45,132
|
|
|
$
|
41,488
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
850
|
|
|
$
|
6
|
|
Accounts payable
|
|
401
|
|
|
309
|
|
Funds payable and amounts due to customers
|
|
10,545
|
|
|
9,260
|
|
Accrued expenses and other current liabilities
|
|
5,393
|
|
|
2,799
|
|
Deferred revenue
|
|
188
|
|
|
158
|
|
Income taxes payable
|
|
154
|
|
|
107
|
|
Total current liabilities
|
|
17,531
|
|
|
12,639
|
|
Deferred and other tax liabilities, net
|
|
792
|
|
|
841
|
|
Long-term debt
|
|
6,777
|
|
|
4,117
|
|
Other liabilities
|
|
126
|
|
|
244
|
|
Total liabilities
|
|
25,226
|
|
|
17,841
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
19,906
|
|
|
23,647
|
|
Total liabilities and stockholders' equity
|
|
$
|
45,132
|
|
|
$
|
41,488
|
|
|
|
|
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited Condensed Consolidated Statement of Income
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
4,921
|
|
|
$
|
4,530
|
|
|
$
|
17,902
|
|
|
$
|
16,047
|
|
|
Cost of net revenues (1)
|
|
1,600
|
|
|
1,449
|
|
|
5,732
|
|
|
5,036
|
|
|
Gross profit
|
|
3,321
|
|
|
3,081
|
|
|
12,170
|
|
|
11,011
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing (1)
|
|
945
|
|
|
837
|
|
|
3,587
|
|
|
3,060
|
|
|
Product development (1)
|
|
509
|
|
|
450
|
|
|
2,000
|
|
|
1,768
|
|
|
General and administrative (1)
|
|
475
|
|
|
461
|
|
|
1,843
|
|
|
1,703
|
|
|
Provision for transaction and loan losses
|
|
273
|
|
|
238
|
|
|
958
|
|
|
791
|
|
|
Amortization of acquired intangible assets
|
|
58
|
|
|
73
|
|
|
268
|
|
|
318
|
|
|
Total operating expenses
|
|
2,260
|
|
|
2,059
|
|
|
8,656
|
|
|
7,640
|
|
|
Income from operations
|
|
1,061
|
|
|
1,022
|
|
|
3,514
|
|
|
3,371
|
|
|
Interest and other, net
|
|
(7
|
)
|
|
6
|
|
|
17
|
|
|
95
|
|
|
Income before income taxes
|
|
1,054
|
|
|
1,028
|
|
|
3,531
|
|
|
3,466
|
|
|
Provision for income taxes
|
|
(118
|
)
|
|
(178
|
)
|
|
(3,572
|
)
|
|
(610
|
)
|
|
Net income (loss)
|
|
$
|
936
|
|
|
$
|
850
|
|
|
$
|
(41
|
)
|
|
$
|
2,856
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.76
|
|
|
$
|
0.66
|
|
|
$
|
(0.03
|
)
|
|
$
|
2.20
|
|
|
Diluted
|
|
$
|
0.75
|
|
|
$
|
0.65
|
|
|
$
|
(0.03
|
)
|
|
$
|
2.18
|
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
1,230
|
|
|
1,295
|
|
|
1,251
|
|
|
1,295
|
|
|
Diluted
|
|
1,241
|
|
|
1,310
|
|
|
1,251
|
|
|
1,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenues
|
|
$
|
20
|
|
|
$
|
34
|
|
|
$
|
76
|
|
|
$
|
79
|
|
|
Sales and marketing
|
|
50
|
|
|
44
|
|
|
183
|
|
|
156
|
|
|
Product development
|
|
60
|
|
|
67
|
|
|
227
|
|
|
187
|
|
|
General and administrative
|
|
57
|
|
|
52
|
|
|
189
|
|
|
187
|
|
|
|
|
$
|
187
|
|
|
$
|
197
|
|
|
$
|
675
|
|
|
$
|
609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited Condensed Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(In millions)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
936
|
|
|
$
|
850
|
|
|
$
|
(41
|
)
|
|
$
|
2,856
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for transaction and loan losses
|
|
273
|
|
|
238
|
|
|
958
|
|
|
791
|
|
|
Depreciation and amortization
|
|
370
|
|
|
367
|
|
|
1,490
|
|
|
1,400
|
|
|
Stock-based compensation
|
|
187
|
|
|
197
|
|
|
675
|
|
|
609
|
|
|
Gain on sale of equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
Deferred income taxes
|
|
(101
|
)
|
|
(37
|
)
|
|
2,895
|
|
|
(31
|
)
|
|
Changes in assets and liabilities, net of acquisition effects
|
|
(24
|
)
|
|
98
|
|
|
(300
|
)
|
|
(555
|
)
|
|
Net cash provided by operating activities
|
|
1,641
|
|
|
1,713
|
|
|
5,677
|
|
|
4,995
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
(369
|
)
|
|
(281
|
)
|
|
(1,271
|
)
|
|
(1,250
|
)
|
|
Changes in principal loans receivable, net
|
|
(527
|
)
|
|
(399
|
)
|
|
(1,020
|
)
|
|
(794
|
)
|
|
Purchases of investments
|
|
(1,955
|
)
|
|
(1,779
|
)
|
|
(8,834
|
)
|
|
(7,505
|
)
|
|
Maturities and sales of investments
|
|
3,930
|
|
|
1,233
|
|
|
8,524
|
|
|
3,943
|
|
|
Acquisitions, net of cash acquired
|
|
—
|
|
|
(784
|
)
|
|
(59
|
)
|
|
(869
|
)
|
|
Repayment of Kynetic note receivable and sale of RueLaLa and
ShopRunner
|
|
—
|
|
|
—
|
|
|
—
|
|
|
485
|
|
|
Other
|
|
(7
|
)
|
|
(8
|
)
|
|
(13
|
)
|
|
(22
|
)
|
|
Net cash provided by (used in) investing activities
|
|
1,072
|
|
|
(2,018
|
)
|
|
(2,673
|
)
|
|
(6,012
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
122
|
|
|
136
|
|
|
300
|
|
|
437
|
|
|
Repurchases of common stock
|
|
(1,181
|
)
|
|
(254
|
)
|
|
(4,658
|
)
|
|
(1,343
|
)
|
|
Excess tax benefits from stock-based compensation
|
|
25
|
|
|
21
|
|
|
115
|
|
|
201
|
|
|
Tax withholdings related to net share settlements of restricted
stock units and awards
|
|
(28
|
)
|
|
(20
|
)
|
|
(252
|
)
|
|
(267
|
)
|
|
Proceeds from issuance of debt
|
|
—
|
|
|
—
|
|
|
3,482
|
|
|
—
|
|
|
Net borrowings under commercial paper program
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Repayment of acquired debt
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
(400
|
)
|
|
Funds receivable and customer accounts, net
|
|
(583
|
)
|
|
(170
|
)
|
|
(1,285
|
)
|
|
(1,149
|
)
|
|
Funds payable and amounts due to customers, net
|
|
583
|
|
|
170
|
|
|
1,285
|
|
|
1,149
|
|
|
Other
|
|
(3
|
)
|
|
17
|
|
|
(9
|
)
|
|
18
|
|
|
Net cash provided by (used in) financing activities
|
|
(1,065
|
)
|
|
(500
|
)
|
|
(1,022
|
)
|
|
(1,354
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(110
|
)
|
|
19
|
|
|
(148
|
)
|
|
48
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
1,538
|
|
|
(786
|
)
|
|
1,834
|
|
|
(2,323
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
4,790
|
|
|
5,280
|
|
|
4,494
|
|
|
6,817
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
6,328
|
|
|
$
|
4,494
|
|
|
$
|
6,328
|
|
|
$
|
4,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited Summary of Consolidated Net Revenues
|
|
|
|
|
|
|
|
|
Net Revenues by Type (1)
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
Net transaction revenues
|
|
|
|
|
(In millions, except percentages)
|
|
Marketplaces
|
|
$
|
1,839
|
|
|
$
|
1,707
|
|
|
$
|
1,722
|
|
|
$
|
1,727
|
|
|
$
|
1,828
|
|
|
Current quarter vs prior quarter
|
|
8
|
%
|
|
(1
|
)%
|
|
—
|
%
|
|
(6
|
)%
|
|
14
|
%
|
|
Current quarter vs prior year quarter
|
|
1
|
%
|
|
6
|
%
|
|
9
|
%
|
|
11
|
%
|
|
13
|
%
|
|
Percent of Marketplaces revenue from international
|
|
57
|
%
|
|
57
|
%
|
|
58
|
%
|
|
58
|
%
|
|
57
|
%
|
|
Payments
|
|
1,994
|
|
|
1,783
|
|
|
1,741
|
|
|
1,700
|
|
|
1,693
|
|
|
Current quarter vs prior quarter
|
|
12
|
%
|
|
2
|
%
|
|
2
|
%
|
|
—
|
%
|
|
13
|
%
|
|
Current quarter vs prior year quarter
|
|
18
|
%
|
|
19
|
%
|
|
18
|
%
|
|
19
|
%
|
|
18
|
%
|
|
Percent of Payments revenue from international
|
|
57
|
%
|
|
56
|
%
|
|
56
|
%
|
|
56
|
%
|
|
57
|
%
|
|
Enterprise
|
|
371
|
|
|
199
|
|
|
207
|
|
|
208
|
|
|
333
|
|
|
Current quarter vs prior quarter
|
|
86
|
%
|
|
(4
|
)%
|
|
—
|
%
|
|
(38
|
)%
|
|
80
|
%
|
|
Current quarter vs prior year quarter
|
|
11
|
%
|
|
8
|
%
|
|
7
|
%
|
|
12
|
%
|
|
—
|
%
|
|
Percent of Enterprise revenue from international
|
|
3
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
3
|
%
|
|
Total net transaction revenues
|
|
4,204
|
|
|
3,689
|
|
|
3,670
|
|
|
3,635
|
|
|
3,854
|
|
|
Current quarter vs prior quarter
|
|
14
|
%
|
|
1
|
%
|
|
1
|
%
|
|
(6
|
)%
|
|
17
|
%
|
|
Current quarter vs prior year quarter
|
|
9
|
%
|
|
12
|
%
|
|
13
|
%
|
|
14
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing services and other revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplaces
|
|
493
|
|
|
449
|
|
|
452
|
|
|
428
|
|
|
471
|
|
|
Current quarter vs prior quarter
|
|
10
|
%
|
|
(1
|
)%
|
|
6
|
%
|
|
(9
|
)%
|
|
13
|
%
|
|
Current quarter vs prior year quarter
|
|
5
|
%
|
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
|
8
|
%
|
|
Percent of Marketplaces revenue from international
|
|
67
|
%
|
|
70
|
%
|
|
72
|
%
|
|
71
|
%
|
|
69
|
%
|
|
Payments
|
|
169
|
|
|
167
|
|
|
205
|
|
|
145
|
|
|
143
|
|
|
Current quarter vs prior quarter
|
|
1
|
%
|
|
(19
|
)%
|
|
41
|
%
|
|
1
|
%
|
|
13
|
%
|
|
Current quarter vs prior year quarter
|
|
18
|
%
|
|
31
|
%
|
|
38
|
%
|
|
27
|
%
|
|
31
|
%
|
|
Percent of Payments revenue from international
|
|
4
|
%
|
|
4
|
%
|
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
|
Enterprise
|
|
72
|
|
|
60
|
|
|
60
|
|
|
61
|
|
|
74
|
|
|
Current quarter vs prior quarter
|
|
20
|
%
|
|
—
|
%
|
|
(2
|
)%
|
|
(17
|
)%
|
|
11
|
%
|
|
Current quarter vs prior year quarter
|
|
(3
|
)%
|
|
(10
|
)%
|
|
(9
|
)%
|
|
(1
|
)%
|
|
(3
|
)%
|
|
Percent of Enterprise revenue from international
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Total marketing services and other revenues
|
|
734
|
|
|
676
|
|
|
717
|
|
|
634
|
|
|
688
|
|
|
Current quarter vs prior quarter
|
|
9
|
%
|
|
(6
|
)%
|
|
13
|
%
|
|
(8
|
)%
|
|
12
|
%
|
|
Current quarter vs prior year quarter
|
|
7
|
%
|
|
10
|
%
|
|
12
|
%
|
|
10
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of inter-segment net revenue (2)
|
|
(17
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|
(7
|
)
|
|
(12
|
)
|
|
Total net revenues
|
|
$
|
4,921
|
|
|
$
|
4,353
|
|
|
$
|
4,366
|
|
|
$
|
4,262
|
|
|
$
|
4,530
|
|
|
Current quarter vs prior quarter
|
|
13
|
%
|
|
—
|
%
|
|
2
|
%
|
|
(6
|
)%
|
|
16
|
%
|
|
Current quarter vs prior year quarter
|
|
9
|
%
|
|
12
|
%
|
|
13
|
%
|
|
14
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
During the first quarter of 2014, we changed our reportable segments
based on changes in our organizational structure which reflect the
integration of our Magento platform into our Enterprise segment.
Prior to this change, Magento was reported in corporate and other.
Also during the quarter, we revised our internal management
reporting of certain Marketplaces transactions to align more closely
with our related operating metrics. Related to this change, we
reclassified our Marketplaces vehicles and real estate revenues from
net transaction revenues to marketing services and other revenues.
Prior period amounts have been revised to conform to the current
period segment reporting structure.
|
|
(2)
|
|
Represents revenue generated between our reportable segments.
|
|
|
|
|
|
Net Revenues by Geography (1)
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
(In millions, except percentages)
|
|
U.S. net revenues
|
|
$
|
2,400
|
|
|
$
|
2,050
|
|
|
$
|
2,047
|
|
|
$
|
1,998
|
|
|
$
|
2,180
|
|
|
Current quarter vs prior quarter
|
|
17
|
%
|
|
—
|
%
|
|
2
|
%
|
|
(8
|
)%
|
|
16
|
%
|
|
Current quarter vs prior year quarter
|
|
10
|
%
|
|
9
|
%
|
|
9
|
%
|
|
12
|
%
|
|
11
|
%
|
|
Percent of total
|
|
49
|
%
|
|
47
|
%
|
|
47
|
%
|
|
47
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International net revenues
|
|
2,521
|
|
|
2,303
|
|
|
2,319
|
|
|
2,264
|
|
|
2,350
|
|
|
Current quarter vs prior quarter
|
|
9
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
(4
|
)%
|
|
16
|
%
|
|
Current quarter vs prior year quarter
|
|
7
|
%
|
|
14
|
%
|
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
Percent of total
|
|
51
|
%
|
|
53
|
%
|
|
53
|
%
|
|
53
|
%
|
|
52
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
$
|
4,921
|
|
|
$
|
4,353
|
|
|
$
|
4,366
|
|
|
$
|
4,262
|
|
|
$
|
4,530
|
|
|
Current quarter vs prior quarter
|
|
13
|
%
|
|
—
|
%
|
|
2
|
%
|
|
(6
|
)%
|
|
16
|
%
|
|
Current quarter vs prior year quarter
|
|
9
|
%
|
|
12
|
%
|
|
13
|
%
|
|
14
|
%
|
|
13
|
%
|
|
(1)
|
|
Revenues are attributed to U.S. and international geographies
primarily based upon the country in which the seller, payment
recipient, customer, website that displays advertising, or other
service provider, as the case may be, is located.
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited eBay Inc. Supplemental Operating Data
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
(In millions, except percentages)
|
|
ECV (1)
|
|
$72,005
|
|
|
$63,056
|
|
|
$61,639
|
|
|
$58,495
|
|
|
$59,607
|
|
|
Current quarter vs prior quarter
|
|
14
|
%
|
|
2
|
%
|
|
5
|
%
|
|
(2
|
%)
|
|
20
|
%
|
|
Current quarter vs prior year quarter
|
|
21
|
%
|
|
27
|
%
|
|
26
|
%
|
|
24
|
%
|
|
23
|
%
|
|
During the first quarter of 2014, we revised our internal management
reporting of certain Marketplaces transactions to align more closely
with our related operating metrics. Related to this change, we
correspondingly excluded vehicles and real estate gross merchandise
volume from our total gross merchandise volume. Prior period amounts
have been revised to conform to the current period segment reporting
structure.
|
|
(1)
|
|
Includes Marketplaces GMV, Payments Merchant Services Net TPV and
eBay Enterprise Gross Merchandise Sales not earned on eBay or paid
for via PayPal or PayPal Credit (formerly Bill Me Later) during
the period; excludes volume transacted through the Magento
platform. PayPal Merchant Services Net TPV is the total dollar
volume of payments, net of payment reversals, successfully
completed through our payments networks, including PayPal Credit,
Venmo, and payments processed through Braintree’s full stack
payments platform during the period, excludes PayPal’s and
Braintree’s payment gateway businesses and payments for
transactions on our Marketplaces platforms.
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited Payments Supplemental Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
(In millions, except percentages)
|
|
Active registered accounts (1)
|
|
161.5
|
|
|
156.9
|
|
|
152.5
|
|
|
148.4
|
|
|
142.6
|
|
|
Current quarter vs prior quarter
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
|
4
|
%
|
|
Current quarter vs prior year quarter
|
|
13
|
%
|
|
14
|
%
|
|
15
|
%
|
|
16
|
%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net number of payments (2)
|
|
1,057.7
|
|
|
893.0
|
|
|
849.7
|
|
|
835.3
|
|
|
846.4
|
|
|
Current quarter vs prior quarter
|
|
18
|
%
|
|
5
|
%
|
|
2
|
%
|
|
(1
|
)%
|
|
16
|
%
|
|
Current quarter vs prior year quarter
|
|
25
|
%
|
|
22
|
%
|
|
21
|
%
|
|
23
|
%
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net total payment volume (3)
|
|
$64,296
|
|
|
$56,576
|
|
|
$55,046
|
|
|
$52,006
|
|
|
$51,973
|
|
|
Current quarter vs prior quarter
|
|
14
|
%
|
|
3
|
%
|
|
6
|
%
|
|
—
|
%
|
|
19
|
%
|
|
Current quarter vs prior year quarter
|
|
24
|
%
|
|
29
|
%
|
|
29
|
%
|
|
27
|
%
|
|
25
|
%
|
|
On eBay net total payment volume as % of net total payment volume
|
|
24
|
%
|
|
25
|
%
|
|
27
|
%
|
|
29
|
%
|
|
29
|
%
|
|
Merchant Services net total payment volume as % of net total
payment volume
|
|
76
|
%
|
|
75
|
%
|
|
73
|
%
|
|
71
|
%
|
|
71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Take rate (4)
|
|
3.36
|
%
|
|
3.45
|
%
|
|
3.53
|
%
|
|
3.55
|
%
|
|
3.53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction rates (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense rate
|
|
0.92
|
%
|
|
0.95
|
%
|
|
0.95
|
%
|
|
0.99
|
%
|
|
0.97
|
%
|
|
Loss rate
|
|
0.32
|
%
|
|
0.33
|
%
|
|
0.28
|
%
|
|
0.27
|
%
|
|
0.32
|
%
|
|
Margin rate
|
|
63.2
|
%
|
|
62.8
|
%
|
|
65.1
|
%
|
|
64.6
|
%
|
|
63.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan portfolio rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk adjusted margin (6)
|
|
14.7
|
%
|
|
16.8
|
%
|
|
16.6
|
%
|
|
16.2
|
%
|
|
15.8
|
%
|
|
Net charge-off rate (7)
|
|
6.3
|
%
|
|
5.3
|
%
|
|
5.5
|
%
|
|
5.4
|
%
|
|
6.3
|
%
|
|
90-day delinquency rate (8)
|
|
3.3
|
%
|
|
3.2
|
%
|
|
2.7
|
%
|
|
2.8
|
%
|
|
2.9
|
%
|
|
(1)
|
|
All registered accounts that successfully sent or received at least
one payment or payment reversal through our payments networks,
including PayPal Credit and Venmo, but excluding users of
Braintree’s unbranded payment checkout solutions, within the last 12
months and which are currently able to transact.
|
|
(2)
|
|
Total number of payments, net of payment reversals, successfully
completed through our payments networks, including PayPal Credit,
Venmo and payments processed through Braintree’s full stack payments
platform during the period; excludes payments sent or received
through PayPal’s and Braintree’s payment gateway businesses.
|
|
(3)
|
|
Total dollar volume of payments, net of payment reversals,
successfully completed through our payments networks, including
PayPal Credit, Venmo, and payments processed through Braintree’s
full stack payments platform during the period; excludes payments
sent or received through PayPal’s and Braintree’s payment gateway
businesses.
|
|
(4)
|
|
Take Rate reflects total net revenues earned through our payments
networks, including PayPal Credit, Braintree, Venmo, PayPal’s
payment gateway business, subscription fees and other net revenues,
divided by Net Total Payment Volume.
|
|
(5)
|
|
Expense Rate reflects third party payment processing expenses and
other related service costs, divided by Net Total Payment Volume.
|
|
|
|
Loss Rate reflects expense associated with our customer protection
programs, fraud, chargebacks and merchant credit losses, bad debt
expense associated with our accounts receivable balances and loan
reserves associated with our loan receivables balances, divided by
Net Total Payment Volume.
|
|
|
|
Margin Rate reflects Take Rate less Expense Rate and Loss Rate,
divided by Take Rate.
|
|
(6)
|
|
The risk adjusted margin represents annualized credit portfolio
revenue, excluding contra-revenue incentives to customers or
merchants, less cost of funds and less net credit and fraud losses
during the period, divided by average loan receivables for the
period.
|
|
(7)
|
|
Net charge-off rate is the annualized ratio of net credit losses
over the average daily loan receivables balance during the period.
Net credit losses are the principal loan losses, exclusive of
interest and late fee write offs, less recoveries of previously
charged off balances.
|
|
(8)
|
|
90-day delinquency rate is the end of period PayPal Credit account
balances that have missed three or more consecutive payments,
divided by total ending loan receivables.
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited Marketplaces Supplemental Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
(In millions, except percentages)
|
|
Active Buyers (1)
|
|
155.2
|
|
|
152.3
|
|
|
148.9
|
|
|
145.1
|
|
|
140.3
|
|
|
Current quarter vs prior quarter
|
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
|
Current quarter vs prior year quarter
|
|
11
|
%
|
|
13
|
%
|
|
14
|
%
|
|
14
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Merchandise Volume (2)
|
|
$21,849
|
|
|
$20,075
|
|
|
$20,485
|
|
|
$20,545
|
|
|
$21,503
|
|
|
Current quarter vs prior quarter
|
|
9
|
%
|
|
(2
|
)%
|
|
—
|
%
|
|
(4
|
)%
|
|
17
|
%
|
|
Current quarter vs prior year quarter
|
|
2
|
%
|
|
9
|
%
|
|
12
|
%
|
|
12
|
%
|
|
13
|
%
|
|
U.S. GMV as % of total GMV
|
|
39
|
%
|
|
39
|
%
|
|
39
|
%
|
|
40
|
%
|
|
39
|
%
|
|
International GMV as % of total GMV
|
|
61
|
%
|
|
61
|
%
|
|
61
|
%
|
|
60
|
%
|
|
61
|
%
|
|
eBay's classifieds web sites, brands4friends and Shopping.com are
not included in these metrics.
|
|
|
|
During the first quarter of 2014, we revised our internal management
reporting of certain Marketplaces transactions to align more closely
with our related operating metrics. Related to this change, we
reclassified our Marketplaces vehicle and real estate revenue from
net transaction revenues to marketing services and other revenues.
Prior period amounts have been revised to conform to the current
period segment reporting structure.
|
|
|
|
(1)
|
|
All buyers (including buyers of Half.com, StubHub, GittiGidiyor, and
our Korean subsidiary) who successfully closed a transaction within
the previous 12-month period. Buyers may register more than once,
and as a result, may have more than one account.
|
|
(2)
|
|
Total value of all successfully closed transactions between users on
Marketplaces platforms during the period regardless of whether the
buyer and seller actually consummated the transaction; excludes
vehicles and real estate gross merchandise volume.
|
|
|
|
|
|
eBay Inc.
|
|
Unaudited Enterprise Supplemental Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
(In millions, except percentages)
|
|
Gross Merchandise Sales (1)
|
|
$1,927
|
|
|
$900
|
|
|
$940
|
|
|
$936
|
|
|
$1,771
|
|
|
Current quarter vs prior quarter
|
|
114
|
%
|
|
(4
|
%)
|
|
—
|
%
|
|
(47
|
%)
|
|
125
|
%
|
|
Current quarter vs prior year quarter
|
|
9
|
%
|
|
14
|
%
|
|
15
|
%
|
|
16
|
%
|
|
11
|
%
|
|
(1)
|
|
Represents the retail value of all sales transactions, inclusive of
freight charges and net of allowance for returns and discounts,
which flow through our Enterprise commerce technologies, whether we
record the full amount of such transaction as a product sale or a
percentage of such transaction as a service fee; excludes volume
transacted through the Magento platform.
|
|
|
|
|
eBay Inc.
Business Outlook
(In Millions,
Except Per Share Amounts)
The guidance figures provided below and elsewhere in this press
release are forward-looking statements, reflect a number of estimates,
assumptions and other uncertainties, and are approximate in nature
because the company's future performance is difficult to predict. Such
guidance is based on information available on the date of this press
release, and the company assumes no obligation to update it.
The company's future performance involves risks and uncertainties, and
the company's actual results could differ materially from the
information below and elsewhere in this press release. Some of the
factors that could affect the company's operating results are set forth
under the caption “Forward-Looking Statements” above in this press
release. More information about factors that could affect the company's
operating results is included under the captions “Risk Factors” and
“Management's Discussion and Analysis of Financial Condition and Results
of Operations” in its most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q, copies of which may be
obtained by visiting the company's investor relations website at http://investor.ebayinc.com
or the SEC's website at www.sec.gov.
|
|
|
|
|
|
|
Three Months Ending
|
|
|
|
March 31, 2015
|
|
(In millions, except per share amounts)
|
|
GAAP
|
|
Non-GAAP (a)
|
|
Net Revenue
|
|
$4,350 - $4,450
|
|
$4,350 - $4,450
|
|
Diluted EPS
|
|
$0.37 - $0.43
|
|
$0.68 - $0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending
|
|
|
|
December 31, 2015
|
|
(In millions, except per share amounts)
|
|
GAAP
|
|
Non-GAAP (b)
|
|
Net Revenue
|
|
$18,600 - $19,100
|
|
$18,600 - $19,100
|
|
Diluted EPS
|
|
$2.17 - $2.32
|
|
$3.05 - $3.15
|
|
(a)
|
|
Estimated non-GAAP amounts above for the three months ending March
31, 2015, reflect adjustments that exclude the estimated
amortization of acquired intangible assets of approximately $75 -
$85 million, estimated separation and restructuring expense of
approximately $210 - $240 million and estimated stock-based
compensation expense and employer payroll taxes on stock-based
compensation expense of approximately $165 - $175 million as well as
the related tax impact.
|
|
|
|
|
|
(b)
|
|
Estimated non-GAAP amounts above for the twelve months ending
December 31, 2015, reflect adjustments that exclude the estimated
amortization of acquired intangible assets of approximately $315 -
$325 million, estimated separation and restructuring expense of
approximately $350 - $400 million and estimated stock-based
compensation expense and employer payroll taxes on stock-based
compensation expense of approximately $730 - $750 million.
|
|
|
|
|
eBay Inc.
Non-GAAP Measures of Financial Performance
To supplement the company's condensed consolidated financial statements
presented in accordance with generally accepted accounting principles,
or GAAP, the company uses non-GAAP measures of certain components of
financial performance. These non-GAAP measures include non-GAAP net
income, non-GAAP earnings per diluted share, non-GAAP operating margin,
non-GAAP effective tax rate, and free cash flow.
These non-GAAP measures are not in accordance with, or an alternative
to, measures prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with the company's results of
operations as determined in accordance with GAAP. These measures should
only be used to evaluate the company's results of operations in
conjunction with the corresponding GAAP measures.
Reconciliation to the nearest GAAP measure of all non-GAAP measures
included in this press release can be found in the tables included in
this press release.
These non-GAAP measures are provided to enhance investors' overall
understanding of the company's current financial performance and its
prospects for the future. Specifically, the company believes the
non-GAAP measures provide useful information to both management and
investors by excluding certain expenses, gains and losses, or net
purchases of property and equipment, as the case may be, that may not be
indicative of its core operating results and business outlook. In
addition, because the company has historically reported certain non-GAAP
results to investors, the company believes that the inclusion of
non-GAAP measures provides consistency in the company's financial
reporting.
For its internal budgeting process, and as discussed further below, the
company's management uses financial measures that do not include
stock-based compensation expense, employer payroll taxes on stock-based
compensation, amortization or impairment of acquired intangible assets,
impairment of goodwill, significant gains or losses from the
disposal/acquisition of a business, certain effects of the planned
separation of our eBay and PayPal business, certain gains and losses on
investments, restructuring-related charges and the income taxes
associated with the foregoing. In addition to the corresponding GAAP
measures, the company's management also uses the foregoing non-GAAP
measures in reviewing the financial results of the company.
The company excludes the following items from non-GAAP net income,
non-GAAP earnings per diluted share, non-GAAP operating margin and
non-GAAP effective tax rate:
Stock-based compensation expense and related employer payroll taxes.
This expense consists of expenses for stock options, restricted stock
and employee stock purchases. The company excludes stock-based
compensation expense from its non-GAAP measures primarily because they
are non-cash expenses that management does not believe are reflective of
ongoing operating results. The related employer payroll taxes is
dependent on the company's stock price and the timing and size of
exercises by employees of their stock options and the vesting of their
restricted stock, over which management has limited to no control, and
as such management does not believe it correlates to the company's
operation of the business.
Amortization or impairment of acquired intangible assets, impairment
of goodwill, significant gains or losses and transaction expenses from
the acquisition or disposal of a business and certain gains or losses on
investments. The company incurs amortization or impairment of
acquired intangible assets and goodwill in connection with acquisitions
and may incur significant gains or losses from the acquisition or
disposal of a business and therefore excludes these amounts from its
non-GAAP measures. The company also excludes certain gains and losses on
investments. The company excludes the impact of the accretion of a note
receivable associated with the disposal of certain businesses. The
company excludes these items because management does not believe they
correlate to the ongoing operating results of the company's business.
Restructuring. These charges consist of expenses for employee
severance and other exit and disposal costs. The company excludes
significant restructuring charges primarily because management does not
believe they are reflective of ongoing operating results.
Other certain significant gains, losses, or charges that are not
indicative of the Company’s core operating results. These are
significant gains, losses, or charges during a period that are the
result of isolated events or transactions which have not occurred
frequently in the past and are not expected to occur regularly or be
repeated in the future. The company excludes these amounts from its
results primarily because management does not believe they are
indicative of its current or ongoing operating results.
Separation. These are significant expenses that are related to
the planned separation of our eBay and PayPal businesses into separate
publicly traded companies. These consist primarily of third-party
consulting fees, legal fees, employee retention payments and other
expenses incurred to complete the separation.
Tax effect of non-GAAP adjustments. This amount is used to
present stock-based compensation and the other amounts described above
on an after-tax basis consistent with the presentation of non-GAAP net
income.
In addition to the non-GAAP measures discussed above, the company also
uses free cash flow. Free cash flow represents operating cash flows less
purchases of property and equipment. The company considers free cash
flow to be a liquidity measure that provides useful information to
management and investors about the amount of cash generated by the
business after the purchases of property, buildings, and equipment,
which can then be used to, among other things, invest in the company's
business, make strategic acquisitions, and repurchase stock. A
limitation of the utility of free cash flow as a measure of financial
performance is that it does not represent the total increase or decrease
in the company's cash balance for the period.
|
|
|
eBay Inc.
|
|
Reconciliation of GAAP Operating Margin to Non-GAAP Operating
Margin
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(In millions, except percentages)
|
|
GAAP operating income
|
|
$
|
1,061
|
|
|
$
|
1,022
|
|
|
$
|
3,514
|
|
|
$
|
3,371
|
|
|
Stock-based compensation expense and related employer payroll taxes
|
|
189
|
|
|
199
|
|
|
703
|
|
|
638
|
|
|
Acquisition related transaction expenses
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
Amortization of acquired intangible assets within cost of net
revenues
|
|
18
|
|
|
21
|
|
|
84
|
|
|
77
|
|
|
Amortization of acquired intangible assets within operating expenses
|
|
58
|
|
|
73
|
|
|
268
|
|
|
318
|
|
|
Separation
|
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
Restructuring
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(6
|
)
|
|
Total non-GAAP operating income adjustments
|
|
300
|
|
|
300
|
|
|
1,090
|
|
|
1,036
|
|
|
Non-GAAP operating income
|
|
$
|
1,361
|
|
|
$
|
1,322
|
|
|
$
|
4,604
|
|
|
$
|
4,407
|
|
|
Non-GAAP operating margin
|
|
27.7
|
%
|
|
29.2
|
%
|
|
25.7
|
%
|
|
27.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income to Non-GAAP Net Income and
|
|
GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(In millions, except percentages)
|
|
GAAP income before income taxes
|
|
$
|
1,054
|
|
|
$
|
1,028
|
|
|
$
|
3,531
|
|
|
$
|
3,466
|
|
|
GAAP provision for income taxes
|
|
(118
|
)
|
|
(178
|
)
|
|
(3,572
|
)
|
|
(610
|
)
|
|
GAAP net income
|
|
$
|
936
|
|
|
$
|
850
|
|
|
$
|
(41
|
)
|
|
$
|
2,856
|
|
|
Non-GAAP adjustments to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income adjustments (see table above)
|
|
300
|
|
|
300
|
|
|
1,090
|
|
|
1,036
|
|
|
Accretion of note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
Gain on investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
Amortization of intangibles of investments
|
|
—
|
|
|
1
|
|
|
4
|
|
|
7
|
|
|
Gain on sale of investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
Other significant gains, losses or charges
|
|
14
|
|
|
|
|
|
3,050
|
|
|
|
|
|
Tax effect of non-GAAP adjustments
|
|
(136
|
)
|
|
(84
|
)
|
|
(374
|
)
|
|
(248
|
)
|
|
Non-GAAP net income
|
|
$
|
1,114
|
|
|
$
|
1,067
|
|
|
$
|
3,729
|
|
|
$
|
3,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
0.75
|
|
|
$
|
0.65
|
|
|
$
|
(0.03
|
)
|
|
$
|
2.18
|
|
|
Non-GAAP
|
|
$
|
0.90
|
|
|
$
|
0.81
|
|
|
$
|
2.95
|
|
|
$
|
2.71
|
|
|
Shares used in GAAP diluted net income (loss) per-share calculation
|
|
1,241
|
|
|
1,310
|
|
|
1,251
|
|
|
1,313
|
|
|
Shares used in non-GAAP diluted net income per-share calculation
|
|
1,241
|
|
|
1,310
|
|
|
1,262
|
|
|
1,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate
|
|
11
|
%
|
|
17
|
%
|
|
101
|
%
|
|
18
|
%
|
|
Tax effect of non-GAAP adjustments to net income
|
|
8
|
%
|
|
3
|
%
|
|
(81
|
)%
|
|
1
|
%
|
|
Non-GAAP effective tax rate
|
|
19
|
%
|
|
20
|
%
|
|
20
|
%
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Cash Flow to Free Cash Flow
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
(In millions)
|
|
(In millions)
|
|
Net cash provided by operating activities
|
|
$
|
1,641
|
|
|
$
|
1,713
|
|
|
$
|
5,677
|
|
|
$
|
4,995
|
|
|
Less: Purchases of property and equipment
|
|
(369
|
)
|
|
(281
|
)
|
|
(1,271
|
)
|
|
(1,250
|
)
|
|
Free cash flow
|
|
$
|
1,272
|
|
|
$
|
1,432
|
|
|
$
|
4,406
|
|
|
$
|
3,745
|
|
Copyright Business Wire 2015