eBay Inc.
* Company Reports Record Q1 Net Revenues of $1.390 Billion
* Delivers Q1 GAAP Diluted EPS of $0.17 and Non-GAAP (pro forma) Diluted EPS of $0.24
eBay Inc. reported financial results for its first quarter ended March 31, 2006.
eBay reported record consolidated Q1-06 net revenues of $1.390 billion, representing a growth rate of 35% year over year and GAAP operating income of $322.6 million representing a 23% operating margin. Non-GAAP operating income in Q1-06 was $460.7 million representing a 33% operating margin. Certain financial measures previously referred to as "pro forma" are now referred to as non-GAAP.
GAAP net income in Q1-06 was $248.3 million, or $0.17 earnings per diluted share. Non-GAAP net income in Q1-06 was $342.9 million, or $0.24 earnings per diluted share.
These results exceeded the high end of the company's guidance of $1.380 billion for net revenues, $0.15 for GAAP earnings per diluted share, and $0.23 for non-GAAP earnings per diluted share.
"Q1 was an excellent quarter for the company, with strong growth across our portfolio of businesses," said Meg Whitman, President and CEO of eBay Inc. "eBay, PayPal and Skype are successful businesses on their own, and together they create additional opportunities for innovation and expansion."
Key Q1 Financial and Operating Metrics
Consolidated Net Revenues -- Consolidated net revenues totaled a record $1.390 billion in Q1-06, a growth rate of 35% over the $1.032 billion reported in Q1-05.
* US Marketplaces -- US Marketplaces net revenues, including Shopping.com, totaled $527.2 million in Q1-06, representing 30% year-over-year growth.
* International Marketplaces -- International Marketplaces net revenues totaled $493.0 million in Q1-06, representing 25% year-over-year growth. Excluding the impact of foreign currency translation, Q1-06 International Marketplaces net revenues increased 32% year over year.
* Payments -- Payments net revenues totaled $335.1 million in Q1-06, representing 44% year-over-year growth. Excluding the impact of foreign currency translation, Q1-06 Payments net revenue increased 47% year over year.
* Communications -- Communications net revenues totaled $35.2 million in Q1-06, representing a 42% increase from the $24.8 million reported in Q4-05. The Q4-05 revenue represented the operations of Skype from the acquisition date of October 14, 2005 through the end of Q4-05.
Marketplaces
* Confirmed Registered Users -- eBay cumulative confirmed registered users at the end of Q1-06 totaled 192.9 million, representing a 31% increase over the 147.1 million users reported at the end of Q1-05.
* Active Users -- eBay active users, the number of users on the eBay platform who bid, bought, or listed an item within the previous 12-month period, increased to a record 75.4 million in Q1-06, a 25% increase over the 60.5 million active users reported in Q1-05.
* Listings -- eBay new listings totaled a record 575.4 million in Q1-06, 33% higher than the 431.8 million new listings reported in Q1-05.
* Gross Merchandise Volume (GMV) -- eBay GMV, the total value of all successfully closed items on eBay's trading platforms, was $12.5 billion in Q1-06, representing an 18% year-over-year increase from the $10.6 billion reported in Q1-05. Excluding the impact of foreign currency translation, Q1-06 GMV increased 22% year over year.
* Fixed Price Trading -- eBay's fixed price trading contributed approximately $4.3 billion or 34% of total GMV during Q1-06, primarily from eBay's "Buy It Now" feature.
* eBay Stores -- At the end of Q1-06, eBay hosted approximately 486,000 stores worldwide, with approximately 247,000 stores hosted on the US site.
Payments
* Total Payments Accounts -- PayPal had 105.0 million total accounts at the end of Q1-06, a 47% increase from the 71.6 million reported in Q1-05. Total payments accounts represent the cumulative total of all accounts opened, excluding accounts that have been closed or locked and the payment gateway business accounts, and including users who made payments with PayPal but have not registered.
* Total Payment Volume (TPV) -- TPV, the dollar volume of payments initiated through the PayPal system, excluding the payment gateway business, was a record $8.8 billion in Q1-06, a 41% increase from the $6.2 billion reported in Q1-05.
Communications
# Registered Users -- Communications had 94.6 million total registered users at the end of Q1-06. Communications registered users represent the cumulative total of all users who have completed the Skype registration process.
Consolidated Operating Results
This is the first quarter that eBay's financial results include stock-based compensation expenses from the adoption of the new accounting standard, FAS 123®. eBay's financial results for prior periods have not been restated for FAS 123®. In addition, eBay continues to disclose its non-GAAP (previously referred to as "pro forma") financial measures, which in each case exclude the stock-based compensation expense as well as stock option related payroll taxes, amortization of acquired intangible assets and the income taxes related to these items.
GAAP Operating Income -- Operating income decreased 4% year over year to $322.6 million, or 23% of net revenues. Excluding stock-based compensation of $83.8 million, operating income would have increased 21% year over year to $406.4 million or 29% of net revenues.
Non-GAAP Operating Income -- Non-GAAP operating income increased 25% year over year to $460.7 million, or 33% of net revenues.
GAAP Net Income -- Net income decreased 3% year over year to $248.3 million, or $0.17 per diluted share. Excluding stock-based compensation of $58.3 million (net of tax effects), or $0.04 per diluted share, net income would have increased 20% year over year to $306.6 million, or $0.21 per diluted share.
Non-GAAP Net Income -- Non-GAAP net income increased 24% year over year to $342.9 million, or $0.24 per diluted share.
Operating and Free Cash Flows -- GAAP operating cash flows increased 18% year over year to $584.2 million. Free cash flows, representing operating cash flows less net purchases of property and equipment of $133.6 million, increased 56% year over year to $450.6 million.
Consolidated Financial and Operating Summary
eBay reported record consolidated net revenues of $1.390 billion in Q1-06, representing a growth rate of 35% year over year which is primarily due to continued Marketplaces and PayPal growth. Net revenues were negatively impacted by foreign currency translation of approximately $50.2 million in Q1-06 as compared to Q1-05. On a sequential basis, consolidated net revenues were positively impacted by foreign currency translation in Q1-06 by approximately $8.3 million.
GAAP gross profit was $1.112 billion in Q1-06, or 80% of net revenues, lower than the 82% reported in Q1-05. Excluding stock-based compensation of $9.5 million, gross profit would have been $1.121 billion in Q1-06, or 81% of net revenues. Gross profit declined slightly due to the inclusion of telecommunications costs related to eBay's Communications segment in Q1-06.
GAAP sales and marketing expenses totaled $400.6 million, or 29% of net revenues, higher than the 26% reported in Q1-05. Excluding stock-based compensation of $24.7 million, sales and marketing expenses totaled $375.8 million in Q1-06, or 27% of net revenues. Sales and marketing expenses increased primarily due to the inclusion of Shopping.com in Q1-06.
GAAP product development expenses totaled $119.1 million, or 9% of net revenues, up from the 7% reported in Q1-05. Excluding stock-based compensation of $20.7 million, product development expenses totaled $98.4 million in Q1-06, or 7% of net revenues, consistent with the 7% reported in Q1-05.
GAAP general and administrative costs totaled $215.4 million, or 15% of net revenues, up from the 13% reported in Q1-05. Excluding stock-based compensation of $28.9 million, general and administrative costs totaled $186.4 million in Q1-06, or 13% of net revenues, consistent with the 13% reported in Q1-05.
GAAP operating income totaled $322.6 million during Q1-06, a 4% decrease over the $335.6 million reported in Q1-05. Excluding stock-based compensation of $83.8 million, operating income totaled $406.4 million, a 21% increase over the $335.6 million reported in Q1-05. On a non-GAAP basis, operating income totaled $460.7 million, a 25% increase over the $367.4 million reported in Q1-05. On a year-over-year basis, both GAAP and non-GAAP Q1-06 operating income were negatively impacted by foreign currency translation of approximately $25.1 million in Q1-06. On a sequential basis, GAAP operating income was positively impacted by foreign currency translation in Q1-06 of approximately $2.4 million.
Interest and other income, net, totaled $25.8 million in Q1-06, up from the $22.4 million reported in Q1-05. The increase was primarily due to higher interest rates and higher cash and investments balances.
The GAAP effective tax rate for Q1-06 was 29%, an increase from 28% for Q1-05, and consistent with 29% for Q4-05. The non-GAAP effective tax rate in Q1-06 was 29%, consistent with 29% for Q1-05 and an increase from 28% for Q4-05. The higher effective tax rate for Q1-06 as compared to Q1-05 results primarily from shifts in the company's geographic mix of business.
The Company reported $584.2 million in operating cash flows and $133.6 million of net purchases of property and equipment in Q1-06, resulting in free cash flows of $450.6 million. The company's cash, cash equivalents, and investments totaled nearly $3.5 billion at the end of Q1-06.
Business Outlook
The following updated guidance reflects current business trends and assumed exchange rates. This guidance is based on a weighted average exchange rate of US $1.20 per Euro, which is consistent with prior guidance. The guidance includes the estimated impact of expensing stock options from the adoption of FAS 123®, which is reflected in eBay's operating results beginning in Q1-06.
Net Revenues -- eBay expects consolidated net revenues for 2006 to be in the range of $5.700 billion to $5.900 billion. eBay expects consolidated net revenues to be in the range of $1.370 to $1.415 billion in Q2-06.
GAAP Diluted EPS -- eBay estimates GAAP earnings per diluted share for the full year 2006 to be in the range of $0.65 to $0.71. eBay estimates GAAP earnings per diluted share to be in the range of $0.14 to $0.16 in Q2-06. The estimated GAAP earnings per diluted share includes the estimated impact of stock-based compensation expense from the adoption of FAS 123® of approximately $0.16 to $0.17 for the full year ending December 31, 2006 and $0.04 to $0.05 for each of the quarters in the year ending December 31, 2006.
Non-GAAP Diluted EPS -- eBay estimates non-GAAP earnings per diluted share for the full year 2006 to be in the range of $0.96 to $1.01. eBay estimates non-GAAP earnings per diluted share to be in the range of $0.22 to $0.23 in Q2-06.
Quarterly Conference Call
eBay will host a conference call to discuss first quarter results at 2 pm Pacific Time today. A live webcast of the conference call can be accessed through the company's Investor Relations website at
http://investor.ebay.com. In addition, an archive of the webcast will be accessible through the same link.
Non-GAAP Measures
To supplement the company's consolidated financial statements presented in accordance with GAAP, eBay 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 income, non-GAAP operating margin, non-GAAP effective tax rate, and free cash flows as well as GAAP amounts excluding the impact of stock-based compensation expenses. eBay makes reference to measures of operating income, gross profit, certain expenses (including sales and marketing, product development, general and administrative), net income and earnings per share for Q1-06, which exclude stock-based compensation to allow for a better comparison of results in the current period to those in prior periods that did not include FAS 123® stock-based compensation. eBay's reference to these measures should be considered in addition to results that are prepared under current accounting standards but should not be considered a substitute for results that are presented as consistent with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and the company's prospects for the future and provide further information for comparative information due the adoption of the new accounting standard FAS 123®. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, net purchases of property and equipment, that may not be indicative of its core operating results and business outlook.
In addition, because eBay has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency in the company's financial reporting. The company believes the non-GAAP measures that exclude stock-based compensation enhance the comparability of results against prior periods. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the financial tables included on pages 8, 9 and 10 of this press release. For non-GAAP measures that solely exclude stock-based compensation, the reconciliation to GAAP is presented in narrative form in this release when the non-GAAP measure is referenced.
About eBay Inc.
Founded in 1995, eBay pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay enables ecommerce on a local, national and international basis with an array of websites -- including the eBay Marketplaces, PayPal, Skype, Kijiji, Rent.com and Shopping.com -- that bring together millions of buyers and sellers every day.
Forward-Looking Statements
This press release contains forward-looking statements relating to the future performance of eBay and its consolidated subsidiaries, as well as the estimated impact of expensing stock options under FAS 123® "Share-Based Payment" effective in Q1-06. Those statements involve risks and uncertainties, and the company's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to: the company's need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity; the company's need to increasingly achieve growth from its existing users as well as from new users in its more established markets; 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; the need to integrate, manage, and profitably expand its recently-acquired businesses, the regulatory and competitive risks specific to Skype; the litigation, regulatory, credit card association, and other risks specific to PayPal, especially as it continues to expand geographically; the company's need to manage other regulatory, tax, and litigation risks even as its product offerings expand and its services are offered in more jurisdictions; the company's ability to upgrade and develop its systems, infrastructure and customer service capabilities to accommodate growth at a 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; fluctuations in foreign exchange rates; the company's ability to profitably expand its model to new types of merchandise and sellers; assumptions and methods used to value and expense stock options provided to employees; and, the company's ability to profitably integrate and manage recent and future acquisitions and other transactions. The forward looking statements in this release do not include the potential impact of any acquisitions that may be completed after the date hereof.
More information about factors that could affect the company's operating results is included under the captions "Risk Factors That May Affect Results of Operations and Financial Condition" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company's investor relations site at
http://investor.ebay.com. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the company on the date hereof. eBay assumes no obligation to update such statements.
eBay Inc.
Unaudited Condensed Consolidated Balance Sheet
(US Dollars In Thousands)
December 31, March 31,
2005 2006
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 1,313,580 $ 1,876,434
Short-term investments 774,650 828,049
Accounts receivable, net 322,788 318,878
Funds receivable from customers 255,282 225,295
Restricted cash and investments 29,702 30,755
Other current assets 487,235 620,832
------------ ------------
Total current assets 3,183,237 3,900,243
Long-term investments 825,667 793,497
Property and equipment, net 801,602 860,493
Goodwill 6,120,079 6,205,075
Intangible assets, net 823,280 781,988
Other assets 35,121 27,239
------------ ------------
$11,788,986 $12,568,535
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 55,692 $ 101,157
Funds payable and amounts due to
customers 586,651 660,838
Accrued expenses and other current
liabilities 578,557 589,665
Deferred revenue and customer advances 81,940 90,965
Income taxes payable 182,095 238,883
------------ ------------
Total current liabilities 1,484,935 1,681,508
Deferred tax liabilities, net 215,682 220,430
Other liabilities 40,388 39,797
------------ ------------
Total liabilities 1,741,005 1,941,735
------------ ------------
Total stockholders' equity 10,047,981 10,626,800
------------ ------------
$11,788,986 $12,568,535
============ ============
eBay Inc.
Unaudited Condensed Consolidated Statement of Income
(US Dollars In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
-----------------------
2005 2006
----------- -----------
Net revenues $1,031,724 $1,390,419
Cost of net revenues (1) 186,369 278,568
----------- -----------
Gross profit 845,355 1,111,851
----------- -----------
Operating expenses (1)
Sales and marketing 271,349 400,562
Product development 73,789 119,070
General and administrative 136,389 215,350
Payroll tax on employee stock options 5,731 2,324
Amortization of acquired intangible assets 22,523 51,921
----------- -----------
Total operating expenses 509,781 789,227
----------- -----------
Income from operations 335,574 322,624
Interest and other income, net 22,403 25,760
Interest expense (1,720) (747)
----------- -----------
Income before income taxes and minority
interests 356,257 347,637
Provision for income taxes (99,948) (99,354)
Minority interests (18) (1)
----------- -----------
Net income $ 256,291 $ 248,282
=========== ===========
Net income per share:
Basic $ 0.19 $ 0.18
=========== ===========
Diluted $ 0.19 $ 0.17
=========== ===========
Weighted average shares:
Basic 1,343,442 1,406,309
=========== ===========
Diluted 1,382,150 1,437,581
=========== ===========
(1) Includes stock-based compensation as
follows (2006 increases are due primarily
to the adoption of FAS 123®):
Cost of net revenues $ 78 $ 9,476
Sales and marketing - 24,721
Product development 322 20,701
General and administrative 3,196 28,920
----------- -----------
Total stock-based compensation $ 3,596 $ 83,818
=========== ===========
eBay Inc.
Reconciliation of GAAP to Non-GAAP
Condensed Consolidated Statement of Income
(US Dollars In Thousands, Except Per Share Amounts)
Three Months Ended
March 31, 2005
-------------------------------------
Non-GAAP
Reported Entries Non-GAAP
-------------------------------------
Net revenues $1,031,724 $ - $1,031,724
Cost of net revenues 186,369 (78) (a) 186,291
--------------------- -----------
Gross profit 845,355 78 845,433
--------------------- -----------
Operating expenses:
Sales and marketing 271,349 - (a) 271,349
Product development 73,789 (322) (a) 73,467
General and administrative 136,389 (3,196) (a) 133,193
Payroll tax on employee stock
options 5,731 (5,731) (b) -
Amortization of acquired
intangible assets 22,523 (22,523) © -
--------------------- -----------
Total operating expenses 509,781 (31,772) 478,009
--------------------- -----------
Income from operations 335,574 31,850 367,424
Interest and other income, net 22,403 - 22,403
Interest expense (1,720) - (1,720)
--------------------- -----------
Income before income taxes and
minority interests 356,257 31,850 388,107
Provision for income taxes (99,948) (12,603) (d) (112,551)
Minority interests (18) - (18)
--------------------- -----------
Net income $ 256,291 $ 19,247 $ 275,538
===================== ===========
Net income per share:
Basic $ 0.19 $ 0.21
=========== ===========
Diluted $ 0.19 $ 0.20
=========== ===========
Weighted average shares:
Basic 1,343,442 1,343,442
=========== ===========
Diluted 1,382,150 1,382,150
=========== ===========
Operating margin 33% 3% 36%
===================== ===========
Three Months Ended
March 31, 2006
-------------------------------------
Non-GAAP
Reported Entries Non-GAAP
-------------------------------------
Net revenues $1,390,419 $ - $1,390,419
Cost of net revenues 278,568 (9,476) (a) 269,092
--------------------- -----------
Gross profit 1,111,851 9,476 1,121,327
--------------------- -----------
Operating expenses:
Sales and marketing 400,562 (24,721) (a) 375,841
Product development 119,070 (20,701) (a) 98,369
General and administrative 215,350 (28,920) (a) 186,430
Payroll tax on employee stock
options 2,324 (2,324) (b) -
Amortization of acquired
intangible assets 51,921 (51,921) © -
--------------------- -----------
Total operating expenses 789,227 (128,587) 660,640
--------------------- -----------
Income from operations 322,624 138,063 460,687
Interest and other income, net 25,760 - 25,760
Interest expense (747) - (747)
--------------------- -----------
Income before income taxes and
minority interests 347,637 138,063 485,700
Provision for income taxes (99,354) (43,442) (d) (142,796)
Minority interests (1) - (1)
--------------------- -----------
Net income $ 248,282 $ 94,621 $ 342,903
===================== ===========
Net income per share:
Basic $ 0.18 $ 0.24
=========== ===========
Diluted $ 0.17 $ 0.24
=========== ===========
Weighted average shares:
Basic 1,406,309 1,406,309
=========== ===========
Diluted 1,437,581 1,437,581
=========== ===========
Operating margin 23% 10% 33%
===================== ===========
Notes:
(a) Stock-based compensation expense
(b) Employer payroll taxes on employee non-qualified stock option
gains
© Amortization of acquired intangible assets
(d) Income taxes associated with certain non-GAAP entries
eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(US Dollars In Thousands)
Three Months Ended
March 31,
-----------------------
2005 2006
----------- -----------
Cash flows from operating activities:
Net income $ 256,291 $ 248,282
Adjustments:
Provision for doubtful accounts and
authorized credits 22,024 27,047
Provision for transaction losses 18,579 25,627
Depreciation and amortization 79,660 123,286
Stock-based compensation expense related
to stock options and purchases 3,596 83,818
Tax benefit on the exercise of stock
options 84,992 37,442
Excess tax benefits from stock-based
compensation - (23,372)
Minority interest 18 1
Changes in assets and liabilities, net of
acquisition effects:
Accounts receivable (54,162) (22,901)
Funds receivable from customers (77,333) 29,748
Other current assets 1,203 (117,726)
Other non-current assets (8,361) 7,263
Deferred tax liabilities, net 2,240 (7,500)
Accounts payable 20,909 51,956
Funds payable and amounts due to
customers 168,928 74,331
Accrued expenses and other liabilities (21,838) (18,761)
Deferred revenue and customer advances (6,975) 9,023
Income taxes payable 5,648 56,640
----------- -----------
Net cash provided by operating activities 495,419 584,204
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment, net (79,584) (133,576)
Purchases of investments (368,094) (378,087)
Maturities and sales of investments 245,665 365,777
Acquisitions, net of cash acquired (445,008) -
----------- -----------
Net cash used in investing activities (647,021) (145,886)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of common stock, net 179,279 80,606
Excess tax benefits from stock-based
compensation - 23,372
Payment of headquarters facility lease
obligation (126,390) -
Principal payments on long-term obligations (1,849) -
----------- -----------
Net cash provided by financing activities 51,040 103,978
----------- -----------
Effect of exchange rate changes on cash and
cash equivalents (12,711) 20,558
----------- -----------
Net increase (decrease) in cash and cash
equivalents (113,273) 562,854
Cash and cash equivalents at beginning of
period 1,330,045 1,313,580
----------- -----------
Cash and cash equivalents at end of period $1,216,772 $1,876,434
=========== ===========
Supplemental non-GAAP measure:
Net cash provided by operating activities $ 495,419 $ 584,204
Less: Purchases of property and equipment, net (79,584) (133,576)
Less: Payment of headquarters facility lease
obligation (126,390) -
----------- -----------
Free cash flow $ 289,445 $ 450,628
=========== ===========
eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(US Dollars In Thousands, Except Percentages)
Net Revenues by Type
March June September December March
31, 2005 30, 2005 30, 2005 31, 2005 31, 2006
-------------------------------------------------------
Net Transaction
Revenues
US
Marketplaces $ 388,759 $ 408,452 $ 434,937 $ 504,891 $ 507,312
Current
quarter vs
prior
quarter 7% 5% 6% 16% 0%
Current
quarter vs
prior year
quarter 19% 28% 32% 39% 30%
International
Marketplaces 387,187 411,671 401,883 464,521 483,215
Current
quarter vs
prior
quarter 12% 6% (2%) 16% 4%
Current
quarter vs
prior year
quarter 51% 50% 42% 35% 25%
Payments 227,097 237,217 239,922 297,679 328,150
Current
quarter vs
prior
quarter 13% 4% 1% 24% 10%
Current
quarter vs
prior year
quarter 46% 49% 44% 49% 44%
Communications - - - 24,809 35,160
-------------------------------------------------------
Total net
transaction
revenues 1,003,043 1,057,340 1,076,742 1,291,900 1,353,837
Current
quarter vs
prior
quarter 11% 5% 2% 20% 5%
Current
quarter vs
prior year
quarter 36% 41% 38% 42% 35%
Advertising and
other non-
transaction
revenues
Total
advertising
and other
non-
transaction
revenues 28,681 28,963 28,773 36,959 36,582
Current
quarter vs
prior
quarter 1% 1% (1%) 28% (1%)
Current
quarter vs
prior year
quarter 65% 33% 8% 30% 28%
-------------------------------------------------------
Total net
revenues $1,031,724 $1,086,303 $1,105,515 $1,328,859 $1,390,419
=======================================================
Current
quarter vs
prior
quarter 10% 5% 2% 20% 5%
Current
quarter vs
prior year
quarter 36% 40% 37% 42% 35%
eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(US Dollars In Thousands, Except Percentages)
Net Revenues by Segment
March June September December March
31, 2005 30, 2005 30, 2005 31, 2005 31, 2006
-------------------------------------------------------
US Marketplaces $ 404,848 $ 423,565 $ 449,549 $ 526,130 $ 527,220
Current
quarter vs
prior quarter 7% 5% 6% 17% 0%
Current
quarter vs
prior year
quarter 20% 27% 29% 39% 30%
International
Marketplaces 393,792 418,839 408,868 473,546 492,973
Current
quarter vs
prior quarter 12% 6% (2%) 16% 4%
Current
quarter vs
prior year
quarter 52% 51% 43% 35% 25%
Payments 233,084 243,899 247,098 304,374 335,066
Current
quarter vs
prior quarter 13% 5% 1% 23% 10%
Current
quarter vs
prior year
quarter 47% 51% 44% 48% 44%
Percent of
Payments
revenue which
is
international 35% 35% 36% 36% 35%
Communications - - - 24,809 35,160
Percent of
Communications
revenue which
is
international - - - 87% 87%
-------------------------------------------------------
Total net
revenues $1,031,724 $1,086,303 $1,105,515 $1,328,859 $1,390,419
=======================================================
Current
quarter vs
prior quarter 10% 5% 2% 20% 5%
Current
quarter vs
prior year
quarter 36% 40% 37% 42% 35%
Net Revenues by Geography
March June September December March
31, 2005 30, 2005 30, 2005 31, 2005 31, 2006
-------------------------------------------------------
US net revenues $ 556,246 $ 581,851 $ 608,428 $ 724,748 $ 748,136
Current
quarter vs
prior quarter 7% 5% 5% 19% 3%
Current
quarter vs
prior year
quarter 22% 29% 30% 40% 35%
% of total 54% 54% 55% 55% 54%
International
net revenues 475,478 504,452 497,087 604,111 642,283
Current
quarter vs
prior quarter 14% 6% (1%) 22% 6%
Current
quarter vs
prior year
quarter 58% 56% 47% 44% 35%
% of total 46% 46% 45% 45% 46%
-------------------------------------------------------
Total net
revenues $1,031,724 $1,086,303 $1,105,515 $1,328,859 $1,390,419
=======================================================
Current
quarter vs
prior quarter 10% 5% 2% 20% 5%
Current
quarter vs
prior year
quarter 36% 40% 37% 42% 35%
eBay Inc.
eBay Marketplaces Unaudited Supplemental Operating Data
(In Millions, Except Percentages)
March June September December March
31, 2005 30, 2005 30, 2005 31, 2005 31, 2006
--------- --------- --------- --------- ---------
Confirmed Registered
Users (1) 147.1 157.3 168.1 180.6 192.9
Current quarter vs
prior quarter 9% 7% 7% 7% 7%
Current quarter vs
prior year quarter 40% 38% 35% 33% 31%
Active Users (2) 60.5 64.6 68.0 71.8 75.4
Current quarter vs
prior quarter 8% 7% 5% 6% 5%
Current quarter vs
prior year quarter 34% 34% 32% 28% 25%
Number of Non-Stores
Listings (3) 399.8 402.2 407.0 480.6 490.8
Current quarter vs
prior quarter 6% 1% 1% 18% 2%
Current quarter vs
prior year quarter 25% 27% 24% 28% 23%
Number of Stores
Listings (3) 32.0 37.9 51.6 65.7 84.6
Current quarter vs
prior quarter 14% 18% 36% 27% 29%
Current quarter vs
prior year quarter 300% 131% 154% 135% 164%
Gross Merchandise
Volume (4) $ 10,602 $ 10,884 $ 10,800 $ 12,013 $ 12,504
Current quarter vs
prior quarter 8% 3% (1%) 11% 4%
Current quarter vs
prior year quarter 32% 36% 30% 22% 18%
Rent.com, Shopping.com, and our classifieds websites are not included
in these metrics.
(1) Cumulative total of all users who have completed the registration
process on one of eBay's trading platforms.
(2) All users, excluding users of Half.com, Internet Auction,
Rent.com, Shopping.com, and our classifieds websites, who bid on,
bought, or listed an item within the previous 12-month period.
Includes users of eBay India since the migration to the eBay
platform in April 2005.
(3) All listings on eBay's trading platforms during the quarter,
regardless of whether the listing subsequently closed
successfully.
(4) Total value of all successfully closed items between users on
eBay's trading platforms during the quarter, regardless of whether
the buyer and seller actually consummated the transaction.
#
eBay Inc.
PayPal Unaudited Supplemental Operating Data
(In Millions, Except Percentages)
March June September December March
31, 2005 30, 2005 30, 2005 31, 2005 31, 2006
--------- --------- --------- --------- ---------
Total accounts (1) 71.6 78.9 86.6 96.2 105.0
Current quarter vs
prior quarter 12% 10% 10% 11% 9%
Current quarter vs
prior year
quarter 57% 56% 53% 51% 47%
Active accounts (2) 22.1 22.9 24.5 28.1 29.2
Total number of
payments (3) 110.4 113.2 117.4 139.7 149.2
Current quarter vs
prior quarter 11% 3% 4% 19% 7%
Current quarter vs
prior year
quarter 39% 46% 41% 40% 35%
Total payment volume
(4) $ 6,233 $ 6,471 $ 6,667 $ 8,114 $ 8,769
Current quarter vs
prior quarter 11% 4% 3% 22% 8%
Current quarter vs
prior year
quarter 44% 49% 44% 45% 41%
eBay Marketplaces
as % of total
payment volume 71% 70% 69% 69% 67%
Transaction rates
(5)
Transaction
revenue rate 3.64% 3.67% 3.60% 3.67% 3.74%
Transaction
processing
expense rate 1.15% 1.08% 1.11% 1.09% 1.04%
Transaction loss
rate 0.30% 0.19% 0.24% 0.33% 0.29%
(1) Cumulative total of all accounts opened, including users who made
payments using PayPal but have not registered, and excluding
accounts that have been closed or locked and the payment gateway
business accounts.
(2) All accounts, and users whether registered or not, that sent or
received at least one payment through the PayPal system during the
quarter.
(3) Total number of payments initiated through the PayPal system
during the quarter, excluding the payment gateway business,
regardless of whether the payment was actually sent successfully,
or was reversed, rejected, or pending at the end of the quarter.
(4) Total dollar volume of payments initiated through the PayPal
system during the quarter, excluding the payment gateway business,
regardless of whether the payment was actually sent successfully,
or was reversed, rejected, or was pending at the end of the
quarter.
(5) Transaction rates represent the ratio of PayPal revenues
(including the payment gateway business), PayPal third party
processing expenses and PayPal fraud and protection program losses
relative to total payment volume.
eBay Inc.
Guidance Summary
(US Dollars In Millions, Except Per Share Amounts And Percentages)
The guidance figures provided below and elsewhere in this press
release are approximate in nature because eBay's future performance is
difficult to predict. Such guidance is based on information available
on the date hereof, and eBay assumes no obligation to update it.
eBay's future performance involves risks and uncertainties, and the
company's actual results could differ materially from such guidance.
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
eBay's operating results is included under the captions "Risk Factors
That May Affect Results of Operations and Financial Condition" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in its most recent annual report on Form 10-K
and quarterly reports on Form 10-Q, copies of which may be obtained by
visiting the company's investor relations site at
http://investor.ebay.com.
Three months ending
June 30, 2006
------------------------------
GAAP (a) Non-GAAP (b)
------------------------------
Net revenues $1,370-$1,415 $1,370-$1,415
Diluted EPS $0.14-$0.16 $0.22-$0.23
Six months ending
December 31, 2006
------------------------------
GAAP (a) Non-GAAP (b)
------------------------------
Net revenues $2,965-$3,105 $2,965-$3,105
Diluted EPS $0.37-$0.40 $0.52-$0.54
Year ending December 31, 2006
------------------------------
GAAP (a) Non-GAAP (b)
------------------------------
Net revenues $5,700-$5,900 $5,700-$5,900
Operating margin 23% 33%
Diluted EPS(1) $0.65-$0.71 $0.96-$1.01
Effective tax rate 29% - 30% 29% - 30%
(1) Please note that the sum of the quarters may not total to the full
year EPS because the quarterly EPS is calculated using the
respective results and weighted average shares for each quarter,
and the full year EPS is calculated using the results and weighted
average shares for the full year.
(a) GAAP guidance includes the estimated impact of expensing stock
option under FAS 123® "Share-Based Payment." The new accounting
standard is expected to reduce diluted GAAP EPS by approximately
$0.16-$0.17 for the full year ending December 31, 2006 and
$0.04-$0.05 for each of the quarters in the year ending December
31, 2006.
(b) Non-GAAP guidance reflects estimated quarterly adjustments to
exclude the amortization of acquired intangible assets of
approximately $45-$55 million, payroll taxes on employee stock
options of approximately $5-$10 million, stock-based compensation
of approximately $85-$100 million, which includes the estimated
impact of expensing stock options due to the adoption of FAS
123® "Share-Based Payment," and other adjustments estimated to
result in an operating margin adjustment of approximately 10% for
each of the quarters in the year ending December 31, 2006. Net of
tax, the above non-GAAP items are estimated to result in a
$0.07-$0.08 per diluted share adjustment for each of the quarters
in the year ending December 31, 2006.
you made me spit Pepsi on my monitor 
