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Full Version: eBay meets Q2 Earnings Estimates, raises Store fees, buys back stock
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Listen to the conference call here at 5pm http://biz.yahoo.com/cc/2/69552.html

more earnings news to follow after 4pm Eastern...

related topic:
eBay Shares Tumble as Analyst Warns of Dramatic 2Q Slowdown in Growth
http://community.tuliptools.com/index.ph...229.0.html
Pre-earnings announcement comments from a Lehman Brothers analyst:

Quote:Anmuth remained cautious on the stock due to the e-commerce market's shift toward multi-channel selling, decelerating growth in core markets and increased competition from both Google  and local country e-commerce players, such as Gmarket and TaoBao in Asia, which could hurt eBay's fundamentals in the near term.

The rising number of eBay Store listings, up to 17% in the second quarter from 14.7% of all eBay listings in the first quarter, are also pressuring eBay's revenue per listed item, Anmuth said, given eBay Store items' lower conversion rates and average selling prices.

full article: http://www.forbes.com/2006/07/19/ebay-ea...r=yahootix
eBay Inc. Announces Second Quarter 2006 Financial Results
Wednesday July 19, 4:15 pm ET

# SAN JOSE, Calif.---July 19, 2006--eBay Inc. :Company Reports Record Q2 Net Revenues of $1.411 Billion

    * Delivers Q2 GAAP Diluted EPS of $0.17 and Non-GAAP Diluted EPS of $0.24
    * Announces a $2 Billion Stock Repurchase Program

eBay Inc. (Nasdaq:EBAY - News; www.ebay.com) reported financial results for its second quarter ended June 30, 2006.

eBay reported record consolidated Q2-06 net revenues of $1.411 billion, representing a growth rate of 30% year over year and GAAP operating income of $311 million representing a 22% operating margin. Non-GAAP operating income in Q2-06 was $460 million representing a 33% operating margin.

GAAP net income in Q2-06 was $250 million, or $0.17 earnings per diluted share. Non-GAAP net income in Q2-06 was $351 million, or $0.24 earnings per diluted share.

These results were in the range of the company's guidance of $1.370 billion to $1.415 billion for net revenues and exceeded the high end of the company's guidance of $0.16 for GAAP earnings per diluted share, and $0.23 for non-GAAP earnings per diluted share.

As of June 30, 2006, eBay's cash and marketable securities of nearly $4 billion is at the highest level in the history of the company.

The company announced that its Board of Directors has authorized the repurchase of up to $2 billion of the company's stock within the next two years.

"Q2 was a good quarter for the company driven by solid growth across eBay, PayPal and Skype," said Meg Whitman, President and CEO of eBay Inc. "Our stock repurchase plan underscores our confidence in our ability to generate strong profitability and cash flows while investing in the future of the company."

The company also announced marketing and pricing initiatives it expects will increase the velocity of trading on the eBay marketplace.

Key Q2 Financial and Operating Metrics

Consolidated Net Revenues -- Consolidated net revenues totaled $1.411 billion in Q2-06, a growth rate of 30% over the $1.086 billion reported in Q2-05.

    * Marketplaces -- Marketplaces net revenues totaled $1.028 billion in Q2-06, representing 22% year-over-year growth.
    * Payments -- Payments net revenues totaled $339 million in Q2-06, representing 39% year-over-year growth.
    * Communications -- Communications net revenues totaled $44 million in Q2-06, representing a 26% increase from the $35 million reported in Q1-06.

Marketplaces

    * Confirmed Registered Users -- eBay cumulative confirmed registered users at the end of Q2-06 totaled 203 million, representing a 29% increase over the 157 million users reported at the end of Q2-05.
    * Active Users -- eBay active users increased to 78 million at the end of Q2-06, a 20% increase over the 65 million active users reported at the end of Q2-05.
    * Listings -- eBay new listings totaled 596 million in Q2-06, 35% higher than the 440 million new listings reported in Q2-05.
    * Gross Merchandise Volume (GMV) -- eBay GMV, the total value of all successfully closed items on eBay's trading platforms, was $13 billion in Q2-06, representing an 18% year-over-year increase from the $11 billion reported in Q2-05.
    * Fixed Price Trading -- eBay's fixed price trading contributed approximately $4 billion or 35% of total GMV during Q2-06, primarily from eBay's "Buy It Now" feature.
    * eBay Stores -- At the end of Q2-06, eBay hosted approximately 541,000 stores worldwide, with approximately 255,000 stores hosted on the US site.

Payments

    * Total Payments Accounts -- PayPal had 114 million total payments accounts at the end of Q2-06, a 44% increase from the 79 million reported at the end of Q2-05.
    * Total Payment Volume (TPV) -- TPV, the dollar volume of payments initiated through the PayPal system, excluding the payment gateway business, was $9 billion in Q2-06, a 37% increase from the $6 billion reported in Q2-05.

Communications
# Registered Users -- Communications had a cumulative total of 113 million registered users at the end of Q2-06, representing a 20% increase from the 95 million in Q1-06. Communications registered users represent the number of unique user accounts created on Skype.

Consolidated Financial and Operating Summary

Note that beginning with Q1-06, eBay's financial results include stock-based compensation from the adoption of the new accounting standard, FAS 123R. eBay's financial results for prior periods have not been restated for FAS 123R. eBay discloses its non-GAAP financial measures, which in each case excludes the stock-based compensation as well as stock option related payroll taxes, amortization of acquired intangible assets and the income taxes related to these items.

eBay reported consolidated net revenues of $1.411 billion in Q2-06, representing a growth rate of 30% year over year which is primarily due to continued Marketplaces and PayPal growth and acquisitions made in the past 12 months, including Shopping.com and Skype. On a sequential basis, net revenues increased 1% and were positively impacted by foreign currency translation in Q2-06 by approximately $27 million.

GAAP gross profit of $1.118 billion in Q2-06, was 79% of net revenues, lower than the 82% reported in Q2-05. Excluding stock-based compensation of $8 million, gross profit would have been $1.126 billion, or 80% of net revenues in Q2-06. Gross profit as a percentage of revenues was lower primarily due to the inclusion of eBay's Communications segment in Q2-06.

GAAP sales and marketing expenses totaled $398 million, or 28% of net revenues, higher than the 26% reported in Q2-05. Excluding stock-based compensation of $27 million, sales and marketing expenses totaled $371 million in Q2-06, or 26% of net revenues consistent with the 26% reported in Q2-05.

GAAP product development expenses totaled $124 million, or 9% of net revenues, up from the 7% reported in Q2-05. Excluding stock-based compensation of $23 million, product development expenses totaled $101 million in Q2-06, or 7% of net revenues, consistent with the 7% reported in Q2-05.

GAAP general and administrative expenses totaled $223 million, or 16% of net revenues, up from the 12% reported in Q2-05. Excluding stock-based compensation of $28 million, general and administrative costs totaled $195 million in Q2-06, or 14% of net revenues. General and administrative expenses as a percentage of revenues increased year-over-year primarily due to increased investment in consumer protection programs.

GAAP operating income decreased 18% year over year to $311 million, or 22% of net revenues. Excluding stock-based compensation of $85 million, operating income would have increased 5% year over year to $397 million, or 28% of net revenues. Non-GAAP operating income increased 13% year over year to $460 million, or 33% of net revenues. On a sequential basis, GAAP operating income decreased 3% and was positively impacted by foreign currency translation in Q2-06 of approximately $13 million.

Interest and other income, net, totaled $26 million in Q2-06, down from the $33 million reported in Q2-05. The decrease was primarily attributable to a loss realized upon settlement of foreign exchange hedging contracts, offset by higher interest income due to higher interest rates.

The GAAP effective tax rate for Q2-06 was 26%, a decrease from 29% for Q2-05 and Q1-06. The non-GAAP effective tax rate in Q2-06 was 28%, a decrease from 30% for Q2-05 and from 29% for Q1-06. The lower GAAP and non-GAAP effective tax rates for Q2-06, as compared to Q2-05 and Q1-06, result primarily from shifts in the company's forecasted geographic mix of business.

Net income decreased 14% year over year to $250 million, or $0.17 per diluted share. Excluding stock-based compensation of $60 million (net of tax effects), or $0.04 per diluted share, net income would have increased 6% year over year to $310 million, or $0.22 per diluted share. Non-GAAP net income increased 14% year over year to $351 million, or $0.24 per diluted share.

GAAP operating cash flows increased 4% year over year to $516 million. Free cash flows, representing operating cash flows less net purchases of property and equipment of $148 million, decreased 10% year over year to $367 million.

Stock Repurchase Program

eBay's Board of Directors has authorized the repurchase of up to $2 billion of the company's common stock within the next two years. The stock repurchase program may be limited or terminated at any time without prior notice. Stock repurchases under this program may be made through open market and privately negotiated transactions at times and in such amounts as management deems appropriate and will be funded using the company's working capital. The timing and actual number of shares repurchased will depend on a variety of factors including corporate and regulatory requirements, price and other market conditions. The program will be designed to comply with the volume, timing and other limitations set forth in Rule 10b-18 under the Securities Exchange Act of 1934.

Business Outlook

The following updated 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 123R, which has been 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 $1.355 to $1.430 billion in Q3-06.

GAAP Diluted EPS -- eBay estimates GAAP earnings per diluted share for the full year 2006 to be in the range of $0.69 to $0.72. eBay estimates GAAP earnings per diluted share to be in the range of $0.15 to $0.17 in Q3-06. The estimated GAAP earnings per diluted share includes the estimated impact of stock-based compensation from the adoption of FAS 123R 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 $0.98 to $1.01. eBay estimates non-GAAP earnings per diluted share to be in the range of $0.22 to $0.23 in Q3-06.

Quarterly Conference Call

eBay will host a conference call to discuss second 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 and the corresponding percentages of net revenues. eBay makes reference to measures of operating income, gross profit, certain expenses (including cost of net revenues, sales and marketing, product development, and general and administrative), net income and earnings per share for Q2-06, 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 123R 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 to the adoption of the new accounting standard FAS 123R. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, and 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, 10, 11 and 16 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 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 impact of the company's recently announced pricing and product changes; the need to integrate, manage, and profitably expand its recently-acquired businesses; the need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity; 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 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" 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.
[pre] eBay Inc.
            Unaudited Condensed Consolidated Balance Sheet
                            (In Thousands)

                                            December 31,    June 30,
                                                2005          2006
                                            --------------------------
                                ASSETS

Current assets
  Cash and cash equivalents                $ 1,313,580  $ 2,634,381
  Short-term investments                        774,650      720,115
  Accounts receivable, net                      322,788      310,039
  Funds receivable from customers              255,282      219,864
  Restricted cash and investments                29,702      33,420
  Other current assets                          487,235      628,410
                                            --------------------------
    Total current assets                      3,183,237    4,546,229
Long-term investments                            825,667      622,862
Property and equipment, net                      801,602      942,437
Goodwill                                      6,120,079    6,355,466
Intangible assets, net                          823,280      758,521
Other assets                                      35,121      24,736
                                            --------------------------
                                            $11,788,986  $13,250,251
                                            ==========================
               
                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable                          $    55,692  $  134,193
  Funds payable and amounts due to
    customers                                    586,651      665,117
  Accrued expenses and other current
    liabilities                                  578,557      608,370
  Deferred revenue and customer advances        81,940      106,082
  Income taxes payable                          182,095      205,643
                                            --------------------------
    Total current liabilities                1,484,935    1,719,405
Deferred tax liabilities, net                    215,682      206,822
Other liabilities                                40,388      40,552
                                            --------------------------
    Total liabilities                        1,741,005    1,966,779
                                            --------------------------
Total stockholders' equity                    10,047,981  11,283,472
                                            --------------------------
                                            $11,788,986  $13,250,251
                                            ==========================



                              eBay Inc.
        Unaudited Condensed Consolidated Statement of Income
              (In Thousands, Except Per Share Amounts)

                          Three Months Ended    Six Months Ended
                                June 30,              June 30,
                        ---------------------- ----------------------
                            2005      2006      2005        2006
                          ---------- ---------- ---------- -----------
Net revenues            $1,086,303 $1,410,784 $2,118,027  $2,801,203
Cost of net revenues (1)    191,840    292,479    378,209    571,047
                          ---------- ---------- ---------- -----------
  Gross profit            894,463  1,118,305  1,739,818  2,230,156
                          ---------- ---------- ---------- -----------
Operating expenses (1):
Sales and marketing        287,144    398,000    558,493    798,562
Product development        71,639    123,972    145,428    243,042
General and
  administrative            130,900    222,923    273,020    440,597
Amortization of acquired
  intangible assets          25,794    61,996    48,317    113,917
                          ---------- ---------- ---------- -----------
  Total operating
    expenses                515,477    806,891  1,025,258  1,596,118
                          ---------- ---------- ---------- -----------
Income from operations      378,986    311,414    714,560    634,038
Interest and other
income, net                32,525    25,630    54,928      51,390
Interest expense              (405)      (929)    (2,125)    (1,676)
                          ---------- ---------- ---------- -----------
Income before income
taxes and minority
interests                  411,106    336,115    767,363    683,752
Provision for income
taxes                    (119,518)  (86,120)  (219,466)  (185,474)
Minority interests              (28)        (1)      (46)        (2)
                          ---------- ---------- ---------- -----------
Net income              $  291,560 $  249,994 $  547,851 $  498,276
                          ========== ========== ========== ===========

Net income per share:
Basic                  $    0.22 $    0.18 $    0.41 $      0.35
                          ========== ========== ========== ===========
Diluted                $    0.21 $    0.17 $    0.40 $      0.35
                          ========== ========== ========== ===========
Weighted average shares:
Basic                    1,351,375  1,411,925  1,347,429  1,409,190
                          ========== ========== ========== ===========
Diluted                  1,379,088  1,435,757  1,380,736  1,438,746
                          ========== ========== ========== ===========

(1) Includes stock-based compensation as
follows (2006 increases are due primarily to
the adoption of FAS 123R):
  Cost of net revenues  $        - $    7,631 $      78 $    17,107
  Sales and marketing            -    27,063          -      51,784
  Product development        (721)    22,991      (399)    43,692
  General and
    administrative              771    27,723      3,967      56,643
                          ---------- ---------- ---------- -----------
    Total stock-based
        compensation    $      50 $  85,408 $    3,646 $  169,226
                          ========== ========== ========== ===========



                              eBay Inc.
            Reconciliation of GAAP to Non-GAAP Condensed
                  Consolidated Statement of Income
              (In Thousands, Except Per Share Amounts)

                                          Three Months Ended
                                            June 30, 2005
                                  -----------------------------------
                                              Non-GAAP
                                  Reported    Entries    Non-GAAP
                                  -----------------------------------

Net revenues                    $1,086,303 $      -      $1,086,303
Cost of net revenues                191,840        -        191,840
                                  ----------- --------    -----------
  Gross profit                      894,463        -        894,463
                                  ----------- --------    -----------
Operating expenses:
  Sales and marketing                287,144        -        287,144
  Product development                71,639      721  (a)    72,360
  General and administrative        130,900    (771) (a)    128,569
                                              (1,560) (b)
  Amortization of acquired
  intangible assets                  25,794  (25,794) ©          -
                                  ----------- --------    -----------
  Total operating expenses          515,477  (27,404)        488,073
                                  ----------- --------    -----------
Income from operations              378,986  27,404        406,390
Interest and other income, net      32,525  (2,260) (d)    30,265
Interest expense                      (405)      -            (405)
                                  ----------- --------    -----------
Income before income taxes and
  minority interests                411,106  25,144        436,250
Provision for income taxes        (119,518)  (9,468) (e)  (128,986)
Minority interests                      (28)      -            (28)
                                  ----------- --------    -----------
Net income                      $  291,560 $ 15,676      $  307,236
                                  =========== ========    ===========

Net income per share:
  Basic                          $    0.22              $    0.23
                                  ===========              ===========
  Diluted                        $    0.21              $    0.22
                                  ===========              ===========

Weighted average shares:
  Basic                            1,351,375                1,351,375
                                  ===========              ===========
  Diluted                          1,379,088                1,379,088
                                  ===========              ===========

Operating margin                        35%      2%            37%
                                  =========== ========    ===========

Effective tax rate                      29%      1% (e)        30%
                                  =========== ========    ===========



                                          Three Months Ended
                                            June 30, 2006
                                -------------------------------------
                                              Non-GAAP
                                  Reported    Entries    Non-GAAP
                                -------------------------------------

Net revenues                    $1,410,784 $      -      $1,410,784
Cost of net revenues              292,479    (7,631) (a)    284,848
                                ----------- ---------    -----------
  Gross profit                  1,118,305    7,631      1,125,936
                                ----------- ---------    -----------
Operating expenses:
  Sales and marketing              398,000  (27,063) (a)    370,937
  Product development              123,972  (22,991) (a)    100,981
  General and administrative        222,923  (27,723) (a)    193,591
                                              (1,609) (b)
  Amortization of acquired
  intangible assets                61,996  (61,996) ©          -
                                ----------- ---------    -----------
  Total operating expenses        806,891  (141,382)        665,509
                                ----------- ---------    -----------
Income from operations            311,414  149,013        460,427
Interest and other income, net      25,630        -          25,630
Interest expense                      (929)        -            (929)
                                ----------- ---------    -----------
Income before income taxes and
  minority interests                336,115  149,013        485,128
Provision for income taxes        (86,120)  (48,260) (e)  (134,380)
Minority interests                      (1)        -              (1)
                                ----------- ---------    -----------
Net income                      $  249,994 $ 100,753      $  350,747
                                =========== =========    ===========

Net income per share:
  Basic                          $    0.18                $    0.25
                                ===========              ===========
  Diluted                        $    0.17                $    0.24
                                ===========              ===========

Weighted average shares:
  Basic                          1,411,925                1,411,925
                                ===========              ===========
  Diluted                        1,435,757                1,435,757
                                ===========              ===========

Operating margin                        22%      11%            33%
                                =========== =========    ===========

Effective tax rate                      26%        2% (e)        28%
                                =========== =========    ===========

Notes:

(a)Stock-based compensation
(b)Employer payroll taxes on employee non-qualified stock option gains
©Amortization of acquired intangible assets
(d)Gain on sale of equity investment
(e)Income taxes associated with certain non-GAAP entries



                              eBay Inc.
            Reconciliation of GAAP to Non-GAAP Condensed
                  Consolidated Statement of Income
              (In Thousands, Except Per Share Amounts)

                                          Six Months Ended
                                            June 30, 2005
                                -------------------------------------
                                              Non-GAAP
                                    GAAP      Entries      Non-GAAP
                                -------------------------------------

Net revenues                    $2,118,027 $      -      $ 2,118,027
Cost of net revenues              378,209      (78) (a)    378,131
                                ----------- --------      -----------
  Gross profit                  1,739,818      78        1,739,896
                                ----------- --------      -----------
Operating expenses:
  Sales and marketing              558,493        -          558,493
  Product development              145,428      399  (a)    145,827
  General and administrative        273,020  (3,967) (a)    261,762
                                              (7,291) (b)
  Amortization of acquired
  intangible assets                48,317  (48,317) ©          -
                                ----------- --------      -----------
  Total operating expenses      1,025,258  (59,176)        966,082
                                ----------- --------      -----------
Income from operations            714,560  59,254          773,814
Interest and other income, net      54,928  (2,260) (d)      52,668
Interest expense                    (2,125)      -          (2,125)
                                ----------- --------      -----------
Income before income taxes and
  minority interests                767,363  56,994          824,357
Provision for income taxes        (219,466) (22,071) (e)    (241,537)
Minority interests                    (46)      -              (46)
                                ----------- --------      -----------
Net income                      $  547,851 $ 34,923      $  582,774
                                =========== ========      ===========

Net income per share:
  Basic                          $    0.41              $    0.43
                                ===========              ============
  Diluted                        $    0.40              $    0.42
                                ===========              ============

Weighted average shares:
  Basic                          1,347,429                1,347,429
                                ===========              ============
  Diluted                        1,380,736                1,380,736
                                ===========              ============

Operating margin                        34%      3%              37%
                                =========== ========      ===========

Effective tax rate                      29%      -  (e)          29%
                                =========== ========      ===========



                                          Six Months Ended
                                            June 30, 2006
                                -------------------------------------
                                              Non-GAAP
                                    GAAP      Entries      Non-GAAP
                                -------------------------------------

Net revenues                    $2,801,203 $      -      $2,801,203
Cost of net revenues              571,047  (17,107)  (a)  553,940
                                ----------- ---------    -----------
  Gross profit                  2,230,156    17,107      2,247,263
                                ----------- ---------    -----------
Operating expenses:
  Sales and marketing              798,562  (51,784)  (a)  746,778
  Product development              243,042  (43,692)  (a)  199,350
  General and administrative        440,597  (56,643)  (a)  380,021
                                              (3,933)  (b)
  Amortization of acquired
  intangible assets                113,917  (113,917)  ©        -
                                ----------- ---------    -----------
  Total operating expenses      1,596,118  (269,969)      1,326,149
                                ----------- ---------    -----------
Income from operations            634,038  287,076        921,114
Interest and other income, net      51,390        -          51,390
Interest expense                    (1,676)        -          (1,676)
                                ----------- ---------    -----------
Income before income taxes and
  minority interests                683,752  287,076        970,828
Provision for income taxes        (185,474)  (91,702)  (e)  (277,176)
Minority interests                      (2)        -              (2)
                                ----------- ---------    -----------
Net income                      $  498,276 $ 195,374      $  693,650
                                =========== =========    ===========

Net income per share:
  Basic                          $    0.35                $    0.49
                                ===========              ===========
  Diluted                        $    0.35                $    0.48
                                ===========              ===========

Weighted average shares:
  Basic                          1,409,190                1,409,190
                                ===========              ===========
  Diluted                        1,438,746                1,438,746
                                ===========              ===========

Operating margin                        23%      10%            33%
                                =========== =========    ===========

Effective tax rate                      27%        2%  (e)        29%
                                ==========  =========    ===========

Notes:

(a)Stock-based compensation
(b)Employer payroll taxes on employee non-qualified stock option gains
©Amortization of acquired intangible assets
(d)Gain on sale of equity investment
(e)Income taxes associated with certain non-GAAP entries                                  [/pre]
[pre] eBay Inc.
      Unaudited Condensed Consolidated Statement of Cash Flows
                            (In Thousands)

                            Three Months Ended    Six Months Ended
                                June 30,              June 30,
                          --------------------- ---------------------
                              2005      2006      2005      2006
                          ---------- ---------- ---------- ----------
Cash flows from operating
activities:
Net income              $  291,560 $  249,994 $  547,851 $  498,276
Adjustments:
  Provision for doubtful
    accounts and
    authorized credits        22,697    24,827    44,721    51,874
  Provision for
    transaction losses        12,556    24,279    31,135    49,906
  Depreciation and
    amortization              85,305    142,426    164,965    265,712
  Amortization of
    unearned stock-based
    compensation                  50    85,408      3,646    169,226
  Tax benefit on the
    exercise of employee
    stock options            25,607    53,082    110,599    90,524
  Excess tax benefits
    from stock-based
    compensation                  --    (37,601)        --    (60,973)
  Minority interests            10          1        28          2
  Changes in assets and
    liabilities, net of
    acquisition effects:
    Accounts receivable    (17,220)  (14,697)  (71,382)  (37,598)
    Funds receivable from
      customers                3,179      4,062    (74,154)    33,810
    Other current assets    (13,759)  (15,765)  (12,556)  (133,491)
    Other non-current
      assets                    (389)    1,514    (8,750)    8,777
    Deferred tax
      liabilities, net        65,188    (5,800)    67,428    (13,300)
    Accounts payable        (17,910)    23,336      2,999    75,292
    Funds payable and
      amounts due to
      customers              12,897      5,684    181,825    80,015
    Accrued expenses and
      other liabilities        8,107    (6,963)  (13,731)  (25,724)
    Deferred revenue and
      customer advances          380    15,641    (6,595)    24,664
    Income taxes payable    18,274    (33,915)    23,922    22,725
                          ---------- ---------- ---------- ----------
Net cash provided by
operating activities        496,532    515,513    991,951  1,099,717
                          ---------- ---------- ---------- ----------
Cash flows from investing
activities:
Purchases of property and
  equipment, net            (90,479)  (148,432)  (170,063)  (282,008)
Purchases of investments  (286,527)  (113,137)  (654,621)  (491,224)
Maturities and sales of
  investments                547,975    395,382    793,640    761,159
Acquisitions, net of cash
  acquired                  (81,606)  (45,505)  (526,614)  (45,505)
Other                        (1,953)    (1,245)    (1,953)    (1,245)
                          ---------- ---------- ---------- ----------
Net cash provided by (used
in) investing activities    87,410    87,063  (559,611)  (58,823)
                          ---------- ---------- ---------- ----------
Cash flows from financing
activities:
Proceeds from issuance of
  common stock, net          80,387    94,395    259,666    175,001
Excess tax benefits from
  stock-based compensation        --    37,601        --    60,973
Payment of headquarters
  facility lease
  obligation                      --        --  (126,390)        --
Principal payments on
  long-term obligations          --        --    (1,849)        --
                          ---------- ---------- ---------- ----------
Net cash provided by
financing activities        80,387    131,996    131,427    235,974
                          ---------- ---------- ---------- ----------

Effect of exchange rate
changes on cash and cash
equivalents                (25,452)    23,375    (38,163)    43,933
                          ---------- ---------- ---------- ----------

Net increase in cash and
cash equivalents            638,877    757,947    525,604  1,320,801
Cash and cash equivalents
at beginning of period    1,216,772  1,876,434  1,330,045  1,313,580
                          ---------- ---------- ---------- ----------
Cash and cash equivalents
at end of period        $1,855,649 $2,634,381 $1,855,649 $2,634,381
                          ========== ========== ========== ==========

Supplemental Non-GAAP
Measure:
Net cash provided by
operating activities    $  496,532 $  515,513 $  991,951 $1,099,717
Less: Purchases of
property and equipment,
net                        (90,479)  (148,432)  (170,063)  (282,008)
Less: Payment of
headquarters facility
lease obligation                --        --  (126,390)        --
                          ---------- ---------- ---------- ----------
Free cash flow            $  406,053 $  367,081 $  695,498 $  817,709
                          ========== ========== ========== ==========



                              eBay Inc.
            Unaudited Summary of Consolidated Net Revenues
                  (In Thousands, Except Percentages)

Net Revenues by Type

                  June    September  December    March      June
                  30,        30,        31,        31,        30,
                  2005      2005      2005      2006      2006
              -------------------------------------------------------

Net Transaction
Revenues

US Market-
  places      $  408,452 $  434,937 $  504,891 $  507,312 $  490,440
  Current
    quarter vs
    prior
    quarter            5%        6%        16%        0%      (3)%
  Current
    quarter vs
    prior year
    quarter            28%        32%        39%        30%        20%

International
  Marketplaces    411,671    401,883    464,521    483,215    506,681
  Current
    quarter vs
    prior
    quarter            6%      (2%)        16%        4%        5%
  Current
    quarter vs
    prior year
    quarter            50%        42%        35%        25%        23%

Payments        237,217    239,922    297,679    328,150    330,684
  Current
    quarter vs
    prior
    quarter            4%        1%        24%        10%        1%
  Current
    quarter vs
    prior year
    quarter            49%        44%        49%        44%        39%

Communi-
  cations              --        --    24,809    35,160    44,158
  Current
    quarter vs
    prior
    quarter            --        --        --        42%        26%
              -------------------------------------------------------

Total net
  transaction
  revenues      1,057,340  1,076,742  1,291,900  1,353,837  1,371,963
  Current
    quarter vs
    prior
    quarter            5%        2%        20%        5%        1%
  Current
    quarter vs
    prior year
    quarter            41%        38%        42%        35%        30%

Advertising
and other
non-
transaction
revenues

Total
  advertising
  and other
  non-
  transaction
  revenues        28,963    28,773    36,959    36,582    38,821
  Current
    quarter vs
    prior
    quarter            1%      (1%)        28%      (1%)        6%
  Current
    quarter vs
    prior year
    quarter            33%        8%        30%        28%        34%

              -------------------------------------------------------
Total net
revenues      $1,086,303 $1,105,515 $1,328,859 $1,390,419 $1,410,784
              =======================================================
  Current
    quarter vs
    prior
    quarter            5%        2%        20%        5%        1%
  Current
    quarter vs
    prior year
    quarter            40%        37%        42%        35%        30%



                              eBay Inc.
            Unaudited Summary of Consolidated Net Revenues
                  (In Thousands, Except Percentages)

Net Revenues by Segment

                  June    September  December    March      June
                  30,        30,        31,        31,        30,
                  2005      2005      2005      2006      2006
              -------------------------------------------------------

US
Marketplaces  $  423,565 $  449,549 $  526,130 $  527,220 $  509,277
  Current
    quarter vs
    prior
    quarter            5%        6%        17%        0%      (3)%
  Current
    quarter vs
    prior year
    quarter            27%        29%        39%        30%        20%

International
Marketplaces    418,839    408,868    473,546    492,973    518,258
  Current
    quarter vs
    prior
    quarter            6%      (2%)        16%        4%        5%
  Current
    quarter vs
    prior year
    quarter            51%        43%        35%        25%        24%

Payments          243,899    247,098    304,374    335,066    339,091
  Current
    quarter vs
    prior
    quarter            5%        1%        23%        10%        1%
  Current
    quarter vs
    prior year
    quarter            51%        44%        48%        44%        39%

  Percent of
    Payments
    revenue
    that is
    inter-
    national          35%        36%        36%        35%        38%

Communications        --        --    24,809    35,160    44,158
    Current
      quarter
      vs prior
      quarter          --        --        --        42%        26%

  Percent of
    Communi-
    cations
    revenue
    that is
    inter-
    national          --        --        87%        87%        86%
              -------------------------------------------------------

Total net
revenues      $1,086,303 $1,105,515 $1,328,859 $1,390,419 $1,410,784
              =======================================================
  Current
    quarter vs
    prior
    quarter            5%        2%        20%        5%        1%
  Current
    quarter vs
    prior year
    quarter            40%        37%        42%        35%        30%


Net Revenues by Geography

                  June    September             
                    30,      30,    December 31,  March 31,  June 30,
                  2005      2005      2005        2006      2006
                ------------------------------------------------------

US net revenues $  581,851 $  608,428 $  724,748 $  748,136 $  724,699
  Current
    quarter vs
    prior
    quarter            5%        5%        19%        3%      (3)%
  Current
    quarter vs
    prior year
    quarter            29%        30%        40%        35%        25%
  % of total          54%        55%        55%        54%        51%

International
net revenues      504,452    497,087    604,111    642,283    686,085
  Current
    quarter vs
    prior
    quarter            6%      (1%)        22%        6%        7%
  Current
    quarter vs
    prior year
    quarter            56%        47%        44%        35%        36%
  % of total          46%        45%        45%        46%        49%
                ------------------------------------------------------

Total net
revenues      $ 1,086,303 $1,105,515 $1,328,859 $1,390,419 $1,410,784
              =======================================================
  Current
    quarter vs
    prior
    quarter            5%        2%        20%        5%        1%
  Current
    quarter vs
    prior year
    quarter            40%        37%        42%        35%        30%

eBay Inc.
        eBay Marketplaces Unaudited Supplemental Operating Data
                  (In Millions, Except Percentages)


                          June    September December  March    June
                          30,      30,      31,      31,      30,
                          2005      2005    2005    2006    2006
                        ---------------------------------------------

Confirmed Registered
Users (1)                157.3    168.1    180.6    192.9    202.7
    Current quarter vs
    prior quarter            7%        7%      7%      7%      5%
    Current quarter vs
    prior year quarter      38%      35%      33%      31%      29%

Active Users (2)            64.6      68.0    71.8    75.4    77.7
    Current quarter vs
    prior quarter            7%        5%      6%      5%      3%
    Current quarter vs
    prior year quarter      34%      32%      28%      25%      20%

Number of Non-Stores
Listings (3)              402.2    407.0    480.6    490.8    490.5
    Current quarter vs
    prior quarter            1%        1%      18%      2%    (0)%
    Current quarter vs
    prior year quarter      27%      24%      28%      23%      22%

Number of Stores Listings
(3)                        37.9      51.6    65.7    84.6    105.5
    Current quarter vs
    prior quarter            18%      36%      27%      29%      25%
    Current quarter vs
    prior year quarter      131%      154%    135%    164%    178%

Gross Merchandise Volume
(4)                    $10,884  $10,800  $12,013  $12,504  $12,896
    Current quarter vs
    prior quarter            3%      (1%)      11%      4%      3%
    Current quarter vs
    prior year quarter      36%      30%      22%      18%      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.

(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.
            Payments Unaudited Supplemental Operating Data
                  (In Millions, Except Percentages)


                            June  September December  March  June
                              30,      30,      31,    31,    30,
                            2005    2005      2005    2006    2006
                            ------------------------------------------

Total accounts (1)            78.9      86.6    96.2  105.0  113.7
    Current quarter vs
    prior quarter              10%      10%      11%      9%      8%
    Current quarter vs
    prior year quarter        56%      53%      51%    47%    44%

Active accounts (2)          22.9      24.5    28.1    29.2    29.5

Total number of payments
(3)                        113.2    117.4    139.7  149.2  143.3
    Current quarter vs
    prior quarter              3%        4%      19%      7%    (4)%
    Current quarter vs
    prior year quarter        46%      41%      40%    35%    27%

Total payment volume (4)    $6,471    $6,667  $8,114  $8,769  $8,856
    Current quarter vs
    prior quarter              4%        3%      22%      8%      1%
    Current quarter vs
    prior year quarter        49%      44%      45%    41%    37%

  eBay Marketplaces as % of
  total payment volume        70%      69%      69%    67%    65%

Transaction rates (5)
  Transaction revenue rate    3.67%    3.60%    3.67%  3.74%  3.73%
  Transaction processing
  expense rate              1.08%    1.11%    1.09%  1.04%  1.02%
  Transaction loss rate      0.19%    0.24%    0.33%  0.29%  0.27%

---------------

(1) Cumulative total of all accounts opened, including users who made
    payments using PayPal but have not registered, excluding accounts
    that have been closed or locked and excluding 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 transaction
    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
        (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"
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 September 30, 2006
                              ---------------------------------------
                                    GAAP (a)          Non-GAAP (b)
                              ---------------------------------------
Net revenues                    $1,355-$1,430        $1,355-$1,430
Diluted EPS                      $0.15-$0.17          $0.22-$0.23

                                    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)                  $0.69-$0.72          $0.98-$1.01
Effective tax rate                28% - 29%            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
    options under FAS 123R "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 remaining 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, stock-based compensation (including
    the estimated impact of the adoption of FAS 123R) and payroll
    taxes on employee stock options of approximately $90-$110 million.
    These non-GAAP items are estimated to result in a $0.07-$0.08 per
    diluted share adjustment, net of tax, and an operating margin of
    approximately 10% for each of the remaining quarters in the year
    ending December 31, 2006                    .



                            [/pre]
[quote author=bargainbloodhound link=topic=4454.msg18011#msg18011 date=1153340286]
The rising number of eBay Store listings, up to 17% in the second quarter from 14.7% of all eBay listings in the first quarter, are also pressuring eBay's revenue per listed item, Anmuth said, given eBay Store items' lower conversion rates and average selling prices.[/quote]

Well, they sure fixed that in a hurry. Raising store fees substantially! I'm sooooo glad I'm outa there!

http://www2.ebay.com/aw/core/200607.shtm...7-19130146
They did fix the stores problem quickly.  Thanks for the link to the announcement.  I just copied the announcement and started a topic on the Stores fee hike here: http://community.tuliptools.com/index.ph...456.0.html
Can anyone say: ENRON?
Meg Whitman and Bob "ex-Webvan CEO" Swan will be speaking on the conference call.

Stock is up 1.11 to 27 in after hours trading after falling 0.66 during the trading day.
Summary of Meg on conference call: the search roll back wasn't enough so we're raising store fees in hopes that exposure for core and Express listings (NOT eBay Stores) will be increased
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