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PayPal Announces Second Quarter Results; Payment Volume Growth Drives Second Quarter Revenues of $53.8 million.

    Business Editors

    MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 23, 2002--

                   GAAP earnings of $0.01 per share;
                 pro forma earnings of $0.09 per share

    PayPal, Inc. (Nasdaq:PYPL; www.paypal.com), a leading Internet
payment service, today reported financial results for the fiscal
second quarter ended June 30, 2002.
    Revenues for the second quarter of 2002 totaled $53.8 million, an
increase of 173% over the $19.7 million in revenues in the second
quarter of 2001. PayPal reported $529,000 of net income for the
quarter, or $0.01 per diluted share on a Generally Accepted Accounting
Principles (GAAP) basis, compared to a net loss of $27.7 million, or
$4.47 per share, for the same period last year. For the quarter,
PayPal's pro forma after-tax net income, which excludes non-cash
expenses related to stock-based compensation and non-recurring charges
resulting from PayPal's exiting of leased facilities in Palo Alto,
California, amounted to $5.7 million, or $0.09 per diluted share,
compared with a pro forma net loss of $7.2 million, or $1.17 per
share, for the second quarter of 2001.
    "The strong growth of PayPal's global network led to record
payment volume and increased revenues," said Peter Thiel, co-founder
and CEO of PayPal. "We continue to see broad adoption in e-commerce --
both auction and fixed price, both in the U.S. and internationally."

    Business Outlook

    PayPal estimates third quarter 2002 revenues could range from $56
million to $57 million. Excluding non-cash expenses related to
stock-based compensation and non-recurring charges related to the
pending acquisition of the company by eBay(TM), we estimate that pro
forma after-tax net income for the third quarter could be $0.09 per
diluted share, with between 64 million and 65 million fully diluted
shares projected for the quarter. These estimates are based on an
assumed tax rate of 38%.
    PayPal affirms its forecast estimates issued on June 12 for the
fiscal year ending December 31, 2002.
    PayPal's business outlook can be obtained on the company's website
throughout the current quarter. PayPal disclaims any duty to update
its business outlook to reflect future developments and currently
expects not to update its outlook until the release of the company's
next earnings announcement; however, PayPal may update or remove any
portion of its business outlook at any time for any reason. The
business outlook should not be relied on as having continued accuracy
beyond the date of this release.

    Key Operating Metrics

    Second quarter revenues represent a 10% sequential increase from
PayPal's $48.8 million revenues during the first quarter of 2002.
These increased revenues resulted from 11% growth in PayPal's total
payment volume, from $1.46 billion in the first quarter of 2002 to
$1.62 billion in the second quarter of 2002. Second quarter 2002 total
payment volume represented 116% growth from $747 million in the second
quarter of 2001.
    For the second quarter of 2002, the payment volume sent to
business and premier accounts, which we refer to as Gross Merchant
Sales or GMS, amounted to 90% of total payment volume. GMS increased
to $1.45 billion in the second quarter of 2002, representing 10%
growth from $1.31 billion in the first quarter of 2002 and 119% growth
from $663 million in the second quarter of 2001.
    Account growth continued to drive increased payment volume. In the
second quarter of 2002, our registered accounts grew by 2.5 million to
17.8 million, an average of 27,000 new accounts per day. This
represents a decline of 3% from the average daily account growth of
28,000 in the first quarter of 2002, and is consistent with our
experience in 2001, when average daily account growth declined 6% from
the first to second quarter. In the second quarter of 2002, business
and premier accounts grew by 480,000 to a total of 3.7 million, and
international accounts grew by 399,000 to a total of 1.8 million.

    Business Overview and Strategy

    During the second quarter, PayPal achieved continued adoption by
the eBay community. An estimated 75% of eBay(TM) auctions listed
PayPal as a payment option in this period.
    To accelerate further our growth, PayPal launched a number of new
eBay(TM)-related features. Two notable features are Auction Finder,
which allows winning bidders to pay for multiple auction purchases at
one time and to make auction payments directly from the PayPal
homepage; and Winning Bidder Notification, which encourages buyers to
use PayPal at the end of a successful auction. PayPal received a
strong endorsement from sellers at eBay Live!(TM), the online auction
leader's first convention of members and suppliers, where we
demonstrated new product features to the over 5000 attendees.
    Beyond its core auction business, PayPal achieved robust growth
for payments involving fixed-price sale of goods, the sale of
services, and other cash transfers. Our 11% overall sequential payment
volume growth was driven by 7% growth in our auction-related payment
volume and 16% growth in our non-auction-related payment volume over
the same period. As a result, the auction-related share of our total
payment volume decreased to 59% for the second quarter of 2002 from
61% for the first quarter of 2002, while the non-auction-related share
of our total payment volume increased to 41% from 39% over the same
period.
    The PayPal Developer Network, which fosters the creation of
e-commerce applications and their adoption by entrepreneurs and small
businesses, grew to over 50,000 registered members at the end of the
second quarter of 2002. To date, these developers have created 138
PayPal-compatible applications. In the second quarter of 2002 alone,
the PayPal Developer Network created e-commerce solutions for
Microsoft VisualStudio.NET and ASP.NET, for NetObjects Fusion 7,
payment solutions for digital content and delivery, and "PayPal
E-commerce Email" with email newsletter publishing tools provider
Topica.
    PayPal launched a Small Business Resource Center on its website
(www.paypal.com/cgi-bin/webscr?cmd=p/sell/small-biz-intro-outside)
to provide tips and tools on the use of PayPal for small businesses.
    PayPal also announced a partnership with United Parcel Service to
promote shipping by UPS to PayPal sellers. Sellers accepting payment
through PayPal now will be able to fill out and print UPS shipping
labels and pay for shipping directly from their PayPal account. This
partnership represents the first integration of the UPS application
programming interface (API) with a third party.

    International

    PayPal achieved strong growth and continued adoption outside the
United States. In the second quarter of 2002, 23% of our total payment
volume involved at least one party outside the United States, compared
to 10% for the same period last year, and 20% for the first quarter of
2002. Users in 17 of the 38 countries we serve (including the United
States) have the ability electronically to transfer funds from their
PayPal accounts to their local bank accounts; the company now also
provides users in Germany and the Netherlands with the ability
electronically to transfer funds into their PayPal accounts from their
local bank accounts, a feature previously only available to U.S.
members.

    Financial Metrics

    For the second quarter of 2002, PayPal earned an average
transaction revenue rate of 3.33% of total payment volume. PayPal
incurred an average transaction processing expense rate of 1.14% of
total payment volume; the percentage of payment volume funded by
credit cards declined to 46.2% in the second quarter of 2002, from
50.5% in the second quarter of 2001 and 47.7% in the first quarter of
2002. Transaction revenues less transaction processing expenses and
less the provision for transaction losses, which amounted to 0.38% of
total payment volume, resulted in a gross margin of 54.3% for the
second quarter of 2002.
    In June and July 2002, PayPal completed a $131.1 million secondary
public offering of 6.9 million shares, more than doubling the
company's publicly traded share volume to approximately 13.1 million
shares. The company did not receive any proceeds from the transaction,
other than for reimbursement to us of expenses related to this
offering, as all shares were sold by existing shareholders. As of June
30, 2002, the company had corporate cash, cash equivalents, and
investment securities totaling $141.8 million, which included $30.6
million in restricted cash and investment securities.

    Recent Developments

    On July 8, eBay(TM) announced an agreement with PayPal to acquire
all of the outstanding shares of the company in a tax-free,
stock-for-stock transaction using a fixed exchange ratio of 0.39 eBay
shares for each PayPal share. The acquisition, which is subject to
various stockholder, government and regulatory approvals, is expected
to close around year-end 2002.

    Headquarters Move

    In April, PayPal moved its California headquarters from Palo Alto
to Mountain View. The company's Palo Alto lease extends through 2007,
with total lease commitments of $8.0 million. Though PayPal intends to
sublease the Palo Alto property, it has taken a non-recurring charge
of $5.5 million for this lease and the disposal of certain fixed
assets in this property.

    Regulatory Status

    PayPal has received money services business licenses, also known
as money transmitter licenses, in 12 states, has applied in 15 other
states, and is preparing one additional application. As previously
disclosed, in June, the company received a letter from the New York
Banking Department stating that, based on its review of PayPal's
business model and the relationship between PayPal and its customers
created by the PayPal User Agreement, the Department had concluded
that PayPal is not engaged in illegal banking. This follows actions
taken by the company in the first quarter to remove customer funds
from the company's balance sheet and to cease earning income on those
funds. PayPal made these modifications following an advisory opinion
the company received from the Federal Deposit Insurance Corporation
(FDIC) in February stating that when PayPal acts as an agent for its
customers and deposits customer funds on their behalf in FDIC-insured
institutions, these funds qualify for FDIC insurance on a pass-through
basis, in the event of a failure of the bank in which such funds are
placed. The New York Banking Department also encouraged PayPal to
submit an application to obtain a New York money transmitter license,
which the company subsequently has done.
    On July 9, 2002, PayPal was served with a subpoena, dated July 5,
2002, issued by the Attorney General of the State of New York. The
subpoena seeks the production of documents that are related to, among
other things, PayPal's transactions with merchants involved in online
gambling activities. No civil or criminal action or proceeding has
been commenced against PayPal by the Attorney General, and the stated
purpose of the subpoena is to assist the Attorney General in
determining whether an action or proceeding should be instituted.
PayPal intends to cooperate fully with the Attorney General in this
matter.

    Quarterly Conference Call

    PayPal will host a conference call today to discuss second quarter
results at 8:00 a.m. EDT. A live Webcast of the conference call can be
accessed at
http://www.paypal.com/cgi-bin/webscr?cmd=_ir-calendar-outside, and
will be available via that URL until at least July 30. In addition,
the conference call will be available for replay until July 30 by
calling 888/203-1112, reference code: 736983.

    About PayPal

    PayPal enables any business or consumer with email to send and
receive Internet payments securely, conveniently and cost-effectively.
PayPal's network builds on the existing financial infrastructure of
bank accounts and credit cards to create a global payment system. As
of June 30, 2002, PayPal had 17.8 million member accounts, including
3.7 million business accounts. More than $3 billion was sent through
the PayPal network in the first half of 2002.
    Based in Mountain View, California, PayPal is available to users
in 38 countries including the United States. Further information about
the company can be found at www.paypal.com.

    Forward-Looking Statements

    This press release contains forward-looking statements, including
statements about PayPal's expected revenue and earnings for the
current quarter and fiscal year. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ
significantly from those projected. Factors that might cause or
contribute to such differences include, but are not limited to, our
ability to compete with other payment systems, the risk of loss due to
fraud and disputes between senders and recipients, the fact that our
status under state, federal and international financial services
regulation is unclear, the uncertainty of the outcome of the N.Y.
Attorney General's inquiry regarding transactions with online gambling
merchants, the possibility that the transaction with eBay will not
close, and the reaction of PayPal's users to the transaction. You are
cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date of this release. Our
filings with the Securities and Exchange Commission, including our
Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2002, and the section entitled "Risk Factors" in our Registration
Statement on Form S-1 (File No. 333-90318), include more information
about factors that could affect our financial results. PayPal's
results of operations for the quarter ended June 30, 2002 are not
necessarily indicative of PayPal's expected quarterly results for the
full fiscal year or any future periods. All forward-looking statements
are based on information available to PayPal on the date hereof, and
we assume no obligation to update these statements. [paragraph] Investors and
security holders are urged to read the proxy statement/prospectus
regarding the announced acquisition of PayPal by eBay referenced in
this press release, when they become available, because they will
contain important information. The proxy statement/prospectus will be
filed with the Securities and Exchange Commission by eBay. Investors
and security holders may obtain a free copy of the proxy
statement/prospectus, when available, and other documents filed by
eBay and PayPal with the Commission at the Commission's web site at
www.sec.gov. Free copies of the proxy statement/prospectus and eBay's
other filings with the Commission may also be obtained by directing a
request to eBay at investorrelations@ebay.com. Free copies of PayPal's
SEC filings may be obtained at the Investor Relations section of the
PayPal web site or by directing a request to PayPal at
investorrelations@paypal.com.

-0-
*T                                                                                                         # # #



                             PAYPAL, INC.
                CONSOLIDATED SUMMARY BALANCE SHEET DATA
                       (in thousands; unaudited)

                                               December 31,   June 30,
                                                  2001          2002
ASSETS
Cash, cash equivalents and
 investment securities-corporate (A)          $  62,525      $ 141,795
Cash, cash equivalents and
 investment securities-customer
 accounts (A) (B)                               144,235         33,911
Funds receivable                                 32,074         54,106
Fixed assets, net                                15,857         21,021
Goodwill and other intangibles, net              16,415         15,552
Other assets                                      7,471          8,858
                                              ---------      ---------
Total assets                                  $ 278,577      $ 275,243
                                              =========      =========
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE
 PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

Due to customers (B)                          $ 174,763      $  70,087
Funds payable                                     4,459         16,077
Reserve for transaction losses                    7,233          7,384
Accounts payable
 and accrued liabilities                          6,975         12,819
Other liabilities                                 5,235          8,659
                                              ---------      ---------
Total liabilities                               198,665        115,026
                                              ---------      ---------
Mandatorily redeemable
 convertible preferred stock                    279,224           --
Total stockholders'
 equity (deficit)                              (199,312)       160,217
                                              ---------      ---------
Total liabilities,
 mandatorily redeemable
 convertible preferred stock and
 stockholders' equity (deficit)               $ 278,577      $ 275,243
                                              =========      =========

(A) An analysis of cash, cash equivalents and investment
securities as at December 31, 2001 and June 30, 2002 is as follows:

                                               December 31,   June 30,
                                                  2001          2002

Cash and cash equivalents                     $ 144,963      $ 102,314
Investment securities                            30,625         42,788
Restricted cash                                  31,172         30,604
                                              ---------      ---------
Total cash, cash equivalents and
 investment securities                        $ 206,760      $ 175,706
                                              =========      =========
Cash, cash equivalents and
 investment securities-corporate              $  62,525      $ 141,795
Cash, cash equivalents and investment
 securities-customer accounts                   144,235         33,911
                                              ---------      ---------
Total cash, cash equivalents
 and investment securities                    $ 206,760      $ 175,706
                                              =========      =========

(B) Beginning in February 2002, cash and investments held as agent for
customers whose funds are deposited in FDIC-insured accounts and the
related liabilities are not included in the company's balance sheet.
These custodial assets held for the benefit of customers totaled
$166.7 million, at June 30, 2002.

                             PAYPAL, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
          (in thousands, except per share amounts; unaudited)

                           Three Months Ended        Six Months Ended
                                 June 30,                 June 30,
                             2001       2002         2001       2002
Transaction and
 other fees               $ 18,744    $ 53,729    $ 31,629    $102,062
Interest on funds held
 for others                    920          43       2,063         471
                          --------    --------    --------    --------
Total revenues              19,664      53,772      33,692     102,533
                          --------    --------    --------    --------
Transaction processing
 expenses                   10,659      18,370      19,413      35,322
Provision for
 transaction losses          2,437       6,206       5,540      13,114
Customer service and
 operations                  7,216      10,366      14,280      20,410
Product development          2,125       3,308       4,143       6,344
Selling, general and
 administrative              5,488       7,284      10,660      12,766
Stock-based compensation     4,026       3,150       6,183       8,034
Amortization of goodwill
 and other intangibles      16,415        --        32,830         864
Non-recurring charges (A)     --         5,534        --         5,534
                          --------    --------    --------    --------
Total operating expenses    48,366      54,218      93,049     102,388
                          --------    --------    --------    --------
Income (loss) from
 operations                (28,702)       (446)    (59,357)        145
Interest and other income
 (expense), net              1,052       1,181       2,449       1,871
                          --------    --------    --------    --------
Income (loss) before
 income taxes              (27,650)        735     (56,908)      2,016
Provision for
 income taxes                 --           206        --           256
                          --------    --------    --------    --------
Net income (loss)         $(27,650)   $    529    $(56,908)   $  1,760
                          ========    ========    ========    ========
Net income (loss)
 per share:
Basic                     $  (4.47)   $   0.01    $  (9.80)   $   0.04
                          ========    ========    ========    ========
Diluted                   $  (4.47)   $   0.01    $  (9.80)   $   0.03
                          ========    ========    ========    ========
Shares used in
 calculating net income
 (loss) per share:
Basic                        6,187      57,837       5,807      45,078
                          ========    ========    ========    ========
Diluted                      6,187      64,337       5,807      61,840
                          ========    ========    ========    ========

    (A) Non-recurring charges result from PayPal's exiting of leased
facilities during the second quarter of 2002.


                             PAYPAL, INC.
         PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS DATA
          (in thousands, except per share amounts; unaudited)

                           Three Months Ended        Six Months Ended
                                 June 30,                 June 30,
                             2001       2002         2001       2002

Net income (loss)        $(27,650)   $    529    $(56,908)   $  1,760

Amortization of goodwill
 and other intangibles     16,415        --        32,830         864
Stock-based compensation    4,026       3,150       6,183       8,034
Non-recurring
 charges (A)                 --         5,534        --         5,534
Income tax effect (B)        --        (3,501)       --        (6,153)
                         --------    --------    --------    --------
Pro forma after tax net
 income (loss)           $ (7,209)   $  5,712    $(17,895)   $ 10,039
                         ========    ========    ========    ========
Pro forma after
 tax net income
 (loss) per
 share-diluted           $  (1.17)   $   0.09    $  (3.08)   $   0.16
                         ========    ========    ========    ========
Shares used in
 calculating pro
 forma after tax
 net income (loss)
 per share-diluted          6,187      64,337       5,807      61,840
                         ========    ========    ========    ========

    PayPal provides pro forma net income (loss) and pro forma net
income (loss) per share data as additional information for
understanding its operating results. These measures are not in
accordance with, or an alternative for, generally accepted accounting
principles and may be different from pro forma measures used by other
companies.

    (A) Non-recurring charges result from PayPal's exiting of leased
facilities during the second quarter of 2002.

    (B) We have used an income tax rate of 38% for these pro forma
calculations.


                             PAYPAL, INC.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (in thousands; unaudited)

                          Three Months Ended        Six Months Ended
                              June 30,                  June 30,
                              2001        2002      2001       2002

Cash flows from
 operating activities
Net income (loss)         $ (27,650) $     529   $ (56,908) $   1,760
Adjustments to  reconcile
  net loss to net cash
  provided by (used in)
  operating activities:
Provision for
 transaction losses           2,437      6,206       5,540     13,114
Depreciation and
 amortization of
 fixed assets                 1,258      2,205       2,511      4,101
Amortization of
 goodwill and
 other intangibles           16,415       --        32,830        864
Non-cash stock-based
 compensation                 4,026      3,150       6,183      8,034
Non-recurring charges (A)      --        5,534        --        5,534
 Changes in operating
   assets and liabilities:
  Restricted cash
   and investments           (1,500)     9,665      (2,072)       568
  Funds receivable
   and other current
   receivables                 (328)    (8,925)     (2,207)   (25,166)
  Prepaid expenses
   and other assets            (935)       568      (1,273)     1,730
  Due to customers (B)       11,422     16,831      25,785   (104,676)
  Charge-offs and
   recoveries to
   provision for
   transaction losses        (3,529)    (4,951)     (6,404)   (12,963)
  Accounts payable
   and accrued
   liabilities                  490      3,748      (1,814)     5,844
  Funds payable
   and other
   liabilities                2,253    (10,632)      7,170     11,188
                          ---------  ---------   ---------  ---------
Net cash provided
 by (used in)
 operating activities         4,359     23,928       9,341    (90,068)
                          ---------  ---------   ---------  ---------
Cash flows
 from investing
 activities
(Purchase of) proceeds
 from sale of
 investment securities       (7,369)     8,412     (26,292)   (11,739)
Purchase of fixed assets     (2,725)    (6,979)     (4,595)    (9,955)
                          ---------  ---------   ---------  ---------
Cash provided by
 (used in) investing
 activities                 (10,094)     1,433     (30,887)   (21,694)
                          ---------  ---------   ---------  ---------
Cash flows from financing
 activities
Principal payments
 on capital lease
 obligations                   --         (549)       --         (991)
Proceeds from issuance of
 preferred stock, net          --         --        37,433       --
Proceeds from issuance
 of common stock in initial
 public offering, net          --         --          --       69,924
Proceeds from exercise of
 stock options                  451        152         544        181
Proceeds from repayments of
 stockholder notes             --           30        --           30
Payments to repurchase
 preferred stock               (750)      --          (750)      --
Payments to repurchase
 common stock                  (350)       (31)       (350)       (31)
                          ---------  ---------   ---------  ---------
Cash provided by
 (used in) financing
 activities                    (649)      (398)     36,877     69,113
                          ---------  ---------   ---------  ---------
Net increase (decrease) in
 cash and cash equivalents   (6,384)    24,963      15,331    (42,649)
Cash and cash equivalents
 at beginning of period     129,995     77,351     108,280    144,963
                          ---------  ---------   ---------  ---------
Cash and cash
 equivalents at
 end of period            $ 123,611  $ 102,314   $ 123,611  $ 102,314
                          =========  =========   =========  =========

    (A) Non-recurring charges result from PayPal's exiting of leased
facilities during the second quarter of 2002.

    (B) Beginning in February 2002, cash and investments held as agent
for customers whose funds are deposited in FDIC-insured accounts and
the related liabilities are not included in the company's balance
sheet. These custodial assets held for the benefit of customers
totaled $166.7 million, at June 30, 2002.

                             PayPal, Inc.
                             NASDAQ: PYPL
                   Investor Relations: 888-337-3533

Highlights - Q2 02

--  Total payment volume increased 116% Y-on-Y to $1.62 billion

--  GMS increased 119% Y-on-Y to $1.45 billion

--  Revenue increased 173% Y-on-Y to $53.8 million

--  Gross margin equaled 54%, up from 51% in Q1 2002

--  23% of payment volume involved an international account,


Financial Performance
                                      6/30/01              6/30/02
In millions                             QTR                  QTR

Total revenue(1)                       $19.7                $53.8

Net income (loss)                     ($27.7)                $0.5

Pro forma net income (loss)(2)         ($7.2)                $9.4

Corporate cash, cash equivalents       $65.9               $141.8
& investment securities (3)

Key Metrics
Seasonality may create quarter-to-quarter variations.

                  Q2 01    Q3 01   Q4 01     Q1 02    Q2 02     FY01
Total payment
 volume
 ($ millions)    $  747  $  925  $ 1,206  $  1,460  $  1,615  $  3,520
Gross merchant
 sales (GMS)
 ($ millions)    $  663  $  815  $ 1,071  $  1,314  $  1,449  $  3,096
Total revenue(1)
 ($ millions)    $ 19.7  $ 30.0  $  40.1  $   48.8  $   53.8  $  104.8

Average number
 transactions
 per day        165,477  195,319  242,601   295,167   316,011  188,687
Average
 transaction
 size            $ 49.60 $ 51.45 $  54.03  $ 54.97  $  56.16  $  51.11

Transaction
 revenue rate     2.51%     3.14%    3.26%   3.31%     3.33%     2.87%
Transaction
 expense rate     1.43%     1.35%    1.30%   1.16%     1.14%     1.35%
Transaction
 loss rate        0.33%     0.45%    0.42%   0.47%     0.38%     0.42%

Total number
 of accounts*
 (millions)        8.8      10.6     12.8     15.4      17.8      12.8
Total number of
 international
 accounts*
 (millions)        0.5       0.7      1.0      1.4       1.8       1.0
Total number of
 business/premier
 accounts*
 (millions)        1.7       2.1      2.6      3.2       3.6       2.6
Number of
 active
 accounts**
 (millions)        3.0       3.6      4.4      5.2       5.5       7.5

* end of period

** active accounts defined as accounts sending or receiving a payment
in the given period

Business Outlook

                            Q3 02E                   FY 02E
Total payment volume  $1.72 - $1.74 billion    $6.55 - $6.75 billion
Revenues                $56 - $57 million       $222 - $230 million
EPS(2)                       $0.09                 $0.35 - $0.37
Shares used in EPS
 calculation             64 - 65 million            63 - 64 million

(1) Transaction and other fee revenues and selling, general and
administrative expenses each have been reduced from balances
previously reported due to our adoption of EITF 01-09 in Q1 02.

(2) excluding non-cash expenses related to amortization of
intangibles and stock-based compensation and certain non-recurring
charges, and assuming an income tax rate of 38%

(3) includes restricted cash and investment securities

*T

    --30--jb/sf*

    CONTACT: PayPal, Inc.
             Sravanthi Agrawal, 888/337-3533
             sagrawal@paypal.com

    KEYWORD: CALIFORNIA
    INDUSTRY KEYWORD: BANKING INTERNET E-COMMERCE EARNINGS
    SOURCE: PayPal, Inc.

COPYRIGHT 2002 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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