eBay Inc. Announces First Quarter 2004 Financial Results.Business Editors/High-Tech Writers SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--April 21, 2004 eBay (eBay, Inc., San Jose, CA, www.ebay.com) The major auction service on the Web. eBay popularized the concept of buying and selling online, and both individuals and commercial enterprises list items for sale. Inc. (Nasdaq:EBAY) -- Company Reports Record Q1 Net Revenues of $756.2 Million, Up 59% Year Over Year -- Achieves Q1 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.30 and Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Diluted EPS of $0.31 -- Raises 2004 Net Revenues and EPS Guidance eBay Inc. (Nasdaq:EBAY) (www.ebay.com), The World's Online Marketplace, reported financial results for its quarter ended March 31, 2004. eBay reported record consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Q1-04 net revenues of $756.2 million, up 59% year over year; record operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $266.7 million, up 80% year over year; and record pro forma operating income of $286.4 million, up 73% year over year. Operating income was 35% of net revenues and pro forma operating income was 38% of net revenues. Consolidated net income in Q1-04 was $200.1 million, or $0.30 per diluted share. eBay's pro forma consolidated net income, excluding certain items, was a record $210.8 million, or $0.31 per diluted share. These results exceeded the company's guidance of $700 million for net revenues, $0.24 for earnings per diluted share and $0.25 for pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per diluted share. "eBay's Q1 results exceeded our highest expectations," said Meg Whitman Margaret C. "Meg" Whitman (born August 4, 1956) has been the President and CEO of the online marketplace eBay since March 1998. Whitman joined eBay when the company had 29 employees and operated solely in the United States; eBay is now a global organization with over 11,000 , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of eBay. "Our continuing momentum demonstrates yet again the power of eBay's community and reinforces our confidence in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. potential of our business." Key Financial and Operating Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. Consolidated Net Revenues -- Consolidated net revenues totaled a record $756.2 million, which represented an increase of 59% from the $476.5 million reported in Q1-03. Transaction Revenues -- Consolidated net transaction revenues totaled a record $738.8 million, which represented an increase of 59% from the $465.6 million reported in Q1-03. -- eBay U.S. Net Transaction Revenues -- eBay U.S. net transaction revenues totaled $326.2 million in Q1-04, reflecting 39% year-over-year growth. -- eBay International Net Transaction Revenues -- eBay International net transaction revenues totaled $257.1 million in Q1-04, representing 87% year-over-year growth. -- Payments Net Transaction Revenues -- Payments net transaction revenues totaled $155.5 million in Q1-04, representing 67% year-over-year growth. Confirmed Registered Users -- Cumulative confirmed registered users at the end of Q1-04 totaled a record 104.8 million, representing a 52% increase over the 68.8 million users reported at the end of Q1-03. Active Users -- Active users, the number of users on the eBay platform who bid, bought or listed over the trailing 12 months, increased to 45.1 million, a 45% increase over the 31.1 million active users reported in the same period a year ago. Listings -- Listings totaled a record 327.7 million in Q1-04, 49% higher than the 219.7 million listings reported in Q1-03. Gross Merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain Sales (GMS GMS Greater Mekong Subregion GMS Global Mobile (Communications) System GMS Guild Management System GMS General Medical Services GMS Global Management System (Sonicwall) GMS GroupWise Mobile Server ) -- GMS, the total value of items sold, was a record $8.0 billion, representing a 51% year-over-year increase from the $5.3 billion reported in Q1-03. Total Payments Accounts -- eBay's PayPal A Web payment processing service founded in 1998 and acquired by eBay in late 2002. Operating as an independent brand, PayPal, San Jose, CA (www.paypal.com) is used to shop at PayPal-enabled retail sites as well as to send or request money from anyone with an e-mail address. business had 45.6 million total accounts at the end of Q1-04, a 67% increase from the 27.2 million reported in Q1-03. Total Payment Volume (TPV TPV Temporary Protection Visa (Australia) TPV Terminal Punto Venta TPV Third-Party Verification TPV Thermophotovoltaic TPV Thermoplastic Vulcanizate (thermoplastic elastomer) TPV Total Payment Volume ) -- PayPal's TPV was $4.3 billion in Q1-04, a 64% increase from the $2.6 billion reported in Q1-03. Gross Profit -- Gross profit was a record $621.9 million, or 82% of net revenues, which was up from the 81% level reported in Q1-03. Operating Income -- Operating income was a record $266.7 million, or 35% of net revenues, an 80% increase over the $148.1 million reported in Q1-03. Pro forma operating income increased 73% year over year to a record $286.4 million, or 38% of net revenues, compared to 35% in Q1-03. GAAP Net Income -- GAAP net income increased 92% year over year to $200.1 million, or $0.30 per diluted share. Pro Forma Net Income -- Pro forma net income increased 81% year over year to a record $210.8 million, or $0.31 per diluted share. Operating and Free Cash Flows -- Operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. totaled $366.2 million. Free cash flows, representing operating cash flows less capital expenditures, totaled $295.3 million. Key Category Performance -- Based on Q1-04 GMS, eBay now has twelve categories that deliver $1 billion or more in worldwide annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. GMS: eBay Motors at $8.7 billion; Computers at $2.6 billion; Consumer Electronics at $2.5 billion; Books/Movies/Music at $2.4 billion; Clothing and Accessories at $2.2 billion; Sports at $2.0 billion; Collectibles at $1.6 billion; Home & Garden at $1.6 billion; Toys at $1.5 billion; Jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. & Gemstones at $1.3 billion; Cameras & Photo at $1.2 billion; and Business & Industrial at $1.1 billion. Fixed Price Trading -- eBay's fixed price trading contributed approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.2 billion or 28% of total GMS during Q1-04, primarily from eBay's "Buy It Now" feature. eBay Stores -- eBay hosts approximately 146,000 stores worldwide. In Q1-04, the company initiated store fees for the first time for certain of its international websites. Mobile.de -- On April 1, 2004, eBay completed its acquisition of mobile.de, one of the leading online classifieds websites for vehicles in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . eBay acquired all outstanding shares of mobile.de for approximately Euro 121 million in cash, or approximately US $150 million, based on the April 1, 2004 exchange rate of Euro 1.24 per US $1.00. Consolidated Financial and Operating Summary eBay reported record consolidated net revenues of $756.2 million in Q1-04, representing a 59% year-over-year increase. On a year-over-year basis, consolidated net revenues reflected a foreign exchange benefit in Q1-04 of approximately $47.1 million. On a sequential One after the other in some consecutive order such as by name or number. basis, consolidated net revenues reflected a foreign exchange benefit in Q1-04 of approximately $18.0 million, primarily related to the Euro. Gross profit as a percentage of net revenues was 82%, a percentage point improvement from the 81% level reported in Q1-03, primarily reflecting improved cost leverage and the continuing effects of cost savings from eBay Picture Services, launched in Q4-03. Sales and marketing expenses totaled $192.7 million, or 25% of net revenues, compared with 26% reported in Q1-03. The incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. dollar change in sales and marketing costs primarily reflects international expansion and increases in both on-line and off-line See offline. (jargon) off-line - (Or "offline") 1. Not directly connected to the computer (e.g., an off-line tape drive), or with connection suspended ("take the printer off-line"). Contrast background, on-line. 2. Not now or not here. marketing efforts. Product development expenses totaled $52.7 million, or 7% of net revenues, consistent with 7% of net revenues reported in Q1-03. Total product development expenses in Q1-04 do not include $10.2 million of required cost capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. for major site and other product development efforts. General and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. totaled $90.6 million, or 12% of net revenues, down from the 13% of net revenues reported in Q1-03. The incremental dollar change in general and administrative costs primarily reflects increases in headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . Income from operations totaled a record $266.7 million during Q1-04, an 80% increase over the $148.1 million reported in Q1-03. On a pro forma basis, income from operations totaled a record $286.4 million, a 73% increase over the $165.6 million reported in Q1-03. Included in both the GAAP and pro forma Q1-04 results was a $29.5 million year-over-year net benefit from changes in foreign exchange rates. Net interest and other income totaled $21.2 million in Q1-04, up from the $7.4 million reported in Q1-03. The increase in Q1-04 was primarily the result of gains of approximately $14.8 million due to certain sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. amendments and contract terminations Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). . The GAAP and pro forma effective tax rates for Q1-04 were 30% and 31% respectively, a decrease from the 32% GAAP and pro forma effective tax rates in Q1-03. The lower rates reflect an increased profit contribution from the company's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . eBay's balance sheet remains strong. At the end of Q1-04, the company had $3.1 billion in aggregate cash and investments and more than $6.4 billion in total assets. The company reported $366.2 million in operating cash flows and $70.9 million of capital expenditures in Q1-04, resulting in free cash flows of $295.3 million. Business Outlook For the remainder of 2004, and consistent with eBay's long-term opportunity and financial strategy, the company plans to invest aggressively in China, product development, site infrastructure, sales and marketing, and the international expansion of PayPal. Net Revenues -- The company now expects that consolidated net revenues for 2004 could be as high as $3.15 billion, $150 million higher than the company's most recent guidance. This improved outlook derives from the strength of eBay's U.S., International and Payments businesses. From a quarterly perspective, eBay expects that consolidated net revenues could be as high as $760 million in Q2-04, $765 million in Q3-04 and $869 million in Q4-04. eBay's guidance is based on an assumed 2004 quarterly weighted average exchange rate of US $1.20 per Euro. GAAP Diluted EPS -- eBay now expects that GAAP earnings per diluted share for the full year 2004 could be as high as $1.06, $0.07 higher than the company's most recent guidance. From a quarterly perspective, eBay estimates that GAAP earnings per diluted share could be as high as $0.24 in Q2-04, $0.24 in Q3-04 and $0.29 in Q4-04. Pro Forma Diluted EPS -- eBay now expects that pro forma earnings per diluted share for the full year 2004 could be as high as $1.13, $0.09 higher than the company's most recent guidance. From a quarterly perspective, eBay estimates pro forma earnings per diluted share could be as high as $0.26 in Q2-04, $0.25 in Q3-04 and $0.31 in Q4-04. Effective Tax Rate -- eBay's current estimate for its 2004 effective tax rate is 30% on a GAAP basis and 31% on a pro forma basis, which is consistent with previous guidance. Capital Expenditures -- eBay expects its capital expenditures to total $250 million for the full year 2004, without taking into account acquisitions, which is consistent with previous guidance. Non-GAAP Measures To supplement the company's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, eBay uses non-GAAP measures of certain components of financial performance, including gross profit, operating income, net income, earnings per share, cash flows, and effective tax rate, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. 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. Specifically, the company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative indicative: see mood. of its core operating results. In addition, because eBay has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency Consistency can refer to:
Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , but should not be considered a substitute for, or superior to, GAAP results. Consistent with the company's historical practice, the non-GAAP measures included in this press release have been reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to the nearest GAAP measure. About eBay eBay is The World's Online Marketplace(R). Founded in 1995, eBay created a powerful platform for the sale of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay. eBay enables trade on a local, national and international basis with customized sites in markets around the world. Through an array of services, such as its payment solution provider PayPal, eBay is enabling global e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. for an ever-growing online community. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the future performance of eBay and its consolidated subsidiaries. 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 company with a broad range of businesses; the company's ability to deal with the increasingly competitive environment for online trading Online Trading Making trades via the Internet. Notes: The use of online trading increased dramatically in the mid to late 1990's with the advent of high-speed computers and Internet connections. Stocks, bonds, options, futures, and currencies can all be traded online. , 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 (1) Not connected to the Internet, online service or internal network. See offline file. (2) Not connected to or not installed in the computer. If a terminal, printer or other device is physically connected to the computer, but is not turned on or in ready mode, it is ; the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , credit card association, and other risks specific to PayPal; 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 on all of its sites; the company's ability to continue to expand its model to new types of merchandise and sellers; the company's ability to continue to expand outside of the US; fluctuations in foreign exchange rates; and the costs and benefits of announced and prospective acquisitions and other commercial transactions. 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 Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" in the company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. , copies of which may be obtained by visiting the company's investor relations Investor relations The process by which the corporation communicates with its investors. 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . eBay assumes no obligation to update such statements.
eBay Inc.
Unaudited Condensed Consolidated Balance Sheet
(U.S. Dollars In Thousands)
December 31, March 31,
2003 2004
----------------------------
ASSETS
------
Current assets:
Cash and cash equivalents $1,381,513 $1,501,708
Short-term investments 340,576 418,677
Accounts receivable, net 225,871 225,050
Funds receivable 79,893 142,655
Other current assets 118,029 370,270
-------------- ------------
Total current assets 2,145,882 2,658,360
Long-term investments 934,171 1,166,674
Restricted cash and investments 127,432 1,114
Property and equipment, net 601,785 628,086
Goodwill 1,719,311 1,721,794
Intangible assets, net 274,057 260,053
Other assets 17,496 22,165
-------------- ------------
$5,820,134 $6,458,246
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $64,633 $107,480
Funds payable and amounts due to
customers 106,568 247,436
Accrued expenses and other current
liabilities 356,491 344,669
Deferred revenue and customer advances 28,874 36,886
Short-term debt 2,840 124,838
Income taxes payable 87,870 95,856
-------------- ------------
Total current liabilities 647,276 957,165
Long-term obligations 124,476 1,330
Deferred tax liabilities 79,238 84,745
Other liabilities 33,494 18,896
Minority interests 39,408 41,469
-------------- ------------
Total liabilities 923,892 1,103,605
-------------- ------------
Total stockholders' equity 4,896,242 5,354,641
-------------- ------------
$5,820,134 $6,458,246
============== ============
eBay Inc.
Unaudited Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
----------------------------
2003 2004
----------------------------
Net revenues $476,492 $756,239
Cost of net revenues 92,098 134,358
----------------------------
Gross profit 384,394 621,881
----------------------------
Operating expenses:
Sales and marketing 123,760 192,690
Product development 34,332 52,698
General and administrative 63,000 90,636
Payroll tax on employee stock options 3,290 5,146
Amortization of acquired intangible
assets 11,868 13,963
----------------------------
Total operating expenses 236,250 355,133
----------------------------
Income from operations 148,144 266,748
Interest and other income (expense), net 7,704 23,499
Interest expense (31) (2,331)
Impairment of certain equity investments (230) -
----------------------------
Income before income taxes and minority
interests 155,587 287,916
Provision for income taxes (49,018) (85,756)
Minority interests (2,378) (2,060)
----------------------------
Net income $104,191 $200,100
============================
Net income per share:
Basic $0.17 $0.31
============================
Diluted $0.16 $0.30
============================
Weighted average shares:
Basic 627,316 652,501
============================
Diluted 642,518 673,798
============================
eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)
Three Months Ended
March 31, 2003
--------------------------------
Pro Forma
Reported Entries Pro Forma
--------------------------------
Net revenues $476,492 $- $476,492
Cost of net revenues 92,098 (84) (a) 92,014
------------------- ---------
Gross profit 384,394 84 384,478
------------------- ---------
Operating expenses:
Sales and marketing 123,760 (418) (a) 123,342
Product development 34,332 (517) (a) 33,815
General and administrative 63,000 (1,253) (a) 61,747
Payroll tax on employee stock
options 3,290 (3,290) (b) -
Amortization of acquired
intangible assets 11,868 (11,868) (c) -
------------------- ---------
Total operating expenses 236,250 (17,346) 218,904
------------------- ---------
Income from operations 148,144 17,430 165,574
Interest and other income (expense),
net 7,704 - 7,704
Interest expense (31) - (31)
Impairment of certain equity
investments (230) 230 (d) -
------------------- ---------
Income before income taxes and
minority interests 155,587 17,660 173,247
Provision for income taxes (49,018) (5,651) (e) (54,669)
Minority interests (2,378) - (2,378)
------------------- ---------
Net income $104,191 $12,009 $116,200
=================== =========
Net income per share:
Basic $0.17 $0.19
========= =========
Diluted $0.16 $0.18
========= =========
Weighted average shares:
Basic 627,316 627,316
========= =========
Diluted 642,518 642,518
========= =========
Operating Margin 31% 4% 35%
Three Months Ended
March 31, 2004
--------------------------------
Pro Forma
Reported Entries Pro Forma
--------------------------------
Net revenues $756,239 $- $756,239
Cost of net revenues 134,358 (24) (a) 134,334
----------------- -----------
Gross profit 621,881 24 621,905
----------------- -----------
Operating expenses:
Sales and marketing 192,690 (75) (a) 192,615
Product development 52,698 (189) (a) 52,509
General and administrative 90,636 (268) (a) 90,368
Payroll tax on employee stock
options 5,146 (5,146) (b) -
Amortization of acquired
intangible assets 13,963 (13,963) (c) -
----------------- -----------
Total operating expenses 355,133 (19,641) 335,492
----------------- -----------
Income from operations 266,748 19,665 286,413
Interest and other income (expense),
net 23,499 - 23,499
Interest expense (2,331) - (2,331)
Impairment of certain equity
investments - - -
----------------- -----------
Income before income taxes and
minority interests 287,916 19,665 307,581
Provision for income taxes (85,756) (8,979) (e) (94,735)
Minority interests (2,060) - (2,060)
----------------- -----------
Net income $200,100 $10,686 $210,786
================= ===========
Net income per share:
Basic $0.31 $0.32
========= ===========
Diluted $0.30 $0.31
========= ===========
Weighted average shares:
Basic 652,501 652,501
========= ===========
Diluted 673,798 673,798
========= ===========
Operating Margin 35% 3% 38%
Notes:
------
(a) Non-cash stock based compensation expense
(b) Employer payroll taxes on employee non-qualified stock option
gains
(c) Amortization of acquired intangible assets
(d) Impairment of certain equity investments
(e) Income taxes associated with certain pro forma entries
eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(U.S. Dollars In Thousands)
Three Months Ended
March 31,
-----------------------
2003 2004
-----------------------
Cash flows from operating activities:
Net income $104,191 $200,100
Adjustments:
Provision for doubtful accounts and
authorized credits 9,137 15,604
Provision for transaction losses 8,993 11,644
Depreciation and amortization 32,020 55,685
Stock-based compensation 2,272 556
Tax benefit on the exercise of employee
stock options 41,340 76,640
Impairment of certain equity investments 230 -
Minority interests 1,778 2,060
Changes in assets and liabilities:
Accounts receivable (34,824) (15,054)
Funds receivable (42,871) (61,691)
Other current assets 1,258 (115,745)
Other non-current assets 1,140 (4,667)
Deferred tax assets and liabilities, net 616 (2,621)
Accounts payable 6,826 42,341
Funds payable and amounts due to customers 46,881 143,652
Accrued expenses and other liabilities 4,904 2,024
Deferred revenue and customer advances 1,744 7,850
Income taxes payable 4,371 7,867
-----------------------
Net cash provided by operating activities 190,006 366,245
-----------------------
Cash flows from investing activities:
Purchases of property and equipment (43,908) (70,912)
Purchases of investments (135,153) (823,783)
Maturities and sales of investments 218,360 517,428
Purchases of intangibles and certain non-
current assets - (945)
Acquisitions, net of cash acquired (4,389) (34,663)
-----------------------
Net cash provided by (used in) investing
activities 34,910 (412,875)
-----------------------
Cash flows from financing activities:
Proceeds from issuance of common stock, net 217,385 173,089
Principal payments on long-term debt (307) (1,147)
-----------------------
Net cash provided by financing activities 217,078 171,942
-----------------------
Effect of exchange rate changes on cash and
cash equivalents 3,111 (5,117)
-----------------------
Net increase in cash and cash equivalents 445,105 120,195
Cash and cash equivalents at beginning of
period 1,109,313 1,381,513
-----------------------
Cash and cash equivalents at end of period $1,554,418 $1,501,708
=======================
Net cash provided by operating activities $190,006 $366,245
Less: Purchases of property and equipment (43,908) (70,912)
-----------------------
Free cash flow $146,098 $295,333
=======================
eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(U.S. Dollars In Thousands, Except Percentages)
Net Revenues by Type
---------------------------------------------
March 31, June 30, Sep 30, Dec 31, March 31,
2003 2003 2003 2003 2004
---------------------------------------------
Transaction
U.S. $234,876 $242,385 $256,076 $291,578 $326,217
Current quarter vs
prior quarter 11% 3% 6% 14% 12%
Current quarter vs
prior year quarter 49% 45% 41% 38% 39%
International 137,504 155,155 154,715 210,500 257,090
Current quarter vs
prior quarter 28% 13% 0% 36% 22%
Current quarter vs
prior year quarter 166% 146% 105% 96% 87%
Payments 93,179 99,363 106,350 130,561 155,513
Current quarter vs
prior quarter 20% 7% 7% 23% 19%
Current quarter vs
prior year quarter 1847% 2006% 1645% 68% 67%
---------------------------------------------
Total transaction 465,559 496,903 517,141 632,639 738,820
---------------------------------------------
Current quarter vs
prior quarter 17% 7% 4% 22% 17%
Current quarter vs
prior year quarter 118% 111% 96% 60% 59%
Advertising and other
non-transaction revenues
U.S. 7,593 8,774 10,012 11,540 12,353
Current quarter vs
prior quarter (45%) 16% 14% 15% 7%
Current quarter vs
prior year quarter (75%) (71%) (59%) (16%) 63%
International 1,313 1,432 1,760 2,261 2,400
Current quarter vs
prior quarter (23%) 9% 23% 28% 6%
Current quarter vs
prior year quarter 59% 18% 96% 32% 83%
Payments 2,027 2,160 2,029 1,953 2,666
Current quarter vs
prior quarter (2%) 7% (6%) (4%) 37%
Current quarter vs
prior year quarter N/A N/A N/A (5%) 32%
---------------------------------------------
Total advertising and
other non-transaction
revenues 10,933 12,366 13,801 15,754 17,419
---------------------------------------------
Current quarter vs
prior quarter (37%) 13% 12% 14% 11%
Current quarter vs
prior year quarter (65%) (60%) (45%) (10%) 59%
---------------------------------------------
Total net revenues $476,492 $509,269 $530,942 $648,393 $756,239
=============================================
Current quarter vs
prior quarter 15% 7% 4% 22% 17%
Current quarter vs
prior year quarter 94% 91% 84% 57% 59%
eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(U.S. Dollars In Thousands, Except Percentages)
Net Revenues by Segment
---------------------------------------------
March 31, June 30, Sep 30, Dec 31, March 31,
2003 2003 2003 2003 2004
---------------------------------------------
U.S. $242,469 $251,159 $266,088 $303,118 $338,570
Current quarter vs
prior quarter 8% 4% 6% 14% 12%
Current quarter vs
prior year quarter 29% 27% 29% 35% 40%
International 138,817 156,587 156,475 212,761 259,490
Current quarter vs
prior quarter 27% 13% 0% 36% 22%
Current quarter vs
prior year quarter 164% 143% 105% 95% 87%
Payments 95,206 101,523 108,379 132,514 158,179
Current quarter vs
prior quarter 19% 7% 7% 22% 19%
Current quarter vs
prior year quarter 1889% 2051% 1678% 66% 66%
---------------------------------------------
Total net revenues $476,492 $509,269 $530,942 $648,393 $756,239
=============================================
Current quarter vs
prior quarter 15% 7% 4% 22% 17%
Current quarter vs
prior year quarter 94% 91% 84% 57% 59%
Net Revenues by Geography
---------------------------------------------
March 31, June 30, Sep 30, Dec 31, March 31,
2003 2003 2003 2003 2004
---------------------------------------------
U.S. net revenues $319,170 $331,322 $351,187 $404,833 $455,355
Current quarter vs
prior quarter 10% 4% 6% 15% 12%
Current quarter vs
prior year quarter 66% 64% 65% 39% 43%
% of total 67% 65% 66% 62% 60%
International net
revenues 157,322 177,947 179,755 243,560 300,884
Current quarter vs
prior quarter 28% 13% 1% 35% 24%
Current quarter vs
prior year quarter 199% 177% 136% 97% 91%
% of total 33% 35% 34% 38% 40%
---------------------------------------------
Total net revenues $476,492 $509,269 $530,942 $648,393 $756,239
=============================================
Current quarter vs
prior quarter 15% 7% 4% 22% 17%
Current quarter vs
prior year quarter 94% 91% 84% 57% 59%
eBay Inc.
eBay Unaudited Supplemental Operating Data
(In Millions, Except Percentages)
--------------------------------------------
March 31, June 30, Sep 30, Dec 31, March 31,
2003 2003 2003 2003 2004
--------------------------------------------
Confirmed Registered
Users 68.8 75.3 85.5 94.9 104.8
Current quarter vs prior
quarter 12% 9% 14% 11% 10%
Current quarter vs prior
year quarter 49% 51% 56% 54% 52%
Active Users (1) 31.1 34.1 37.4 41.2 45.1
Current quarter vs prior
quarter 12% 10% 10% 10% 9%
Current quarter vs prior
year quarter 57% 57% 55% 49% 45%
Number of Listings 219.7 225.0 234.6 291.7 327.7
Current quarter vs prior
quarter 12% 2% 4% 24% 12%
Current quarter vs prior
year quarter 59% 55% 47% 49% 49%
Gross Merchandise Sales $5,317 $5,635 $5,775 $7,052 $8,039
Current quarter vs prior
quarter 16% 6% 2% 22% 14%
Current quarter vs prior
year quarter 71% 66% 53% 53% 51%
(1) Defined as all users, excluding Half.com, EachNet and Internet
Auction, who bid, bought, or listed an item within the previous
12-month period.
eBay Inc.
PayPal Unaudited Supplemental Operating Data
(In Millions, Except Percentages)
--------------------------------------------
March 31, June 30, Sep 30, Dec 31, March 31,
2003 2003 2003 2003 2004
--------------------------------------------
Revenue
Transaction $92.2 $99.4 $106.4 $130.6 $155.5
Current quarter vs prior
quarter 27% 8% 7% 23% 19%
Current quarter vs prior
year quarter 92% 90% 83% 80% 69%
Non-transaction $2.0 $2.1 $2.0 $2.0 $2.7
Current quarter vs prior
quarter (5%) 7% (5%) 0% 37%
Current quarter vs prior
year quarter 150% 69% 67% (5%) 32%
Total revenues $94.2 $101.5 $108.4 $132.6 $158.2
Percent of revenue which is
international 19.6% 21.0% 21.4% 23.2% 26.2%
Metrics
Total accounts 27.2 31.1 35.2 40.3 45.6
Current quarter vs prior
quarter 17% 14% 13% 14% 13%
Current quarter vs prior
year quarter 77% 75% 79% 73% 67%
Active accounts (1) 9.4 10.2 11.2 13.2 14.5
Total number of payments 50.5 53.7 57.4 68.2 79.2
Current quarter vs prior
quarter 29% 6% 7% 19% 16%
Current quarter vs prior
year quarter 90% 86% 83% 74% 57%
Total payment volume $2,628 $2,843 $3,044 $3,711 $4,321
Current quarter vs prior
quarter 23% 8% 7% 22% 16%
Current quarter vs prior
year quarter 80% 76% 70% 74% 64%
Auction as % of total
payment volume 67% 66% 67% 69% 70%
Transaction rates
Transaction revenue rate 3.51% 3.50% 3.49% 3.52% 3.60%
Transaction processing
expense rate 1.27% 1.30% 1.25% 1.23% 1.25%
Transaction loss rate 0.34% 0.32% 0.22% 0.31% 0.27%
(1) Defined as users that sent or received at least one payment during
the quarter
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 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, 2004
---------------------------------
GAAP Adjustments Pro Forma (a)
-------------------------------------------------
Net revenue $760 - $760
Diluted EPS $0.24 $0.02 (b) $0.26
Three months ending September 30, 2004
--------------------------------------
GAAP Adjustments Pro Forma (a)
-------------------------------------------------
Net revenue $765 - $765
Diluted EPS $0.24 $0.01 (b) $0.25
Three months ending December 31, 2004
-------------------------------------
GAAP Adjustments Pro Forma (a)
-------------------------------------------------
Net revenue $869 - $869
Diluted EPS $0.29 $0.02 (b) $0.31
Year ending December 31, 2004
-----------------------------
GAAP Adjustments Pro Forma (a)
-------------------------------------------------
Net revenue $3,150 - $3,150
Diluted EPS $1.06 $0.07 (b) $1.13
Effective Tax Rate 30% 1%(c) 31%
(a) Pro forma guidance reflects estimated quarterly adjustments for
amortization of acquired intangible assets of approximately $15
million, payroll taxes on employee stock options of approximately
$2-$4 million, stock based compensation of approximately $300-$600
thousand and other adjustments estimated to result in an operating
margin adjustment of 2-3% for each of the quarters in the year ending
December 31, 2004.
(b) Net of tax, the above pro forma items are estimated to result in a
$0.01-$0.02 per diluted share adjustment for each of the quarters in
the year ending December 31, 2004.
(c) Adjustments to the pro forma effective tax rate reflect the impact
on the effective tax rate of the pro forma adjustments.
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