SAN JOSE, Calif., Oct. 23,
2019 /PRNewswire/ -- eBay Inc. (Nasdaq: EBAY), a global
commerce leader, delivered revenue for the quarter ended
September 30, 2019 of $2.6
billion, remaining flat, on an as-reported basis and
increasing 2% on a foreign exchange (FX) neutral basis. Gross
merchandise volume (GMV) of $21.7
billion, was down 4% on an as-reported basis and down 2% on
a FX-Neutral basis.
During the quarter, eBay delivered GAAP net income from
continuing operations of $310
million, or $0.37 per diluted
share and non-GAAP net income from continuing operations of
$563 million, or $0.67 per diluted share. The company generated
$1.0 billion of operating cash
flow and $913 million of free cash
flow from continuing operations while also repurchasing
approximately $1.0 billion of its
common stock and paying $115 million
in cash dividends in the quarter. In addition, $400 million of floating rate notes and
$1.15 billion of 2.200% fixed rate
notes matured and were paid during the quarter.
"We performed in line with expectations in Q3 while improving
the Marketplace experience, creating better customer outcomes, and
maintaining momentum in advertising and payments," said
Scott Schenkel, interim Chief
Executive Officer of eBay Inc. "We also made progress on our
portfolio review and completed a thorough operating review that has
resulted in a three-year plan to drive margin improvement while
enabling reinvestment in critical customer initiatives."
In the third quarter, eBay grew active buyers by 4% across its
platforms, for a total of 183 million global active buyers.
Underlying total eBay performance, the Marketplace platforms
delivered $2.1 billion of revenue and
$20.5 billion of GMV. Marketplace
revenue was down 1% on an as-reported basis and was up 1% on a
FX-Neutral basis, and GMV was down 5% on an as-reported basis and
down 2% on a FX-Neutral basis. StubHub platforms drove revenue of
$306 million, up 5% on both an
as-reported and FX-Neutral basis, and GMV of $1.2 billion, flat on both an as-reported and
FX-Neutral basis. Classifieds platforms delivered revenue of
$265 million, up 4% on an as-reported
basis and up 8% on a FX-Neutral basis.
Based on these results and increased confidence in the year,
eBay raised non-GAAP EPS guidance and narrowed GAAP EPS guidance
for the full year.
Momentum of Growth Initiatives
Since launching the managed payments offering approximately one
year ago, eBay has processed over $1.1
billion in payments for more than 20,000 sellers, with over
$500 million of those payments
processed in Q3. In September, the service reached 9.4% of volume
in the U.S. and successfully launched in a second market,
Germany. First-party advertising also continued its momentum.
More than one million sellers now leverage promoted listings,
promoting over 300 million listings on the marketplace, which has
resulted in revenue of $103 million,
up 119% on an as-reported basis and up over 120% on a FX-Neutral
basis.
Improving the Marketplace Experience
During the quarter, eBay introduced new tools and features that
enhance the customer experience. Terapeak, a suite of features that
help sellers identify what to sell, when to sell, and how to price
inventory, was integrated into Seller Hub in major
markets. The company also introduced additional seller
protections, continued to enhance the new buyer experience,
announced a Managed Delivery fulfillment service in the U.S., and
bolstered its grocery partnership with Coles in Australia. Additionally, Multi-User Account
Access became available for sellers in the U.S., with a planned
expansion to Germany in 2020.
Commitment to Responsible Business Practices
eBay continued to demonstrate its dedication to responsible
business practices. During the quarter, Retail Revival launched in
Baton Rouge, Louisiana, and a
version of the program was also brought to Plovdiv, Bulgaria, connecting local businesses to the
global marketplace. Approximately 400 businesses across 12 cities
globally have participated in the program, collectively selling
nearly 600,000 items to buyers in 162 countries. In recognition of
Retail Revival, eBay was named to Fortune's 2019 Change the World
list. eBay also announced 100% renewable energy sourcing at its two
largest locations - San Jose,
California, and Draper,
Utah. These sites join the company's locations in
Dreilinden, Germany; Dublin, Ireland; and Portland, Oregon for 100% renewable energy
sourcing. Additionally, eBay was ranked by both the Dow Jones World
and North America Sustainability Indices for responsible business
practices in 2019.
Update on Operating Review and Portfolio Review
The company completed an extensive operating review resulting in
a multi-year plan for operating efficiency. These efficiencies,
combined with 2019 margin expansion and reinvestment, are expected
to drive 3 points of additional operating margin by 2022 and create
capacity to reinvest in critical customer initiatives. eBay
continues to review the role and value of StubHub and Classifieds
in its portfolio to determine the best path forward and anticipates
sharing an update on the StubHub business before the next earnings
release.
Third Quarter 2019 Financial Highlights (presented in
millions, except per share data and percentages)
|
Third
Quarter
|
|
|
|
2019
|
2018
|
Change
|
eBay
Inc.
|
|
|
|
|
Net
revenues
|
$2,649
|
$2,649
|
$—
|
—%
|
GAAP - Continuing
Operations
|
|
|
|
|
Income (loss) from
continuing operations
|
$310
|
$720
|
$(410)
|
(57)%
|
Earnings (loss) per
diluted share from continuing operations
|
$0.37
|
$0.73
|
$(0.36)
|
(50)%
|
Non-GAAP -
Continuing Operations
|
|
|
|
|
Net income
|
$563
|
$554
|
$9
|
2%
|
Earnings per diluted
share
|
$0.67
|
$0.56
|
$0.11
|
19%
|
Other Selected Financial and Operational Results
- Operating margin – GAAP operating margin decreased to 20.1% for
the third quarter of 2019, compared to 21.0% for the same period
last year. Non-GAAP operating margin increased to 26.6% in the
third quarter of 2019, compared to 26.4% for the same period last
year.
- Taxes – The GAAP effective tax rate for continuing operations
for the third quarter of 2019 was 20.7%, compared to 24.1% for the
third quarter of 2018. The non-GAAP effective tax rate for
continuing operations for the third quarter of 2019 was 15.3%,
compared to 15.4% for the third quarter of 2018.
- Cash flow – The company generated $1.0
billion of operating cash flow from continuing operations
and $913 million of free cash flow
during the third quarter of 2019.
- Capital returns – The company repurchased approximately
$1.0 billion of its common stock, or
25 million shares, in the third quarter of 2019. The company's
total repurchase authorization remaining as of September 30, 2019 was $3.2 billion. The company also paid cash
dividends of $115 million during the
third quarter of 2019.
- Cash and cash equivalents and non-equity investments – The
company's cash and cash equivalents and non-equity investments
portfolio totaled $4.2 billion as of
September 30, 2019.
Business Outlook
- Fourth quarter 2019 — The company expects net revenue between
$2.77 billion and $2.82 billion, representing Organic FX-Neutral
growth of (1)% - 1%, with GAAP earnings per diluted share from
continuing operations in the range of $0.55 - $0.60 and
non-GAAP earnings per diluted share from continuing operations in
the range of $0.73 - $0.76.
- Full year 2019 — The company expects net revenue between
$10.75 billion and $10.80 billion, representing Organic FX-Neutral
growth of 2% - 3%, with GAAP earnings per diluted share from
continuing operations in the range of $1.97 - $2.02 and
non-GAAP earnings per diluted share from continuing operations in
the range of $2.75 - $2.78.
Dividend Declaration
- eBay's Board of Directors has declared a cash dividend of
$0.14 per share of the company's
common stock. The dividend is payable on December 20, 2019 to shareholders of record as of
December 2, 2019.
Quarterly Conference Call and Webcast
eBay Inc. will host a conference call to discuss third quarter
2019 results at 2:00 p.m. Pacific Time today. A live webcast
of the conference call, together with a slide presentation that
includes supplemental financial information and reconciliations of
certain non-GAAP measures to their nearest comparable GAAP
measures, can be accessed through the company's Investor Relations
website at https://investors.ebayinc.com. In addition, an archive
of the webcast will be accessible for at least three months through
the same link.
eBay Inc. uses its Investor Relations website at
https://investors.ebayinc.com as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Accordingly, investors should
monitor this website, in addition to following our press releases,
SEC filings, public conference calls and webcasts.
About eBay
eBay Inc. (Nasdaq: EBAY) is a global commerce leader including
the Marketplace, StubHub and Classifieds platforms. Collectively,
we connect millions of buyers and sellers around the world,
empowering people and creating opportunity for all. Founded in 1995
in San Jose, Calif., eBay is one
of the world's largest and most vibrant marketplaces for
discovering great value and unique selection. In 2018, eBay enabled
$95 billion of gross merchandise
volume. For more information about the company and its global
portfolio of online brands, visit www.ebayinc.com.
Presentation
All growth rates represent year-over-year comparisons, except as
otherwise noted. All amounts in tables are presented in U.S.
dollars, rounded to the nearest million, except as otherwise noted.
As a result, certain amounts may not sum or recalculate using the
rounded dollar amounts provided.
Non-GAAP Financial Measures
This press release includes the following financial measures
defined as "non-GAAP financial measures" by the Securities and
Exchange Commission (SEC): non-GAAP net income, non-GAAP earnings
per diluted share, non-GAAP operating margin, non-GAAP effective
tax rate, free cash flow and FX-Neutral basis. These non-GAAP
financial measures are presented on a continuing operations basis.
These measures may be different from non-GAAP financial measures
used by other companies. The presentation of this financial
information, which is not prepared under any comprehensive set of
accounting rules or principles, is not intended to be considered in
isolation of, or as a substitute for, the financial information
prepared and presented in accordance with generally accepted
accounting principles (GAAP). For a reconciliation of these
non-GAAP financial measures, except for FX-Neutral basis, to the
nearest comparable GAAP measures, see "Business Outlook,"
"Non-GAAP Measures of Financial Performance," "Reconciliation
of GAAP Operating Margin to Non-GAAP Operating Margin,"
"Reconciliation of GAAP Net Income to Non-GAAP Net Income
and Reconciliation of GAAP Effective Tax Rate to
Non-GAAP Effective Tax Rate" and "Reconciliation of Operating
Cash Flow to Free Cash Flow" included in this press release. For
figures in this press release reported "on a FX-Neutral basis", we
calculate the year-over-year impact of foreign currency movements
using prior period foreign currency rates applied to current year
transactional currency amounts. We define organic FX-Neutral
revenue growth as reported revenue growth, excluding incremental
revenue from acquisitions or dispositions for the twelve-month
period following such acquisitions or dispositions and foreign
exchange rate effects.
Forward-Looking Statements
This press release contains forward-looking statements relating
to, among other things, the future performance of eBay Inc. and its
consolidated subsidiaries that are based on the company's current
expectations, forecasts and assumptions and involve risks and
uncertainties. These statements include, but are not limited to,
statements regarding the future performance of eBay Inc. and its
consolidated subsidiaries, including expected financial results for
the fourth quarter and full year 2019 and the future growth in its
business, operating efficiency and margins, reinvestments,
dividends, share repurchases, and the expected timing of the
announcements regarding the company's strategic portfolio review.
Actual results could differ materially from those predicted or
implied and reported results should not be considered as an
indication of future performance. Other factors that could cause or
contribute to such differences include, but are not limited to:
changes in political, business and economic conditions, any
regional or general economic downturn or crisis and any conditions
that affect ecommerce growth or cross-border trade; the company's
ability to realize expected growth opportunities in payments
intermediation and advertising; the outcome of the strategic
portfolio review; fluctuations in foreign currency exchange rates;
the company's need to successfully react to the increasing
importance of mobile commerce and the increasing social aspect of
commerce; an increasingly competitive environment for its business;
changes to the company's capital allocation, including the timing,
declaration, amount and payment of any future dividends or levels
of the company's share repurchases, or management of operating
cash; the company's ability to increase operating efficiency to
drive margin improvements and enable reinvestments; the company's
ability to manage its indebtedness, including managing exposure to
interest rates and maintaining its credit ratings; the company's
need to manage an increasingly large enterprise with a broad range
of businesses of varying degrees of maturity and in many different
geographies; the ability to successfully intermediate payments on
our marketplace platform; the company's need and ability to
manage regulatory, tax, data security and litigation risks; whether
the operational, marketing and strategic benefits of the separation
of the eBay and PayPal businesses can be achieved; the company's
ability to timely upgrade and develop its technology systems,
infrastructure and customer service capabilities at reasonable cost
while maintaining site stability and performance and adding new
products and features; and the company's ability to integrate,
manage and grow businesses that have been acquired or may be
acquired in the future.
The forward-looking statements in this release do not include
the potential impact of any acquisitions or divestitures that may
be announced and/or completed after the date hereof.
More information about factors that could affect the company's
operating results is included under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the company's most recent Annual Report
on Form 10-K and subsequent quarterly reports on
Form 10-Q, copies of which may be obtained by visiting the
company's Investor Relations website at
https://investors.ebayinc.com or the SEC's website at www.sec.gov.
Undue reliance should not be placed on the forward-looking
statements in this press release, which are based on information
available to the company on the date hereof. The company assumes no
obligation to update such statements.
eBay
Inc.
Unaudited
Condensed Consolidated Balance Sheet
|
|
|
September 30,
2019
|
|
December 31,
2018
|
|
(In millions)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
897
|
|
|
$
|
2,202
|
|
Short-term
investments
|
2,189
|
|
|
2,713
|
|
Accounts receivable,
net
|
714
|
|
|
712
|
|
Other current
assets
|
1,409
|
|
|
1,499
|
|
Total current
assets
|
5,209
|
|
|
7,126
|
|
Long-term
investments
|
1,446
|
|
|
3,778
|
|
Property and
equipment, net
|
1,516
|
|
|
1,597
|
|
Goodwill
|
5,097
|
|
|
5,160
|
|
Intangible assets,
net
|
79
|
|
|
92
|
|
Operating lease
right-of-use assets
|
634
|
|
|
—
|
|
Deferred tax
assets
|
4,374
|
|
|
4,792
|
|
Other
assets
|
359
|
|
|
274
|
|
Total
assets
|
$
|
18,714
|
|
|
$
|
22,819
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
|
518
|
|
|
$
|
1,546
|
|
Accounts
payable
|
296
|
|
|
286
|
|
Accrued expenses and
other current liabilities
|
2,507
|
|
|
2,335
|
|
Deferred
revenue
|
169
|
|
|
170
|
|
Income taxes
payable
|
195
|
|
|
117
|
|
Total current
liabilities
|
3,685
|
|
|
4,454
|
|
Operating lease
liabilities
|
497
|
|
|
—
|
|
Deferred tax
liabilities
|
2,620
|
|
|
2,925
|
|
Long-term
debt
|
7,235
|
|
|
7,685
|
|
Other
liabilities
|
1,407
|
|
|
1,474
|
|
Total
liabilities
|
15,444
|
|
|
16,538
|
|
|
|
|
|
Total stockholders'
equity
|
3,270
|
|
|
6,281
|
|
Total liabilities and
stockholders' equity
|
$
|
18,714
|
|
|
$
|
22,819
|
|
eBay
Inc.
Unaudited
Condensed Consolidated Statement of Income
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(In millions,
except per share amounts)
|
Net
revenues
|
$
|
2,649
|
|
|
$
|
2,649
|
|
|
$
|
7,979
|
|
|
$
|
7,869
|
|
Cost of net revenues
(1)
|
627
|
|
|
608
|
|
|
1,858
|
|
|
1,764
|
|
Gross
profit
|
2,022
|
|
|
2,041
|
|
|
6,121
|
|
|
6,105
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and marketing
(1)
|
806
|
|
|
852
|
|
|
2,365
|
|
|
2,446
|
|
Product development
(1)
|
313
|
|
|
307
|
|
|
932
|
|
|
993
|
|
General and
administrative (1)
|
283
|
|
|
248
|
|
|
866
|
|
|
886
|
|
Provision for
transaction losses
|
76
|
|
|
65
|
|
|
219
|
|
|
203
|
|
Amortization of
acquired intangible assets
|
12
|
|
|
13
|
|
|
37
|
|
|
36
|
|
Total operating
expenses
|
1,490
|
|
|
1,485
|
|
|
4,419
|
|
|
4,564
|
|
Income from
operations
|
532
|
|
|
556
|
|
|
1,702
|
|
|
1,541
|
|
Interest and other,
net
|
(142)
|
|
|
392
|
|
|
(129)
|
|
|
661
|
|
Income from
continuing operations before income taxes
|
390
|
|
|
948
|
|
|
1,573
|
|
|
2,202
|
|
Income tax
provision
|
(80)
|
|
|
(228)
|
|
|
(339)
|
|
|
(437)
|
|
Income from
continuing operations
|
$
|
310
|
|
|
$
|
720
|
|
|
$
|
1,234
|
|
|
$
|
1,765
|
|
Income (loss) from
discontinued operations, net of income taxes
|
—
|
|
|
1
|
|
|
(4)
|
|
|
5
|
|
Net income
|
$
|
310
|
|
|
$
|
721
|
|
|
$
|
1,230
|
|
|
$
|
1,770
|
|
|
|
|
|
|
|
|
|
Income per share -
basic:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.37
|
|
|
$
|
0.74
|
|
|
$
|
1.43
|
|
|
$
|
1.78
|
|
Discontinued
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income per share
- basic
|
$
|
0.37
|
|
|
$
|
0.74
|
|
|
$
|
1.43
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
|
|
Income per share -
diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.37
|
|
|
$
|
0.73
|
|
|
$
|
1.42
|
|
|
$
|
1.76
|
|
Discontinued
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income per share
- diluted
|
$
|
0.37
|
|
|
$
|
0.73
|
|
|
$
|
1.42
|
|
|
$
|
1.76
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
Basic
|
830
|
|
|
974
|
|
|
863
|
|
|
992
|
|
Diluted
|
837
|
|
|
983
|
|
|
870
|
|
|
1,005
|
|
|
|
|
|
|
|
|
|
(1) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of net
revenues
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
43
|
|
|
$
|
43
|
|
Sales and
marketing
|
24
|
|
|
26
|
|
|
72
|
|
|
82
|
|
Product
development
|
49
|
|
|
45
|
|
|
148
|
|
|
148
|
|
General and
administrative
|
29
|
|
|
40
|
|
|
113
|
|
|
123
|
|
|
$
|
116
|
|
|
$
|
125
|
|
|
$
|
376
|
|
|
$
|
396
|
|
eBay
Inc.
Unaudited
Condensed Consolidated Statement of Cash Flows
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(In
millions)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
310
|
|
|
$
|
721
|
|
|
$
|
1,230
|
|
|
$
|
1,770
|
|
(Income) loss from
discontinued operations, net of income taxes
|
—
|
|
|
(1)
|
|
|
4
|
|
|
(5)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Provision for
transaction losses
|
76
|
|
|
65
|
|
|
219
|
|
|
203
|
|
Depreciation and
amortization
|
170
|
|
|
175
|
|
|
514
|
|
|
524
|
|
Stock-based
compensation
|
116
|
|
|
125
|
|
|
376
|
|
|
396
|
|
(Gain) loss on
investments, net
|
—
|
|
|
(312)
|
|
|
1
|
|
|
(572)
|
|
(Gain) loss on sale
of business
|
52
|
|
|
—
|
|
|
52
|
|
|
—
|
|
Deferred income
taxes
|
12
|
|
|
98
|
|
|
83
|
|
|
81
|
|
Change in fair value
of warrant
|
49
|
|
|
(126)
|
|
|
(56)
|
|
|
(232)
|
|
Changes in assets and
liabilities, net of acquisition effects
|
224
|
|
|
(185)
|
|
|
(120)
|
|
|
(738)
|
|
Net cash provided by
continuing operating activities
|
1,009
|
|
|
560
|
|
|
2,303
|
|
|
1,427
|
|
Net cash used in
discontinued operating activities
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(2)
|
|
Net cash provided by
operating activities
|
1,009
|
|
|
558
|
|
|
2,303
|
|
|
1,425
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(96)
|
|
|
(179)
|
|
|
(415)
|
|
|
(521)
|
|
Purchases of
investments
|
(13,223)
|
|
|
(5,812)
|
|
|
(37,401)
|
|
|
(16,177)
|
|
Maturities and sales
of investments
|
14,656
|
|
|
5,876
|
|
|
40,483
|
|
|
18,431
|
|
Equity investment in
Paytm Mall
|
(160)
|
|
|
—
|
|
|
(160)
|
|
|
—
|
|
Proceeds from sale of
equity investment in Flipkart
|
—
|
|
|
1,029
|
|
|
—
|
|
|
1,029
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
—
|
|
|
(93)
|
|
|
(302)
|
|
Other
|
(34)
|
|
|
12
|
|
|
15
|
|
|
13
|
|
Net cash provided by
(used in) investing activities
|
1,143
|
|
|
926
|
|
|
2,429
|
|
|
2,473
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
4
|
|
|
3
|
|
|
59
|
|
|
70
|
|
Repurchases of common
stock
|
(1,022)
|
|
|
(991)
|
|
|
(3,971)
|
|
|
(2,991)
|
|
Payments for taxes
related to net share settlements of restricted stock units and
awards
|
(43)
|
|
|
(36)
|
|
|
(162)
|
|
|
(189)
|
|
Payments for
dividends
|
(115)
|
|
|
—
|
|
|
(360)
|
|
|
—
|
|
Repayment of
debt
|
(1,550)
|
|
|
—
|
|
|
(1,550)
|
|
|
(750)
|
|
Other
|
1
|
|
|
4
|
|
|
1
|
|
|
(27)
|
|
Net cash used in
financing activities
|
(2,725)
|
|
|
(1,020)
|
|
|
(5,983)
|
|
|
(3,887)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(39)
|
|
|
1
|
|
|
(59)
|
|
|
(50)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(612)
|
|
|
465
|
|
|
(1,310)
|
|
|
(39)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
1,521
|
|
|
1,636
|
|
|
2,219
|
|
|
2,140
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
909
|
|
|
$
|
2,101
|
|
|
$
|
909
|
|
|
$
|
2,101
|
|
eBay
Inc.
Unaudited Summary
of Consolidated Net Revenues
|
|
|
Three Months
Ended
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
(In millions,
except percentages)
|
Net Revenues by
Type:
|
|
|
|
|
|
|
|
|
|
Net transaction
revenues:
|
|
|
|
|
|
|
|
|
|
Marketplace
(2)
|
$
|
1,829
|
|
|
$
|
1,887
|
|
|
$
|
1,885
|
|
|
$
|
1,984
|
|
|
$
|
1,803
|
|
Current quarter vs
prior year quarter
|
1
|
%
|
|
3
|
%
|
|
5
|
%
|
|
9
|
%
|
|
6
|
%
|
Percent from
international
|
63
|
%
|
|
63
|
%
|
|
62
|
%
|
|
64
|
%
|
|
62
|
%
|
StubHub
|
286
|
|
|
243
|
|
|
223
|
|
|
311
|
|
|
286
|
|
Current quarter vs
prior year quarter
|
—
|
%
|
|
1
|
%
|
|
(3)
|
%
|
|
2
|
%
|
|
6
|
%
|
Percent from
international
|
7
|
%
|
|
9
|
%
|
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
Total net
transaction revenues
|
2,115
|
|
|
2,130
|
|
|
2,108
|
|
|
2,295
|
|
|
2,089
|
|
Current quarter vs
prior year quarter
|
1
|
%
|
|
3
|
%
|
|
4
|
%
|
|
8
|
%
|
|
6
|
%
|
Percent from
international
|
55
|
%
|
|
57
|
%
|
|
56
|
%
|
|
56
|
%
|
|
55
|
%
|
|
|
|
|
|
|
|
|
|
|
Marketing services
and other revenues:
|
|
|
|
|
|
|
|
|
|
Marketplace
|
254
|
|
|
270
|
|
|
277
|
|
|
316
|
|
|
301
|
|
Current quarter vs
prior year quarter
|
(16)
|
%
|
|
(9)
|
%
|
|
(11)
|
%
|
|
(5)
|
%
|
|
3
|
%
|
Percent from
international
|
53
|
%
|
|
56
|
%
|
|
54
|
%
|
|
53
|
%
|
|
54
|
%
|
Classifieds
|
265
|
|
|
271
|
|
|
256
|
|
|
263
|
|
|
254
|
|
Current quarter vs
prior year quarter
|
4
|
%
|
|
5
|
%
|
|
4
|
%
|
|
8
|
%
|
|
8
|
%
|
Percent from
international
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
StubHub
|
20
|
|
|
21
|
|
|
7
|
|
|
3
|
|
|
5
|
|
Current quarter vs
prior year quarter
|
**
|
|
|
**
|
|
|
**
|
|
|
112
|
%
|
|
123
|
%
|
Percent from
international
|
8
|
%
|
|
20
|
%
|
|
7
|
%
|
|
22
|
%
|
|
90
|
%
|
Elimination of
intersegment revenue
|
(5)
|
|
|
(5)
|
|
|
(5)
|
|
|
—
|
|
|
—
|
|
Total marketing
services and other revenues
|
534
|
|
|
557
|
|
|
535
|
|
|
582
|
|
|
560
|
|
Current quarter vs
prior year quarter
|
(5)
|
%
|
|
(1)
|
%
|
|
(4)
|
%
|
|
1
|
%
|
|
6
|
%
|
Percent from
international
|
74
|
%
|
|
76
|
%
|
|
75
|
%
|
|
74
|
%
|
|
75
|
%
|
Total net revenues
(1)
|
$
|
2,649
|
|
|
$
|
2,687
|
|
|
$
|
2,643
|
|
|
$
|
2,877
|
|
|
$
|
2,649
|
|
Current quarter vs
prior year quarter
|
—
|
%
|
|
2
|
%
|
|
2
|
%
|
|
6
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Foreign currency
impact
|
$
|
(43)
|
|
|
$
|
(86)
|
|
|
$
|
(68)
|
|
|
$
|
(9)
|
|
|
$
|
4
|
|
(2) Hedge
gain/(loss)
|
$
|
19
|
|
|
$
|
13
|
|
|
$
|
20
|
|
|
$
|
29
|
|
|
$
|
12
|
|
eBay
Inc.
Unaudited
Supplemental Operating Data
|
|
|
Three Months
Ended
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
(In millions,
except percentages)
|
Active Buyers
(1)
|
183
|
|
|
182
|
|
|
180
|
|
|
179
|
|
|
177
|
|
Current quarter vs
prior year quarter
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
Gross Merchandise
Volume (2)
|
|
|
|
|
|
|
|
|
|
Marketplace
|
$
|
20,489
|
|
|
$
|
21,484
|
|
|
$
|
21,571
|
|
|
$
|
23,231
|
|
|
$
|
21,482
|
|
Current quarter vs
prior year quarter
|
(5)
|
%
|
|
(5)
|
%
|
|
(4)
|
%
|
|
1
|
%
|
|
5
|
%
|
StubHub
|
$
|
1,232
|
|
|
$
|
1,117
|
|
|
$
|
1,018
|
|
|
$
|
1,410
|
|
|
$
|
1,237
|
|
Current quarter vs
prior year quarter
|
—
|
%
|
|
5
|
%
|
|
(3)
|
%
|
|
(2)
|
%
|
|
7
|
%
|
Total
GMV
|
$
|
21,721
|
|
|
$
|
22,601
|
|
|
$
|
22,589
|
|
|
$
|
24,641
|
|
|
$
|
22,719
|
|
Current quarter vs
prior year quarter
|
(4)
|
%
|
|
(4)
|
%
|
|
(4)
|
%
|
|
1
|
%
|
|
5
|
%
|
|
|
(1)
|
All buyers who
successfully closed a transaction on our Marketplace and StubHub
platforms within the previous 12-month period. Buyers may register
more than once, and as a result, may have more than one account.
Starting in the second quarter of 2018, year-over-year growth rate
is on a pro-forma basis, which includes Giosis' Japan business
active buyers in both current and prior year periods.
|
(2)
|
Total value of all
successfully closed transactions between users on our Marketplace
and StubHub platforms during the period regardless of whether the
buyer and seller actually consummated the transaction. We believe
that GMV provides a useful measure of the overall volume of closed
transactions that flow through our platforms in a given period,
notwithstanding the inclusion in GMV of closed transactions that
are not ultimately consummated.
|
eBay Inc.
Business Outlook
The guidance figures provided below and elsewhere in this
press release are forward-looking statements, reflect a number of
estimates, assumptions and other uncertainties, and are approximate
in nature because the company's future performance is difficult to
predict. Such guidance is based on information available on the
date of this press release, and the company assumes no obligation
to update it.
The company's future performance involves risks and
uncertainties, and the company's actual results could differ
materially from the information below and elsewhere in this press
release. Some of the factors that could affect the company's
operating results are set forth under the caption "Forward-Looking
Statements" above in this press release. More information about
factors that could affect the company's operating results is
included under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in its most recent annual report on Form 10-K and
subsequent quarterly reports on Form 10-Q, copies of which may
be obtained by visiting eBay's investor relations website at
https://investors.ebayinc.com or the SEC's website at
www.sec.gov.
eBay
Inc.
|
|
|
Three Months
Ending
|
|
December 31,
2019
|
(In billions,
except per share amounts)
|
GAAP
|
|
Non-GAAP
(a)
|
Net
Revenue
|
$2.77 -
$2.82
|
|
$2.77 -
$2.82
|
Diluted EPS from
continuing operations
|
$0.55 -
$0.60
|
|
$0.73 -
$0.76
|
|
|
|
|
|
Twelve Months
Ending
|
|
December 31,
2019
|
(In billions,
except per share amounts)
|
GAAP
|
|
Non-GAAP
(b)
|
Net
Revenue
|
$10.75 -
$10.80
|
|
$10.75 -
$10.80
|
Diluted EPS from
continuing operations
|
$1.97 -
$2.02
|
|
$2.75 -
$2.78
|
|
|
|
|
(a) Estimated
non-GAAP amounts above for the three months ending December 31,
2019 reflect adjustments that exclude the estimated amortization of
acquired intangible assets of approximately $13 - $18 million,
estimated stock-based compensation expense and associated employer
payroll tax expense of approximately $125 - $135 million and an
adjustment that excludes the net deferred tax impact related to the
step-up in the tax basis of intangible assets of approximately $40
- $50 million.
|
(b) Estimated
non-GAAP amounts above for the twelve months ending December 31,
2019 reflect adjustments that exclude the estimated amortization of
acquired intangible assets of approximately $55 - $60 million,
estimated stock-based compensation expense and associated employer
payroll tax expense of approximately $515 - $525 million and an
adjustment that excludes the net deferred tax impact related to the
step-up in the tax basis of intangible assets of approximately $160
- $170 million.
|
eBay Inc.
Non-GAAP Measures of
Financial Performance
To supplement the company's condensed consolidated financial
statements presented in accordance with generally accepted
accounting principles, or GAAP, the company uses non-GAAP measures
of certain components of financial performance. These non-GAAP
measures include non-GAAP net income, non-GAAP earnings per diluted
share, non-GAAP operating margin, non-GAAP effective tax rate, and
free cash flow. These non-GAAP financial measures are presented on
a continuing operations basis.
These non-GAAP measures are not in accordance with, or an
alternative to, measures prepared in accordance with GAAP and may
be different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. Non-GAAP
measures have limitations in that they do not reflect all of the
amounts associated with the company's results of operations as
determined in accordance with GAAP. These measures should only be
used to evaluate the company's results of operations in conjunction
with the corresponding GAAP measures.
Reconciliation to the nearest GAAP measure of all non-GAAP
measures included in this press release can be found in the tables
included in this press release.
These non-GAAP measures are provided to enhance investors'
overall understanding of the company's current financial
performance and its prospects for the future. Specifically, the
company believes the non-GAAP measures provide useful information
to both management and investors by excluding certain expenses,
gains and losses, or net purchases of property and equipment, as
the case may be, that may not be indicative of its core operating
results and business outlook. In addition, because the company has
historically reported certain non-GAAP results to investors, the
company believes that the inclusion of non-GAAP measures provides
consistency in the company's financial reporting.
For its internal budgeting process, and as discussed further
below, the company's management uses financial measures that do not
include stock-based compensation expense, employer payroll taxes on
stock-based compensation, amortization or impairment of acquired
intangible assets, impairment of goodwill, amortization of deferred
tax assets associated with the realignment of its legal structure
and related foreign exchange effects, significant gains or losses
from the disposal/acquisition of a business, certain gains and
losses on investments, gains or losses associated with a warrant
agreement that the company entered into with Adyen,
restructuring-related charges and the income taxes associated with
the foregoing. In addition to the corresponding GAAP measures, the
company's management also uses the foregoing non-GAAP measures in
reviewing the financial results of the company.
The company excludes the following items from non-GAAP net
income, non-GAAP earnings per diluted share, non-GAAP operating
margin and non-GAAP effective tax rate:
Stock-based compensation
expense and related employer payroll taxes. This expense
consists of expenses for stock options, restricted stock and
employee stock purchases. The company excludes stock-based
compensation expense from its non-GAAP measures primarily because
they are non-cash expenses that management does not believe are
reflective of ongoing operating results. The related employer
payroll taxes are dependent on the company's stock price and the
timing and size of exercises by employees of their stock options
and the vesting of their restricted stock, over which management
has limited to no control, and as such management does not believe
it correlates to the company's operation of the business.
Amortization or impairment of
acquired intangible assets, impairment of goodwill, certain
amortization of deferred tax assets and related foreign exchange
effects, significant gains or losses and transaction expenses from
the acquisition or disposal of a business and certain gains or
losses on investments. The company incurs amortization or
impairment of acquired intangible assets and goodwill in connection
with acquisitions and may incur significant gains or losses from
the acquisition or disposal of a business and therefore excludes
these amounts from its non-GAAP measures. The company also excludes
certain gains and losses on investments. The company excludes the
non-cash amortization of deferred tax assets associated with the
realignment of its legal structure, which is not reduced by the
effects of the Tax Cuts and Jobs Act, and related foreign exchange
effects. The company excludes these items because management does
not believe they correlate to the ongoing operating results of the
company's business.
Restructuring. These
charges consist of expenses for employee severance and other exit
and disposal costs. The company excludes significant restructuring
charges primarily because management does not believe they are
reflective of ongoing operating results.
Other certain significant
gains, losses, or charges that are not indicative of the company's
core operating results. These are significant gains, losses, or
charges during a period that are the result of isolated events or
transactions which have not occurred frequently in the past and are
not expected to occur regularly or be repeated in the
future. The company excludes these amounts from its results
primarily because management does not believe they are indicative
of its current or ongoing operating results.
Change in fair market value of
warrant. These are gains or losses associated with a
warrant agreement that the company entered into with Adyen, which
are attributable to changes in fair value during the period.
Tax effect of non-GAAP
adjustments. This amount is used to present stock-based
compensation and the other amounts described above on an after-tax
basis consistent with the presentation of non-GAAP net income.
In addition to the non-GAAP measures discussed above, the
company also uses free cash flow. Free cash flow represents
operating cash flows less purchases of property and equipment. The
company considers free cash flow to be a liquidity measure that
provides useful information to management and investors about the
amount of cash generated by the business after the purchases of
property, buildings, and equipment, which can then be used to,
among other things, invest in the company's business, make
strategic acquisitions, repurchase stock and pay dividends. A
limitation of the utility of free cash flow as a measure of
financial performance is that it does not represent the total
increase or decrease in the company's cash balance for the
period.
eBay
Inc.
Reconciliation of
GAAP Operating Margin to Non-GAAP Operating
Margin
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(In millions,
except percentages)
|
GAAP operating
income
|
$
|
532
|
|
|
$
|
556
|
|
|
$
|
1,702
|
|
|
$
|
1,541
|
|
Stock-based
compensation expense and related employer payroll taxes
|
119
|
|
|
127
|
|
|
390
|
|
|
411
|
|
Amortization of
acquired intangible assets within cost of net revenues
|
1
|
|
|
3
|
|
|
5
|
|
|
13
|
|
Amortization of
acquired intangible assets within operating expenses
|
12
|
|
|
13
|
|
|
37
|
|
|
36
|
|
Other significant
gains, losses or charges
|
41
|
|
|
2
|
|
|
82
|
|
|
86
|
|
Total non-GAAP
operating income adjustments
|
173
|
|
|
145
|
|
|
514
|
|
|
546
|
|
Non-GAAP operating
income
|
$
|
705
|
|
|
$
|
701
|
|
|
$
|
2,216
|
|
|
$
|
2,087
|
|
Non-GAAP operating
margin
|
26.6
|
%
|
|
26.4
|
%
|
|
27.8
|
%
|
|
26.5
|
%
|
Reconciliation of
GAAP Net Income to Non-GAAP Net Income and
GAAP Effective Tax
Rate to Non-GAAP Effective Tax Rate*
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(In millions,
except per share amounts and percentages)
|
GAAP income from
continuing operations before income taxes
|
$
|
390
|
|
|
$
|
948
|
|
|
$
|
1,573
|
|
|
$
|
2,202
|
|
GAAP provision for
income taxes
|
(80)
|
|
|
(228)
|
|
|
(339)
|
|
|
(437)
|
|
GAAP net income from
continuing operations
|
$
|
310
|
|
|
$
|
720
|
|
|
$
|
1,234
|
|
|
$
|
1,765
|
|
Non-GAAP adjustments
to net income from continuing operations:
|
|
|
|
|
|
|
|
Non-GAAP operating
income from continuing operations adjustments (see table
above)
|
173
|
|
|
145
|
|
|
514
|
|
|
546
|
|
(Gain) loss on
investments and sale of business
|
52
|
|
|
(313)
|
|
|
52
|
|
|
(559)
|
|
Change in fair market
value of warrant
|
49
|
|
|
(126)
|
|
|
(56)
|
|
|
(232)
|
|
Tax effect of step-up
of intangible assets basis
|
—
|
|
|
—
|
|
|
199
|
|
|
—
|
|
Tax effect of
non-GAAP adjustments
|
(21)
|
|
|
128
|
|
|
(183)
|
|
|
115
|
|
Non-GAAP net income
from continuing operations
|
$
|
563
|
|
|
$
|
554
|
|
|
$
|
1,760
|
|
|
$
|
1,635
|
|
|
|
|
|
|
|
|
|
Diluted net income
from continuing operations per share:
|
|
|
|
|
|
|
|
GAAP
|
$
|
0.37
|
|
|
$
|
0.73
|
|
|
$
|
1.42
|
|
|
$
|
1.76
|
|
Non-GAAP
|
$
|
0.67
|
|
|
$
|
0.56
|
|
|
$
|
2.02
|
|
|
$
|
1.62
|
|
Shares used in GAAP
and non-GAAP diluted net income per-share calculation
|
837
|
|
|
983
|
|
|
870
|
|
|
1,005
|
|
|
|
|
|
|
|
|
|
GAAP effective tax
rate - Continuing operations
|
20.7
|
%
|
|
24.1
|
%
|
|
21.6
|
%
|
|
19.9
|
%
|
Tax effect of
non-GAAP adjustments to net income from continuing
operations
|
(5.4)
|
%
|
|
(8.7)
|
%
|
|
(6.1)
|
%
|
|
(3.4)
|
%
|
Non-GAAP effective
tax rate - Continuing operations
|
15.3
|
%
|
|
15.4
|
%
|
|
15.5
|
%
|
|
16.5
|
%
|
|
*Presented on a
continuing operations basis
|
Reconciliation of
Operating Cash Flow to Free Cash Flow*
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(In
millions)
|
Net cash provided by
continuing operating activities
|
$
|
1,009
|
|
$
|
560
|
|
$
|
2,303
|
|
$
|
1,427
|
Less: Purchases of
property and equipment
|
(96)
|
|
(179)
|
|
(415)
|
|
(521)
|
Free cash
flow
|
$
|
913
|
|
$
|
381
|
|
$
|
1,888
|
|
$
|
906
|
|
*Presented on a
continuing operations basis
|
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SOURCE eBay Inc.