SAN JOSE, Calif., July 28,
2020 /PRNewswire/ -- eBay Inc. (Nasdaq: EBAY), a global
commerce leader that connects millions of buyers and sellers around
the world, today reported financial results for its second quarter
ended June 30, 2020.
"Our team's focus on supporting small businesses and communities
during a period of heightened need allowed us to re-engage our
existing buyers and sellers while introducing approximately 8
million new customers to our platform during the quarter," said
Jamie Iannone, Chief Executive
Officer of eBay Inc. "This contributed to a very strong second
quarter, ahead of expectations. Recently, we've also accelerated
the rollout of managed payments and signed an agreement to transfer
our Classifieds business to Adevinta, bringing together two highly
complementary businesses to create the world's largest online
classifieds group."
"Our purpose has always been to empower people and create
economic opportunity for all," continued Iannone. "As we look to
the future, our vision is clear - we will build on our powerful
strengths to become the best global marketplace for buyers and
sellers through a technology-led reimagination. We will accomplish
this vision through three key priorities: build compelling next-gen
experiences for our enthusiasts; become the partner of choice for
sellers; and cultivate life-long trusted buyer relationships."
Second Quarter Financial Highlights
- Revenue was $2.9 billion, up 18%
on an as-reported basis and up 21% on a foreign exchange (FX)
neutral basis.
- Annual active buyers grew by 5%, adding approximately 8 million
buyers in the quarter, for a total of 182 million global active
buyers.
- Gross merchandise volume (GMV) was $27.1
billion, with growth accelerating sequentially since Q1,
and up 26% on an as-reported basis and up 29% on a FX-Neutral
basis, year on year.
- Marketplace platforms delivered $2.7
billion of revenue, up 24% on an as-reported basis and up
26% on a FX-Neutral basis.
- Classifieds platforms delivered revenue of $201 million, down 26% on an as-reported basis
and down 24% on a FX-Neutral basis.
- GAAP net income from continuing operations was $740 million, or $1.04 per diluted share.
- Non-GAAP net income from continuing operations was $770 million, or $1.08 per diluted share.
- Generated $964 million of
operating cash flow and $866 million
of free cash flow from continuing operations.
- Announced pricing of $750 million
senior unsecured notes offering on June 8,
2020, with the intention of using proceeds from the offering
to repay debt maturities coming due in 2021.
- Repaid $500 million of 2.150%
senior fixed rate notes due 2020 that matured in the quarter, and
completed a tender offer to purchase any and all of the
$750 million of 2.875% senior fixed
rate notes due in 2021, purchasing approximately 44% of the
outstanding 2.875% senior notes in Q2.
Business Highlights
- Following a thorough review of eBay's Classifieds business, on
July 21, 2020, eBay announced it had
entered into a definitive agreement to transfer its Classifieds
business to Adevinta for a total consideration valued at
approximately $9.2 billion, based on
the closing trading price of Adevinta shares on the Oslo Stock
Exchange on July 17, 2020. eBay will
receive $2.5 billion of cash and 540
million shares of Adevinta, representing 44% ownership of the pro
forma company, and an approximate 33.3% voting stake. The
transaction is expected to close by Q1 2021, subject to approval of
Adevinta stockholders and other customary conditions.
- eBay's managed payments reached a significant milestone at the
end of July with the expiration of its Operating Agreement with
PayPal. Now, eBay is able to scale its management of payments
globally, offering buyers more choice and flexibility in payment
options and simplifying business operations for sellers. Since
launch, eBay has managed payments for nearly 42,000 sellers and
processed $4.7 billion in GMV.
- Marketplace platforms have experienced strength in key metrics
- traffic, buyer acquisition, conversion, sold items, and GMV -
driven by consumer behavior shift to e-commerce shopping resulting
from the COVID-19 pandemic. All major verticals accelerated
significantly compared to previous quarters, including Home &
Garden, Electronics, Fashion, Auto Parts and Collectibles.
- In Q2, Promoted Listings delivered $196
million of revenue, up 120% on an as-reported basis and up
124% on a FX-Neutral basis.
- Programs like eBay's Up & Running to support small
businesses continued to expand globally, now with adaptations in
over 25 markets, most recently announced in the Baltics,
Malaysia and Singapore.
- To improve seller onboarding, eBay recently launched
improvements to seller registration, updating the Welcome Tour and
Get Started overview in an effort to help new sellers onboard more
easily. The company also boosted seller presence by launching
Storefronts in the mobile app.
- Seller Hub capabilities continue to grow with the launch of
several new features including expanded multi-user authentication
capabilities, real-time competitive pricing and traffic data and
enhanced our competitive pricing analytics to include the search of
item specifics in addition to title.
- eBay announced the launch of Dark Mode, a feature that provides
a more comfortable viewing experience for users and can be enabled
in the device settings, for eBay mobile apps on iOS and Android.
This was the most requested app feature by customers, and eBay was
one of the first e-commerce companies to implement the
feature.
- eBay Motors mobile app launched escrow services to enable a
safe, secure transaction via a new partnership with Escrow.com,
along with additional chat features.
- Through its Gumtree Australia classifieds business, the
acquisition of Cox Australia Media Solutions completed on
June 1, 2020, combining the strength
of Gumtree, CarsGuide.com.au and Autotrader.com.au to create an
attractive car-buying platform for Australian consumers.
- In addition to the charitable donations reported during the
company's mid-quarter update in June, in the U.K., the company
donated $2.1 million as part of the
Charity Connect training program to upskill U.K. charities to boost
their online sales, $650,000 to NHS
Charities Together COVID Appeal, and $260,000 to the Stephen Lawrence Charitable
Foundation, which works to build a fair and inclusive society.
Second Quarter
2020 Financial Highlights (presented in millions, except per share
data and percentages)
|
|
Second
Quarter
|
|
|
|
2020
|
2019
|
Change
|
eBay
Inc.
|
|
|
|
|
Net
revenues
|
$2,865
|
$2,423
|
$442
|
18%
|
GAAP - Continuing
Operations
|
|
|
|
|
Income (loss) from
continuing operations
|
$740
|
$400
|
$340
|
85%
|
Earnings (loss) per
diluted share from continuing operations
|
$1.04
|
$0.46
|
$0.58
|
125%
|
Non-GAAP -
Continuing Operations
|
|
|
|
|
Net income
|
$770
|
$576
|
$194
|
34%
|
Earnings per diluted
share
|
$1.08
|
$0.66
|
$0.42
|
63%
|
Other Selected Financial and Operational Results
- Operating margin – GAAP operating margin increased to 28.7% for
the second quarter of 2020, compared to 23.0% for the same period
last year. Non-GAAP operating margin increased to 34.3% in the
second quarter of 2020, compared to 29.2% for the same period last
year.
- Taxes – The GAAP effective tax rate for continuing operations
for the second quarter of 2020 was 26.2%, compared to 21.0% for the
second quarter of 2019. The non-GAAP effective tax rate for
continuing operations for the second quarter of 2020 was 15.7%,
compared to 13.3% for the second quarter of 2019.
- Cash flow – The company generated $964
million of operating cash flow from continuing operations
and $866 million of free cash flow
during the second quarter of 2020.
- Capital returns – The company paid cash dividends of
$112 million during the second
quarter of 2020.
- Cash and cash equivalents and non-equity investments – The
company's cash and cash equivalents and non-equity investments
portfolio totaled $5.8 billion as of
June 30, 2020.
Business Outlook
- Third quarter 2020 — The company expects net revenue between
$2.64 billion and $2.71 billion, representing Organic FX-Neutral
growth of 14% - 17%, with GAAP earnings per diluted share from
continuing operations in the range of $0.58 - $0.64 and
non-GAAP earnings per diluted share from continuing operations in
the range of $0.81 - $0.87.
- Full year 2020 — The company expects net revenue between
$10.56 billion and $10.75 billion, representing Organic FX-Neutral
growth of 12% - 14%, with GAAP earnings per diluted share from
continuing operations in the range of $2.85 - $3.00 and
non-GAAP earnings per diluted share from continuing operations in
the range of $3.47 - $3.59.
- This guidance reflects management's expectations for
operational performance and the impacts seen in both of our
Marketplaces and Classifieds platforms to date, but it is difficult
to predict exactly how buyer behavior, retail channel shifts, and
changes in the economic environment will affect our volume over
time. The guidance we are providing assumes Classifieds results are
included in the entire year. We will provide updates moving forward
as appropriate.
Capital Allocation
- eBay's Board of Directors has declared a cash dividend of
$0.16 per share of the company's
common stock. The dividend is payable on September 18, 2020 to stockholders of record as
of September 1, 2020.
Quarterly Conference Call and Webcast
eBay Inc. will host a conference call to discuss second quarter
2020 results at 2:00 p.m. Pacific Time today. Investors and
participants can access the call by dialing (866) 211-3115 in the
U.S. and (647) 689-6602 internationally. The passcode for the
conference line is 5508006. 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 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, California, eBay is one of the
world's largest and most vibrant marketplaces for discovering great
value and unique selection. In 2019, eBay enabled $86 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 figures in this press
release presented on a "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 management's vision for the
future of eBay and our ability to accomplish our vision, expected
financial results for the third quarter and full year 2020 and the
future growth in its business, the effects of COVID-19 on our
business and operations and our ability to respond to such effects,
operating efficiency and margins, reinvestments, dividends, share
repurchases, and the closing of the announced transaction with
Adevinta ASA (the "Transaction") and the potential benefits of the
Transaction. 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,
the duration of the COVID-19 pandemic and the effects of COVID-19
on our business and operations and on the general economy,
including effects on our sellers and customers, any regional or
general economic downturn or crisis and any conditions that affect
e-commerce growth or cross-border trade; the company's ability to
realize expected growth opportunities in payments intermediation
and advertising; 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; the company's ability to integrate, manage
and grow businesses that have been acquired or may be acquired in
the future; the possibility that regulatory and other approvals and
conditions to the Transaction are not received or satisfied on a
timely basis or at all; the possibility that eBay may not fully
realize the projected benefits of the Transaction; changes in the
anticipated timing for closing the Transaction; business disruption
during the pendency of or following the Transaction; diversion of
management time on Transaction-related issues; the reaction of
customers and other persons to the Transaction; and other events
that could adversely impact the completion of the Transaction,
including COVID-19 and industry or economic conditions outside of
our control.
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.
Company News:
https://www.ebayinc.com/stories/news/
Investor Relations website:
https://investors.ebayinc.com
eBay
Inc.
Unaudited
Condensed Consolidated Balance Sheet
|
|
|
June
30,
2020
|
|
December
31,
2019
|
|
|
(In millions)
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,006
|
|
|
$
|
923
|
|
|
Short-term
investments
|
4,297
|
|
|
1,850
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of $140 and $100
|
845
|
|
|
691
|
|
|
Other current
assets
|
1,246
|
|
|
1,101
|
|
|
Current assets of
discontinued operations
|
—
|
|
|
141
|
|
|
Total current
assets
|
7,394
|
|
|
4,706
|
|
|
Long-term
investments
|
832
|
|
|
1,305
|
|
|
Property and
equipment, net
|
1,364
|
|
|
1,484
|
|
|
Goodwill
|
4,910
|
|
|
4,929
|
|
|
Intangible assets,
net
|
56
|
|
|
62
|
|
|
Operating lease
right-of-use assets
|
536
|
|
|
599
|
|
|
Deferred tax
assets
|
4,203
|
|
|
4,369
|
|
|
Other
assets
|
719
|
|
|
414
|
|
|
Long-term assets of
discontinued operations
|
—
|
|
|
306
|
|
|
Total
assets
|
$
|
20,014
|
|
|
$
|
18,174
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
debt
|
$
|
516
|
|
|
$
|
1,022
|
|
|
Accounts
payable
|
305
|
|
|
251
|
|
|
Accrued expenses and
other current liabilities
|
2,440
|
|
|
2,189
|
|
|
Deferred
revenue
|
103
|
|
|
135
|
|
|
Income taxes
payable
|
1,328
|
|
|
210
|
|
|
Current liabilities of
discontinued operations
|
—
|
|
|
259
|
|
|
Total current
liabilities
|
4,692
|
|
|
4,066
|
|
|
Operating lease
liabilities
|
411
|
|
|
472
|
|
|
Deferred tax
liabilities
|
2,584
|
|
|
2,646
|
|
|
Long-term
debt
|
8,161
|
|
|
6,738
|
|
|
Other
liabilities
|
1,264
|
|
|
1,356
|
|
|
Long-term liabilities
of discontinued operations
|
—
|
|
|
26
|
|
|
Total
liabilities
|
17,112
|
|
|
15,304
|
|
|
Total stockholders'
equity
|
2,902
|
|
|
2,870
|
|
|
Total liabilities and
stockholders' equity
|
$
|
20,014
|
|
|
$
|
18,174
|
|
|
eBay
Inc.
Unaudited
Condensed Consolidated Statement of Income
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(In millions,
except per share amounts)
|
Net
revenues
|
$
|
2,865
|
|
|
$
|
2,423
|
|
|
$
|
5,239
|
|
|
$
|
4,836
|
|
Cost of net revenues
(1)
|
598
|
|
|
553
|
|
|
1,124
|
|
|
1,092
|
|
Gross
profit
|
2,267
|
|
|
1,870
|
|
|
4,115
|
|
|
3,744
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and marketing
(1)
|
716
|
|
|
688
|
|
|
1,323
|
|
|
1,335
|
|
Product development
(1)
|
308
|
|
|
295
|
|
|
575
|
|
|
567
|
|
General and
administrative (1)
|
320
|
|
|
256
|
|
|
554
|
|
|
540
|
|
Provision for
transaction losses
|
93
|
|
|
63
|
|
|
195
|
|
|
130
|
|
Amortization of
acquired intangible assets
|
9
|
|
|
10
|
|
|
18
|
|
|
21
|
|
Total operating
expenses
|
1,446
|
|
|
1,312
|
|
|
2,665
|
|
|
2,593
|
|
Income from
operations
|
821
|
|
|
558
|
|
|
1,450
|
|
|
1,151
|
|
Interest and other,
net
|
182
|
|
|
(51)
|
|
|
184
|
|
|
13
|
|
Income from
continuing operations before income taxes
|
1,003
|
|
|
507
|
|
|
1,634
|
|
|
1,164
|
|
Income tax
provision
|
(263)
|
|
|
(107)
|
|
|
(409)
|
|
|
(248)
|
|
Income from
continuing operations
|
$
|
740
|
|
|
$
|
400
|
|
|
$
|
1,225
|
|
|
$
|
916
|
|
Income (loss) from
discontinued operations, net of income taxes
|
6
|
|
|
2
|
|
|
2,933
|
|
|
4
|
|
Net income
|
$
|
746
|
|
|
$
|
402
|
|
|
$
|
4,158
|
|
|
$
|
920
|
|
|
|
|
|
|
|
|
|
Income per share -
basic:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.05
|
|
|
$
|
0.47
|
|
|
$
|
1.68
|
|
|
$
|
1.04
|
|
Discontinued
operations
|
0.01
|
|
|
—
|
|
|
4.03
|
|
|
0.01
|
|
Net income per share
- basic
|
$
|
1.06
|
|
|
$
|
0.47
|
|
|
$
|
5.71
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
Income per share -
diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
1.04
|
|
|
$
|
0.46
|
|
|
$
|
1.67
|
|
|
$
|
1.03
|
|
Discontinued
operations
|
0.01
|
|
|
—
|
|
|
4.00
|
|
|
0.01
|
|
Net income per share
- diluted
|
$
|
1.05
|
|
|
$
|
0.46
|
|
|
$
|
5.67
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
Basic
|
703
|
|
|
860
|
|
|
728
|
|
|
880
|
|
Diluted
|
711
|
|
|
867
|
|
|
734
|
|
|
887
|
|
|
|
|
|
|
|
|
|
(1) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of net
revenues
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
25
|
|
Sales and
marketing
|
24
|
|
|
23
|
|
|
44
|
|
|
44
|
|
Product
development
|
46
|
|
|
50
|
|
|
85
|
|
|
92
|
|
General and
administrative
|
34
|
|
|
43
|
|
|
65
|
|
|
80
|
|
|
$
|
116
|
|
|
$
|
129
|
|
|
$
|
216
|
|
|
$
|
241
|
|
eBay
Inc.
Unaudited
Condensed Consolidated Statement of Cash Flows
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(In
millions)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
$
|
746
|
|
|
$
|
402
|
|
|
$
|
4,158
|
|
|
$
|
920
|
|
|
(Income) loss from
discontinued operations, net of income taxes
|
(6)
|
|
|
(2)
|
|
|
(2,933)
|
|
|
(4)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Provision for
transaction losses
|
93
|
|
|
63
|
|
|
195
|
|
|
130
|
|
|
Depreciation and
amortization
|
172
|
|
|
168
|
|
|
319
|
|
|
330
|
|
|
Stock-based
compensation
|
116
|
|
|
129
|
|
|
216
|
|
|
241
|
|
|
(Gain) loss on
investments, net
|
40
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
Deferred income
taxes
|
52
|
|
|
35
|
|
|
104
|
|
|
56
|
|
|
Change in fair value
of warrant
|
(293)
|
|
|
8
|
|
|
(305)
|
|
|
(105)
|
|
|
Changes in assets and
liabilities, net of acquisition effects
|
44
|
|
|
(108)
|
|
|
(90)
|
|
|
(302)
|
|
|
Net cash provided by
continuing operating activities
|
964
|
|
|
695
|
|
|
1,666
|
|
|
1,267
|
|
|
Net cash provided by
(used in) discontinued operating activities
|
—
|
|
|
49
|
|
|
(110)
|
|
|
27
|
|
|
Net cash provided by
operating activities
|
964
|
|
|
744
|
|
|
1,556
|
|
|
1,294
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(98)
|
|
|
(133)
|
|
|
(196)
|
|
|
(313)
|
|
|
Purchases of
investments
|
(10,968)
|
|
|
(12,252)
|
|
|
(21,673)
|
|
|
(24,167)
|
|
|
Maturities and sales
of investments
|
10,471
|
|
|
13,080
|
|
|
19,666
|
|
|
25,827
|
|
|
Acquisitions, net of
cash acquired
|
(42)
|
|
|
—
|
|
|
(42)
|
|
|
(93)
|
|
|
Other
|
—
|
|
|
37
|
|
|
39
|
|
|
49
|
|
|
Net cash provided by
(used in) continuing investing activities
|
(637)
|
|
|
732
|
|
|
(2,206)
|
|
|
1,303
|
|
|
Net cash provided by
(used in) discontinued investing activities
|
—
|
|
|
(4)
|
|
|
4,075
|
|
|
(17)
|
|
|
Net cash provided by
(used in) investing activities
|
(637)
|
|
|
728
|
|
|
1,869
|
|
|
1,286
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of common stock
|
45
|
|
|
50
|
|
|
50
|
|
|
55
|
|
|
Repurchases of common
stock
|
(33)
|
|
|
(1,518)
|
|
|
(4,030)
|
|
|
(2,949)
|
|
|
Payments for taxes
related to net share settlements of restricted
|
|
|
|
|
|
|
(83)
|
|
|
(119)
|
|
|
stock units and
awards
|
(43)
|
|
|
(65)
|
|
Payments for
dividends
|
(112)
|
|
|
(120)
|
|
|
(226)
|
|
|
(245)
|
|
|
Proceeds from issuance
of long-term debt, net
|
771
|
|
|
—
|
|
|
1,765
|
|
|
—
|
|
|
Repayment of
debt
|
(839)
|
|
|
—
|
|
|
(839)
|
|
|
—
|
|
|
Other
|
2
|
|
|
—
|
|
|
(7)
|
|
|
—
|
|
|
Net cash used in
financing activities
|
(209)
|
|
|
(1,653)
|
|
|
(3,370)
|
|
|
(3,258)
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
8
|
|
|
(10)
|
|
|
(26)
|
|
|
(20)
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
126
|
|
|
(191)
|
|
|
29
|
|
|
(698)
|
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
899
|
|
|
1,712
|
|
|
996
|
|
|
2,219
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
1,025
|
|
|
1,521
|
|
|
1,025
|
|
|
1,521
|
|
|
Less: Cash, cash
equivalents and restricted cash of discontinued
operations
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|
Cash, cash
equivalents and restricted cash of continuing operations at end of
period
|
$
|
1,025
|
|
|
$
|
1,501
|
|
|
$
|
1,025
|
|
|
$
|
1,501
|
|
|
eBay
Inc.
Unaudited Summary
of Consolidated Net Revenues
|
|
Three Months
Ended
|
|
June
30,
2020
|
|
March
31,
2020
|
|
December
31,
2019
|
|
September
30,
2019
|
|
June
30,
2019
|
|
(In millions,
except percentages)
|
Net Revenues by
Type:
|
|
|
|
|
|
|
|
|
|
Net transaction
revenues:
|
|
|
|
|
|
|
|
|
|
Marketplace
(1)
|
$
|
2,447
|
|
|
$
|
1,900
|
|
|
$
|
1,977
|
|
|
$
|
1,829
|
|
|
$
|
1,887
|
|
Current quarter vs
prior year quarter
|
30
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
3
|
%
|
Percent from
international
|
60
|
%
|
|
62
|
%
|
|
64
|
%
|
|
63
|
%
|
|
63
|
%
|
|
|
|
|
|
|
|
|
|
|
Marketing services
and other revenues:
|
|
|
|
|
|
|
|
|
|
Marketplace
|
221
|
|
|
230
|
|
|
259
|
|
|
254
|
|
|
270
|
|
Current quarter vs
prior year quarter
|
(18)
|
%
|
|
(17)
|
%
|
|
(18)
|
%
|
|
(16)
|
%
|
|
(9)
|
%
|
Percent from
international
|
50
|
%
|
|
53
|
%
|
|
52
|
%
|
|
53
|
%
|
|
56
|
%
|
Classifieds
|
201
|
|
|
248
|
|
|
269
|
|
|
265
|
|
|
271
|
|
Current quarter vs
prior year quarter
|
(26)
|
%
|
|
(3)
|
%
|
|
3
|
%
|
|
4
|
%
|
|
5
|
%
|
Percent from
international
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Elimination of
intersegment revenue
|
(4)
|
|
|
(4)
|
|
|
(5)
|
|
|
(5)
|
|
|
(5)
|
|
Total marketing
services and other revenues
|
418
|
|
|
474
|
|
|
523
|
|
|
514
|
|
|
536
|
|
Current quarter vs
prior year quarter
|
(22)
|
%
|
|
(10)
|
%
|
|
(9)
|
%
|
|
(8)
|
%
|
|
(4)
|
%
|
Percent from
international
|
74
|
%
|
|
77
|
%
|
|
76
|
%
|
|
76
|
%
|
|
78
|
%
|
Total net revenues
(2)
|
$
|
2,865
|
|
|
$
|
2,374
|
|
|
$
|
2,500
|
|
|
$
|
2,343
|
|
|
$
|
2,423
|
|
Current quarter vs
prior year quarter
|
18
|
%
|
|
(2)
|
%
|
|
(2)
|
%
|
|
(1)
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
(1) Hedge
gain/(loss)
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
19
|
|
|
$
|
13
|
|
(2) Foreign currency
impact
|
$
|
(46)
|
|
|
$
|
(41)
|
|
|
$
|
(14)
|
|
|
$
|
(42)
|
|
|
$
|
(85)
|
|
eBay
Inc.
Unaudited
Supplemental Operating Data
|
|
Three Months
Ended
|
|
June
30,
2020
|
|
March
31,
2020
|
|
December
31,
2019
|
|
September
30,
2019
|
|
June
30,
2019
|
|
(In millions,
except percentages)
|
Active Buyers
(1)
|
182
|
|
|
174
|
|
|
174
|
|
|
174
|
|
|
173
|
|
Current quarter vs
prior year quarter
|
5
|
%
|
|
2
|
%
|
|
2
|
%
|
|
4
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
Gross Merchandise
Volume (2)
|
|
|
|
|
|
|
|
|
|
U.S.
|
$
|
10,489
|
|
|
$
|
7,631
|
|
|
$
|
7,694
|
|
|
$
|
7,334
|
|
|
$
|
7,789
|
|
Current quarter vs
prior year quarter
|
35
|
%
|
|
(4)
|
%
|
|
(9)
|
%
|
|
(6)
|
%
|
|
(6)
|
%
|
International
|
$
|
16,646
|
|
|
$
|
13,628
|
|
|
$
|
14,272
|
|
|
$
|
13,155
|
|
|
$
|
13,695
|
|
Current quarter vs
prior year quarter
|
22
|
%
|
|
—
|
%
|
|
(4)
|
%
|
|
(4)
|
%
|
|
(4)
|
%
|
Total
GMV
|
$
|
27,135
|
|
|
$
|
21,259
|
|
|
$
|
21,966
|
|
|
$
|
20,489
|
|
|
$
|
21,484
|
|
Current quarter vs
prior year quarter
|
26
|
%
|
|
(1)
|
%
|
|
(5)
|
%
|
|
(5)
|
%
|
|
(5)
|
%
|
|
|
(1)
|
All buyers who
successfully closed a transaction on our Marketplace platform
within the previous 12-month period. Buyers may register more than
once, and as a result, may have more than one account.
|
|
|
(2)
|
Total value of all
successfully closed transactions between users on our Marketplace
platform 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 Marketplace platform 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
|
|
September 30,
2020
|
(In billions,
except per share amounts)
|
GAAP
|
|
Non-GAAP
(a)
|
Net
Revenue
|
$2.64 -
$2.71
|
|
$2.64 -
$2.71
|
Diluted EPS from
continuing operations
|
$0.58 -
$0.64
|
|
$0.81 -
$0.87
|
|
|
|
|
|
Twelve Months
Ending
|
|
December 31,
2020
|
(In billions,
except per share amounts)
|
GAAP
|
|
Non-GAAP
(b)
|
Net
Revenue
|
$10.56 -
$10.75
|
|
$10.56 -
$10.75
|
Diluted EPS from
continuing operations
|
$2.85 -
$3.00
|
|
$3.47 -
$3.59
|
|
|
|
|
(a) Estimated
non-GAAP amounts above for the three months ending September 30,
2020 reflect adjustments that exclude the estimated amortization of
acquired intangible assets of approximately $10 - $15 million,
estimated stock-based compensation expense and associated employer
payroll tax expense of approximately $120 - $130 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 $45
- $55 million.
|
|
(b) Estimated
non-GAAP amounts above for the twelve months ending December 31,
2020 reflect adjustments that exclude the estimated amortization of
acquired intangible assets of approximately $40 - $50 million,
estimated stock-based compensation expense and associated employer
payroll tax expense of approximately $465 - $485 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 $180
- $200 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, free
cash flow and figures in this press release presented on a
"FX-Neutral basis". 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, except for figures in this
press release presented on a "FX-Neutral basis", can be found in
the tables included in this press release. For figures in this
press release reported "on a FX-Neutral basis", the company
calculates the year-over-year impact of foreign currency movements
using prior period foreign currency rates applied to current year
transactional currency amounts. The company defines 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.
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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(In millions,
except percentages)
|
GAAP operating
income
|
$
|
821
|
|
|
$
|
558
|
|
|
$
|
1,450
|
|
|
$
|
1,151
|
|
Stock-based
compensation expense and related employer payroll taxes
|
120
|
|
|
135
|
|
|
221
|
|
|
252
|
|
Amortization of
acquired intangible assets within cost of net revenues
|
1
|
|
|
2
|
|
|
2
|
|
|
4
|
|
Amortization of
acquired intangible assets within operating expenses
|
9
|
|
|
10
|
|
|
18
|
|
|
21
|
|
Other significant
gains, losses or charges
|
33
|
|
|
3
|
|
|
41
|
|
|
41
|
|
Total non-GAAP
operating income adjustments
|
163
|
|
|
150
|
|
|
282
|
|
|
318
|
|
Non-GAAP operating
income
|
$
|
984
|
|
|
$
|
708
|
|
|
$
|
1,732
|
|
|
$
|
1,469
|
|
Non-GAAP operating
margin
|
34.3
|
%
|
|
29.2
|
%
|
|
33.1
|
%
|
|
30.4
|
%
|
Reconciliation of
GAAP Net Income to Non-GAAP Net Income and
GAAP Effective Tax
Rate to Non-GAAP Effective Tax Rate*
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(In millions,
except per share amounts and percentages)
|
GAAP income from
continuing operations before income taxes
|
$
|
1,003
|
|
|
$
|
507
|
|
|
$
|
1,634
|
|
|
$
|
1,164
|
|
GAAP provision for
income taxes
|
(263)
|
|
|
(107)
|
|
|
(409)
|
|
|
(248)
|
|
GAAP net income from
continuing operations
|
$
|
740
|
|
|
$
|
400
|
|
|
$
|
1,225
|
|
|
$
|
916
|
|
Non-GAAP adjustments
to net income from continuing operations:
|
|
|
|
|
|
|
|
Non-GAAP operating
income from continuing operations adjustments (see table
above)
|
163
|
|
|
150
|
|
|
282
|
|
|
318
|
|
(Gain) loss on
investments and sale of business
|
40
|
|
|
—
|
|
|
3
|
|
|
—
|
|
Change in fair market
value of warrant
|
(293)
|
|
|
8
|
|
|
(305)
|
|
|
(105)
|
|
Tax effect of step-up
of intangible assets basis
|
—
|
|
|
199
|
|
|
—
|
|
|
199
|
|
Tax effect of non-GAAP
adjustments
|
120
|
|
|
(181)
|
|
|
151
|
|
|
(162)
|
|
Non-GAAP net income
from continuing operations
|
$
|
770
|
|
|
$
|
576
|
|
|
$
|
1,356
|
|
|
$
|
1,166
|
|
|
|
|
|
|
|
|
|
Diluted net income
from continuing operations per share:
|
|
|
|
|
|
|
|
GAAP
|
$
|
1.04
|
|
|
$
|
0.46
|
|
|
$
|
1.67
|
|
|
$
|
1.03
|
|
Non-GAAP
|
$
|
1.08
|
|
|
$
|
0.66
|
|
|
$
|
1.85
|
|
|
$
|
1.32
|
|
Shares used in GAAP
and non-GAAP diluted net income per-share calculation
|
711
|
|
|
867
|
|
|
734
|
|
|
887
|
|
|
|
|
|
|
|
|
|
GAAP effective tax
rate - Continuing operations
|
26.2
|
%
|
|
21.0
|
%
|
|
25.0
|
%
|
|
21.2
|
%
|
Tax effect of
non-GAAP adjustments to net income from continuing
operations
|
(10.5)
|
%
|
|
(7.7)
|
%
|
|
(9.0)
|
%
|
|
(5.9)
|
%
|
Non-GAAP effective
tax rate - Continuing operations
|
15.7
|
%
|
|
13.3
|
%
|
|
16.0
|
%
|
|
15.3
|
%
|
|
*Presented on a
continuing operations basis
|
Reconciliation of
Operating Cash Flow to Free Cash Flow*
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(In
millions)
|
Net cash provided by
continuing operating activities
|
$
|
964
|
|
|
$
|
695
|
|
|
$
|
1,666
|
|
|
$
|
1,267
|
|
Less: Purchases of
property and equipment
|
(98)
|
|
|
(133)
|
|
|
(196)
|
|
|
(313)
|
|
Free cash
flow
|
$
|
866
|
|
|
$
|
562
|
|
|
$
|
1,470
|
|
|
$
|
954
|
|
|
*Presented on a
continuing operations basis
|
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SOURCE eBay Inc.