Pressmeddelande -
eBAY INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2005 FINANCIAL RESULTS
eBay Inc. (Nasdaq: EBAY; www.ebay.com) reported financial results for its fourth quarter and full year ended December 31, 2005.
eBay reported record consolidated Q4-05 net revenues of $1.329 billion, representing a growth rate of 42% year
over year (up from 37% Q3-05 over Q3-04); operating income of $370.4 million, up 30% year over year,
representing a 28% operating margin; and pro forma operating income of $448.1 million, up 43% year over
year, representing a 34% pro forma operating margin.
Consolidated net income in Q4-05 was $279.2 million, or $0.20 per diluted share. eBays pro forma
consolidated net income was $340.1 million, or $0.24 per diluted share.
These results exceeded the high end of the companys guidance of $1.285 billion for net revenues, exceeded the
companys guidance of $0.16 for GAAP earnings per diluted share and exceeded the companys guidance of
$0.21 for pro forma earnings per diluted share.
For the full year, eBay generated consolidated net revenues of $4.552 billion, a 39% increase over the $3.271
billion in 2004. Consolidated net income increased 39% year over year to $1.082 billion, or $0.78 per diluted
share. On a pro forma basis, eBay reported a 45% increase in consolidated net income year over year to $1.203
billion, or $0.86 per diluted share. Operating cash flows increased 56% year over year to $2.010 billion. Free
cash flows increased 59% year over year to $1.574 billion.
Q4 capped off a remarkable year for eBay, said Meg Whitman, President and CEO of eBay, Inc. We saw
accelerating growth and momentum across the board, a testament to the fact that eBay has built the most
outstanding portfolio of businesses on the Internet.
Full Year Key Financial and Operating Metrics
Consolidated Net Revenues Consolidated net revenues totaled a record $4.552 billion, which represented an
increase of 39% from the $3.271 billion reported in the full year 2004.
Listings eBay listings totaled a record 1.9 billion in the full year 2005, 33% higher than the 1.4 billion
listings reported in the full year 2004.
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eBay Announces Q4-05 Earnings (cont.)
Gross Merchandise Volume (GMV) eBay GMV, the total value of all successfully closed listings on eBays
trading platforms, was a record $44.3 billion, representing a 30% year over year increase from the $34.2 billion
reported in the full year 2004.
Total Payment Volume (TPV) TPV, the dollar volume of payments initiated through the PayPal system,
excluding the payment gateway business, was $27.5 billion, representing a 45% year over year increase from
the $18.9 billion reported in the full year 2004.
Key Q4 Financial and Operating Metrics
Consolidated Net Revenues Consolidated net revenues totaled a record $1.329 billion in Q4-05, an
accelerating growth rate of 42% over the $935.8 million reported in Q4-04.
US Marketplaces Net Revenues US Marketplaces, including Shopping.com, net revenues totaled
$526.1 million in Q4-05, representing 39% year over year growth.
International Marketplaces Net Revenues International Marketplaces net revenues totaled $473.5
million in Q4-05, representing 35% year over year growth, in dollar terms.
Payments Net Revenues Payments net revenues totaled $304.4 million in Q4-05, representing 48%
year over year growth.
Communications Net Revenues Our Communications business represents the operations of Skype
Technologies SA, which we acquired on October 14, 2005. Communications net revenues totaled $24.8
million from the acquisition date through the end of Q4-05.
Marketplaces
Confirmed Registered Users eBay cumulative confirmed registered users at the end of Q4-05 totaled
180.6 million, representing a 33% increase over the 135.5 million users reported at the end of Q4-04.
Active Users eBay active users, the number of users on the eBay platform who bid, bought, or listed
an item within the previous 12-month period, increased to a record 71.8 million in Q4-05, a 28% increase
over the 56.1 million active users reported in the same period a year ago.
Listings eBay new listings totaled a record 546.4 million in Q4-05, 35% higher than the 404.6 million
new listings reported in Q4-04.
Gross Merchandise Volume (GMV) eBay GMV, the total value of all successfully closed items on
eBays trading platforms, was $12.0 billion, representing a 22% year over year increase from the $9.8
billion reported in Q4-04. Excluding the impact of foreign currency translation, Q4-05 GMV increased
26% year over year.
Fixed Price Trading eBays fixed price trading contributed approximately $4.0 billion or 34% of total
GMV during Q4-05, primarily from eBays Buy It Now feature.
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eBay Announces Q4-05 Earnings (cont.)
eBay Stores At the end of Q4-05, eBay hosted approximately 383,000 stores worldwide, with
approximately 212,000 stores hosted on the US site.
Payments
Total Payments Accounts PayPal had 96.2 million total accounts at the end of Q4-05, a 51% increase
from the 63.8 million reported in Q4-04. Total payments accounts represent the cumulative total of all
accounts opened, excluding accounts that have been closed or locked and the payment gateway business
accounts, and including users who made payments with PayPal but have not registered.
Total Payment Volume (TPV) TPV, the dollar volume of payments initiated through the PayPal
system, excluding the payment gateway business, was a record $8.1 billion in Q4-05, a 45% increase
from the $5.6 billion reported in Q4-04.
Communications
Registered Users Communications had 74.7 million total registered users at the end of Q4-05.
Communications registered users represent the cumulative total of all users who have completed the
Skype registration process.
GAAP Operating Income GAAP operating income increased 30% year over year to $370.4 million, or 28%
of net revenues.
Pro Forma Operating Income Pro forma operating income increased 43% year over year to $448.1 million,
or 34% of net revenues. Pro forma operating income represents GAAP operating income adjusted to exclude
certain items, primarily stock based compensation expense and related payroll taxes and amortization of
acquired intangible assets.
GAAP Net Income GAAP net income increased 36% year over year to $279.2 million, or $0.20 per diluted
share.
Pro Forma Net Income Pro forma net income increased 50% year over year to $340.1 million, or $0.24 per
diluted share. Pro forma net income represents GAAP net income adjusted to exclude certain items, primarily
stock based compensation expense and related payroll taxes, amortization of acquired intangible assets and
income taxes related to these items.
Operating and Free Cash Flows Operating cash flows increased 38% year over year to $526.2 million. Free
cash flows, representing operating cash flows less net purchases of property and equipment of $97.7 million,
increased 44% year over year to $428.5 million.
Consolidated Financial and Operating Summary
eBay reported record consolidated net revenues of $1.329 billion in Q4-05 with growth rates accelerating to
42% year over year. Consolidated net revenues was negatively impacted by foreign currency translation of
approximately $40.7 million in Q4-05 as compared to Q4-04. On a sequential basis, consolidated net revenues
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eBay Announces Q4-05 Earnings (cont.)
was negatively impacted by foreign currency translation in Q4-05 by approximately $13.9 million.
Gross profit was $1.089 billion in Q4-05, or 82% of net revenues, slightly higher than the 81% reported in Q4-
04, due primarily to increases in our International Marketplaces and Payments segment gross margins.
Sales and marketing expenses totaled $378.5 million, or 28% of net revenues, lower than the 29% reported in
Q4-04. This improvement results from optimization of our marketing mix and increased focus on online
marketing efficiency.
Product development expenses totaled $103.9 million, or 8% of net revenues, up from the 7% reported in Q4-
04.
General and administrative costs totaled $181.7 million, or 14% of net revenues, up from the 12% reported in
Q4-04. The percentage increase was primarily due to headcount additions and higher transaction loss expense.
Income from operations totaled $370.4 million during Q4-05, a 30% increase over the $284.7 million reported
in Q4-04. On a pro forma basis, income from operations totaled $448.1 million, a 43% increase over the $313.9
million reported in Q4-04. On a year over year basis, income from operations was negatively impacted by
foreign currency translation of approximately $17.7 million in Q4-05. On a sequential basis, income from
operations was negatively impacted by foreign currency translation in Q4-05 by approximately $5.2 million.
Interest and other income, net, totaled $25.6 million in Q4-05, up from the $18.8 million reported in Q4-04. The
increase was primarily due to higher interest rates, offset in part by lower cash and investments balances
resulting from Q4-05 acquisitions.
The GAAP effective tax rate for Q4-05 was 29% (pro forma 28%), a decrease from the GAAP effective tax rate
of 32% for Q4-04 (pro forma 32%), and from 34% for Q3-05 (pro forma 34%). The lower effective tax rates for
Q4-05 as compared to Q3-05 were due primarily to a one-time $16.6 million charge in Q3-05 related to the final
application of certain tax regulations. The lower tax rate for Q4-05 as compared to Q4-04 results primarily
from changes in the companys geographic mix.
The company reported $526.2 million in operating cash flows and $97.7 million of net purchases of property
and equipment in Q4-05, resulting in free cash flows of $428.5 million. The companys cash, cash equivalents,
and investments totaled nearly $2.9 billion at the end of Q4-05.
Business Outlook
The following updated guidance reflects current business trends and assumed exchange rates. This guidance is
based on a weighted average exchange rate of US $1.20 per Euro, which is consistent with prior guidance. The
guidance includes the estimated impact of expensing stock options from the adoption of Financial Accounting
Standards Board Statement FAS No. 123(R) Share-Based Payment (FAS 123(R)), which will be reflected in
our operating results beginning in Q1-06. The guidance does not include the potential impact of any future
acquisitions.
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eBay Announces Q4-05 Earnings (cont.)
Fiscal Year 2006
Net Revenues eBay expects consolidated net revenues for 2006 to be in the range of $5.700 billion to $5.900
billion. From a quarterly perspective, eBay expects consolidated net revenues to be in the range of $1.365 to
$1.380 billion in Q1-06, $1.370 to $1.415 billion in Q2-06, and $2.965 to $3.105 billion for the six months
ending December 31, 2006.
GAAP Diluted EPS eBay estimates GAAP earnings per diluted share for the full year 2006 to be in the range
of $0.65 to $0.71. From a quarterly perspective, eBay estimates GAAP earnings per diluted share to be in the
range of $0.14 to $0.15 in Q1-06, $0.14 to $0.16 in Q2-06 and $0.37 to $0.40 for the six months ending
December 31, 2006. The estimated earnings per diluted share includes the estimated impact of expensing stock
options under FAS 123(R) of approximately $0.16 to $0.17 for the full year ending December 31, 2006 and
$0.04 to $0.05 for each of the quarters in the year ending December 31, 2006.
Pro Forma Diluted EPS eBay estimates pro forma earnings per diluted share for the full year 2006 to be in
the range of $0.96 to $1.01. From a quarterly perspective, eBay estimates pro forma earnings per diluted share
to be in the range of $0.22 to $0.23 in Q1-06, $0.22 to $0.23 in Q2-06 and $0.52 to $0.54 for the six months
ending December 31, 2006.
Quarterly Conference Call
eBay will host a conference call to discuss fourth quarter and full year results at 2 pm Pacific Time today. A live
webcast of the conference call can be accessed through the companys Investor Relations website at
http://investor.ebay.com. In addition, an archive of the webcast will be accessible through the same link.
Non-GAAP Measures
To supplement the companys consolidated financial statements presented in accordance with GAAP, eBay uses
non-GAAP measures of certain components of financial performance. These non-GAAP measures include pro
forma net income, pro forma earnings per diluted share, pro forma operating income, pro forma operating
margin, and free cash flows. These non-GAAP measures are provided to enhance investors overall
understanding of the companys current financial performance and the companys 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 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 in the companys financial reporting. These
measures should be considered in addition to results prepared in accordance with generally accepted accounting
principles, but should not be considered a substitute for, or superior to, GAAP results. Reconciliation to the
nearest GAAP measure of all non-GAAP measures included in this press release can be found in the financial
tables included on pages 10, 11 and 12 of this press release.
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eBay Announces Q4-05 Earnings (cont.)
About eBay
Founded in 1995, eBay pioneers communities built on commerce, sustained by trust, and inspired by
opportunity. eBay enables ecommerce on a local, national and international basis with an array of websites
including the eBay Marketplaces, PayPal, Skype, Kijiji, Rent.com and Shopping.com that bring together
millions of buyers and sellers every day.
Forward-Looking Statements
This press release contains forward-looking statements relating to the future performance of eBay and its
consolidated subsidiaries, as well as the estimated impact of expensing stock options under FAS 123(R) Share-
Based Payment effective in Q1-06. Those statements involve risks and uncertainties, and the companys
actual results could differ materially from those discussed. Factors that could cause or contribute to such
differences include, but are not limited to: the companys need to manage an increasingly large enterprise with a
broad range of businesses of varying degrees of maturity; the companys need to increasingly achieve growth
from its existing users as well as from new users in its more established markets; the companys ability to deal
with the increasingly competitive ecommerce environment, including competition for its sellers from other
trading sites and other means of selling, and competition for its buyers from other merchants, online and offline;
the need to integrate, manage, and profitably expand its newly-acquired businesses, including Skype, the
payment gateway business acquired from VeriSign, and Shopping.com; the regulatory and competitive risks
specific to Skype; the litigation, regulatory, credit card association, and other risks specific to PayPal, especially
as it continues to expand geographically; the companys need to manage other regulatory, tax, and litigation
risks even as its product offerings expand and its services are offered in more jurisdictions; the companys
ability to upgrade and develop its systems, infrastructure and customer service capabilities to accommodate
growth at a reasonable cost; the companys ability to maintain site stability and performance on all of its sites
while adding new products and features in a timely fashion; fluctuations in foreign exchange rates; the
companys ability to profitably expand its model to new types of merchandise and sellers; assumptions and
methods used to value and expense stock options provided to employees; and, the companys ability to
profitably integrate and manage recent and future acquisitions and other transactions. The forward looking
statements in this release do not include the potential impact of any acquisitions that may be completed after the
date hereof.
More information about factors that could affect the companys operating results is included under the captions
Risk Factors That May Affect Results of Operations and Financial Condition and Managements Discussion
and Analysis of Financial Condition and Results of Operations in the companys annual report on Form 10-K
and quarterly reports on Form 10-Q, copies of which may be obtained by visiting the companys investor
relations site at http://investor.ebay.com. Undue reliance should not be placed on the forward-looking
statements in this release, which are based on information available to the company on the date hereof. eBay
assumes no obligation to update such statements.
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eBay Announces Q4-05 Earnings (cont.)
Investor Relations Contact: Tracey Ford 408-376-7205
Media Relations Contact: Hani Durzy 408-376-7458
Investor Information Request: 408-376-7493
Company News: http://www.businesswire.com
Investor Relations Website: http://investor.ebay.com
8
eBay Inc.
Unaudited Condensed Consolidated Balance Sheet
(US Dollars In Thousands)
December 31,
2004
December 31,
2005
ASSETS
Current assets
Cash and cash equivalents $ 1,330,045 $ 1,313,580
Short-term investments 682,004 774,650
Accounts receivable, net 240,856 322,788
Funds receivable from customers 123,424 255,282
Restricted cash and investments 155,405 29,702
Other current assets 379,415 429,791
Total current assets 2,911,149 3,125,793
Long-term investments 1,267,707 825,667
Property and equipment, net 709,773 801,602
Goodwill 2,709,794 6,120,079
Intangible assets, net 362,909 823,280
Other assets 29,719 35,121
$ 7,991,051 $ 11,731,542
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 37,958 $ 55,692
Funds payable and amounts due to customers 331,805 586,651
Accrued expenses and other current liabilities 421,969 578,557
Deferred revenue and customer advances 50,439 81,940
Short-term obligations 124,272
Income taxes payable 118,427 182,095
Total current liabilities 1,084,870 1,484,935
Deferred tax liabilities, net 135,971 158,238
Other liabilities 41,869 40,388
Total liabilities 1,262,710 1,683,561
Total stockholders equity 6,728,341 10,047,981
$ 7,991,051 $ 11,731,542
9
eBay Inc.
Unaudited Condensed Consolidated Statement of Income
(US Dollars In Thousands, Except Per Share Amounts)
Three Months Ended
December 31,
Year Ended
December 31,
2004 2005 2004 2005
Net revenues $ 935,782 $ 1,328,859 $ 3,271,309 $ 4,552,401
Cost of net revenues 176,405 239,520 614,415 818,104
Gross profit 759,377 1,089,339 2,656,894 3,734,297
Operating expenses:
Sales and marketing 268,879 378,489 857,874 1,230,728
Product development 64,568 103,882 240,647 328,191
General and administrative 116,278 181,699 415,725 591,716
Payroll tax on employee stock options 5,190 3,433 17,479 13,014
Amortization of acquired intangible assets 19,739 51,425 65,927 128,941
Total operating expenses 474,654 718,928 1,597,652 2,292,590
Income from operations 284,723 370,411 1,059,242 1,441,707
Interest and other income, net 18,762 25,563 77,867 111,148
Interest expense (2,265) (922) (8,879) (3,478)
Income before income taxes and minority interests 301,220 395,052 1,128,230 1,549,377
Provision for income taxes (95,782) (115,830) (343,885) (467,285)
Minority interests (59) (1) (6,122) ( 49)
Net income $ 205,379 $ 279,221 $ 778,223 $ 1,082,043
Net income per share:
Basic $ 0.15 $ 0.20 $ 0.59 $ 0.79
Diluted $ 0.15 $ 0.20 $ 0.57 $ 0.78
Weighted average shares:
Basic 1,333,486 1,394,566 1,319,458 1,361,708
Diluted 1,385,694 1,426,475 1,367,720 1,393,875
10
eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
(US Dollars In Thousands, Except Per Share Amounts)
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) Income taxes associated with certain pro forma entries
Three Months Ended Three Months Ended
December 31, 2004 December 31, 2005
Reported
Pro Forma
Entries Pro Forma Reported
Pro Forma
Entries Pro Forma
Net revenues $ 935,782 $ - $ 935,782 $ 1,328,859 $ - $ 1,328,859
Cost of net revenues 176,405 (146) (a) 176,259 239,520
(1,602) (a) 237,918
Gross profit 759,377 146 759,523 1,089,339
1,602 1,090,941
Operating expenses:
Sales and marketing 268,879 (11) (a) 268,868 378,489
(8,300) (a) 370,189
Product development 64,568 (162) (a) 64,406 103,882 (5,643) (a) 98,239
General and administrative 116,278
(3,888) (a) 112,390 181,699 (7,256) (a) 174,443
Payroll tax on employee stock options 5,190 (5,190) (b) - 3,433 (3,433) (b) -
Amortization of acquired intangible assets 19,739 (19,739) (c) - 51,425 (51,425) (c) -
Total operating expenses 474,654 (28,990) 445,664 718,928 (76,057) 642,871
Income from operations 284,723 29,136 313,859 370,411 77,659 448,070
Interest and other income, net 18,762 - 18,762 25,563 - 25,563
Interest expense (2,265) - (2,265) (922) - (922)
Income before income taxes and minority interests 301,220 29,136 330,356 395,052 77,659 472,711
Provision for income taxes (95,782) (8,484) (d)
(104,266) (115,830) (16,817)
(d) (132,647)
Minority interests (59) - (59) (1) - (1)
Net income $ 205,379 $ 20,652 $ 226,031 $ 279,221 $ 60,842 $ 340,063
Net income per share:
Basic $ 0.15 $ 0.17 $ 0.20 $ 0.24
Diluted $ 0.15 $ 0.16 $ 0.20 $ 0.24
Weighted average shares:
Basic 1,333,486 1,333,486 1,394,566 1,394,566
Diluted 1,385,694 1,385,694 1,426,475 1,426,475
Operating margin 30% 4% 34% 28% 6% 34%
11
eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
(US Dollars In Thousands, Except Per Share Amounts)
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) Gain on sale of equity investment and loss on sale of certain real estate properties
(e) Income taxes associated with certain pro forma entries
Year Ended Year Ended
December 31, 2004 December 31, 2005
Reported
Pro Forma
Entries Pro Forma Reported
Pro Forma
Entries Pro Forma
Net revenues $ 3,271,309 $ - $ 3,271,309 $ 4,552,401 $ - $ 4,552,401
Cost of net revenues 614,415
(233) (a) 614,182 818,104
(1,881) (a) 816,223
Gross profit 2,656,894 233 2,657,127 3,734,297
1,881 3,736,178
Operating expenses:
Sales and marketing 857,874 (136) (a) 857,738 1,230,728
(8,696) (a) 1,222,032
Product development 240,647 (654) (a) 239,993 328,191 (6,468) (a) 321,723
General and administrative 415,725
(4,809) (a) 410,916 591,716
(14,727) (a) 576,989
Payroll tax on employee stock options 17,479 (17,479) (b) - 13,014
(13,014) (b) -
Amortization of acquired intangible assets 65,927 (65,927) (c) - 128,941
(128,941) (c) -
Total operating expenses 1,597,652 (89,005) 1,508,647 2,292,590
(171,846) 2,120,744
Income from operations
1,059,242 89,238
1,148,480 1,441,707
173,727 1,615,434
Interest and other income, net 77,867 (6,485) (d) 71,382 111,148 (2,260) (d) 108,888
Interest expense (8,879) - (8,879) (3,478) - (3,478)
Income before income taxes and minority interests
1,128,230 82,753
1,210,983 1,549,377 171,467 1,720,844
Provision for income taxes (343,885) (31,520) (e) (375,405) (467,285) (50,517) (e) (517,802)
Minority interests (6,122) - (6,122) (49) - (49)
Net income $ 778,223 $ 51,233 $ 829,456 $ 1,082,043 $ 120,950 $ 1,202,993
Net income per share:
Basic $ 0. 59 $ 0.63 $ 0.79 $ 0.88
Diluted $ 0.57 $ 0. 61 $ 0.78 $ 0.86
Weighted average shares:
Basic
1,319,458 1,319,458 1,361,708 1,361,708
Diluted 1,367,720 1,367,720 1,393,875 1,393,875
Operating margin 32% 3% 35% 32% 3% 35%
12
eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(US Dollars In Thousands)
Three Months Ended
December 31,
Year Ended
December 31,
2004 2005 2004 2005
Cash flows from operating activities:
Net income $ 205,379 $ 279,221 $ 778,223 $ 1,082,043
Adjustments:
Provision for doubtful accounts and authorized credits 32,947 23,846 90,942 89,499
Provision for transaction losses 17,767 26,817 50,459 73,773
Depreciation and amortization 72,849 121,298 253,690 378,165
Amortization of unearned stock-based compensation 4,207 22,801 5,832 31,772
Tax benefit on the exercise of employee stock options 77,528 94,978 261,983 267,142
Minority interest 69 49 6,122 49
Changes in assets and liabilities, net of acquisition effects:
Accounts receivable 32,327 (68,758) (105,540) (151,993)
Funds receivable from customers 30,463 (47,914) (44,751) (132,606)
Other current assets (164,302) (25,705) (312,756) (49,371)
Other non-current assets 3,617 1,953 (308) (4,612)
Deferred tax liabilities, net (7,082) (38,134) 28,652 91,690
Accounts payable (38,943) 5,802 (33,975) 564
Funds payable and amounts due to customers 67,759 58,993 216,967 251,870
Accrued expenses and other liabilities 16,601 20,288 39,618 17,013
Deferred revenue and customer advances 6,459 8,040 20,061 3,646
Income taxes payable 23,562 42,662 30,096 61,247
Net cash provided by operating activities 381,207 526,237 1,285,315 2,009,891
Cash flows from investing activities:
Purchases of property and equipment, net (82,888) (97,747) (292,838) (338,281)
Proceeds from sale of corporate aircraft 28,290
Purchases of investments (492,634) (474,502) (1,754,808) (1,324,353)
Maturities and sales of investments 168,375 593,412 1,079,548 1,928,539
Acquisitions, net of cash acquired (332,770) (1,613,485) (1,036,476) (2,732,230)
Other (1,389) (12,123) (8,646) (14,696)
Net cash used in investing activities (741,306) (1,604,445) (2,013,220) (2,452,731)
Cash flows from financing activities:
Proceeds from issuance of common stock, net 221,396 215,460 650,638 599,845
Payment of headquarters facility lease obligation (126,390)
Principal payments on long-term obligations (370) (2,969) (1,849)
Net cash provided by financing activities 221,026 215,460 647,669 471,606
Effect of exchange rate changes on cash and cash equivalents 33,208 (4,270) 28,768 (45,231)
Net decrease in cash and cash equivalents (105,865) (867,018) (51,468) (16,465)
Cash and cash equivalents at beginning of period 1,435,910 2,180,598 1,381,513 1,330,045
Cash and cash equivalents at end of period $ 1,330,045 $1,313,580 $ 1,330,045 $ 1,313,580
Supplemental non-GAAP measure:
Net cash provided by operating activities $ 381,207 $ 526,237 $ 1,285,315 $ 2,009,891
Less: Purchases of property and equipment, net (82,888) (97,747) (292,838) (309,991)
Less: Payment of headquarters facility lease obligation (126,390)
Free cash flow $ 298,319 $ 428,490 $ 992,477 $ 1,573,510
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eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(US Dollars In Thousands, Except Percentages)
Net Revenues by Type
December 31, March 31, June 30, September 30, December 31,
2004 2005 2005 2005 2005
Net Transaction Revenues
US Marketplaces $ 362,736 $ 388,759 $ 408,452 $ 434,937 $ 504,891
Current quarter vs prior quarter 10% 7% 5% 6% 16%
Current quarter vs prior year quarter 24% 19% 28% 32% 39%
International Marketplaces 344,348 387,187 411,671 401,883 464,521
Current quarter vs prior quarter 22% 12% 6% (2%) 16%
Current quarter vs prior year quarter 64% 51% 50% 42% 35%
Payments 200,203 227,097 237,217 239,922 297,679
Current quarter vs prior quarter 20% 13% 4% 1% 24%
Current quarter vs prior year quarter 53% 46% 49% 44% 49%
Communications 24,809
Total net transaction revenues 907,287 1,003,043 1,057,340 1,076,742 1,291,900
Current quarter vs prior quarter 16% 11% 5% 2% 20%
Current quarter vs prior year quarter 43% 36% 41% 38% 42%
Advertising and other non-transaction revenues
Total advertising and other non-transaction revenues 28,495 28,681 28,963 28,773 36,959
Current quarter vs prior quarter 7% 1% 1% (1%) 28%
Current quarter vs prior year quarter 81% 65% 33% 8% 30%
Total net revenues $ 935,782 $ 1,031,724 $ 1,086,303 $ 1,105,515 $ 1,328,859
Current quarter vs prior quarter 16% 10% 5% 2% 20%
Current quarter vs prior year quarter 44% 36% 40% 37% 42%
14
eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(US Dollars In Thousands, Except Percentages)
Net Revenues by Segment
December 31, March 31, June 30, September 30, December 31,
2004 2005 2005 2005 2005
US Marketplaces $ 379,454 $ 404,848 $ 423,565 $ 449,549 $ 526,130
Current quarter vs prior quarter 9% 7% 5% 6% 17%
Current quarter vs prior year quarter 25% 20% 27% 29% 39%
International Marketplaces 350,309 393,792 418,839 408,868 473,546
Current quarter vs prior quarter 22% 12% 6% (2%) 16%
Current quarter vs prior year quarter 65% 52% 51% 43% 35%
Payments 206,019 233,084 243,899 247,098 304,374
Current quarter vs prior quarter 20% 13% 5% 1% 23%
Current quarter vs prior year quarter 55% 47% 51% 44% 48%
Percent of Payments revenue which is international 33.0% 35.0% 35.1% 35.7% 35.8%
Communications 24,809
Percent of Communications revenue which is
international 87%
Total net revenues $ 935,782 $ 1,031,724 $ 1,086,303 $ 1,105,515 $ 1,328,859
Current quarter vs prior quarter 16% 10% 5% 2% 20%
Current quarter vs prior year quarter 44% 36% 40% 37% 42%
Net Revenues by Geography
December 31, March 31, June 30, September 30, December 31,
2004 2005 2005 2005 2005
US net revenues $ 517,465 $ 556,246 $ 581,851 $ 608,428 $ 724,748
Current quarter vs prior quarter 11% 7% 5% 5% 19%
Current quarter vs prior year quarter 28% 22% 29% 30% 40%
% of total 55% 54% 54% 55% 55%
International net revenues 418,317 475,478 504,452 497,087 604,111
Current quarter vs prior quarter 24% 14% 6% (1%) 22%
Current quarter vs prior year quarter 72% 58% 56% 47% 44%
% of total 45% 46% 46% 45% 45%
Total net revenues $ 935,782 $ 1,031,724 $ 1,086,303 $ 1,105,515 $ 1,328,859
Current quarter vs prior quarter 16% 10% 5% 2% 20%
Current quarter vs prior year quarter 44% 36% 40% 37% 42%
15
eBay Inc.
eBay Marketplaces Unaudited Supplemental Operating Data
(In Millions, Except Percentages)
December 31, March 31, June 30, September 30, December 31,
2004 2005 2005 2005 2005
Confirmed Registered Users (1) 135.5 147.1 157.3 168.1 180.6
Current quarter vs prior quarter 8% 9% 7% 7% 7%
Current quarter vs prior year quarter 43% 40% 38% 35% 33%
Active Users (2) 56.1 60.5 64.6 68.0 71.8
Current quarter vs prior quarter 9% 8% 7% 5% 6%
Current quarter vs prior year quarter 36% 34% 34% 32% 28%
Number of Non-Stores Listings (3) 376.6 399.8 402.2 407.0 480.6
Current quarter vs prior quarter 15% 6% 1% 1% 18%
Current quarter vs prior year quarter 31% 25% 27% 24% 28%
Number of Stores Listings (3) 28.0 32.0 37.9 51.6 65.7
Current quarter vs prior quarter 38% 14% 18% 36% 27%
Current quarter vs prior year quarter 449% 300% 131% 154% 135%
Gross Merchandise Volume (4) $ 9,810 $ 10,602 $ 10,884 $ 10,800 $ 12,013
Current quarter vs prior quarter 18% 8% 3% (1%) 11%
Current quarter vs prior year quarter 39% 32% 36% 30% 22%
Rent.com, Shopping.com, and our classifieds websites are not included in these metrics.
____________
(1) Cumulative total of all users who have completed the registration process on one of eBays trading platforms.
(2) All users, excluding users of Half.com, Internet Auction, Rent.com, Shopping.com, and our classifieds websites, who bid on,
bought, or listed an item within the previous 12-month period. Includes users of eBay EachNet in China and eBay India since the
migration to the eBay platform in September 2004 and April 2005, respectively.
(3) All listings on eBays trading platforms during the quarter, regardless of whether the listing subsequently closed successfully.
(4) Total value of all successfully closed items between users on eBays trading platforms during the quarter, regardless of whether
the buyer and seller actually consummated the transaction.
16
eBay Inc.
PayPal Unaudited Supplemental Operating Data
(In Millions, Except Percentages)
December 31, March 31, June 30, September 30, December 31,
2004 2005 2005 2005 2005
Total accounts (1) 63.8 71.6 78.9 86.6 96.2
Current quarter vs prior quarter 13% 12% 10% 10% 11%
Current quarter vs prior year quarter 58% 57% 56% 53% 51%
Active accounts (2) 20.2 22.1 22.9 24.5 28.1
Total number of payments (3) 99.6 110.4 113.2 117.4 139.7
Current quarter vs prior quarter 19% 11% 3% 4% 19%
Current quarter vs prior year quarter 46% 39% 46% 41% 40%
Total payment volume (4) $ 5,607 $ 6,233 $ 6,471 $ 6,667 $ 8,114
Current quarter vs prior quarter 21% 11% 4% 3% 22%
Current quarter vs prior year quarter 51% 44% 49% 44% 45%
eBay Marketplaces as % of total payment volume 71% 71% 70% 69% 69%
Transaction rates (5):
Transaction revenue rate 3.57% 3.64% 3.67% 3.60% 3.67%
Transaction processing expense rate 1.27% 1.15% 1.08% 1.11% 1.09%
Transaction loss rate 0.31% 0.30% 0.19% 0.24% 0.33%
____________
(1) Cumulative total of all personal, premier, or business accounts opened, excluding accounts that have been closed or locked and the
payment gateway business accounts, and including users who made payments using PayPal but have not registered.
(2) All accounts, and users whether registered or not, that sent or received at least one payment through the PayPal system during the
quarter.
(3) Total number of payments initiated through the PayPal system during the quarter, excluding the payment gateway business,
regardless of whether the payment was actually sent successfully, or was reversed, rejected, or pending at the end of the quarter.
(4) Total dollar volume of payments initiated through the PayPal system during the quarter, excluding the payment gateway business,
regardless of whether the payment was actually sent successfully, or was reversed, rejected, or was pending at the end of the
quarter.
(5) Transaction rates represent the ratio of PayPal revenues, PayPal third party processing expenses and PayPal fraud and protection
program losses relative to total payment volume.
17
eBay Inc.
Guidance Summary
(US Dollars In Millions, Except Per Share Amounts And Percentages)
The guidance figures provided below and elsewhere in this press release are approximate in nature because eBays 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.
eBays future performance involves risks and uncertainties, and the companys actual results could differ materially from such guidance. Some of the
factors that could affect the companys operating results are set forth under the caption Forward-Looking Statements above in this press release.
More information about factors that could affect eBays operating results is included under the captions Risk Factors That May Affect Results of
Operations and Financial Condition and Managements 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 companys investor relations
site at http://investor.ebay.com.
Three months ending March 31, 2006
GAAP (a) Pro Forma (b)
Net revenues $1,365-$1,380 $1,365-$1,380
Diluted EPS $0.14-$0.15 $0.22-$0.23
Three months ending June 30, 2006
GAAP (a) Pro Forma (b)
Net revenues $1,370-$1,415 $1,370-$1,415
Diluted EPS $0.14-$0.16 $0.22-$0.23
Six months ending December 31, 2006
GAAP (a) Pro Forma (b)
Net revenues $2,965-$3,105 $2,965-$3,105
Diluted EPS $0.37-$0.40 $0.52-$0.54
Year ending December 31, 2006
GAAP (a) Pro Forma (b)
Net revenues $5,700-$5,900 $5,700-$5,900
Operating margin 23% 33%
Diluted EPS* $0.65-$0.71 $0.96-$1.01
Effective tax rate 29% - 30% 29% - 30%
____________
* Please note that the sum of the quarters may not total to the full year EPS because the quarterly EPS is calculated using the respective results and
weighted average shares for each quarter, and the full year EPS is calculated using the results and weighted average shares for the full year.
(a) GAAP guidance includes the estimated impact of expensing stock option under FAS 123(R) Share-Based Payment. The new accounting
standard is expected to reduce diluted GAAP EPS by approximately $0.16-$0.17 for the full year ending December 31, 2006 and $0.04-$0.05
for each of the quarters in the year ending December 31, 2006.
(b) Pro forma guidance reflects estimated quarterly adjustments for amortization of acquired intangible assets of approximately $45-$55 million,
payroll taxes on employee stock options of approximately $5-$10 million, stock based compensation of approximately $85-$100 million, which
includes the estimated impact of expensing stock options due to the adoption of FAS 123(R) Share-Based Payment, and other adjustments
estimated to result in an operating margin adjustment of approximately 10% for each of the quarters in the year ending December 31, 2006. Net
of tax, the above pro forma items are estimated to result in a $0.07-$0.08 per diluted share adjustment for each of the quarters in the year ending
December 31, 2006.
