eBay released its Q3 earnings report, which includes $3 billion in revenue for the quarter, up 32% year-over-year.“Our company reported another strong quarter, with eBay, PayPal and GSI each performing well,” said President and CEO John Donahoe. “Mobile commerce continues to accelerate as consumers change the way they shop and pay. We expect eBay mobile commerce to generate almost $5 billion in merchandise volume this year and PayPal mobile to exceed $3.5 billion in payment volume. Mobile is one way online and offline shopping are blending into a single commerce environment. We are focused on enabling commerce, helping consumers shop anytime, anywhere, and being the commerce partner of choice for retailers of all sizes.”
PayPal accounts were up 14% year-over-year, with 103 million active registered accounts. PayPal’s revenue alone was up 32% year-over-year. The company attributes this to increased penetration on eBay itself, in addition to continued merchant and consumer adoption.
Here’s the release in its entirety:
eBay Inc. Reports Strong Third Quarter 2011 Results
SAN JOSE, Calif.–(BUSINESS WIRE)–Global ecommerce and online payments leader eBay Inc. (Nasdaq:EBAY) today reported that revenue for the third quarter ended September 30, 2011, increased 32% to $3.0 billion, compared to the same period of 2010. The company reported third quarter net income on a GAAP basis of $490.5 million, or $0.37 per diluted share, and non-GAAP net income of $628.2 million, or $0.48 per diluted share. The year-over-year increase in third quarter GAAP and non-GAAP earnings per diluted share was driven primarily by strong top-line growth, partially offset by continued investment in key strategic initiatives and the impact of acquisitions.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”“Our company reported another strong quarter, with eBay, PayPal and GSI each performing well,” said eBay Inc. President and CEO John Donahoe. “Mobile commerce continues to accelerate as consumers change the way they shop and pay. We expect eBay mobile commerce to generate almost $5 billion in merchandise volume this year and PayPal mobile to exceed $3.5 billion in payment volume. Mobile is one way online and offline shopping are blending into a single commerce environment. We are focused on enabling commerce, helping consumers shop anytime, anywhere, and being the commerce partner of choice for retailers of all sizes.”
The company’s PayPal business continued to expand its leadership position in global payments. PayPal ended the quarter with 103.0 million active registered accounts, a 14% increase year over year. PayPal revenue increased 32% year over year driven primarily by increased penetration on eBay as well as continued merchant and consumer adoption. PayPal’s net total payment volume (TPV) grew 31% to $29.3 billion in the third quarter of 2011 compared to the same period of last year. PayPal continues to invest in innovation, focusing on the core platform, as well as mobile and point of sale initiatives. PayPal expects to generate more than $3.5 billion in mobile TPV in 2011, up from $750 million in 2010.
The company’s Marketplaces business also delivered a strong third quarter performance. Gross merchandise volume (GMV) excluding vehicles increased by 16% year over year to $14.7 billion. U.S. GMV excluding vehicles increased 14% year over year, driven by continued improvements in customer experience on the site and growth in key shopping categories. International GMV excluding vehicles increased 18% year over year to $9.1 billion, reflecting solid growth in Europe, continued improved performance in Korea, as well as a positive impact from foreign exchange. Improved cross border trade performance contributed to GMV growth as currencies strengthened against the U.S. dollar. The company continued to benefit from growing adoption of its suite of mobile applications as downloads surpassed 50 million globally since the launch of mobile in the third quarter of 2008. eBay expects to generate almost $5 billion in mobile GMV in 2011, more than double mobile GMV in 2010.
The company’s GSI business, which was acquired in the second quarter of 2011, contributed $202.6 million in revenue for the third quarter. GSI generated $608 million in global ecommerce (GeC) merchandise sales during the quarter.
Third Quarter 2011 Financial Highlights (presented in millions, except per share data and percentages)
| Third Quarter | ||||||||||||
| 2011 | 2010 | Change | ||||||||||
| GAAP | ||||||||||||
| Net revenue | $ | 2,966 | $ | 2,249 | $ | 717 | 32 | % | ||||
| Net income | $ | 491 | $ | 432 | $ | 59 | 14 | % | ||||
| Earnings per diluted share | $ | 0.37 | $ | 0.33 | $ | 0.04 | 12 | % | ||||
| Non-GAAP | ||||||||||||
| Net income | $ | 628 | $ | 531 | $ | 97 | 18 | % | ||||
| Earnings per diluted share | $ | 0.48 | $ | 0.40 | $ | 0.08 | 20 | % | ||||
| Business Units | ||||||||||||
| Payments | ||||||||||||
| Net revenue | $ | 1,107 | $ | 838 | $ | 269 | 32 | % | ||||
| Net total payment volume | $ | 29,282 | $ | 22,365 | $ | 6,917 | 31 | % | ||||
| Merchant Services | $ | 19,314 | $ | 14,161 | $ | 5,153 | 36 | % | ||||
| On eBay | $ | 9,968 | $ | 8,204 | $ | 1,764 | 22 | % | ||||
| Marketplaces | ||||||||||||
| Net revenue | $ | 1,653 | $ | 1,411 | $ | 242 | 17 | % | ||||
| Gross merchandise volume (excl. vehicles) | $ | 14,666 | $ | 12,591 | $ | 2,075 | 16 | % | ||||
| U.S. | $ | 5,588 | $ | 4,900 | $ | 688 | 14 | % | ||||
| International | $ | 9,078 | $ | 7,691 | $ | 1,387 | 18 | % | ||||
| GSI | ||||||||||||
| Net revenue | $ | 203 | $ | — | $ | 203 | N/A | |||||
| GeC Merchandise Sales | $ | 608 | $ | — | $ | 608 | N/A | |||||
- Operating margin — GAAP operating margin decreased to 18.1% for the third quarter of 2011, compared to 21.8% for the same period last year. Non-GAAP operating margin decreased to 25.3% for the quarter, compared to 28.7% for the same period last year. The decrease in GAAP and non-GAAP operating margin was due primarily to the impact of acquisitions and business mix, partially offset by productivity gains.
- Taxes — The GAAP effective tax rate for the third quarter of 2011 was 20%, compared to 16% for the third quarter of 2010. The higher effective tax rate was due to geographic mix, acquisitions and other factors. For the third quarter of 2011 and 2010, the non-GAAP effective tax rate was 21%.
- Cash flow — The company generated $809 million of operating cash flow and $526 million of free cash flow during the third quarter.
- Stock repurchase program — The company repurchased approximately $33 million of its common stock in the third quarter.
- Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $5.8 billion at September 30, 2011, compared to $7.8 billion at December 31, 2010.
- Fourth quarter 2011 — eBay expects net revenues in the range of $3,200 – $3,350 million with GAAP earnings per diluted share in the range of $1.47 – $1.53 and non-GAAP earnings per diluted share in the range of $0.55 – $0.58. GAAP earnings per diluted share includes the gain from the sale of our remaining equity interest in Skype.
- Full year 2011 — eBay now expects net revenues in the range of $11,500 – $11,600 million with GAAP earnings per diluted share in the range of $2.42 – $2.48 and non-GAAP earnings per diluted share in the range of $1.98 – $2.01. GAAP earnings per diluted share includes the gain from the sale of our remaining equity interest in Skype.
eBay will host a conference call to discuss third quarter 2011 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 http://investor.ebayinc.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.
About eBay Inc.
Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) is about enabling commerce. We do so through eBay, the world’s largest online marketplace, which allows users to buy and sell in nearly every country on earth; through PayPal, which enables individuals and businesses to securely, easily and quickly send and receive online payments; and through GSI, which facilitates ecommerce, multichannel retailing and digital marketing for global enterprises. X.commerce brings together the technology assets and developer communities of eBay, PayPal and Magento, an ecommerce platform, to support eBay Inc.’s mission of enabling commerce. We also reach millions through specialized marketplaces such as StubHub, the world’s largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission, or SEC: non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin, non-GAAP effective tax rate and free cash flow. 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 or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. For a reconciliation of these non-GAAP financial measures 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,” “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.
Forward-Looking Statements
This press release contains forward-looking statements relating to, among other things, the future performance of eBay 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 expected financial results for the fourth quarter and full year 2011 and the future growth in the Payments, Marketplaces and GSI businesses. The company’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: changes in political, business and economic conditions, including any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; the company’s ability to profitably integrate, manage and grow businesses that have been acquired recently or may be acquired in the future, including GSI; the company’s need to increasingly achieve growth from its existing users, particularly in its more established markets; the company’s 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 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 effect of management changes and business initiatives; the company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; any changes the company may make to its product offerings; the competitive, regulatory, credit card association-related and other risks specific to PayPal and Bill Me Later, especially as PayPal continues to expand geographically and grow its open platform initiative and as new laws and regulations related to financial services companies come into effect; the company’s ability to timely upgrade and develop its systems, infrastructure and customer service capabilities, including GSI’s v.11 initiative, at reasonable cost; and the company’s ability to maintain site stability and performance on all of its sites while adding new products and features in a timely fashion. 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 http://investor.ebayinc.com or the SEC’s website at www.sec.gov. 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.
| eBay Inc. Unaudited Condensed Consolidated Balance Sheet | ||||||
| September 30, 2011 | December 31, 2010 | |||||
| (In thousands) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 2,998,950 | $ | 5,577,411 | ||
| Short-term investments | 1,013,924 | 1,045,403 | ||||
| Accounts receivable, net | 595,716 | 454,366 | ||||
| Loans and interest receivable, net | 1,186,870 | 956,189 | ||||
| Funds receivable and customer accounts | 3,295,115 | 2,550,731 | ||||
| Other current assets | 671,770 | 481,238 | ||||
| Total current assets | 9,762,345 | 11,065,338 | ||||
| Long-term investments | 3,018,596 | 2,492,012 | ||||
| Property and equipment, net | 1,859,190 | 1,523,333 | ||||
| Goodwill | 8,341,910 | 6,193,163 | ||||
| Intangible assets, net | 1,452,723 | 540,711 | ||||
| Other assets | 465,773 | 189,205 | ||||
| Total assets | $ | 24,900,537 | $ | 22,003,762 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Short-term debt | $ | 1,015,830 | $ | 300,000 | ||
| Accounts payable | 269,031 | 184,963 | ||||
| Funds payable and amounts due to customers | 3,295,115 | 2,550,731 | ||||
| Accrued expenses and other current liabilities | 1,427,706 | 1,343,888 | ||||
| Deferred revenue | 108,274 | 96,464 | ||||
| Income taxes payable | 29,196 | 40,468 | ||||
| Total current liabilities | 6,145,152 | 4,516,514 | ||||
| Deferred and other tax liabilities, net | 1,005,732 | 645,457 | ||||
| Long-term debt | 1,528,158 | 1,494,227 | ||||
| Other liabilities | 56,169 | 45,385 | ||||
| Total liabilities | 8,735,211 | 6,701,583 | ||||
| Total stockholders’ equity | 16,165,326 | 15,302,179 | ||||
| Total liabilities and stockholders’ equity | $ | 24,900,537 | $ | 22,003,762 | ||
| eBay Inc. Unaudited Condensed Consolidated Statement of Income | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| Net revenues (2) | $ | 2,965,761 | $ | 2,249,488 | $ | 8,271,644 | $ | 6,660,924 | ||||||||
| Cost of net revenues (1) | 919,697 | 640,268 | 2,425,752 | 1,862,194 | ||||||||||||
| Gross profit | 2,046,064 | 1,609,220 | 5,845,892 | 4,798,730 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing (1) | 623,309 | 483,653 | 1,763,226 | 1,408,050 | ||||||||||||
| Product development (1) | 318,902 | 226,803 | 890,921 | 662,259 | ||||||||||||
| General and administrative (1) | 336,606 | 261,662 | 1,018,234 | 800,505 | ||||||||||||
| Provision for transaction and loan losses | 146,054 | 97,964 | 371,641 | 296,025 | ||||||||||||
| Amortization of acquired intangible assets | 84,605 | 45,957 | 181,978 | 148,104 | ||||||||||||
| Restructuring | (233 | ) | 3,005 | (482 | ) | 20,437 | ||||||||||
| Total operating expenses | 1,509,243 | 1,119,044 | 4,225,518 | 3,335,380 | ||||||||||||
| Income from operations (2) | 536,821 | 490,176 | 1,620,374 | 1,463,350 | ||||||||||||
| Loss on divested business | — | — | (256,501 | ) | — | |||||||||||
| Interest and other income (expense), net | 78,704 | 26,825 | 110,972 | 47,692 | ||||||||||||
| Income before income taxes | 615,525 | 517,001 | 1,474,845 | 1,511,042 | ||||||||||||
| Provision for income taxes | (125,022 | ) | (85,072 | ) | (225,070 | ) | (269,268 | ) | ||||||||
| Net income | $ | 490,503 | $ | 431,929 | $ | 1,249,775 | $ | 1,241,774 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.38 | $ | 0.33 | $ | 0.97 | $ | 0.95 | ||||||||
| Diluted | $ | 0.37 | $ | 0.33 | $ | 0.95 | $ | 0.94 | ||||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 1,289,631 | 1,308,888 | 1,290,921 | 1,303,217 | ||||||||||||
| Diluted | 1,309,334 | 1,328,415 | 1,311,173 | 1,324,509 | ||||||||||||
| (1) Includes stock-based compensation as follows: | ||||||||||||||||
| Cost of net revenues | $ | 14,210 | $ | 11,833 | $ | 42,637 | $ | 36,116 | ||||||||
| Sales and marketing | 32,259 | 26,350 | 100,370 | 80,030 | ||||||||||||
| Product development | 25,665 | 24,389 | 90,778 | 75,544 | ||||||||||||
| General and administrative | 36,088 | 31,208 | 112,147 | 96,142 | ||||||||||||
| $ | 108,222 | $ | 93,780 | $ | 345,932 | $ | 287,832 | |||||||||
resource:http://www.webpronews.com/ebay-q3-earnings-released-2011-10
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