Wednesday, October 15, 2008
eBay Inc. Reports Third Quarter 2008 Results
San Jose, Calif., October 15, 2008 — eBay Inc. (Nasdaq: EBAY) today reported financial results for its third quarter ended September 30, 2008. The ecommerce company posted third quarter revenue of $2.12 billion, up $228 million from the same period last year. Net income on a GAAP basis was $492 million, or $0.38 per diluted share, and non-GAAP net income was $592 million, or $0.46 per diluted share.
“Overall, we are pleased with the performance of the portfolio this past quarter,” said eBay Inc. President and CEO John Donahoe. “We took a number of steps during the quarter to further strengthen our business and better align our cost structure to invest and compete. We will continue to stay focused on connecting consumers on our various ecommerce platforms, maintaining financial discipline and capitalizing on new opportunities for growth.”
eBay continues to benefit from an increasingly diversified portfolio of businesses. While Marketplaces transaction revenue still represents a majority of revenue for the company, revenue growth rates were helped by growth in PayPal, Skype and global classifieds. The company’s global footprint helped it benefit year over year from strength in other currencies relative to the U.S. dollar.
GAAP operating margin increased to 24.7% for the quarter, compared to (49.6%) for the same period last year. Non- GAAP operating margin increased to 31.8% for the quarter, compared to 31.4% for the same period last year. The year- over-year increase in non-GAAP operating margin is due primarily to higher margins from each of the business units, which more than offset the growth from lower-margin businesses, primarily PayPal and Skype.
eBay Inc. generated $693 million of operating cash flow during the third quarter. Free cash flow during the quarter was $543 million.
Quarterly Business Highlights
- eBay Inc. was honored by the White House and U.S. Department of Commerce with the National Medal of Technology for leadership in technology and innovation that has enabled millions of entrepreneurs to participate in the global ecommerce market.
- Marc Andreessen, founder of Netscape, Loudcloud and Ning, joined the eBay Inc. board of directors.
- eBay Inc. repurchased approximately 25 million shares of its outstanding common stock at a cost of approximately $623 million. Since the inception of the stock repurchase program in the third quarter of 2006, the company has repurchased approximately $5.3 billion of its common stock.
- eBay lowered listing fees for the Buy It Now format by more than 70% and extended listing periods to 30 days, up from seven.
- The company’s global classifieds businesses averaged 84 million unique visitors per month during the quarter, representing an increase of 55% year-over-year.
- StubHub entered into a partnership with the NFL’s New York Jets franchise to auction personal seat licenses for the football team’s new stadium.
- PayPal launched merchant services deals with Walmart.com, William Hill (U.K.), Continental Airlines, American Eagle Outfitters, BagsOK (China), newegg (Canada) and OfficeMax, among others.
- Payment volume from PayPal’s merchant services business exceeded the volume received from the eBay marketplace for the first time.
- Skype surpassed 13 million concurrent users at certain peak times.
- Skype-to-Skype minutes reached nearly 16 billion, a 63% increase year over year.
Financial Highlights
(presented in millions, except per share data and percentages)
| 2008 (Q3) | 2007 (Q3) | Change | ||
|---|---|---|---|---|
| Net Revenue | $2,118 | $1,889 | $228 | 12% |
| GAAP | ||||
| Net income (loss) | $492 | ($936)* | $1,428 | - |
| Earnings (loss) per diluted | $0.38 | ($0.69)* | $1.07 | - |
| Non-GAAP | ||||
| Net income | $592 | $564 | $28 | 5% |
| Earnings per diluted share | $0.46 | $0.41 | $0.05 | 11% |
* Includes goodwill impairment charge of $1.39 billion recorded in the third quarter of 2007, which was not deductible for tax purposes.
eBay Inc. Reports Third Quarter 2008 Results
