01—Abstract
Summary
Summary of the 10-K filed January 28, 2011. Cited figures are marked; the original filing is the authoritative source.
eBay Inc. reported its 2010 fiscal year results, showcasing a 5% increase in total net revenues, reaching $9.2 billiona.
This growth was primarily driven by a robust 23%b surge in the Payments segment, fueled by strong performance in PayPal and the inclusion of Bill Me Later. The Marketplaces segment also experienced an 8% revenue increase, indicating a recovery and growth in its core business. The company demonstrated improved profitability, with operating margins increasing to 22% from 17% in the prior year, partly due to the absence of the significant legal settlement charge incurred in 2009 and lower amortization costs.
Key strategic developments include the ongoing integration of Bill Me Later into the PayPal ecosystem and continued investment in mobile payment solutions. Despite the positive revenue and profitability trends, the company faces intense competition across all its business lines and acknowledges a slowdown in growth rates in its most mature markets.
Management remains focused on enhancing user experience, expanding product offerings, and investing in technology to maintain its competitive edge. The company also continues its stock repurchase program, repurchasing $712.8 millionc in common stock during 2010.
02—Key points
Key Highlights
- Total net revenues grew 5% to $9.2 billion in 2010.
- The Payments segment was a key growth driver, with revenues increasing by 23%, reaching $3.4 billion.
- Marketplaces segment revenues increased by 8% to $5.7 billion.
- Operating margin improved to 22% in 2010 from 17% in 2009.
- Active users increased to approximately 94.5 million at the end of 2010, up from 90.1 million at the end of 2009.
- The company repurchased $712.8 million of its common stock during the year.
- eBay.com GMV grew 8% to $61.8 billion, with fixed-price listings accounting for 60% of GMV.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, eBay Inc kept $0.20.
- Revenue$9.16B100.0%
- Cost of revenue−$2.56B28.0%
- Gross profit$6.59B72.0%
- Operating costs−$4.54B49.6%
- Operating income$2.05B22.4%
- Interest, other & tax−$253.0M2.8%
- Net income$1.80B19.7%
Where FY2010 revenue went
$9.16B- Other operating costs: $3.63B, 40% of revenue
- Cost of revenue: $2.56B, 28% of revenue
- Net income: $1.80B, 20% of revenue
- R&D: $908.0M, 9.9% of revenue
- Interest, other & tax: $253.0M, 2.8% of revenue
Kept 20% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed January 28, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $9.16B$8.73B | +4.9% |
| Cost of Revenue | $2.56B$2.48B | +3.4% |
| Gross Profit | $6.59B$6.25B | +5.5% |
| R&D Expenses | $908.00M$803.07M | +13.1% |
| Operating Expenses | $4.54B$4.79B | −5.3% |
| Operating Income | $2.05B$1.46B | +41.0% |
| Net Income | $1.80B$2.39B | −24.6% |
| EPS (Basic) | $1.38$1.85 | −25.4% |
| EPS (Diluted) | $1.36$1.83 | −25.7% |
| Shares Outstanding (Basic) | 1.31B1.29B | +1.3% |
| Shares Outstanding (Diluted) | 1.33B1.30B | +1.7% |
05—Questions
Frequently Asked Questions
What were eBay's main revenue drivers in 2010?
eBay's primary revenue drivers in 2010 were its Marketplaces segment, which includes the eBay.com platform and other online marketplaces, and its Payments segment, primarily consisting of PayPal and Bill Me Later. The Payments segment showed particularly strong growth, driven by increased adoption and transaction volume.
How did the company's profitability change in 2010?
eBay's profitability improved in 2010, with its operating margin increasing to 22% from 17% in 2009. This improvement was partly due to the absence of a significant legal settlement charge recorded in 2009 and lower amortization costs.
What is the company's strategy for future growth?
eBay's growth strategy focuses on investing in its customers by improving the user experience and seller economics, enhancing its products and services, strengthening trust and safety, expanding its product offerings into new formats and geographies, and implementing innovative pricing and buyer retention strategies. Key areas of focus include growing the Payments business through expanded merchant coverage and increasing PayPal's penetration on the eBay platform.
What risks does eBay highlight in its 2010 report?
eBay highlights several risks, including intense competition in both Marketplaces and Payments segments, potential negative impacts from economic conditions, regulatory scrutiny and litigation, cybersecurity threats, and the need to continuously innovate and improve user experience to retain market share, especially in its more mature markets.
06—Continue