10-KPeriod: FY2015

EBAY INC Annual Report, Year Ended Dec 31, 2015

Filed February 1, 2016For Securities:EBAY

Summary

eBay Inc.'s 2015 Form 10-K details a year of significant strategic transformation, primarily marked by the separation of PayPal and the sale of its Enterprise businesses. These divestitures have fundamentally reshaped the company's structure and focus towards its core Marketplace, StubHub, and Classifieds platforms. Financially, the company saw a slight decrease in net revenues to $8.59 billion from $8.79 billion in the prior year, impacted by foreign currency headwinds. However, on a constant currency basis, revenue grew. The company generated $82 billion in Gross Merchandise Volume (GMV) across its platforms. Despite the revenue dip, eBay demonstrated strong operational efficiency with a decrease in sales and marketing expenses as a percentage of revenue. The company also continued its commitment to returning capital to shareholders through share repurchases, deploying $2.1 billion in 2015. Looking ahead, eBay faces a competitive e-commerce landscape and ongoing efforts to enhance its platforms' user experience, particularly on mobile devices. The company's strategic focus remains on leveraging its global scale and unique inventory to drive growth in its core businesses.

Financial Highlights

57 data points
Beta

Revenue

$8.59B

79.4% Gross Margin

Net Income

$1.73B

20.1% Net Margin

EPS (Diluted)

$1.42

Total Assets

$17.75B

Cash & Equivalents

$1.83B

Free Cash Flow

$3.37B

Financial Statements
Beta
Revenue$8.59B
Cost of Revenue$1.77B
Gross Profit$6.82B
R&D Expenses$923.00M
Operating Expenses$4.62B
Operating Income$2.20B
Interest Expense$144.00M
Net Income$1.73B
EPS (Basic)$1.43
EPS (Diluted)$1.42
Shares Outstanding (Basic)1.21B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Completed the strategic separation of PayPal into an independent public company in July 2015.
  • 2Sold its Enterprise businesses in November 2015.
  • 3Reported net revenues of $8.59 billion, a slight decrease from $8.79 billion in 2014, primarily due to foreign currency exchange rate fluctuations.
  • 4Generated $81.7 billion in Gross Merchandise Volume (GMV) across its Marketplace and StubHub platforms.
  • 5Repurchased approximately $2.1 billion of its common stock during 2015.
  • 6Sales and marketing expenses decreased by 7% year-over-year, and as a percentage of net revenue, improved to 26% from 28% in 2014.
  • 7As of December 31, 2015, had cash and cash equivalents of $1.83 billion and long-term investments totaling $7.7 billion.

Frequently Asked Questions

The most significant strategic changes for eBay in 2015 were the separation of PayPal into an independent company and the sale of its Enterprise businesses. These actions significantly streamlined eBay's business focus onto its core Marketplace, StubHub, and Classifieds platforms.

The separation of PayPal meant that PayPal's financial results for periods prior to the distribution were reclassified as 'discontinued operations' in eBay's consolidated financial statements. This resulted in a reported net income of $1.725 billion for 2015, a significant increase from $46 million in 2014, largely due to the presentation of PayPal's strong performance as discontinued operations and the absence of its significant contribution to eBay's net income in the current year's continuing operations.

eBay has an ongoing stock repurchase program, with approximately $1.8 billion remaining available as of December 31, 2015. The company stated its expectation to continue opportunistic repurchases. eBay has never paid cash dividends and does not anticipate doing so in the foreseeable future.

The strengthening of the U.S. dollar against other currencies, particularly the Euro, British pound, and Korean won, had a negative impact on eBay's reported net revenues and other financial metrics in 2015. On a 'FX-Neutral' or constant currency basis, however, key metrics like GMV and net revenues showed positive growth.