01—Abstract
Summary
Summary of the 10-K filed February 1, 2016. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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 billionb 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.
02—Key points
Key Highlights
- Completed the strategic separation of PayPal into an independent public company in July 2015.
- Sold its Enterprise businesses in November 2015.
- Reported net revenues of $8.59 billion, a slight decrease from $8.79 billion in 2014, primarily due to foreign currency exchange rate fluctuations.
- Generated $81.7 billion in Gross Merchandise Volume (GMV) across its Marketplace and StubHub platforms.
- Repurchased approximately $2.1 billion of its common stock during 2015.
- Sales and marketing expenses decreased by 7% year-over-year, and as a percentage of net revenue, improved to 26% from 28% in 2014.
- As of December 31, 2015, had cash and cash equivalents of $1.83 billion and long-term investments totaling $7.7 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, eBay Inc kept $0.20.
- Revenue$8.59B100.0%
- Cost of revenue−$1.77B20.6%
- Gross profit$6.82B79.4%
- Operating costs−$4.62B53.8%
- Operating income$2.20B25.6%
- Interest, other & tax−$472.0M5.5%
- Net income$1.73B20.1%
Where FY2015 revenue went
$8.59B- Other operating costs: $3.70B, 43% of revenue
- Cost of revenue: $1.77B, 21% of revenue
- Net income: $1.73B, 20% of revenue
- R&D: $923.0M, 11% of revenue
- Interest, other & tax: $472.0M, 5.5% of revenue
Kept 20% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 1, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $8.59B$8.79B | −2.3% |
| Cost of Revenue | $1.77B$1.66B | +6.5% |
| Gross Profit | $6.82B$7.13B | −4.3% |
| R&D Expenses | $923.00M$983.00M | −6.1% |
| Operating Expenses | $4.62B$4.65B | −0.6% |
| Operating Income | $2.20B$2.48B | −11.3% |
| Interest Expense | $144.00M$109.00M | +32.1% |
| Net Income | $1.73B$46.00M | +3650.0% |
| EPS (Basic) | $1.43$0.04 | +3475.0% |
| EPS (Diluted) | $1.42$0.04 | +3450.0% |
| Shares Outstanding (Basic) | 1.21B1.25B | −3.4% |
| Shares Outstanding (Diluted) | 1.22B1.25B | −2.5% |
05—Questions
Frequently Asked Questions
What were the most significant strategic changes for eBay in 2015?
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.
How did the separation of PayPal impact eBay's financial results?
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.
What is eBay's outlook regarding share repurchases and dividends?
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.
How did foreign currency fluctuations affect eBay's reported results?
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.
06—Continue