01—Abstract
Summary
Summary of the 10-Q filed April 28, 2010. Cited figures are marked; the original filing is the authoritative source.
eBay Inc.'s first quarter 2010 report shows continued growth in net revenues, reaching $2.2 billiona, a 9% increase year-over-year, primarily driven by strong performance in its Marketplaces and Payments segments.
The company also saw an improvement in its operating margin to 22%, up from 21% in the prior year, attributed to productivity gains and lower amortization costs. Diluted earnings per share increased to $0.30b. Key operational highlights include significant growth in Gross Merchandise Volume (GMV) for Marketplaces, up 20%, and a substantial 35% increase in Total Payment Volume (TPV) for the Payments segment.
The company continues to manage its operations efficiently, with a focus on reallocating resources to customer-centric initiatives, while also facing headwinds from foreign currency fluctuations, particularly a strengthening U.S. dollar. Despite a decrease in cash flow from operations compared to the prior year, largely due to tax-related payments from a legal entity restructuring, eBay maintains a strong liquidity position.
02—Key points
Key Highlights
- Net revenues increased by 9% to $2.2 billion in Q1 2010 compared to Q1 2009.
- Operating margin improved to 22% from 21% year-over-year.
- Diluted earnings per share rose to $0.30 from $0.28 in the prior year's quarter.
- Marketplaces GMV (Gross Merchandise Volume) grew by 20% year-over-year.
- Payments segment saw a 35% increase in TPV (Total Payment Volume).
- The company generated $418.3 million in cash flow from operating activities.
- eBay completed the sale of Skype in November 2009, and its results are no longer consolidated in 2010.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2010, eBay Inc kept $0.18.
- Revenue$2.20B100.0%
- Cost of revenue−$606.6M27.6%
- Gross profit$1.59B72.4%
- Operating costs−$1.10B50.1%
- Operating income$488.6M22.2%
- Interest, other & tax−$91.0M4.1%
- Net income$397.7M18.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2010filed April 28, 2010Financial Statements
Q1 FY2010 against Q1 FY2009
| Line item | Q1 FY2010Q1 FY2009 | Change |
|---|---|---|
| Revenue | $2.20B$2.02B | +8.7% |
| Cost of Revenue | $606.55M$573.39M | +5.8% |
| Gross Profit | $1.59B$1.45B | +9.8% |
| R&D Expenses | $210.14M$201.52M | +4.3% |
| Operating Expenses | $1.10B$1.02B | +7.5% |
| Operating Income | $488.61M$422.76M | +15.6% |
| Net Income | $397.65M$357.11M | +11.4% |
| EPS (Basic) | $0.31$0.28 | +10.7% |
| EPS (Diluted) | $0.30$0.28 | +7.1% |
| Shares Outstanding (Basic) | 1.30B1.28B | +1.4% |
| Shares Outstanding (Diluted) | 1.33B1.29B | +3.0% |
05—Questions
Frequently Asked Questions
What was eBay's revenue performance in the first quarter of 2010?
eBay reported a 9% increase in net revenues to $2.2 billion for the first quarter of 2010, compared to $2.02 billion in the same period of the prior year. This growth was primarily driven by the Marketplaces and Payments segments, along with a positive impact from foreign currency movements.
How did eBay's profitability change in Q1 2010?
eBay's profitability improved, with operating margin increasing to 22% from 21% in the first quarter of 2009. This improvement was attributed to productivity gains and lower amortization costs, although partially offset by the faster growth of the lower-margin PayPal business and lower take rates.
What are the key performance indicators for eBay's main segments?
For the Marketplaces segment, Gross Merchandise Volume (GMV) excluding vehicles increased by 24%. For the Payments segment, Total Payment Volume (TPV) saw a significant increase of 35% year-over-year.
What is the company's cash flow situation?
In the first quarter of 2010, eBay generated $418.3 million in cash flow from operating activities, a decrease from the prior year's quarter. This reduction was mainly due to cash paid for income taxes related to a 2009 legal entity restructuring and higher employee bonus payments. Despite this, the company had $5.4 billion in cash, cash equivalents, and non-equity investments as of March 31, 2010.
06—Continue