01—Abstract
Summary
Summary of the 10-Q filed April 20, 2012. Cited figures are marked; the original filing is the authoritative source.
eBay Inc. reported a solid first quarter for 2012, demonstrating continued revenue growth across its key segments.
Net revenues increased by 29% year-over-year to $3.3 billiona, driven by robust performance in both the Marketplaces and Payments divisions, with the newly acquired GSI segment also contributing significantly. The Payments segment, powered by PayPal, saw a 32% increase in net revenues, largely due to a 24% rise in total payment volume (TPV) and a higher take rate. Marketplaces revenue grew 11%, supported by a 12% increase in gross merchandise volume (GMV) excluding vehicles.
Despite revenue growth, the operating margin saw a slight decrease to 20% from 22% in the prior year, primarily attributed to the impact of acquisitions and a shift in business mix. However, diluted earnings per share (EPS) saw a notable increase to $0.44b, up from $0.36 in the prior year, benefiting from strong top-line growth, higher interest income, and a reduction in outstanding shares. The company generated $531 million in cash flow from operations, though this was lower than the previous year due to significant income tax payments related to the prior year's Skype sale. eBay continued its share repurchase program, buying back $240 million in the quarter.
02—Key points
Key Highlights
- Total net revenues increased 29% to $3.3 billion, driven by strong performance in Marketplaces (up 11%) and Payments (up 32%).
- The acquisition of GSI contributed $237 million in revenue in the quarter.
- PayPal's Total Payment Volume (TPV) grew 24%, and its net revenues increased 32%, indicating strong adoption and usage.
- Diluted Earnings Per Share (EPS) rose to $0.44, an increase from $0.36 in the prior year, reflecting solid top-line growth and operational efficiencies.
- Operating margin decreased to 20% from 22%, primarily due to acquisition impacts and business mix changes.
- Cash flow from operations was $531 million, down from $700 million in the prior year, largely due to higher income tax payments.
- eBay repurchased $240 million of its common stock during the quarter under its authorized repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2012, eBay Inc kept $0.17.
- Revenue$3.28B100.0%
- Cost of revenue−$983.0M30.0%
- Gross profit$2.29B70.0%
- Operating costs−$1.64B50.1%
- Operating income$653.0M19.9%
- Interest, other & tax−$83.0M2.5%
- Net income$570.0M17.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed April 20, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $3.28B$2.55B | +28.7% |
| Cost of Revenue | $983.00M$729.00M | +34.8% |
| Gross Profit | $2.29B$1.82B | +26.3% |
| R&D Expenses | $374.00M$275.00M | +36.0% |
| Operating Expenses | $1.64B$1.25B | +31.1% |
| Operating Income | $653.00M$565.00M | +15.6% |
| Net Income | $570.00M$476.00M | +19.7% |
| EPS (Basic) | $0.44$0.37 | +18.9% |
| EPS (Diluted) | $0.44$0.36 | +22.2% |
| Shares Outstanding (Basic) | 1.29B1.30B | −0.7% |
| Shares Outstanding (Diluted) | 1.31B1.32B | −0.9% |
05—Questions
Frequently Asked Questions
What was eBay's revenue performance in the first quarter of 2012?
eBay reported a 29% increase in net revenues to $3.3 billion for the first quarter of 2012, compared to the same period in the prior year. This growth was driven by contributions from its Marketplaces, Payments, and GSI segments.
How did the different business segments perform?
The Marketplaces segment saw an 11% increase in net revenues, driven by a 12% rise in gross merchandise volume (GMV) excluding vehicles. The Payments segment, primarily PayPal, experienced a 32% increase in net revenues due to a 24% growth in Total Payment Volume (TPV). The newly acquired GSI segment contributed $237 million in revenue.
What was the impact of the GSI acquisition on the company's financial results?
The acquisition of GSI, completed in June 2011, contributed $237 million in revenue and $145 million in cost of net revenues during the first quarter of 2012. It also led to an increase in amortization of acquired intangible assets and contributed to a decrease in the overall operating margin due to business mix.
What is the outlook for eBay's business segments in the near future?
eBay expects continued strong performance from its Payments business due to expanded consumer and merchant adoption. The Marketplaces business is anticipated to perform well, driven by e-commerce and mobile strength. The GSI business is also expected to perform well, supported by operational improvements and synergy realization. The company plans to continue investing in all its platforms and new products.
06—Continue