10-QPeriod: Q1 FY2013

EBAY INC Quarterly Report for Q1 Ended Mar 31, 2013

Filed April 19, 2013For Securities:EBAY

Summary

eBay Inc. reported a strong first quarter for 2013, with net revenues increasing by 14% year-over-year to $3.7 billion, driven by robust performance in both its Marketplaces and Payments segments. Diluted earnings per share saw a significant increase of $0.07 to $0.51, benefiting from revenue growth and a lower effective tax rate. The company generated substantial operating cash flow of $937 million, a notable increase from the prior year, indicating healthy operational performance. Key drivers of this growth included a 13% increase in Marketplaces GMV (excluding vehicles) and an 18% increase in Payments net transaction revenues, fueled by higher total payment volume (TPV). However, the GSI segment experienced flat revenue growth and a decline in its operating margin. The company also actively managed its capital structure, repurchasing $476 million of its common stock under an ongoing $2 billion repurchase program, signaling confidence in its financial position and commitment to shareholder returns.

Financial Highlights

50 data points
Beta

Revenue

$3.75B

69.3% Gross Margin

Net Income

$677.00M

18.1% Net Margin

EPS (Diluted)

$0.51

Total Assets

$38.00B

Cash & Equivalents

$6.53B

Free Cash Flow

$638.00M

Financial Statements
Beta
Revenue$3.75B
Cost of Revenue$1.15B
Gross Profit$2.60B
R&D Expenses$434.00M
Operating Expenses$1.80B
Operating Income$800.00M
Net Income$677.00M
EPS (Basic)$0.52
EPS (Diluted)$0.51
Shares Outstanding (Basic)1.29B
Shares Outstanding (Diluted)1.32B

Key Highlights

  • 1Net revenues increased by 14% to $3.7 billion in Q1 2013 compared to Q1 2012.
  • 2Diluted EPS grew to $0.51, up from $0.44 in the prior year's quarter.
  • 3Operating cash flow significantly improved, reaching $937 million in Q1 2013, up from $531 million in Q1 2012.
  • 4Marketplaces segment saw a 13% increase in GMV (excluding vehicles), and Payments segment experienced an 18% increase in net transaction revenues.
  • 5The company repurchased $476 million of its common stock during the quarter under its authorized $2 billion repurchase program.
  • 6Goodwill decreased slightly from $8.537 billion to $8.455 billion due to foreign currency translation adjustments.
  • 7The effective tax rate slightly decreased to 16.3% from 16.7% in the prior year period.

Frequently Asked Questions

eBay's revenue growth was primarily driven by its Marketplaces and Payments segments. Marketplaces saw a 13% increase in Gross Merchandise Volume (GMV) excluding vehicles, while the Payments segment experienced an 18% increase in net transaction revenues due to higher Total Payment Volume (TPV).

Profitability improved significantly, with net income rising to $677 million from $570 million in the prior year's quarter. Diluted earnings per share increased to $0.51 from $0.44. The operating margin also improved to 21% from 20%.

eBay continued its commitment to returning capital to shareholders by repurchasing $476 million of its common stock during the quarter. This aligns with its stated intention to offset dilution from equity compensation programs under a $2 billion stock repurchase authorization.

While overall results were strong, the GSI segment experienced flat revenue growth and a decrease in operating margin. Additionally, the company noted a decrease in its Payments segment operating margin due to factors like a shift to larger merchants with lower take rates and increased investments in consumer awareness and product initiatives.