01—Abstract
Summary
Summary of the 10-Q filed July 19, 2013. Cited figures are marked; the original filing is the authoritative source.
eBay Inc. reported solid financial results for the second quarter and first half of 2013, demonstrating robust revenue growth driven by its Marketplaces and Payments segments.
Net revenues increased by 14% to $3.9 billiona for the quarter and by 15% to $7.6 billion for the first half, year-over-year. The company's Payments segment, notably PayPal, showed strong growth with a 20% revenue increase in the quarter, driven by a 24% rise in total net TPV. The Marketplaces segment also saw a healthy 10% revenue increase, supported by a 13% growth in GMV excluding vehicles.
Despite strong top-line performance, operating margin saw a slight decrease to 19% in the quarter due to faster growth in the lower-margin Payments segment and a favorable tax dispute resolution in the prior year's quarter. Diluted earnings per share decreased to $0.49b from $0.53, impacted by a gain from a business divestiture in the prior year and higher interest expenses.
However, the company generated strong operating cash flow of $1.0 billionc for the quarter, an increase from $768 million in the prior year, indicating solid operational cash generation. The company also continued its share repurchase program, buying back approximately $942 million in the first half of the year.
02—Key points
Key Highlights
- Total net revenues increased 14% year-over-year to $3.9 billion for the three months ended June 30, 2013, and 15% to $7.6 billion for the six months ended June 30, 2013.
- The Payments segment revenue grew 20% year-over-year, driven by a 24% increase in total net TPV.
- The Marketplaces segment revenue grew 10% year-over-year, supported by a 13% increase in GMV excluding vehicles.
- Operating income for the three months ended June 30, 2013, was $750 million, an increase from $695 million in the prior year.
- Diluted earnings per share for the three months ended June 30, 2013, were $0.49, a decrease from $0.53 in the prior year, influenced by a prior year gain on divestiture.
- Cash flow from operating activities for the six months ended June 30, 2013, was $1.9 billion, up from $1.3 billion in the prior year.
- The company repurchased approximately $942 million of its common stock during the six months ended June 30, 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2013, eBay Inc kept $0.17.
- Revenue$3.88B100.0%
- Cost of revenue−$1.21B31.2%
- Gross profit$2.67B68.8%
- Operating costs−$1.92B49.4%
- Operating income$750.0M19.3%
- Interest, other & tax−$110.0M2.8%
- Net income$640.0M16.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2013filed July 19, 2013Financial Statements
Q2 FY2013 against Q2 FY2012
| Line item | Q2 FY2013Q2 FY2012 | Change |
|---|---|---|
| Revenue | $3.88B$3.40B | +14.1% |
| Cost of Revenue | $1.21B$987.00M | +22.7% |
| Gross Profit | $2.67B$2.41B | +10.6% |
| R&D Expenses | $451.00M$394.00M | +14.5% |
| Operating Expenses | $1.92B$1.72B | +11.7% |
| Operating Income | $750.00M$695.00M | +7.9% |
| Net Income | $640.00M$692.00M | −7.5% |
| EPS (Basic) | $0.49$0.54 | −9.3% |
| EPS (Diluted) | $0.49$0.53 | −7.5% |
| Shares Outstanding (Basic) | 1.30B1.29B | +0.5% |
| Shares Outstanding (Diluted) | 1.31B1.31B | +0.3% |
05—Questions
Frequently Asked Questions
What was eBay's revenue performance in the second quarter of 2013?
eBay reported a 14% increase in net revenues, reaching $3.9 billion for the three months ended June 30, 2013, compared to the same period in the prior year. This growth was primarily driven by strong performances in both the Marketplaces and Payments segments.
How did the key business segments perform in terms of revenue?
The Marketplaces segment saw a 10% increase in total net revenues, driven by a 13% rise in GMV (excluding vehicles). The Payments segment experienced a significant 20% increase in total net revenues, largely due to a 24% growth in total net TPV (Total Payment Volume).
What is the company's financial health and cash flow situation?
eBay maintained a strong balance sheet with total assets of $38.55 billion as of June 30, 2013. The company generated $1.9 billion in cash flow from operating activities for the first six months of 2013, an increase from the prior year, demonstrating robust operational cash generation. Additionally, the company had $6.855 billion in cash and cash equivalents at the end of the period.
What is eBay doing with its cash, such as share repurchases?
eBay actively returned capital to shareholders by repurchasing approximately $942 million of its common stock during the first six months of 2013, as part of a $2 billion repurchase program authorized in June 2012. This program is intended to offset dilution from equity compensation.
06—Continue