10-QPeriod: Q2 FY2013

EBAY INC Quarterly Report for Q2 Ended Jun 30, 2013

Filed July 19, 2013For Securities:EBAY

Summary

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 billion 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 $0.49 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 billion 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.

Financial Highlights

50 data points
Beta

Revenue

$3.88B

68.8% Gross Margin

Net Income

$640.00M

16.5% Net Margin

EPS (Diluted)

$0.49

Total Assets

$38.55B

Cash & Equivalents

$6.86B

Free Cash Flow

$658.00M

Financial Statements
Beta
Revenue$3.88B
Cost of Revenue$1.21B
Gross Profit$2.67B
R&D Expenses$451.00M
Operating Expenses$1.92B
Operating Income$750.00M
Net Income$640.00M
EPS (Basic)$0.49
EPS (Diluted)$0.49
Shares Outstanding (Basic)1.30B
Shares Outstanding (Diluted)1.31B

Key Highlights

  • 1Total 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.
  • 2The Payments segment revenue grew 20% year-over-year, driven by a 24% increase in total net TPV.
  • 3The Marketplaces segment revenue grew 10% year-over-year, supported by a 13% increase in GMV excluding vehicles.
  • 4Operating income for the three months ended June 30, 2013, was $750 million, an increase from $695 million in the prior year.
  • 5Diluted 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.
  • 6Cash 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.
  • 7The company repurchased approximately $942 million of its common stock during the six months ended June 30, 2013.

Frequently Asked Questions

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.

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).

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.

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.