01—Abstract
Summary
Summary of the 10-Q filed April 26, 2018. Cited figures are marked; the original filing is the authoritative source.
eBay Inc.'s (EBAY) first quarter 2018 results show a 12% increase in total net revenues to $2.58 billiona, driven by a 11% rise in net transaction revenues and a 14% increase in marketing services and other revenues.
Growth was observed across both Marketplace and StubHub platforms, with international revenue outperforming the U.S. The company's Gross Merchandise Volume (GMV) also saw a healthy 13% increase. Despite revenue growth, diluted earnings per share (EPS) declined to $0.40b from $0.94 in the prior year, primarily impacted by higher operating expenses, including sales and marketing, and product development, as well as a less favorable tax rate compared to Q1 2017. The company's operating margin also saw a slight decrease. eBay continued its significant capital return program, repurchasing approximately $1.0 billion of its common stock during the quarter, underscoring a commitment to shareholder value.
02—Key points
Key Highlights
- Total net revenues increased by 12% to $2.58 billion compared to the prior year's first quarter.
- Gross Merchandise Volume (GMV) grew by 13% to $23.59 billion, indicating increased platform activity.
- Net transaction revenues rose by 11% to $2.02 billion, primarily driven by Marketplace and StubHub.
- Operating expenses increased by 16% to $1.44 billion, impacting profitability.
- Diluted earnings per share (EPS) decreased to $0.40 from $0.94 year-over-year, largely due to higher expenses and a less favorable tax environment.
- The company repurchased approximately $1.0 billion of its common stock during the quarter, demonstrating a strong focus on capital return.
- International revenue grew by 15%, outpacing U.S. revenue growth of 9%, reflecting continued global expansion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2018, eBay Inc kept $0.16.
- Revenue$2.58B100.0%
- Cost of revenue−$559.0M21.7%
- Gross profit$2.02B78.3%
- Operating costs−$1.44B55.9%
- Operating income$579.0M22.4%
- Interest, other & tax−$172.0M6.7%
- Net income$407.0M15.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2018filed April 26, 2018Financial Statements
Q1 FY2018 against Q1 FY2017
| Line item | Q1 FY2018Q1 FY2017 | Change |
|---|---|---|
| Revenue | $2.58B$2.30B | +12.0% |
| Cost of Revenue | $559.00M$514.00M | +8.8% |
| Gross Profit | $2.02B$1.79B | +13.0% |
| R&D Expenses | $334.00M$278.00M | +20.1% |
| Operating Expenses | $1.44B$1.24B | +16.1% |
| Operating Income | $579.00M$547.00M | +5.9% |
| Net Income | $407.00M$1.03B | −60.7% |
| EPS (Basic) | $0.40$0.96 | −58.3% |
| EPS (Diluted) | $0.40$0.94 | −57.4% |
| Shares Outstanding (Basic) | 1.01B1.08B | −6.7% |
| Shares Outstanding (Diluted) | 1.03B1.10B | −6.6% |
05—Questions
Frequently Asked Questions
What was the primary driver of eBay's revenue growth in Q1 2018?
eBay's revenue growth was primarily driven by an 11% increase in net transaction revenues, fueled by a 13% rise in Gross Merchandise Volume (GMV) across its Marketplace and StubHub platforms. Marketing services and other revenues also contributed significantly with a 14% increase.
Why did diluted earnings per share (EPS) decrease despite revenue growth?
Diluted EPS decreased to $0.40 from $0.94 in Q1 2017 due to a significant increase in operating expenses, particularly in sales and marketing (up 17%) and product development (up 20%). Additionally, the company's effective tax rate increased to 25.6% in Q1 2018 from a very low rate (effectively a benefit) in Q1 2017, impacting net income.
How is eBay returning capital to shareholders?
eBay demonstrated a strong commitment to returning capital to shareholders by repurchasing approximately $1.0 billion of its common stock during the first quarter of 2018. This is part of larger authorized repurchase programs totaling $9.0 billion.
What is the company's outlook on international growth?
International revenue experienced robust growth of 15% in the first quarter of 2018, outpacing the U.S. revenue growth of 9%. This suggests a continued strategic focus on expanding its global presence and market share.
06—Continue