01—Abstract
Summary
Summary of the 10-Q filed October 24, 2019. Cited figures are marked; the original filing is the authoritative source.
eBay Inc. reported flat net revenues of $2.6 billiona for the third quarter of 2019, consistent with the prior year, but saw a 2% increase on a foreign exchange (FX)-neutral basis.
This indicates underlying organic growth despite currency headwinds. Diluted earnings per share (EPS) declined to $0.37b from $0.73 in the same period last year, influenced by a decrease in operating margin to 20.1% from 21.0% year-over-year. The company generated strong operating cash flow of $1.0 billion for the quarter, demonstrating its ability to convert earnings into cash.
The company is undergoing strategic reviews of its asset portfolio, including StubHub and Classifieds, which may lead to significant changes in its business structure. Despite a challenging comparison period in the prior year that included a significant gain from an investment sale, eBay maintained its financial stability. Significant cash was returned to shareholders through $4.0 billionc in share repurchases and $360 million in dividends year-to-date.
02—Key points
Key Highlights
- Net revenues remained flat year-over-year at $2.6 billion for Q3 2019, with a 2% increase on an FX-neutral basis, suggesting stable underlying business performance.
- Diluted EPS decreased to $0.37 from $0.73 in Q3 2018, reflecting a lower operating margin of 20.1% compared to 21.0% in the prior year's quarter.
- Operating income from continuing operations for the nine months ended September 30, 2019, increased to $1.7 billion from $1.5 billion in the same period of 2018.
- The company repurchased approximately $4.0 billion of its common stock during the first nine months of 2019, reflecting a commitment to returning capital to shareholders.
- eBay paid cash dividends totaling $360 million in the first nine months of 2019, underscoring its capital return strategy.
- Significant cash flow from operations was generated, with $2.3 billion in the first nine months of 2019.
- The company is undertaking a strategic review of its asset portfolio, including StubHub and Classifieds, which could lead to significant changes in its business structure.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2019, eBay Inc kept $0.15.
- Revenue$2.08B100.0%
- Cost of revenue−$530.0M25.4%
- Gross profit$1.55B74.6%
- Operating costs−$1.15B55.0%
- Operating income$408.0M19.6%
- Interest, other & tax−$98.0M4.7%
- Net income$310.0M14.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2019filed October 24, 2019Financial Statements
Q3 FY2019 against Q3 FY2018
| Line item | Q3 FY2019Q3 FY2018 | Change |
|---|---|---|
| Revenue | $2.08B$2.65B | −21.4% |
| Cost of Revenue | $530.00M$608.00M | −12.8% |
| Gross Profit | $1.55B$2.04B | −23.9% |
| R&D Expenses | $243.00M$307.00M | −20.8% |
| Operating Expenses | $1.15B$1.49B | −22.9% |
| Operating Income | $408.00M$556.00M | −26.6% |
| Net Income | $310.00M$721.00M | −57.0% |
| EPS (Basic) | $0.37$0.74 | −50.0% |
| EPS (Diluted) | $0.37$0.73 | −49.3% |
| Shares Outstanding (Basic) | 830.00M974.00M | −14.8% |
| Shares Outstanding (Diluted) | 837.00M983.00M | −14.9% |
05—Questions
Frequently Asked Questions
What was eBay's revenue performance in Q3 2019?
eBay reported net revenues of $2.6 billion for the third quarter of 2019, which was flat compared to the same period in 2018. On a foreign exchange (FX)-neutral basis, net revenues increased by 2%, indicating positive underlying organic growth.
How did eBay's profitability change in Q3 2019?
Profitability saw a decline compared to the prior year. Diluted earnings per share (EPS) decreased to $0.37 in Q3 2019 from $0.73 in Q3 2018. This was accompanied by a decrease in the operating margin to 20.1% from 21.0% year-over-year.
What is the status of eBay's strategic review of its assets?
eBay announced in the first quarter of 2019 that it initiated a strategic review of its asset portfolio, including its StubHub and Classifieds businesses. The company stated that there is no definitive timetable for the completion of this review, and it is ongoing.
How is eBay returning capital to shareholders?
eBay is actively returning capital to shareholders through share repurchases and dividends. During the first nine months of 2019, the company repurchased approximately $4.0 billion of its common stock and paid cash dividends totaling $360 million. A dividend of $0.14 per share was declared in October 2019 for payment in December 2019.
06—Continue