Essay About Ebay Inc. Announces Third Quarter And Net Revenues

Ebay Inc. Announces Third Quarter 2005 Financial Results
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eBAY INC. ANNOUNCES THIRD QUARTER 2005 FINANCIAL RESULTS
– Company Reports Record Q3 Net Revenues of $1.106 Billion –
– Achieves Q3 GAAP Diluted EPS of $0.18 and Pro Forma Diluted EPS of $0.20 –
– Raises 2005 Net Revenues Guidance and Issues 2006 Guidance –
San Jose, CA, October 19, 2005 — eBay Inc. (Nasdaq: EBAY; www.ebay.com) reported financial results for its
quarter ended September 30, 2005.
eBay reported record consolidated Q3-05 net revenues of $1.106 billion, up 37% year over year; operating
income of $356.7 million, up 40% year over year, representing a 32% operating margin; and pro forma
operating income of $393.6 million, up 44% year over year, representing a 36% pro forma operating margin.
Consolidated net income in Q3-05 was $255.0 million, or $0.18 per diluted share. eBays pro forma
consolidated net income was $280.2 million, or $0.20 per diluted share. Consolidated net income and pro forma
net income include a one-time charge of $16.6 million, or $0.01 per diluted share, from the final application of
tax regulations requiring the inclusion of stock option expense in intercompany cost sharing arrangements.
These results exceeded the high end of the companys guidance of $1.070 billion for net revenues, met the
companys guidance of $0.18 for GAAP earnings per diluted share and exceeded the companys guidance of
$0.19 for pro forma earnings per diluted share.
“We saw very strong growth across every part of our business in Q3,” said Meg Whitman, President and CEO
of eBay. “Its wonderful to see so much strength in our two largest marketplaces, the US and Germany. Were
excited about the great momentum eBay and PayPal have going into the holiday shopping season.”
eBay also announced that Rajiv Dutta, the companys chief financial officer, will transition to the new role of
president of Skype after his successor is named. Dutta will work with Skype CEO Niklas Zennstrцm and
Whitman on Skypes growth and integration across eBay and PayPal. Dutta will remain a member of eBays
executive management team.
“Rajivs contributions to eBays success during the past seven years have been enormous,” said Whitman.
“Hell play an even bigger role in eBays future by helping Niklas and his team achieve Skypes full potential.”
Key Financial and Operating Metrics
Consolidated Net Revenues — Consolidated net revenues totaled a record $1.106 billion in Q3-05, which
represented an increase of 37% from the $805.9 million reported in Q3-04.
eBay Announces Q3-05 Earnings (cont.)
* U.S. Marketplace Net Revenues — U.S. Marketplace net revenues totaled $449.5 million in Q3-05,
representing 29% year-over-year growth.
* International Marketplace Net Revenues — International Marketplace net revenues totaled $408.9 million
in Q3-05, representing 43% year-over-year growth.
* Payments Net Revenues — Payments net revenues totaled $247.1 million in Q3-05, representing 44%
year-over-year growth.
Confirmed Registered Users — Cumulative confirmed registered users at the end of Q3-05 totaled 168.1
million, representing a 35% increase over the 125.0 million users reported at the end of Q3-04.
Active Users — Active users, the number of users on the eBay platform who bid, bought, or listed an item
within the previous 12-month period, increased to a record 68.0 million in Q3-05, a 32% increase over the 51.7
million active users reported in the same period a year ago.
Listings — New listings totaled a record 458.6 million in Q3-05, 32% higher than the 348.0 million new listings
reported in Q3-04.
Gross Merchandise Volume (GMV) — GMV, the total value of all successfully closed items on eBays trading
platforms, was $10.8 billion, representing a 30% year-over-year increase from the $8.3 billion reported in Q3-
Total Payments Accounts — PayPals business had 86.6 million total accounts at the end of Q3-05, a 53%
increase from the 56.7 million reported in Q3-04. Total payments accounts represents the cumulative total of all
accounts opened, excluding accounts that have been closed or locked, and including users that made payments
with PayPal but have not registered.
Total Payment Volume (TPV) — TPV, the dollar volume of payments initiated through the PayPal system, was
a record $6.7 billion in Q3-05, a 44% increase from the $4.6 billion reported in Q3-04.
GAAP Operating Income — GAAP operating income increased 40% year over year to $356.7 million, or 32%
of net revenues.
Pro Forma Operating Income — Pro forma operating income increased 44% year over year to $393.6 million,
or 36% of net revenues. Pro forma operating income represents GAAP operating income adjusted to exclude
certain items, primarily stock based compensation expense and related payroll taxes and amortization of
acquired