SAN JOSE, Calif., July 25 - eBay Inc. (Nasdaq: EBAY) (http://www.ebay.com), the world's largest online trading
community, today reported financial results for its second quarter ended June
30, 2000.
eBay reported consolidated net revenues of $97.4 million in the second
quarter of 2000, a 97 percent increase over the $49.5 million reported for the
same period last year. Consolidated net income for the quarter was $11.6
million, or $0.04 per share on a diluted basis. eBay's consolidated net
income excluding the effects of certain non-cash and stock-related charges was
$13.2 million, or $0.05 per diluted share, compared with $5.1 million, or
$0.02 per diluted share during the second quarter of 1999.
"The top line for the second quarter was in fact the bottom line: eBay's
record profits," said Gary Bengier, CFO of eBay. "These profits were powered
by record revenues and the record gross merchandise sales traded on the eBay
platform."
"We are very pleased with our second quarter results," said Meg Whitman,
President & CEO of eBay. "Everyday the eBay marketplace becomes indispensable
to more people and small businesses around the world."
Key financial and operating metrics:
-- Online Net Revenues -- eBay's online net revenues reached $87.9
million, a 130 percent increase over the $38.2 million in the second
quarter of 1999.
-- Gross Merchandise Sales -- eBay users transacted a record $1.3 billion
in gross merchandise sales (the value of goods traded on the eBay
site), representing a 108 percent increase over the second quarter of
1999.
-- Registered Users -- eBay expanded the number of registered users to
15.8 million by quarter end, an increase of 183 percent from 5.6
million on June 30, 1999.
-- Auctions Hosted -- eBay hosted 62.5 million auctions during the second
quarter, compared to 29.3 million during the same period last year.
This represents year-over-year growth of 113 percent.
-- Gross Margins -- Margins grew to 76% from 73% reported in the prior
quarter.
-- Cash Flow -- eBay generated $28.3 million in cash from operations
increasing total cash and financial investments to $839.0 million.
-- Uptime -- eBay reported another quarter of over 99% system uptime.
Key Execution highlights:
-- On July 11, 2000, completed the acquisition of Half.com which will add
fixed priced functionality to the expanding eBay trading platform.
-- Announced eBay Anywhere, a comprehensive new mobile strategy that aims
to make eBay accessible from any Internet-enabled mobile device.
(http://www.ebay.com/anywhere/)
-- Initiated listing fees for eBay U.K. (http://www.ebay.co.uk)
-- Reported a 56% increase in vehicle listings since the launch of the new
Automobile site on April 24, 2000.
-- Announced a strategic alliance between Saturn and eBay Motors for auto
inspection services.
(http://pages.ebay.com/ebaymotors/services/inspection/inspection.html)
-- Launched eBay co-branded person to person site for the Go Network
portal. (http://pages.ebay.go.com/index.html)
-- Launched the pilot program for Electronic Checks by Billpoint which
offers users another convenient online payment option in addition to
credit cards. (http://pages.ebay.com/help/buyerguide/bp-overview.html)
-- Introduced Instant Purchase, a listing option that allows U.S. buyers
to pay U.S. sellers immediately after a listing ends with one click of
the "Pay Now" icon.
(http://pages.ebay.com/help/buyerguide/bp-overview.html)
-- Launched the redesigned homepage to better highlight all the new and
exciting features offered by eBay. (http://www.ebay.com/)
-- Launched the beta version of Picture Services, an integrated photo
hosting services for eBay users in the Antiques & Art and Pottery &
Glass categories. (http://pages.ebay.com/sell/preview-pspilot.html)
-- eBay received major awards this quarter, including ZDNet's 1st Annual
Visionary Award, recognizing technological efforts, PC World's 2000
World Class Award citing eBay as the "Best Shopping Site," and the
Computerworld Smithsonian Award, placing eBay in the permanent archives
of the Smithsonian's information technology research collection.
Financial and operating summary:
The primary contributor to the increase in the Company's net revenues for
the quarter was on-line activity. Net revenues from eBay's traditional off-
line auction subsidiaries increased slightly from the prior quarter.
Cost of sales remained relatively flat quarter to quarter and declined
slightly as a percent of revenue due to the management of costs in customer
support and site operations. Both product development and general and
administrative costs increased in absolute dollars, but remained comparable as
a percentage of revenue. Sales and marketing expenses decreased over the
prior quarter.
For the second quarter, eBay recorded consolidated non-cash charges of
$799,000 related to stock-based compensation and acquired intangibles. The
Company also recorded charges of $834,000 associated with payroll taxes on the
exercise of employee stock options and $824,000 in one time merger-related
expenses. eBay recorded a consolidated tax provision of $8.4 million
representing an effective tax rate of 42 percent of second quarter
consolidated pretax income.
The Company's overall balance sheet continued to improve during the second
quarter of 2000 as consolidated assets increased by $35.7 million over the
first quarter of 2000. The improvement resulted primarily from an increase of
cash and investments driven by eBay's $28.3 million positive cash flow from
operations.
About eBay
eBay is the world's largest on-line trading community. Founded in 1995,
eBay created a powerful marketplace for the sale of goods and services by a
passionate community of individuals and small businesses. On any given day,
there are millions of items for sale on the site across thousands of
categories. eBay enables trade on a local, national and international basis
with local sites in 53 markets in the U.S. and country specific sites in the
United Kingdom, Canada, Germany, Japan and Australia. With the acquisition of
Half.com in July 2000, eBay's community now benefits from a marketplace
combining traditional auction and fixed-price trading.
Forward Looking Statements
This announcement contains forward looking statements that involve risks
and uncertainties, including those relating to the Company's ability to grow
its business and user base. Actual results could differ materially from those
discussed. Factors that could cause or contribute to such differences
include, but are not limited to, the Company's need to manage both an
increasingly broad range of businesses and significant growth, to deal with
the increasingly competitive environment for online trading, to maintain site
stability and to continue to expand its model outside of the U.S. More
information about potential factors which could affect the Company's business
and financial results is included in the Company's Form 10-K for the period
ended December 31, 1999 under the headings "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
its Form 10-Q for the period ended March 31, 2000. All forward looking
statements are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update such statements.
eBAY INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts; unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 2000 1999 2000
Net revenues $49,479 $97,399 $92,280 $183,152
Cost of net revenues 10,945 23,643 18,922 46,915
Gross profit 38,534 73,756 73,358 136,237
Operating expenses:
Sales and marketing 22,916 32,814 39,874 66,754
Product development 5,476 11,929 7,639 23,048
General and
administrative 10,088 18,285 17,702 34,079
Amortization of
acquired intangibles 327 340 655 615
Payroll taxes on
option exercises -- 834 -- 1,735
Merger related costs 4,359 824 4,359 824
Total operating
expenses 43,166 65,026 70,229 127,055
Income (loss) from
operations (4,632) 8,730 3,129 9,182
Interest and other
income, net 6,039 11,252 6,314 21,642
Income before income
taxes 1,407 19,982 9,443 30,824
Provision for income
taxes (591) (8,392) (4,862) (12,946)
Net income $816 $11,590 $4,581 $17,878
Net income per share:
Basic $0.00 $0.05 $0.02 $0.07
Diluted $0.00 $0.04 $0.02 $0.06
Weighted average shares
Basic 213,710 251,075 204,686 244,463
Diluted 273,228 275,297 269,050 275,838
Supplemental (A)
Historical income
(loss) from
operations $(4,632) $8,730 $3,129 $9,182
Add back certain
non-cash and
merger costs:
Amortization of
stock-based
compensation 1,457 459 2,275 1,526
Amortization of
acquired
intangibles (B) 327 340 780 615
Payroll taxes
on option exercises -- 834 -- 1,735
Merger related costs 4,359 824 4,359 824
Total add back 6,143 2,457 7,414 4,700
Supplemental income
from operations
excluding certain
non-cash and merger
and stock option
related charges 1,511 11,187 10,543 13,882
Interest and other
income, net 6,039 11,252 6,314 21,642
Supplemental provision
for income
taxes (C) (2,422) (9,232) (6,693) (14,285)
Supplemental net
income excluding
certain non cash
and merger and
stock option
related charges $5,128 $13,207 $10,164 $21,239
Supplemental net
income per share,
diluted $0.02 $0.05 $0.04 $0.08
(A) The accompanying supplemental financial information is presented for
informational purposes only and should not be considered as a
substitute for the historical financial information presented in
accordance with generally accepted accounting principles.
(B) Expenses associated with the amortization of acquisition related
charges may be included within cost of net revenues as well as
operating expenses under the heading "amortization of acquired
intangibles."
(C) Supplemental provision for income taxes includes a 42 percent tax
effect for merger related costs in 1999 and the amortization of
acquired intangibles, payroll taxes on option exercises and merger
related costs in 2000.
eBAY INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
December 31, June 30,
1999 2000
audited unaudited
ASSETS
Current assets:
Cash and cash equivalents $219,679 $135,621
Short-term investments 181,086 146,526
Accounts receivable, net 36,538 46,307
Other current assets 22,531 40,697
Total current assets 459,834 369,151
Long-term investments 373,988 430,467
Restricted cash and investments -- 126,390
Property and equipment, net 111,806 123,463
Intangible assets, net 8,812 8,154
Deferred tax and other assets, net 9,502 13,991
$963,942 $1,071,616
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $31,538 $25,941
Accrued expenses and other current
liabilities 32,550 50,417
Deferred revenue and customer advances 5,997 13,035
Debt and leases, current 12,285 15,584
Income taxes payable 6,455 6,078
Total current liabilities 88,825 111,055
Debt and leases, long-term 15,018 14,745
Other liabilities 5,900 5,885
Minority interests 1,732 14,773
Total liabilities 111,475 146,458
Total stockholders' equity 852,467 925,158
$963,942 $1,071,616