San Jose, CA, April 25, 2000 - eBay Inc. (NASDAQ: EBAY;
www.ebay.com), the world's largest online personal trading community, today reported financial
results for its first quarter ended March 31, 2000.
The Company generated consolidated net revenues of $85.8 million in the first quarter of 2000, a
100 percent increase over the $42.8 million reported for the same period last year. Consolidated
net income for the quarter was $6.3 million, or $0.05 per share on a diluted basis. eBay's
consolidated net income excluding the effects of certain non-cash and stock-related charges was
$8.0 million, or $0.06 per diluted share, compared with $4.8 million, or $0.04 per diluted share
during the first quarter of 1999.
"In the first quarter of 2000, eBay achieved unprecedented financial and operational success," said
Meg Whitman, President and CEO of eBay. "The Company is firing on all cylinders as it expands to
become a truly global trading platform."
Key operating metrics and execution highlights:
-Online Net Revenues - eBay's online net revenues reached $77.3 million, a 127 percent
increase over the $34.0 million in the first quarter of 1999.
-Gross Merchandise Sales - eBay achieved $1.15 billion in gross merchandise sales (the value
of goods traded on the eBay site), surpassing the $1 billion mark for the first time and
realizing a 113 percent increase over the first quarter of 1999.
-Registered Users - eBay expanded the number of registered users to 12.6 million by quarter
end, an increase of 230 percent from 3.8 million on March 31, 1999. Moreover, the
Company added a record 2.6 million new users in the quarter, more than in any other quarter
in the Company's history.
-Auctions Hosted - eBay hosted 53.6 million auctions during the first quarter, compared to
22.9 million during the same period last year. This represents year-over-year growth of 133
percent.
-Announced a joint venture with Autotrader.com that is intended to create the Internet's
largest auction-style marketplace for consumers and dealers to buy and sell used cars.
(http://pages.ebay.com/auto-index.html)
-Announced a strategic alliance between Billpoint and Wells Fargo & Company to combine
eBay's trading volume with Wells Fargo's payments expertise.
(http://www.ebay.com/help/buyerguide/bp-overview.html)
-Announced a comprehensive four-year agreement between eBay and Go.com, a subsidiary
of The Walt Disney Company, to develop and promote online trading on all of Disney's
Internet properties.
-Launched eBay Japan through a joint venture agreement with NEC and its BIGLOBE
internet service provider. (http://pages.ebay.com/jpbridge.html)
-Fully integrated Billpoint into eBay payment services, giving users the ease and convenience
of paying online.
-Initiated listings fees for eBay Germany. (http://www.ebay.de)
-Grew revenue from Regional categories 2.5 times faster than the overall site.
(http://pages.ebay.com/search/items/search.html)
-Launched eBay Business Exchange to serve the small business-to-business segment.
(http://pages.ebay.com/business_exchange/)
Financial and operating summary:
The primary contributor to the increase in the Company's net revenues for the quarter was on-line
auction activity. As expected, net revenues from eBay's traditional off-line auction subsidiaries
decreased seasonally from the prior quarter.
In the first quarter, the Company continued to make significant investments in people, customer
support, and equipment to support the site's infrastructure. Personnel costs were the largest single
driver of expense growth. Both product development and general and administrative costs increased
due to personnel additions and depreciation and amortization expense. General and administrative
costs were impacted by increases in personnel and legal costs. Sales and marketing expenses also
increased over the prior quarter as the Company invested in additional on-line advertising.
For the first quarter, eBay recorded consolidated non-cash amortization charges of $1.1 million
related to stock-based compensation and $275,000 associated with acquired intangibles. The
Company also recorded charges of $901,000 associated with payroll taxes on the exercise of
employee stock options. In addition, as a result of an accounting policy change relating to the
recognition of listing fees, eBay had a one-time negative impact to online revenues of $1.4 million.
eBay recorded a consolidated tax provision of $4.6 million representing an effective tax rate of 42
percent of first quarter consolidated pretax income.
The Company's overall balance sheet continued to improve during the first quarter of 2000.
Consolidated assets increased $72.0 million over the fourth quarter of 1999, primarily driven by
increases of $44.8 million in cash and investments, $13.5 million in net fixed assets, and eBay's
positive cash flow.
In other balance sheet activity, as part of the strategic alliance between Wells Fargo and Billpoint,
Wells Fargo purchased a 35 percent equity interest in Billpoint from eBay. In addition, as part of the
joint venture between NEC and eBay, NEC took a 30 percent equity interest in eBay Japan.
In addition, the Board of Directors of eBay has approved a 2-for-1 Common Stock split for shares
of record as of May 9, 2000. The split will be effective on May 24, 2000.
About eBay
eBay (www.ebay.com), the world's personal trading communityTM, pioneered person-to-person
online trading. Founded in 1995, eBay developed an efficient and entertaining trading site on the
Web. Currently, there are millions of items listed for sale. More than half a million items are added
daily in more than 4,300 categories including: automotive; antiques and art; books, movies and
music; coins and stamps; collectibles; computers; dolls and doll houses; Great Collections; jewelry
and gemstones; photo and electronics; pottery and glass; sports; toys and bean bag plush; and
everything else. eBay is also engaged in the traditional auction business through its subsidiaries,
Butterfield & Butterfield and Kruse International.
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 maintain site stability, to manage
significant growth in all aspects of its business, to deal with the increasingly competitive environment
for online trading and to successfully 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." 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 BALANCE SHEET
(in thousands)
December 31, March 31,
1999 2000
audited unaudited
ASSETS
Current assets:
Cash and cash equivalents $219,679 $278,330
Short-term investments 181,086 66,521
Accounts receivable, net 36,538 34,850
Other current assets 22,531 37,009
Total current assets 459,834 416,710
Long-term investments 373,988 348,331
Restricted cash and investments -- 126,390
Property and equipment, net 111,806 125,314
Intangible assets, net 8,812 8,923
Deferred tax and other assets 9,502 10,290
$963,942 $1,035,958
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $31,538 $26,349
Accrued expenses and other current
liabilities 32,550 43,376
Debt and leases, current portion 12,285 13,304
Deferred revenue and customer advances 5,997 4,049
Income taxes payable 6,455 6,398
Total current liabilities 88,825 93,476
Debt and leases, long-term portion 15,018 14,828
Environmental and structural accrual 5,900 5,900
Minority interests 1,732 15,365
Total liabilities 111,475 129,569
Total stockholders' equity 852,467 906,389
$963,942 $1,035,958
eBAY INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts; unaudited)
Three Months Ended March 31,
1999 2000
Net revenues $42,801 $85,753
Cost of net revenues 7,977 23,272
Gross profit 34,824 62,481
Operating expenses:
Sales and marketing 16,958 33,940
Product development 2,163 11,119
General and administrative 7,614 15,794
Amortization of acquired intangibles 328 275
Payroll taxes on option exercises -- 901
Total operating expenses 27,063 62,029
Income from operations 7,761 452
Interest and other income, net 275 10,390
Income before income taxes 8,036 10,842
Provision for income taxes (4,271) (4,554)
Net income $3,765 $6,288
Net income per share:
Basic $0.04 $0.05
Diluted $0.03 $0.05
Weighted average shares:
Basic 97,681 118,926
Diluted 132,327 138,222
Supplemental (A)
Historical income from operations $7,761 $452
Add back certain non-cash, merger and
stock option related costs:
Amortization of stock-based compensation 818 1,067
Amortization of acquired intangibles (B) 453 275
Payroll taxes on option exercises -- 901
Total add back 1,271 2,243
Supplemental income from operations excluding
certain non-cash, merger and stock option
related costs 9,032 2,695
Interest and other income, net 275 10,390
Supplemental provision for income taxes (C) (4,461) (5,048)
Supplemental net income excluding certain
non-cash, merger and stock option related costs $4,846 $8,037
Supplemental net income per share, diluted $0.04 $0.06
(A) The accompanying supplemental financial information is presented for
informational purposes only and should not be considered 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 are 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 the amortization of acquired intangibles and payroll taxes on
option exercises.