Skip to content
Apr 25, 2000


eBay Inc. Announces First Quarter 2000 Financial Results

eBay Reported a Record $1.15 Billion in Gross Merchandise Sales in the Quarter, Surpassing the $1 Billion mark for the first time

eBay Board of Directors Approves 2-for-1 Common Stock Split

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.
Back to Top