EBay Reports Profitable Year

POSTED January 21, 2010

SAN JOSE -- eBay Inc. reported financial results for the fourth quarter and full year ended December 31, 2009. The e-commerce company posted fourth-quarter revenue of $2.4 billion, up 16% from the same period last year. This includes revenue of $112.0 million from Skype for the period that we fully owned it. Excluding Skype from the fourth quarter of 2008 and the fourth quarter of 2009, revenue growth would have been 19%.

The year-over-year increase was due primarily to excellent growth in PayPal and StubHub and improvement in growth rates in the core eBay business, as well as the positive impact from foreign currency movements. The company recorded net income on a GAAP basis of $1.4 billion or $1.02 per diluted share, and non-GAAP net income of $585.8 million or $0.44 per diluted share for the fourth quarter of 2009. “Reconciliation of Operating Cash Flows to Free Cash Flow”

For the full year, eBay Inc. posted $8.7 billion in revenue, net income on a GAAP basis of $2.4 billion or $1.83 per diluted share, and non-GAAP net income of $2.1 billion or $1.58 per diluted share.

“We delivered a strong fourth quarter with double-digit revenue growth driven by exceptional performance at PayPal and turnaround progress and momentum in our core eBay business,” said eBay Inc. President and CEO John Donahoe. “PayPal significantly expanded its presence globally and, for the first time, processed more than $20 billion in total payment volume in a quarter. Gross merchandise volume and sold items accelerated for the third consecutive quarter. We are starting 2010 with significant progress against our three-year growth strategies for PayPal and eBay and a clear focus on our priorities going forward.”

The Payments business unit, made up of PayPal, reported $795.6 million in revenue for the quarter, an increase of 28% year over year. Net total payment volume (TPV) for the quarter was $21.4 billion, an increase of 34% year over year. The growth in revenue and TPV was driven primarily by continued momentum in PayPal’s Merchant Services business and growth on the eBay platform. PayPal continued to increase its penetration on eBay and across other e-commerce platforms. The Payments business plans to remain focused on continuing consumer and merchant adoption on and off eBay, expansion of PayPal’s open platform initiative and ongoing integration of Bill Me Later onto eBay.

The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other e-commerce sites, recorded $1.5 billion in revenue for the quarter, a 15% year-over-year increase. Marketplaces net transaction revenue increased 17% year over year. The Marketplaces business unit benefited from strong growth in its fixed-price format, the continuing success of its highest rated sellers, and double-digit organic growth in sold items. Marketplaces continued to benefit from growth in its international business, which accounted for approximately 60% of Marketplaces revenue for the fourth quarter. Gross Merchandise Volume (GMV) (excluding vehicles) was $14.2 billion for the quarter, an increase of 24% compared to the fourth quarter of 2008. StubHub had a particularly strong quarter driven primarily by high-profile concerts and sporting events leading to strong demand and market share gains. The Marketplaces business plans to continue to focus on trust, value and selection in its core business to drive GMV growth, and on format expansion.

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