eBay Inc.
Jan 16, 2013
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eBay Inc. Reports Strong Fourth Quarter and Full Year 2012 Results

Net Income up Double Digits in 2012 on Record Revenue

SAN JOSE, Calif.--(BUSINESS WIRE)-- eBay Inc., a global commerce platform and payments leader (NASDAQ:EBAY), today reported that revenue for the fourth quarter ended December 31, 2012 increased 18% to $4.0 billion, compared to the same period of 2011. The company reported fourth quarter net income on a GAAP basis of $751 million, or $0.57 per diluted share, and net income on a non-GAAP basis of $927 million, or $0.70 per diluted share. The increase in non-GAAP earnings per diluted share was driven by double digit user growth across the portfolio, strong gains in mobile adoption, and accelerating growth in the company's Marketplaces business, reflecting a 19% increase in U.S. gross merchandise volume (GMV), excluding vehicles.

For the full year, revenue increased 21% to $14.1 billion, compared to 2011. The company reported net income on a GAAP basis of $2.6 billion, or $1.99 per diluted share, and net income on a non-GAAP basis of $3.1 billion, or $2.36 per diluted share. eBay Inc. enabled more than $175 billion of commerce volume (ECV) in 2012, representing growth of 18%. ECV is the total commerce and payment volume across all three business units consisting of Marketplaces GMV, PayPal merchant services net total payment volume and GSI global ecommerce (GeC) merchandise sales.

"We had a great finish to an excellent year, with fourth quarter results exceeding our expectations," said John Donahoe, eBay Inc. President and CEO. "eBay Marketplaces in particular had a terrific fourth quarter, with growth in the U.S. accelerating three points, outpacing ecommerce."

"Mobile continues to rewrite the commerce playbook, and we continue to be a mobile commerce and payments leader," Donahoe said. "eBay mobile finished the year with $13 billion in volume - more than double the prior year - and PayPal mobile handled almost $14 billion in payment volume, more than triple the prior year. In 2013, we expect each to exceed $20 billion."

"Web-enabled multichannel commerce is evolving quickly, and consumer shopping behavior is changing rapidly. Our focus is on being a global commerce leader in this new environment, connecting buyers and sellers everywhere, and being a preferred multichannel partner of choice for retailers and brands of all sizes."

The company's PayPal business continued to expand its leadership position in global payments. PayPal's active account growth accelerated to 15% and ended the year with approximately 123 million registered accounts. PayPal added nearly 2 million accounts a month in the fourth quarter, representing the company's fastest active account growth rate in years. Net total payment volume (TPV) increased 24%, producing revenue growth of 24%. Key drivers included continued merchant and consumer adoption coupled with geographic expansion. PayPal's mobile payment volume reached nearly $14 billion in 2012, up more than 250% over the prior year, as more consumers used their smartphones and tablets to pay online. In addition, PayPal continued to invest in future growth initiatives and made significant progress towards the rollout of its offline payment solutions. Twenty-three major retailers adopted PayPal's offline payment solutions in 18,000 locations in 2012.

The company's Marketplaces business delivered a record $2 billion revenue in the fourth quarter, propelled by strong performance in the U.S. Revenue for the full year was driven by continued investments in the customer experience and efforts to bring the world's inventory to global buyers. Active user growth accelerated two points to 12%, driven by mobile, site enhancements designed to streamline the shopping experience on eBay and emerging markets. Fixed price GMV, excluding vehicles, increased 21% and contributed to a 16% increase in GMV, excluding vehicles. U.S. GMV growth, excluding vehicles, accelerated three points to 19%. Mobile commerce volume in 2012 grew more than 120% to $13 billion driven primarily by increased adoption of eBay's mobile apps and increased engagement from product innovation. eBay's suite of mobile apps attracted more than 4 million new customers in 2012.

GSI revenue for the quarter increased 10% to $398 million driven primarily by a 17% increase in GeC merchandise sales. Same store sales grew 19% outpacing ecommerce. For the full year, GSI shipped a record 146 million units for its clients. GSI contributed revenue of $1.1 billion in 2012, as GSI continued to grow its relationships, investing and driving value to its clients through eBay Inc. technology solutions, including mobile app development, buy online and pick up in-store and mobile express checkout.

Fourth Quarter and Full Year 2012 Financial Highlights (presented in millions, except per share data and percentages)

 
  Fourth Quarter     Full Year  
    2012   2011   Change   2012   2011   Change
GAAP                                
Net revenue   $3,992   $3,380   $612   18%   $14,072   $11,652   $2,420   21%
Net income*   $751   $1,980   $(1,229)   (62%)   $2,609   $3,229   $(620)   (19)%
Earnings per diluted share   $0.57   $1.51   $(0.94)   (62%)   $1.99   $2.46   $(0.47)  

(19)%

Non-GAAP                                
Net income   $927   $789   $138   17%   $3,100   $2,667   $433   16%
Earnings per diluted share   $0.70   $0.60   $0.10   17%   $2.36   $2.03   $0.33   16%

 

    Fourth Quarter       Full Year    
    2012   2011   Change   2012   2011   Change
Business Units                                
Payments                                
Net revenue   $1,541   $1,240   $301   24%   $5,574   $4,412   $1,162   26%
Net total payment volume   $41,471   $33,372   $8,099   24%   $144,937   $118,758   $26,179   22%

Merchant Services

  $28,026   $21,959   $6,067   28%   $97,277   $77,700   $19,577   25%
On eBay   $13,444   $11,413   $2,031   18%   $47,660   $41,058   $6,602   16%
Marketplaces                                
Net revenue   $2,050   $1,772   $278   16%   $7,398   $6,642   $756   11%
Gross merchandise volume (excl. vehicles)   $19,105   $16,490   $2,615   16%   $67,763   $60,332   $7,431   12%
U.S.   $7,338   $6,157   $1,181   19%   $26,424   $22,866   $3,558   16%
International   $11,767   $10,333   $1,434   14%   $41,339   $37,466   $3,873   10%
GSI                                
Net revenue**   $398   $364   $34   10%   $1,083   $590   N/A   N/A
GeC Merchandise Sales   $1,595   $1,362   $233   17%   $3,682   $2,046   N/A   N/A

* GAAP net income for the fourth quarter of 2011 reflects the gain on the sale of the company's remaining investment in Skype.
** Full year 2011 results reflect net revenue attributable to the GSI segment for the period from June 17, 2011 (the date that the acquisition was completed) through December 31, 2011.

Other Selected Financial Results