eBay Inc. Reports Third Quarter 2023 Results

• Revenue of $2.5 billion, up 5% on an as-reported basis and up 5% on an FX-Neutral basis
• Gross Merchandise Volume of $18.0 billion, up 2% on an as-reported basis and roughly flat on an FX-Neutral basis
• GAAP and Non-GAAP earnings per diluted share of $2.46 and $1.03, respectively, on a continuing operations basis
• GAAP and Non-GAAP operating margin of 18.2% and 26.4%, respectively
• Returned $783 million to shareholders in Q3, including $651 million of share repurchases and $132 million paid in cash dividends

SAN JOSE, Calif., Nov. 7, 2023 /PRNewswire/ — eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its third quarter ended September 30, 2023.

“We delivered another quarter of solid results, and have accelerated the pace of innovation across eBay,” said Jamie Iannone, Chief Executive Officer at eBay. “The strategic investments in our marketplace and the team’s strong execution are driving increased customer satisfaction, especially in focus categories. In the face of macroeconomic uncertainty, we continue to make meaningful progress against our ambitious vision to reinvent the future of ecommerce for enthusiasts.” 

“In Q3, we met or exceeded expectations across all of our key financial metrics,” said Steve Priest, Chief Financial Officer at eBay. “Our strong balance sheet and operational rigor enable us to adapt to the evolving changes in this dynamic macro environment. We will continue to be prudent with cost efficiencies, saving to invest for the future, while remaining good stewards of capital for our shareholders. I’m proud of our teams for laying the groundwork for long-term, sustainable growth.”

Third Quarter Financial Highlights

• Revenue was $2.5 billion, up 5% on an as-reported basis and up 5% on a foreign exchange (FX) neutral basis.
• Gross Merchandise Volume (GMV) was $18.0 billion, up 2% on an as-reported basis and roughly flat on an FX-Neutral basis.
• GAAP net income from continuing operations was $1.3 billion, or $2.46 per diluted share.
• Non-GAAP net income from continuing operations was $545 million, or $1.03 per diluted share.
• GAAP and Non-GAAP operating margin was 18.2% and 26.4%, respectively.
• Generated $862 million of operating cash flow and $777 million of free cash flow from continuing operations.
• Returned $783 million to shareholders, including $651 million of share repurchases and $132 million paid in cash dividends.

Business Highlights

Revenue Initiatives

• eBay’s first-party advertising products, primarily driven by Promoted Listings, delivered $345 million of revenue in the third quarter, up 39% on an as-reported basis and up 36% on an FX-Neutral basis.
• The company’s total advertising offerings generated approximately $366 million in revenue in the third quarter, representing roughly 2.0% of GMV.

Strategic Initiatives

• Following the success of the eBay Guaranteed Fit program in the U.S., the company launched similar programs in the U.K. and Germany, enabling tens of millions of Motors Parts & Accessories shoppers to buy auto parts with confidence.
• eBay Motors partnered with several renowned car builders to produce over 70 pieces of content for @eBay’s TikTok channel, building awareness of eBay Guaranteed Fit and engaging with the #CarTok community.
• The company introduced a new consignment service, which gives users direct access to expert sellers who will list and sell their luxury items on their behalf. Launching initially for designer handbags, the service is expected to expand next year to include additional luxury categories, including jewelry and watches.
• eBay expanded Authenticity Guarantee for fine jewelry to the U.K. and hosted The Authenticity Lab, a first-of-its-kind multi-sensory experience for sneakerheads in London.
• During the quarter, eBay authenticated its millionth trading card: a Magic: The Gathering All Hallow’s Eve (Legends) card.
• eBay also expanded its vault offering for collectors with a new submission service for trading cards, which allows collectors to submit graded trading cards valued at $250+ from their personal collections directly to the eBay vault, regardless of where they were purchased.
• eBay launched the first phase of its magical listing experience to all mobile app users in the U.S., U.K. and Germany, enabling sellers to use generative AI (GenAI) to instantly populate item descriptions.
• The company also launched two GenAI features in the eBay Motors app, providing upgrade recommendations and engine code lookup for a more personalized shopping experience.
• eBay and self-professed “Air Fryer King” Nathan Anthony opened the U.K.’s first air fryer restaurant in Shoreditch, offering a 12-plate tasting menu of dishes cooked using only refurbished air fryers from eBay to highlight the value and quality of refurbished kitchen technology.
• The company launched eBay Lokal in Germany, a new buying and selling experience for purchasing and selling products within local neighborhoods. Through this initiative, eBay has significantly enhanced the visibility and discoverability of locally available items in search and across the entire German platform, including the introduction of a new central page dedicated to local search and browsing.
• eBay France launched a repair platform to help customers extend the lifespans of their household appliances, gardening equipment, tools and high-tech products. The service includes diagnostics, repair tutorials and access to experts through chatbot and video assistance.

Impact

• eBay announced the recipients of its fourth annual Up & Running Grants program, which annually awards 50 U.S. sellers with $10,000 each plus customized mentorship, training and tools to scale and grow their businesses.
• The eBay Foundation announced its 2023 Global Give grantees, awarding nearly $3 million to 32 nonprofit grantees across the globe.
• eBay Australia announced the Circular Fashion Fund, supported by the Australian Fashion Council. The initiative offers 200,000 AUD in funding for Australian start-ups specializing in circular fashion solutions.
• During the quarter, eBay for Charity contributed $40 million globally.
• The company was recognized as a Top Corporate Philanthropist by the Silicon Valley Business Journal and San Francisco Business Times.

Third Quarter 2023 Financial Highlights (presented in millions, except per share data and percentages)
	Third Quarter
	2023	2022	Change
eBay Inc.
Net revenues	nbsp;    2,500	nbsp;    2,380	nbsp;       120	5 %
GAAP – Continuing Operations
Income (loss) from continuing operations	nbsp;    1,306	nbsp;        (70)	nbsp;    1,376	**
Earnings (loss) per diluted share from continuing operations	nbsp;      2.46	nbsp;     (0.13)	nbsp;      2.59	**
Non-GAAP – Continuing Operations
Net income	nbsp;       545	nbsp;       552	nbsp;          (7)	(1) %
Earnings per diluted share	nbsp;      1.03	nbsp;      1.00	nbsp;      0.03	3 %

**  Not meaningful

Other Selected Financial and Operational Results

• Operating margin – GAAP operating margin decreased to 18.2% for the third quarter of 2023, compared to 23.9% for the same period last year. Non-GAAP operating margin decreased to 26.4% for the third quarter of 2023, compared to 28.9% for the same period last year.
• Taxes – The GAAP effective tax rate for continuing operations for the third quarter of 2023 was 21.4%, compared to (29.9)% for the third quarter of 2022. The non-GAAP effective tax rate for continuing operations for the third quarter of 2023 was 16.5%⁽¹⁾.
• Cash flow – The company generated $862 million of operating cash flow and $777 million of free cash flow from continuing operations during the third quarter of 2023.
• Capital returns – The company repurchased $651 million of its common stock, or nearly 15 million shares, in the third quarter of 2023. The company’s total repurchase authorization remaining as of September 30, 2023 was approximately $1.7 billion. The company also paid cash dividends of $132 million during the third quarter of 2023.
• Cash and cash equivalents and non-equity investments – The company’s cash and cash equivalents and non-equity investments portfolio totaled $5.4 billion as of September 30, 2023.

Business Outlook

eBay is providing the following guidance for continuing operations for the fourth quarter and full year 2023.

In billions, except per share data and percentages	Q4 2023 Guidance	Full Year 2023 Guidance
Revenue	$2.47 – $2.53	$10.02 – $10.08
FX-Neutral Y/Y Growth	(1)% – 2%	3% – 4%
Diluted GAAP EPS	$0.70 – $0.75	$4.53 – $4.58
Diluted Non-GAAP EPS	$1.00 – $1.05	$4.17 – $4.22

Dividend Declaration

• eBay’s Board of Directors has declared a cash dividend of $0.25 per share of the company’s common stock. The dividend is payable on December 15, 2023 to stockholders of record as of December 1, 2023.

⁽¹⁾ We use a non-GAAP effective tax rate for evaluating our operating results. Based on our current long-term projections, we are using a non-GAAP tax rate of 16.5%. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.

Quarterly Conference Call and Webcast

eBay Inc. will host a conference call to discuss third quarter 2023 results at 2:00 p.m. Pacific Time today. Investors and participants can access the call by dialing (888) 655-9638 in the U.S. and (646) 960-0687 internationally. The passcode for the conference line is 7435074. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company’s Investor Relations website at https://investors.ebayinc.com. In addition, an archive of the webcast will be accessible for at least three months through the same link.

eBay Inc. uses its Investor Relations website at https://investors.ebayinc.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor this website, in addition to following our press releases, SEC filings, public conference calls and webcasts.

About eBay

eBay Inc. (Nasdaq: EBAY) is a global commerce leader that connects people and builds communities to create economic opportunity for all. Our technology empowers millions of buyers and sellers in more than 190 markets around the world, providing everyone the opportunity to grow and thrive. Founded in 1995 in San Jose, California, eBay is one of the world’s largest and most vibrant marketplaces for discovering great value and unique selection. In 2022, eBay enabled nearly $74 billion of gross merchandise volume. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.

Presentation

All growth rates represent year-over-year comparisons, except as otherwise noted. All amounts in tables are presented in U.S. dollars, rounded to the nearest million, except as otherwise noted. As a result, certain amounts may not sum or recalculate using the rounded dollar amounts provided. References to “revenue” refer to “net revenues” as reported in the company’s consolidated statement of income.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission (SEC): non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income, non-GAAP effective tax rate, free cash flow and FX-Neutral basis. These non-GAAP financial measures are presented on a continuing operations basis. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles (GAAP). For a reconciliation of these non-GAAP financial measures, except for figures in this press release presented on an “FX-Neutral basis,” to the nearest comparable GAAP measures, see “Business Outlook,” “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP Operating Income to Non-GAAP Operating Income,” “Reconciliation of GAAP Net Income to Non-GAAP Net Income and Reconciliation of GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate” and “Reconciliation of Operating Cash Flow to Free Cash Flow” included in this press release. For figures in this press release reported “on an FX-Neutral basis,” we calculate the year-over-year impact of foreign currency movements using prior period foreign currency rates, excluding hedging activity, applied to current year transactional currency amounts.

Forward-Looking Statements 

This press release contains forward-looking statements relating to, among other things, the future performance of eBay Inc. and its consolidated subsidiaries that are based on the company’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of eBay Inc. and its consolidated subsidiaries, including management’s vision for the future of eBay and our ability to accomplish our vision, expected financial results for the fourth quarter and full year 2023 and the future growth in our business, the effects of geopolitical events, foreign currency volatility, and inflationary pressure on our business and operations and our ability to respond to such effects, operating efficiency and margins, reinvestments, dividends and share repurchases. Actual results could differ materially from those expressed or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: changes in political, business and economic conditions, including impacts from the ongoing war in Ukraine, rising inflation and interest rates, decreases in consumer confidence, any regional or general economic downturn or crisis and any conditions that affect ecommerce growth or cross-border trade; the company’s ability to realize expected growth opportunities in payments intermediation and advertising; fluctuations in foreign currency exchange rates; the company’s need to successfully react to the increasing importance of mobile commerce and the increasing social aspect of commerce; an increasingly competitive environment for the company’s business; changes to the company’s capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company’s share repurchases, or management of operating cash; the company’s ability to increase operating efficiency to drive margin improvements and enable reinvestments; the company’s ability to manage its indebtedness, including managing exposure to interest rates and maintaining its credit ratings; the company’s need to manage a large enterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; the ability to successfully intermediate payments on our marketplace platform; the company’s need and ability to manage regulatory, tax, data security and litigation risks, including those that may result from the company’s use of artificial intelligence; the ultimate resolution of ongoing investigations and other legal matters involving the company; the company’s ability to timely upgrade and develop its technology systems, infrastructure and customer service capabilities at reasonable cost while maintaining site stability and performance and adding new products and features; and the company’s ability to integrate, manage and grow businesses that have been acquired or may be acquired in the future.

The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

More information about factors that could affect the company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company’s Investor Relations website at https://investors.ebayinc.com or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the company on the date hereof. The company assumes no obligation to update such statements.

 

eBay Inc.  Unaudited Condensed Consolidated Balance Sheet
	September 30, 2023		December 31, 2022
	(In millions)
ASSETS
Current assets:
Cash and cash equivalents	nbsp;             2,550		nbsp;             2,154
Short-term investments	2,144		2,625
Equity investment in Adevinta	4,023		2,692
Customer accounts and funds receivable	908		763
Other current assets	689		1,056
Total current assets	10,314		9,290
Long-term investments	1,352		1,797
Property and equipment, net	1,201		1,238
Goodwill	4,238		4,262
Operating lease right-of-use assets	446		513
Deferred tax assets	3,086		3,169
Other assets	547		581
Total assets	nbsp;           21,184		nbsp;           20,850
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	nbsp;                750		nbsp;             1,150
Accounts payable	303		261
Customer accounts and funds payable	986		768
Accrued expenses and other current liabilities	1,967		1,866
Income taxes payable	776		226
Total current liabilities	4,782		4,271
Operating lease liabilities	355		418
Deferred tax liabilities	2,264		2,245
Long-term debt	6,973		7,721
Other liabilities	911		1,042
Total liabilities	15,285		15,697
Total stockholders’ equity	5,899		5,153
Total liabilities and stockholders’ equity	nbsp;           21,184		nbsp;           20,850

 

eBay Inc.  Unaudited Condensed Consolidated Statement of Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions, except per share amounts)
Net revenues	nbsp;           2,500		nbsp;           2,380		nbsp;           7,550		nbsp;           7,285
Cost of net revenues (1)	705		647		2,123		1,999
Gross profit	1,795		1,733		5,427		5,286
Operating expenses:
Sales and marketing (1)	567		538		1,644		1,582
Product development (1)	401		345		1,145		990
General and administrative (1)	283		212		831		675
Provision for transaction losses	85		69		259		251
Amortization of acquired intangible assets	4		1		17		3
Total operating expenses	1,340		1,165		3,896		3,501
Income from operations	455		568		1,531		1,785
Gain (loss) on equity investments and warrant, net	1,212		(593)		1,196		(4,105)
Interest and other, net	(6)		(29)		(51)		(110)
Income (loss) from continuing operations before income taxes	1,661		(54)		2,676		(2,430)
Income tax benefit (provision)	(355)		(16)		(629)		485
Income (loss) from continuing operations	1,306		(70)		2,047		(1,945)
Income (loss) from discontinued operations, net of income taxes	(1)		1		(4)		4
Net income (loss)	nbsp;           1,305		nbsp;              (69)		nbsp;           2,043		nbsp;         (1,941)
Income (loss) per share – basic:
Continuing operations	nbsp;             2.47		nbsp;           (0.13)		nbsp;             3.84		nbsp;           (3.45)
Discontinued operations	0.00		0.00		(0.01)		0.01
Net income (loss) per share – basic	nbsp;             2.47		nbsp;           (0.13)		nbsp;             3.83		nbsp;           (3.44)
Income (loss) per share – diluted:
Continuing operations	nbsp;             2.46		nbsp;           (0.13)		nbsp;             3.81		nbsp;           (3.45)
Discontinued operations	0.00		0.00		(0.01)		0.01
Net income (loss) per share – diluted	nbsp;             2.46		nbsp;           (0.13)		nbsp;             3.80		nbsp;           (3.44)
Weighted average shares:
Basic	529		548		533		563
Diluted	532		548		537		563
(1) Includes stock-based compensation as follows:
Cost of net revenues	nbsp;                13		nbsp;                13		nbsp;                40		nbsp;                38
Sales and marketing	23		17		68		57
Product development	69		53		202		160
General and administrative	39		35		116		111
	nbsp;              144		nbsp;              118		nbsp;              426		nbsp;              366

 

eBay Inc. Unaudited Condensed Consolidated Statement of Cash Flows
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Cash flows from operating activities:
Net income (loss)	nbsp;        1,305		nbsp;            (69)		nbsp;        2,043		nbsp;      (1,941)
(Income) loss from discontinued operations, net of income taxes	1		(1)		4		(4)
Adjustments:
Provision for transaction losses	85		69		259		251
Depreciation and amortization	97		104		305		335
Stock-based compensation	144		118		426		366
Loss (gain) on investments and other, net	(3)		—		(6)		7
Deferred income taxes	173		(112)		95		(807)
Change in fair value of warrant	109		27		40		246
Change in fair value of equity investment in Adevinta	(1,367)		501		(1,331)		2,973
Change in fair value of equity investment in Adyen	—		(24)		—		261
Change in fair value of equity investment in Gmarket	43		40		83		299
Change in fair value of equity investment in KakaoBank	4		50		11		321
Changes in assets and liabilities, net of acquisition effects	271		32		379		(366)
Net cash provided by continuing operating activities	862		735		2,308		1,941
Net cash used in discontinued operating activities	—		(6)		(4)		(371)
Net cash provided by operating activities	862		729		2,304		1,570
Cash flows from investing activities:
Purchases of property and equipment	(85)		(102)		(330)		(296)
Purchases of investments	(2,920)		(5,077)		(10,607)		(15,223)
Maturities and sales of investments	3,117		5,066		11,499		18,247
Proceeds from sale of shares in Adyen	—		120		—		800
Proceeds from sale of shares in KakaoBank	1		—		1		287
Other	(17)		(18)		(43)		(62)
Net cash provided by (used in) continuing investing activities	96		(11)		520		3,753
Net cash provided by discontinued investing activities	—		2		—		2
Net cash provided by (used in) investing activities	96		(9)		520		3,755
Cash flows from financing activities:
Proceeds from issuance of common stock	—		—		48		55
Repurchases of common stock	(626)		(286)		(1,118)		(2,828)
Payments for taxes related to net share settlements of restricted stock units and awards	24		(32)		(136)		(130)
Payments for dividends	(132)		(120)		(399)		(370)
Repayment of debt	—		—		(1,150)		(1,355)
Net funds receivable and payable activity	121		84		684		92
Net cash used in financing activities	(613)		(354)		(2,071)		(4,536)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(10)		(32)		(16)		(89)
Net increase in cash, cash equivalents and restricted cash	335		334		737		700
Cash, cash equivalents and restricted cash at beginning of period	2,674		1,772		2,272		1,406
Cash, cash equivalents and restricted cash at end of period	nbsp;        3,009		nbsp;        2,106		nbsp;        3,009		nbsp;        2,106

 

eBay Inc. Unaudited Summary of Consolidated Net Revenues
	Three Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
	(In millions, except percentages)
Total net revenues (1)(2)(3)	nbsp;          2,500		nbsp;          2,540		nbsp;          2,510		nbsp;          2,510		nbsp;          2,380
Current quarter vs prior year quarter	5 %		5 %		1 %		(4) %		(5) %
Percent from international	50 %		50 %		50 %		51 %		50 %
(1) Hedge gain/(loss)	nbsp;                  2		nbsp;                14		nbsp;                29		nbsp;                89		nbsp;                36
(2) Foreign currency impact	nbsp;                43		nbsp;                 (9)		nbsp;               (45)		nbsp;               (67)		nbsp;             (100)

(3)

Beginning in the fourth quarter of 2022, we present revenues generated from both Marketplace GMV and non-GMV based businesses as “Net revenues” in order to more closely align our presentation of net revenues with how our business is operated. We formerly presented such amounts as “Net transaction revenues” and “Marketing services and other (MS&O) revenues,” and those line items for such prior periods have been conformed to current period presentation. Consolidated net revenues are unchanged.

 

eBay Inc. Unaudited Supplemental Operating Data
	Three Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
	(In millions, except percentages)
Active Buyers (1)	132		132		133		134		135
Current quarter vs prior year quarter	(3) %		(4) %		(7) %		(9) %		(11) %
Active Buyers excluding GittiGidiyor and TCGplayer (2)	131		131		131		132		133
Current quarter vs prior year quarter	(1) %		(3) %		(5) %		(8) %		(10) %
Gross Merchandise Volume (3)
U.S.	nbsp;         8,638		nbsp;         8,702		nbsp;         9,010		nbsp;         8,894		nbsp;         8,699
Current quarter vs prior year quarter	(1) %		(3) %		(3) %		(9) %		(7) %
International	nbsp;         9,353		nbsp;         9,512		nbsp;         9,400		nbsp;         9,333		nbsp;         9,016
Current quarter vs prior year quarter	4 %		(1) %		(7) %		(15) %		(15) %
Total Gross Merchandise Volume	nbsp;       17,991		nbsp;       18,214		nbsp;       18,410		nbsp;       18,227		nbsp;       17,715
Current quarter vs prior year quarter	2 %		(2) %		(5) %		(12) %		(11) %

(1)	Active Buyers consist of all buyers who paid for a transaction on our platforms within the previous 12-month period. Buyers may register more than once, and as a result, may have more than one account.
(2)	On June 20, 2022 we announced the closure of our marketplace business in Turkey, GittiGidiyor. On October 31, 2022, we completed the acquisition of TCGplayer.
(3)	Gross Merchandise Volume consists of the total value of all paid transactions between users on our platforms during the applicable period inclusive of shipping fees and taxes.

 

eBay Inc.

Business Outlook

The guidance figures provided below and elsewhere in this press release are forward-looking statements, reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature because the company’s future performance is difficult to predict. Such guidance is based on information available on the date of this press release, and the company assumes no obligation to update it.

The company’s future performance involves risks and uncertainties, and the company’s actual results could differ materially from the information below and elsewhere in this press release. Some of the factors that could affect the company’s operating results are set forth under the caption “Forward-Looking Statements” above in this press release. More information about factors that could affect the company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting eBay’s investor relations website at https://investors.ebayinc.com or the SEC’s website at www.sec.gov.

eBay Inc.
	Three Months Ending
	December 31, 2023
(In billions, except per share amounts)	GAAP		Non-GAAP (a)
Net revenues	$2.47 – $2.53		$2.47 – $2.53
Diluted EPS from continuing operations	$0.70 – $0.75		$1.00 – $1.05
	Twelve Months Ending
	December 31, 2023
(In billions, except per share amounts)	GAAP		Non-GAAP (b)
Net Revenue	$10.02 – $10.08		$10.02 – $10.08
Diluted EPS from continuing operations	$4.53 – $4.58		$4.17 – $4.22
(a) Estimated non-GAAP amounts above for the three months ending December 31, 2023 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $8 – $13 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $140 – $150 million and estimated adjustment between our GAAP and non-GAAP tax rate of approximately $20 – $30 million. The estimated GAAP diluted EPS above does not assume any gains or losses on our equity investments.
(b) Estimated non-GAAP amounts above for the twelve months ending December 31, 2023 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $35 – $40 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $577 – $587 million and estimated adjustment between our GAAP and non-GAAP tax rate of approximately $105 – $115 million. The estimated GAAP diluted EPS above does not assume any future gains or losses on our equity investments.

eBay Inc. 

Non-GAAP Measures of Financial Performance 

To supplement the company’s condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income, non-GAAP effective tax rate, free cash flow and figures in this press release presented on an “FX-Neutral basis.” These non-GAAP financial measures are presented on a continuing operations basis.

These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the company’s results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the company’s results of operations in conjunction with the corresponding GAAP measures.

Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release, except for figures in this press release presented on an “FX-Neutral basis,” can be found in the tables included in this press release. For figures in this press release reported “on an FX-Neutral basis,” the company calculates the year-over-year impact of foreign currency movements using prior period foreign currency rates, excluding hedging activity, applied to current year transactional currency amounts.

These non-GAAP measures are provided to enhance investors’ overall understanding of the company’s current financial performance and its prospects for the future. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, or net purchases of property and equipment, as the case may be, that may not be indicative of its core operating results and business outlook. In addition, because the company has historically reported certain non-GAAP results to investors, the company believes that the inclusion of non-GAAP measures provides consistency in the company’s financial reporting.

For its internal budgeting process, and as discussed further below, the company’s management uses financial measures that do not include stock-based compensation expense, employer payroll taxes on stock-based compensation, amortization or impairment of acquired intangible assets, impairment of goodwill, amortization of deferred tax assets associated with the realignment of its legal structure and related foreign exchange effects, significant gains or losses from the disposal/acquisition of a business, certain gains and losses on investments including changes in fair value, changes in foreign currency exchange rates and the impact of any related foreign exchange derivative instruments, gains or losses associated with a warrant agreement that the company entered into with Adyen, restructuring-related charges and the income taxes associated with the foregoing. In addition to the corresponding GAAP measures, the company’s management also uses the foregoing non-GAAP measures in reviewing the financial results of the company.

The company excludes the following items from non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income and non-GAAP effective tax rate:

Stock-based compensation expense and related employer payroll taxes. This expense consists of expenses for stock options, restricted stock and employee stock purchases. The company excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash expenses that management does not believe are reflective of ongoing operating results. The related employer payroll taxes are dependent on the company’s stock price and the vesting of restricted stock by employees and the timing and size of stock option exercises, over which management has limited to no control, and as such management does not believe it correlates to the company’s operation of the business.

Amortization or impairment of acquired intangible assets, impairment of goodwill, certain amortization of deferred tax assets and related foreign exchange effects, significant gains or losses and transaction expenses from the acquisition or disposal of a business and certain gains or losses on investments. The company incurs amortization or impairment of acquired intangible assets and goodwill in connection with acquisitions and may incur significant gains or losses from the acquisition or disposal of a business and therefore excludes these amounts from its non-GAAP measures. The company also excludes certain gains and losses on investments. The company excludes the non-cash amortization of deferred tax assets associated with the realignment of its legal structure, which is not reduced by the effects of the Tax Cuts and Jobs Act, and related foreign exchange effects. The company excludes these items because management does not believe they correlate to the ongoing operating results of the company’s business.

Restructuring. These charges consist of expenses for employee severance and other exit and disposal costs. The company excludes significant restructuring charges primarily because management does not believe they are reflective of ongoing operating results.

Other certain significant gains, losses, or charges that are not indicative of the company’s core operating results. These are significant gains, losses, or charges during a period that are the result of isolated events or transactions which have not occurred frequently in the past and are not expected to occur regularly or be repeated in the future. The company excludes these amounts from its results primarily because management does not believe they are indicative of its current or ongoing operating results.  These amounts include changes in fair value and the related change in foreign currency exchange rates of equity securities with readily determinable fair values, globally.

Change in fair market value of warrant. These are gains or losses associated with a warrant agreement that the company entered into with Adyen, which are attributable to changes in fair value during the period.

Income tax effects and adjustments. We use a non-GAAP tax rate for evaluating our operating results. Based on our current long-term projections, we are using a non-GAAP tax rate of 16.5%. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.

In addition to the non-GAAP measures discussed above, the company also uses free cash flow. Free cash flow represents operating cash flows less purchases of property and equipment. The company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property, buildings, and equipment, which can then be used to, among other things, invest in the company’s business, make strategic acquisitions, repurchase stock and pay dividends. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company’s cash balance for the period and does not exclude certain non-discretionary expenditures, such as mandatory debt service requirements.

eBay Inc. Reconciliation of GAAP Operating Income to Non-GAAP Operating Income*
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions, except percentages)
GAAP operating income	nbsp;          455		nbsp;          568		nbsp;       1,531		nbsp;       1,785
Stock-based compensation expense and related employer payroll taxes	146		120		436		377
Amortization of acquired intangible assets within cost of net revenues and operating expenses	8		2		26		4
Restructuring	(1)		—		38		—
Legal matters	50		—		50		—
Other general and administrative expenses	—		—		5		23
Total non-GAAP operating income adjustments	203		122		555		404
Non-GAAP operating income	nbsp;          658		nbsp;          690		nbsp;       2,086		nbsp;       2,189
Non-GAAP operating margin	26.4 %		28.9 %		27.7 %		30.0 %
*Presented on a continuing operations basis

 

Reconciliation of GAAP Net Income to Non-GAAP Net Income and  GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions, except per share amounts and percentages)
GAAP income (loss) from continuing operations before income taxes	nbsp;       1,661		nbsp;           (54)		nbsp;       2,676		nbsp;     (2,430)
GAAP (provision) benefit for income taxes	(355)		(16)		(629)		485
GAAP net income (loss) from continuing operations	nbsp;       1,306		nbsp;           (70)		nbsp;       2,047		nbsp;     (1,945)
Non-GAAP adjustments to net income (loss) from continuing operations:
Non-GAAP operating income from continuing operations adjustments (see table above)	nbsp;          203		nbsp;          122		nbsp;          555		nbsp;          404
Change in fair value of equity investment in Adevinta	(1,367)		501		(1,331)		2,973
Change in fair market value of warrant	109		27		40		246
Change in fair market value of other equity investments	46		90		95		663
Realized change in fair market value of equity investments	—		(24)		—		218
Other significant gains, losses or charges	—		(1)		—		(1)
Income tax effects and adjustments	248		(93)		294		(827)
Non-GAAP net income from continuing operations	nbsp;          545		nbsp;          552		nbsp;       1,700		nbsp;       1,731
Diluted net income (loss) from continuing operations per share:
GAAP	nbsp;         2.46		nbsp;       (0.13)		nbsp;         3.81		nbsp;       (3.45)
Non-GAAP	nbsp;         1.03		nbsp;         1.00		nbsp;         3.17		nbsp;         3.04
Shares used in GAAP diluted net income (loss) per share calculation	532		548		537		563
Shares used in non-GAAP diluted net income per share calculation	532		551		537		568
GAAP effective tax rate – Continuing operations	21.4 %		(29.9) %		23.5 %		20.0 %
Income tax effects and adjustments to net income (loss) from continuing operations	(4.9) %		46.4 %		(7.0) %		(3.5) %
Non-GAAP effective tax rate – Continuing operations	16.5 %		16.5 %		16.5 %		16.5 %

 

Reconciliation of Operating Cash Flow to Free Cash Flow
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Net cash provided by continuing operating activities	nbsp;              862		nbsp;              735		nbsp;           2,308		nbsp;           1,941
Less: Purchases of property and equipment	(85)		(102)		(330)		(296)
Free cash flow	nbsp;              777		nbsp;              633		nbsp;           1,978		nbsp;           1,645

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/ebay-inc-reports-third-quarter-2023-results-301980686.html

SOURCE eBay Inc.