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eBay Reports 1Q Revenue of $2.2 Billion, Up 9 Percent Year-over-Year

April 21, 2010

eBay Inc., which operates one of the world's largest online marketplaces as well as one of the most popular electronic payment services, PayPal, today reported first quarter revenue of $2.2 billion, up 9 percent year-over-year, or up 18 percent excluding Skype. eBay sold a majority stake of the Internet phone service to a holding company late last year.


The company recorded net income on a GAAP basis of $397.7 million or $0.30 per diluted share, and non-GAAP net income of $554.2 million or $0.42 per diluted share. The increase was attributed to growth in eBay's Payments and Marketplaces businesses, as well as a positive impact from foreign currency movements against the US dollar.

GAAP operating margin increased to 22.2 percent for the quarter, compared to 20.9 percent for the same period last year. Non-GAAP operating margin decreased slightly to 30.6 percent for the quarter, compared to 30.7 percent for the same period last year, as productivity gains were offset by faster growth in the company's lower margin PayPal business and lower take rates.

'Our first quarter results reflect another strong step toward achieving our three-year growth and profitability goals,' said eBay President and CEO John Donahoe. 'We are becoming a more customer-focused and technology-driven company, delivering more innovative products and experiences and driving operating efficiencies to reinvest in growth. We are improving the fundamentals of our business, strengthening eBay Marketplaces and aggressively growing PayPal to become the leader in global online payments.'

eBay's Payments business unit, which includes PayPal, reported $21.3 billion in net total payment volume for the quarter, an increase of 35 percent year-over-year. Revenue for the quarter was $809.3 million, an increase of 26 percent. The growth in revenue and net 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 around the globe. The company's Payments unit continues to work on the integration of Bill Me Later, another payment service which it acquired in 2008.

Also driving the increase in the Payments business was a new payment services agreement with China UnionPay (CUP) which will provide international retailers with access to customers holding more than 2.1 billion CUP cards; a deal with Facebook that allows users to select PayPal to buy virtual goods in the Facebook gift shop; a new 'Send Money' app for the iPhone which was downloaded more than one million times in less than three weeks; and the launch of PayPal X in Q4 2009, which has attracted thousands of developers who have built hundreds of apps that have already generated more than $30 million in TPV.

Meanwhile eBay's Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, eBay Classifieds and other e-commerce sites, recorded $13.4 billion in gross merchandise volume (GMV) excluding vehicles for the quarter, a 24 percent year-over-year increase.

Helping to drive the growth in the Marketplaces business unit is eBay's new fixed-price format, as well as the inclusion of Gmarket. Revenue was $1.4 billion for the quarter, a 13 percent increase compared to the first quarter of 2009. Roughly 60 percent of the 1Q growth came from overseas sales, plus there was positive impact from foreign currency movements against the US dollar.

Initiatives that contributed to the growth in the Marketplaces business include eBay's success with free auction listings and reduced listing fees for fixed-priced items in the US; the rollout of the new eBay Buyer Protection program in the US and UK; the launch of three new buying and selling mobile applications including an eBay app for the iPad; eBay's popular iPhone shopping app, which has been downloaded more than 8.5 million times since Q3 2008; and the introduction of Fashion.ebay.com, a new shopping destination for clothing, shoes and accessories that showcases the breadth of new, vintage, branded and designer merchandise available on eBay.


Patrick Barnard is a senior Web editor for ContactCenterSolutions, covering call and contact center technologies. He also compiles and regularly contributes to ContactCenterSolutions e-Newsletters in the areas of robotics, IT, M2M, OCS and customer interaction solutions. To read more of Patrick's articles, please visit his columnist page.

Edited by Patrick Barnard



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