* Revenue of
* Gross Merchandise Volume of
* GAAP and Non-GAAP earnings per diluted share of
* GAAP and Non-GAAP operating margin of 16.0% and 26.7%, respectively
* Returned
* In
"Last year, we made significant progress toward our vision to reinvent the future of ecommerce for enthusiasts," said
"I'm pleased that we met or exceeded expectations across our key financial metrics in Q4," said
Fourth Quarter Financial Highlights
* Revenue was
* Gross Merchandise Volume (GMV) was
* GAAP net income from continuing operations was
* Non-GAAP net income from continuing operations was
* GAAP and Non-GAAP operating margin was 16.0% and 26.7%, respectively.
* Generated
* Returned
Full Year Financial Highlights
* Revenue was
* GMV was
* GAAP net income from continuing operations was
* Non-GAAP net income from continuing operations was
* GAAP and Non-GAAP operating margin was 19.2% and 27.4%, respectively.
* Generated
* Returned
Business Highlights
Revenue Initiatives
*
* The company's total advertising offerings generated
Strategic Initiatives
* In Q4,
* In the Motors Parts & Accessories category,
* During the quarter,
*
* During the quarter,
*
* The company introduced combined shipping with
Impact
*
*
*
* In Q4, the
* In 2023, the
Fourth Quarter and Full Year 2023 Financial Highlights (presented in millions, except per share data and percentages)
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Net revenues
2 %
3 %
GAAP - Continuing Operations
Net Income (loss)
8 %
**
Earnings (loss) per diluted share
13 %
**
Non-GAAP - Continuing Operations
Net income
(4) %
(2) %
Earnings per diluted share
$ -
- %
3 %
** Not meaningful
Other Selected Financial and Operational Results
Operating margin - GAAP operating margin decreased to 16.0% for the fourth quarter of 2023, compared to 22.5% for the same period last year. Non-GAAP operating margin decreased to 26.7% for the fourth quarter of 2023, compared to 29.9% for the same period last year.
* Taxes - The GAAP effective tax rate for continuing operations for the fourth quarter of 2023 was 29.4%, compared to 19.1% for the fourth quarter of 2022. The non-GAAP effective tax rate for continuing operations for the fourth quarter of 2023 was 16.5%(1).
* Cash flow - The company generated
* Capital returns - The company repurchased
* Cash and cash equivalents and non-equity investments - The company's cash and cash equivalents and non-equity investments portfolio totaled
Business Outlook
In billions, except per share data and percentages
Q1 2024 Guidance
Revenue
FX-Neutral Y/Y Growth
0% - 2%
Diluted GAAP EPS
Diluted Non-GAAP EPS
Dividend Declaration
*
(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
About
Presentation
All growth rates represent year-over-year comparisons, except as otherwise noted. All amounts in tables are presented in
Non-GAAP Financial Measures
This press release includes the following financial measures defined as "non-GAAP financial measures" by the
Forward-Looking Statements
This press release contains forward-looking statements relating to, among other things, the future performance of
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
Unaudited Condensed Consolidated Balance Sheet
2023
2022
(In millions)
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
2,556
2,625
Equity investment in
4,474
2,692
Customer accounts and funds receivable
1,013
763
Other current assets
988
1,056
Total current assets
11,016
9,290
Long-term investments
1,133
1,797
Property and equipment, net
1,243
1,238
4,267
4,262
Operating lease right-of-use assets
493
513
Deferred tax assets
3,089
3,169
Other assets
379
581
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt
Accounts payable
267
261
Customer accounts and funds payable
1,054
768
Accrued expenses and other current liabilities
2,196
1,866
Income taxes payable
253
226
Total current liabilities
4,520
4,271
Operating lease liabilities
387
418
Deferred tax liabilities
2,408
2,245
Long-term debt
6,973
7,721
Other liabilities
936
1,042
Total liabilities
15,224
15,697
Total stockholders' equity
6,396
5,153
Total liabilities and stockholders' equity
Unaudited Condensed Consolidated Statement of Income
Three Months Ended
Year Ended
2023
2022
2023
2022
(In millions, except per share amounts)
Net revenues
Cost of net revenues (1)
710
681
2,833
2,680
Gross profit
1,852
1,829
7,279
7,115
Operating expenses:
Sales and marketing (1)
573
554
2,217
2,136
Product development (1)
399
340
1,544
1,330
General and administrative (1)
365
288
1,196
963
Provision for transaction losses
101
81
360
332
Amortization of acquired intangible assets
4
1
21
4
Total operating expenses
1,442
1,264
5,338
4,765
Income from operations
410
565
1,941
2,350
Interest and other:
Gain (loss) on equity investments and warrant, net
636
319
1,832
(3,786)
Interest expense
(65)
(62)
(263)
(235)
Interest income and other, net
50
7
197
70
Income (loss) from continuing operations before income taxes
1,031
829
3,707
(1,601)
Income tax benefit (provision)
(303)
(158)
(932)
327
Income (loss) from continuing operations
728
671
2,775
(1,274)
Income (loss) from discontinued operations, net of income taxes
(4)
1
(8)
5
Net income (loss)
Income (loss) per share - basic
Continuing operations
Discontinued operations
(0.01)
0.00
(0.02)
0.01
Net income (loss) per share - basic
Income (loss) per share - diluted:
Continuing operations
Discontinued operations
(0.01)
0.00
(0.02)
0.01
Net income (loss) per share - diluted
Weighted average shares:
Basic
518
541
530
558
Diluted
521
544
533
558
(1) Includes stock-based compensation as follows:
Cost of net revenues
Sales and marketing
24
16
92
73
Product development
70
62
272
222
General and administrative
42
37
158
148
Unaudited Condensed Consolidated Statement of Cash Flows
Three Months Ended
Year Ended
2023
2022
2023
2022
(In millions)
Cash flows from operating activities:
Net income (loss)
(Income) loss from discontinued operations, net of income taxes
4
(1)
8
(5)
Adjustments:
Provision for transaction losses
101
81
360
332
Depreciation and amortization
98
107
403
442
Stock-based compensation
149
128
575
494
Loss (gain) on investments and other, net
1
14
(5)
21
Deferred income taxes
160
27
255
(780)
Change in fair value of warrant
(190)
(16)
(150)
230
Change in fair value of equity investment in
(451)
(282)
(1,782)
2,691
Change in fair value of equity investment in Adyen
-
-
-
261
Change in fair value of equity investment in
13
(5)
96
294
Change in fair value of equity investment in
(13)
(28)
(2)
293
Changes in assets and liabilities, net of acquisition effects
(473)
(11)
(94)
(377)
Net cash provided by continuing operating activities
123
686
2,431
2,627
Net cash used in discontinued operating activities
(1)
(2)
(5)
(373)
Net cash provided by operating activities
122
684
2,426
2,254
Cash flows from investing activities:
Purchases of property and equipment
(126)
(153)
(456)
(449)
Purchases of investments
(3,267)
(3,311)
(13,874)
(18,534)
Maturities and sales of investments
3,003
2,379
14,502
20,626
Proceeds from sale of shares in
-
8
-
8
Proceeds from sale of shares in Adyen
-
-
-
800
Proceeds from sale of shares in
105
-
106
287
Acquisition of TCGplayer, net of cash acquired
-
(208)
-
(208)
Other
5
(9)
(38)
(71)
Net cash provided by (used in) continuing investing activities
(280)
(1,294)
240
2,459
Net cash provided by discontinued investing activities
-
-
-
2
Net cash provided by (used in) investing activities
(280)
(1,294)
240
2,461
Cash flows from financing activities:
Proceeds from issuance of common stock
35
32
83
87
Repurchases of common stock
(283)
(315)
(1,401)
(3,143)
Payments for taxes related to net share settlements of restricted stock units and awards
(35)
(30)
(171)
(160)
Payments for dividends
(129)
(119)
(528)
(489)
Proceeds from issuance of long-term debt, net
-
1,143
-
1,143
Repayment of debt
-
-
(1,150)
(1,355)
Net funds receivable and payable activity
33
33
717
125
Net cash provided by (used) in financing activities
(379)
744
(2,450)
(3,792)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
21
32
5
(57)
Net increase (decrease) in cash, cash equivalents and restricted cash
(516)
166
221
866
Cash, cash equivalents and restricted cash at beginning of period
3,009
2,106
2,272
1,406
Cash, cash equivalents and restricted cash at end of period
Unaudited Summary of Consolidated Net Revenues
Three Months Ended
2023
2023
2023
2023
2022
(In millions, except percentages)
Total net revenues (1)(2)
Current quarter vs prior year quarter
2 %
5 %
5 %
1 %
(4) %
Percent from international
50 %
50 %
50 %
50 %
51 %
(1) Hedge gain/(loss)
(2) Foreign currency impact
Unaudited Supplemental Operating Data
Three Months Ended
2023
2023
2023
2023
2022
(In millions, except percentages)
Active Buyers (1)
132
132
132
133
134
Current quarter vs prior year quarter
(2) %
(3) %
(4) %
(7) %
(9) %
Active Buyers excluding GittiGidiyor and TCGplayer (2)
131
131
131
131
132
Current quarter vs prior year quarter
(1) %
(1) %
(3) %
(5) %
(8) %
Gross Merchandise Volume (3)
Current quarter vs prior year quarter
0 %
(1) %
(3) %
(3) %
(9) %
International
Current quarter vs prior year quarter
4 %
4 %
(1) %
(7) %
(15) %
Total Gross Merchandise Volume
Current quarter vs prior year quarter
2 %
2 %
(2) %
(5) %
(12) %
(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
(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.
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
Three Months Ending
(In billions, except per share amounts)
GAAP
Non-GAAP (a)
Net revenues
Diluted EPS from continuing operations
(a) Estimated non-GAAP amounts above for the three months ending
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.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income*
Three Months Ended
Year Ended
2023
2022
2023
2022
(In millions, except percentages)
GAAP operating income
Stock-based compensation expense and related employer payroll taxes
151
130
587
507
Amortization of acquired intangible assets within cost of net revenues and operating expenses
9
5
35
9
Restructuring
99
-
141
-
Legal matters
15
50
65
50
Other general and administrative expenses
2
-
3
23
Total non-GAAP operating income adjustments
276
185
831
589
Non-GAAP operating income
GAAP operating margin
16.0 %
22.5 %
19.2 %
24.0 %
Non-GAAP operating margin
26.7 %
29.9 %
27.4 %
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
Year Ended
2023
2022
2023
2022
(In millions, except per share amounts and percentages)
GAAP income (loss) from continuing operations before income taxes
GAAP (provision) benefit for income taxes
(303)
(158)
(932)
327
GAAP net income (loss) from continuing operations
Non-GAAP adjustments to net income (loss) from continuing operations:
Non-GAAP operating income from continuing operations adjustments (see table above)
Change in fair value of equity investment in
(451)
(282)
(1,782)
2,691
Change in fair market value of warrant
(190)
(16)
(150)
230
Change in fair market value of other equity investments
18
(18)
113
645
Realized change in fair market value of equity investments
(13)
(2)
(13)
216
Other significant gains, losses or charges
-
-
-
(1)
Income tax effects and adjustments
192
43
486
(784)
Non-GAAP net income from continuing operations
Diluted net income (loss) from continuing operations per share:
GAAP
Non-GAAP
Shares used in GAAP diluted net income (loss) per share calculation
521
544
533
558
Shares used in non-GAAP diluted net income per share calculation
521
544
533
562
GAAP effective tax rate - Continuing operations
29.4 %
19.1 %
25.1 %
20.4 %
Income tax effects and adjustments to net income (loss) from continuing operations
(12.9) %
(2.6) %
(8.6) %
(3.9) %
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
Year Ended
2023
2022
2023
2022
(In millions)
Net cash provided by continuing operating activities
Less: Purchases of property and equipment
(126)
(153)
(456)
(449)
Free cash flow
Investor Relations Contact:
ir@ebay.com
Media Relations Contact:
press@ebay.com
https://www.ebayinc.com/stories/news/
Investor Relations website:
https://investors.ebayinc.com
.
(C) 2024 M2 COMMUNICATIONS, source