eBay Inc. Reports Strong Second Quarter 2013 Results

  eBay Inc. Reports Strong Second Quarter 2013 Results

Double-digit growth in revenue and net income, with customer growth
accelerating at Marketplaces and PayPal

Total Company Enabled Commerce Volume Up 21% Year over Year

Business Wire

SAN JOSE, Calif. -- July 17, 2013

Global commerce platform and payments leader eBay Inc. (Nasdaq: EBAY) today
reported that revenue for the second quarter ended June 30, 2013, increased
14% to $3.9 billion, compared to the same period of 2012. The company reported
second quarter net income on a GAAP basis of $640 million, or $0.49 per
diluted share, and non-GAAP net income of $822 million, or $0.63 per diluted
share. The year-over-year increase in second quarter non-GAAP earnings per
diluted share was driven primarily by strong top-line growth. GAAP earnings
per diluted share declined on a year-over-year basis due to a gain on the
divestiture of a business in 2012.

Total company Enabled Commerce Volume (ECV) grew 21% for the quarter, to $51
billion. The growth demonstrates the power of the company's global commerce
platforms. Marketplaces, PayPal and eBay Enterprise connect merchants,
retailers and brands of all sizes with consumers everywhere. Cross-border
trade in the second quarter was $11 billion, representing 22% of the company's
total ECV. The company's mobile commerce leadership is also driving an
efficient channel for growth and engagement, with mobile attracting 3 million
new customers in the quarter and growing more than 90%. eBay Inc.'s mobile
assets and capabilities are delivering innovative, seamless commerce
experiences for merchants and consumers across multiscreen shopping
environments.

"We had a strong second quarter, with $51 billion of enabled commerce volume
across Marketplaces, PayPal and eBay Enterprise driving double-digit revenue
and earnings growth," said eBay Inc. President and CEO John Donahoe.
"Macroeconomic headwinds in Europe and Korea will continue to be a challenge
in the second half of the year. But our core businesses are strong and we
continue to attract millions of new customers each quarter through mobile
innovation. We remain confident in our ability to meet our goals and drive
global commerce innovation and leadership."

PayPal delivered a strong second quarter performance with revenue increasing
20% to $1.6 billion. PayPal gained 4.7 million active registered accounts in
the period and ended the quarter with 132 million, a 17% increase. PayPal's
net total payment volume (TPV) grew 24% to $43 billion driven by consumer and
merchant use of PayPal both on and off eBay. PayPal continues to invest in
growing its addressable market, product development, and consumer
awareness.Payment velocity increased with a sequential acceleration of both
the number of transactions and payment volume. PayPal made strides offline
with PayPal Here now live in six countries while growing domestic merchant
coverage by signing agreements with more than 50 merchant acquirers to
facilitate usage of PayPal over the Discover network.

Marketplaces delivered a strong second quarter performance with revenue of
$2.0 billion, increasing 10%, or 12% excluding the gain from the resolution of
an indirect tax dispute in 2012. Marketplaces gained 3.5 million active users
in the period and ended the quarter with 120 million, a 14% increase. Gross
merchandise volume (GMV), excluding vehicles, increased 13% to $18 billion.
Fixed price GMV grew 17% globally and represented 69% of total GMV. U.S. GMV,
excluding vehicles, increased 16% to $7.3 billion driven by mobile and
momentum in the parts & accessories and home & garden categories.
International GMV, excluding vehicles, increased 11% to $11 billion, showing
stable growth while facing a tougher macroeconomic environment. Marketplace's
new search engine, which went live in North America in the second quarter,
will help to enable smarter, faster and more intuitive search experiences.

GSI Commerce was renamed eBay Enterprise, reflecting the partnership that the
business offers to retailers and brands through its comprehensive technology
solutions and marketing services. eBay Enterprise contributed $246 million in
revenue for the second quarter, an 11% increase. Its enterprise commerce
platform generated $815 million in global ecommerce (GeC) Merchandise Sales, a
21% increase. eBay Enterprise enabled its clients to grow faster than the
ecommerce market as measured by the 19% same store sales growth, but revenue
was pressured by a reduction in take rate. The company expects its omnichannel
product portfolio, including complementary eBay Inc. assets, to be
increasingly adopted by merchants seeking opportunities to grow their
businesses while seamlessly meeting the needs of their customers.


Second Quarter 2013 Financial Highlights (presented in millions, except per
share data and percentages)

                                Second Quarter          
                               2013         2012         Change
eBay Inc.                                                         
Net revenue                     $3,877       $3,398       $479       14%
Enabled commerce volume         $50,597      $41,906      $8,691     21%
(ECV)
GAAP                                                              
Net income                      $640         $692         $(52)      (8%)
Earnings per diluted share      $0.49        $0.53        $(0.04)    (8%)
Non-GAAP                                                          
Net income                      $822         $730         $92        13%
Earnings per diluted share      $0.63        $0.56        $0.07      13%

                                 Second Quarter
                               2013         2012         Change
Business Units                                                    
Payments                                                          
Net revenue                     $1,624       $1,357       $267       20%
Net total payment volume        $42,813      $34,451      $8,362     24%
Marketplaces                                                      
Net revenue                     $2,001       $1,814       $187       10%
Gross merchandise volume        $18,292      $16,171      $2,121     13%
(GMV), excl. vehicles
Enterprise                                                        
Net revenue                     $246         $221         $25        11%
GeC Merchandise Sales           $815         $674         $141       21%
                                                                     

Other Selected Financial Results

  *Operating margin — GAAP operating margin decreased to 19.3% for the second
    quarter of 2013, compared to 20.5% for the same period last year. Non-GAAP
    operating margin decreased to 26.3% in the second quarter, compared to
    27.3% for the same period last year.
  *Taxes — The GAAP effective tax rate for the second quarter of 2013 was
    15%, compared to 19% for the second quarter of 2012. For the second
    quarter of 2013 and 2012, the non-GAAP effective tax rate was 19% and 24%,
    respectively. The decrease in the company's GAAP and non-GAAP effective
    tax rates was due primarily to discrete items recorded in 2012 related to
    uncertain tax positions.
  *Cash flow — The company generated $1.0 billion of operating cash flow and
    $658 million of free cash flow during the second quarter of 2013.
  *Stock repurchase program — The company repurchased approximately $466
    million of its common stock in the second quarter of 2013.
  *Cash and cash equivalents and non-equity investments — The company's cash
    and cash equivalents and non-equity investments portfolio totaled $11.7
    billion at June30, 2013 up from $11.5 billion at December31, 2012.

Business Outlook

  *Third quarter 2013 — the company expects net revenues in the range of
    $3,850 - $3,950 million with GAAP earnings per diluted share in the range
    of $0.49 - $0.51 and non-GAAP earnings per diluted share in the range of
    $0.61 - $0.63.
  *Full year 2013 — the company expects net revenues in the range of $16,000
    - $16,500 million with GAAP earnings per diluted share in the range of
    $2.21 - $2.26 and non-GAAP earnings per diluted share in the range of
    $2.70 - $2.75.

Quarterly Conference Call

eBay Inc. will host a conference call to discuss second quarter 2013 results
at 2:00p.m. Pacific Time today. 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 http://investor.ebayinc.com. In addition, an archive of
the webcast will be accessible for 90 days through the same link.

AbouteBay Inc.

eBay Inc. (NASDAQ: EBAY) is a global commerce and payments leader, providing a
robust platform where merchants of all sizes can compete and win. Founded in
1995 inSan Jose, Calif.,eBay Inc. connects millions of buyers and sellers
and enabled $175 billion of commerce volume in 2012. We do so through eBay,
the world's largest online marketplace, which allows users to buy and sell in
nearly every country on earth; through PayPal, which enables individuals and
businesses to securely, easily and quickly send and receive digital payments;
and through eBay Enterprise, which enables omnichannel commerce, multichannel
retailing and digital marketing for global enterprises in the U.S. and
internationally. We also reach millions through specialized marketplaces such
asStubHub, the world's largest ticket marketplace, andeBay classifieds
sites, which together have a presence in more than 1,000 cities around the
world. For more information about the company and its global portfolio of
online brands, visitwww.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 millions, except as otherwise noted. As a result, certain amounts may
not sum or recalculate using the rounded dollar amounts provided.

Non-GAAPFinancial 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
margin, non-GAAP effective tax rate and free cash flow. 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
to the nearest comparable GAAP measures, see “Business Outlook,”
“Non-GAAPMeasures of Financial Performance,” “Reconciliation of
GAAPOperating Margin to Non-GAAPOperating Margin,” “Reconciliation of
GAAPNet Income to Non-GAAPNet Income and Reconciliation of GAAP Effective
Tax Rate to Non-GAAPEffective Tax Rate” and “Reconciliation of Operating Cash
Flow to Free Cash Flow” included in this press release.

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 expected financial results for
the third quarter and full year 2013, and the future growth in the Payments,
Marketplaces and Enterprise businesses, mobile payments and mobile commerce.
The company's actual results could differ materially from those predicted 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 any European or general economic downturn or crisis and
any conditions that affect ecommerce growth; fluctuations in foreign currency
exchange rates; the company's need to successfully react to the increasing
importance of mobile payments and mobile commerce and the increasing social
aspect of commerce; the company's ability to deal with the increasingly
competitive ecommerce environment, including competition for its sellers from
other trading sites and other means of selling, and competition for its buyers
from other merchants, online and offline; the company's need to manage an
increasingly large enterprise with a broad range of businesses of varying
degrees of maturity and in many different geographies; the effect of
management changes and business initiatives; the company's need and ability to
manage other regulatory, tax and litigation risks as its services are offered
in more jurisdictions and applicable laws become more restrictive; any changes
the company may make to its product offerings; the competitive, regulatory,
credit card association-related and other risks specific to PayPal and Bill Me
Later, especially as PayPal continues to expand geographically and introduce
new products and as new laws and regulations related to financial services
companies come into effect; the company's ability to timely upgrade and
develop its technology systems, infrastructure and customer service
capabilities, including Enterprise's commerce platform, at reasonable cost;
the company's ability to maintain site stability and performance on all of its
sites while adding new products and features in a timely fashion; and the
company's ability to profitably 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 Form10-K and subsequent quarterly
reports on Form10-Q, copies of which may be obtained by visiting the
company's Investor Relations website at http://investor.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

                                                June 30,  December 31,
                                                 2013       2012
                                                 (In millions)
                                                 
ASSETS
Current assets:
Cash and cash equivalents                        $ 6,855    $   6,817
Short-term investments                           3,581      2,591
Accounts receivable, net                         743        822
Loans and interest receivable, net               2,273      2,160
Funds receivable and customer accounts           9,012      8,094
Other current assets                             982        914
Total current assets                             23,446     21,398
Long-term investments                            2,506      3,044
Property and equipment, net                      2,697      2,491
Goodwill                                         8,394      8,537
Intangible assets, net                           926        1,128
Other assets                                     581        476
Total assets                                     $ 38,550   $   37,074
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt                                  $ 410      $   413
Accounts payable                                 313        301
Funds payable and amounts due to customers       9,012      8,094
Accrued expenses and other current liabilities   1,711      1,916
Deferred revenue                                 154        137
Income taxes payable                             70         63
Total current liabilities                        11,670     10,924
Deferred and other tax liabilities, net          889        972
Long-term debt                                   4,123      4,106
Other liabilities                                217        207
Total liabilities                                16,899     16,209
                                                            
Total stockholders' equity                       21,651     20,865
Total liabilities and stockholders' equity       $ 38,550   $   37,074


eBay Inc.
Unaudited Condensed Consolidated Statement of Income

                      Three Months Ended June 30,  Six Months Ended June 30,
                       2013           2012          2013           2012
                       (In millions, except per share amounts)
                                                                     
Net revenues           $  3,877        $  3,398      $  7,625        $ 6,675
Cost of net revenues   1,211          987          2,363          1,970   
(1)
Gross profit           2,666          2,411        5,262          4,705   
Operating expenses:
Sales and marketing    771             717           1,468           1,394
(1)
Product development    451             394           885             768
(1)
General and            419             390           827             762
administrative (1)
Provision for
transaction and loan   193             131           368             265
losses
Amortization of
acquired intangible    82             84           164            168     
assets
Total operating        1,916          1,716        3,712          3,357   
expenses
Income from            750             695           1,550           1,348
operations
Interest and other,    6               38            15              69
net
Gain on divested       —              118          —              118     
business
Income before income   756             851           1,565           1,535
taxes
Provision for income   (116      )     (159      )   (248      )     (273    )
taxes
Net income             $  640         $  692       $  1,317       $ 1,262 
Net income per
share:
Basic                  $  0.49        $  0.54      $  1.02        $ 0.98  
Diluted                $  0.49        $  0.53      $  1.00        $ 0.96  
Weighted average
shares:
Basic                  1,297          1,291        1,296          1,290   
Diluted                1,313          1,309        1,316          1,309   

(1) Includes
stock-based
compensation as
follows:
Cost of net revenues   $  23           $  14         $  36           $ 28
Sales and marketing    41              34            74              64
Product development    46              37            78              67
General and            51             42           84             79      
administrative
                       $  161         $  127       $  272         $ 238   


eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows

                      Three Months Ended June 30,  Six Months Ended June 30,
                       2013           2012          2013           2012
                       (In millions)
Cash flows from
operating
activities:
Net income             $  640          $  692        $  1,317        $ 1,262
Adjustments:
Provision for
transaction and loan   193             131           368             265
losses
Depreciation and       347             290           676             571
amortization
Gain on divested       —               (118      )   —               (118    )
business
Stock-based            161             127           272             238
compensation
Changes in assets
and liabilities, net   (330      )     (354      )   (685      )     (919    )
of acquisition
effects
Net cash provided by   1,011          768          1,948          1,299   
operating activities
Cash flows from
investing
activities:
Purchases of
property and           (353      )     (357      )   (652      )     (599    )
equipment
Changes in principal
loans receivable,      (154      )     (120      )   (183      )     (155    )
net
Purchases of           (598      )     (328      )   (2,024    )     (1,344  )
investments
Maturities and sales   750             221           1,798           629
of investments
Acquisitions, net of   (7        )     (130      )   (15       )     (133    )
cash acquired
Proceeds from
divested business,     —               144           —               144
net of cash disposed
Other                  (9        )     (11       )   (14       )     (16     )
Net cash used in       (371      )     (581      )   (1,090    )     (1,474  )
investing activities
Cash flows from
financing
activities:
Proceeds from
issuance of common     142             140           244             225
stock
Repurchases of         (466      )     (355      )   (942      )     (595    )
common stock
Excess tax benefits
from stock-based       45              14            161             68
compensation
Tax withholdings
related to net share
settlements of         (73       )     (14       )   (226      )     (132    )
restricted stock
units and awards
Funds receivable and
customer accounts,     (115      )     45            (918      )     (328    )
net
Funds payable and
amounts due to         115            (45       )   918            328     
customers, net
Net cash (used in)
provided by            (352      )     (215      )   (763      )     (434    )
financing activities
Effect of exchange
rate changes on cash   37             (98       )   (57       )     (44     )
and cash equivalents
Net (decrease)
increase in cash and   325             (126      )   38              (653    )
cash equivalents
Cash and cash
equivalents at         6,530          4,164        6,817          4,691   
beginning of period
Cash and cash
equivalents at end     $  6,855       $  4,038     $  6,855       $ 4,038 
of period


eBay Inc.
Unaudited Summary of Consolidated Net Revenues

Net Revenues  
by Type
                Three Months Ended
                June 30,    March 31,   December    September   June 30,
                                          31,          30,
                2013        2013        2012        2012        2012
Net
transaction     (In millions, except percentages)
revenues
Marketplaces    $ 1,637      $ 1,608      $ 1,672      $ 1,490      $ 1,491
Current
quarter vs      2       %    (4      )%   12      %    —       %    5       %
prior quarter
Current
quarter vs      10      %    13      %    16      %    10      %    10      %
prior year
quarter
Percent of
Marketplaces    55      %    55      %    56      %    55      %    57      %
revenue from
international
                                                                    
Payments        1,475        1,435        1,432        1,264        1,234
Current
quarter vs      3       %    —       %    13      %    2       %    1       %
prior quarter
Current
quarter vs      20      %    18      %    24      %    22      %    25      %
prior year
quarter
Percent of
Payments        56      %    55      %    56      %    55      %    55      %
revenue from
international
                                                                    
Enterprise      194          186          333          170          164
Current
quarter vs      4       %    (44     )%   97      %    3       %    (10     )%
prior quarter
Current
quarter vs      18      %    2       %    13      %    14      %    N/A
prior year
quarter
Percent of
Enterprise      5       %    5       %    3       %    3       %    4       %
revenue from
international
                                                            
Total net
transaction     3,306        3,229        3,437        2,925        2,889
revenues
Current
quarter vs      2       %    (6      )%   17      %    1       %    2       %
prior quarter
Current
quarter vs      14      %    14      %    19      %    15      %    23      %
prior year
quarter
                                                                    
Marketing
services and
other
revenues
Marketplaces    364          349          378          316          323
Current
quarter vs      4       %    (8      )%   20      %    (2      )%   7       %
prior quarter
Current
quarter vs      13      %    15      %    15      %    5       %    3       %
prior year
quarter
Percent of
Marketplaces    75      %    75      %    72      %    75      %    74      %
revenue from
international
                                                                    
Payments        149          113          109          102          123
Current
quarter vs      32      %    4       %    7       %    (17     )%   32      %
prior quarter
Current
quarter vs      21      %    22      %    32      %    37      %    50      %
prior year
quarter
Percent of
Payments        3       %    4       %    5       %    6       %    4       %
revenue from
international
                                                                    
Enterprise      52           50           65           57           57
Current
quarter vs      4       %    (23     )%   14      %    —       %    3       %
prior quarter
Current
quarter vs      (9      )%   (9      )%   (6      )%   4       %    N/A
prior year
quarter
Percent of
Enterprise      —       %    —       %    —       %    —       %    —       %
revenue from
international
                                                                    
Corporate and   14           12           12           11           10
other
                                                            
Total
marketing
services and    579          524          564          485          513
other
revenues
Current
quarter vs      10      %    (7      )%   16      %    (5      )%   12      %
prior quarter
Current
quarter vs      13      %    15      %    16      %    13      %    27      %
prior year
quarter
                                                                    
Elimination
of
inter-segment   (8      )   (5      )   (9      )   $ (6    )   $ (4    )
net revenue
and other (1)
Total net       $ 3,877    $ 3,748    $ 3,992    $ 3,404    $ 3,398 
revenues
Current
quarter vs      3       %    (6      )%   17      %    —       %    4       %
prior quarter
Current
quarter vs      14      %    14      %    18      %    15      %    23      %
prior year
quarter

(1)  Represents revenue generated between our reportable segments.


Net Revenues
by Geography    Three Months Ended
(1)
                 June 30,   March 31,   December     September   June 30,
                                          31,           30,
                 2013       2013        2012         2012        2012
                 (In millions, except percentages)
U.S. net         $ 1,870     $ 1,789      $  1,949      $ 1,637      $ 1,611
revenues
Current
quarter vs       5       %   (8      )%   19        %   2       %    2       %
prior quarter
Current
quarter vs       16      %   13      %    17        %   15      %    29      %
prior year
quarter
Percent of       48      %   48      %    49        %   48      %    47      %
total
                                                                     
International    2,007       1,959        2,043         1,767        1,787
net revenues
Current
quarter vs       2       %   (4      )%   16        %   (1      )%   5       %
prior quarter
Current
quarter vs       12      %   16      %    19        %   15      %    18      %
prior year
quarter
Percent of       52      %   52      %    51        %   52      %    53      %
total
                                                             
Total net        $ 3,877   $ 3,748    $  3,992    $ 3,404    $ 3,398 
revenues
Current
quarter vs       3       %   (6      )%   17        %   —       %    4       %
prior quarter
Current
quarter vs       14      %   14      %    18        %   15      %    23      %
prior year
quarter

      Revenues are attributed to U.S. and international geographies primarily
(1)  based upon the country in which the seller, payment recipient, customer,
      website that displays advertising, or other service provider, as the
      case may be, is located.


eBay Inc.
Unaudited eBay Inc. Supplemental Operating Data

          Three Months Ended
           June 30,    March 31,    December 31,  September     June 30,
                                                     30,
            2013      2013        2012        2012       2012   
           (In millions, except percentages)
ECV (1)    $ 50,597     $ 48,795      $  50,186      $  42,593      $ 41,906
Current
quarter      4      %     (3     %)      18      %      2       %     2      %
vs prior
quarter
Current
quarter
vs prior     21     %     19     %       N/A            N/A           N/A
year
quarter

      Represents the total commerce and payment volume across all three
      business units consisting of Marketplaces GMV, PayPal Merchant Services
      TPV and Enterprise GeC Merchandise Sales not earned on eBay or paid for
      via PayPal or Bill Me Later during the period. Excludes volume
(1)  transacted through the Magento platform. PayPal Merchant Services TPV is
      the total dollar volume of payments, net of payment reversals,
      successfully completed through our Payments networks, Bill Me Later
      accounts and Zong during the period, excluding PayPal's payment gateway
      business and payments for transactions on our Marketplaces and
      Enterprise platforms.


eBay Inc.
Unaudited Payments Supplemental Operating Data

              Three Months Ended
               June 30,    March 31,    December    September   June 30,
                                          31,          30,
               2013        2013         2012        2012        2012
               (In millions, except percentages)
Active
registered       132.4        127.7         122.7        117.4        113.2
accounts (1)
Current
quarter vs       4      %     4      %      5      %     4      %     3      %
prior
quarter
Current
quarter vs       17     %     16     %      15     %     14     %     13     %
prior year
quarter
                                                                    
Net number
of payments      700.6        681.6         691.7        589.2        564.8
(2)
Current
quarter vs       3      %     (1     )%     17     %     4      %     2      %
prior
quarter
Current
quarter vs       24     %     23     %      26     %     28     %     31     %
prior year
quarter
                                                                    
Net total
payment        $ 42,813     $ 41,040      $ 41,471     $ 35,159     $ 34,451
volume (3)
Current
quarter vs       4      %     (1     )%     18     %     2      %     2      %
prior
quarter
Current
quarter vs       24     %     21     %      24     %     20     %     20     %
prior year
quarter
On eBay net
total
payment
volume as %      30     %     32     %      32     %     33     %     33     %
of net total
payment
volume
Merchant
Services net
total
payment          70     %     68     %      68     %     67     %     67     %
volume as %
of net total
payment
volume
                                                                    
Transaction
rates
Take rate        3.79   %     3.77   %      3.72   %     3.89   %     3.94   %
Transaction      1.04   %     1.05   %      1.03   %     1.07   %     1.07   %
expense
Loss rate        0.31   %     0.29   %      0.28   %     0.30   %     0.26   %
Transaction      64.4   %     64.4   %      64.7   %     64.8   %     66.3   %
margin (4)
                                                                    
Loan
portfolio
rates
Risk
adjusted         16.2   %     15.8   %      15.6   %     16.5   %     15.5   %
margin (5)
Net
charge-off       5.6    %     5.3    %      5.3    %     4.9    %     4.6    %
rate (6)
90-day
delinquency      2.7    %     2.7    %      2.7    %     2.9    %     2.5    %
rate (7)

      All registered accounts that successfully sent or received at least one
(1)  payment or payment reversal through the PayPal system or Bill Me Later
      accounts that are currently able to transact and that received a
      statement within the last 12 months.
      Number of payments, net of payment reversals, successfully completed
(2)   through our Payments networks, Bill Me Later accounts and Zong during
      the quarter, excluding PayPal's payments gateway business.
      Total dollar volume of payments, net of payment reversals, successfully
(3)   completed through our Payments networks, Bill Me Later accounts and Zong
      during the quarter, excluding PayPal's payment gateway business.
      Transaction margin calculation has been adjusted to include total
      revenues (including revenue from credit) less transaction expense
(4)   (including credit cost of funds) less transaction loss (including credit
      loan losses), divided by global take rate (based on global total
      revenues divided by total TPV).
      The risk adjusted margin represents the annualized ratio of Bill Me
(5)   Later revenue, excluding contra-revenue incentives to customers or
      merchants, less cost of funds, and less net credit and fraud losses
      relative to average loans receivable for the quarter.
(6)   Net charge-off rate represents the annualized ratio of Bill Me Later net
      credit losses relative to average loans receivable for the quarter.
      90-day delinquency rate is the ratio of Bill Me Later end of period
(7)   account balances that have missed three or more consecutive payments
      relative to total ending loan receivables.


eBay Inc.
Unaudited Marketplaces Supplemental Operating Data

               Three Months Ended
                June 30,     March 31,    December     September    June 30,
                                            31,           30,
                2013         2013         2012         2012         2012
                (In millions, except percentages)
Active Users      119.7         116.2         112.3         108.3         104.8
(1)
Current
quarter vs        3      %      3      %      4      %      3      %      2      %
prior quarter
Current
quarter vs        14     %      13     %      12     %      10     %      8      %
prior year
quarter
                                                                        
Gross
Merchandise
Volume          $ 18,292      $ 18,326      $ 19,105      $ 16,281      $ 16,171
(excluding
vehicles) (2)
Current
quarter vs        —      %      (4     )%     17     %      1      %      —      %
prior quarter
Current
quarter vs        13     %      13     %      16     %      11     %      10     %
prior year
quarter
U.S. GMV as %     40     %      40     %      38     %      40     %      39     %
of total GMV
International
GMV as % of       60     %      60     %      62     %      60     %      61     %
total GMV
                                                                        
Vehicles
Gross           $ 1,805       $ 1,686       $ 1,727       $ 1,994       $ 2,021
Merchandise
Volume (3)
Current
quarter vs        7      %      (2     )%     (13    )%     (1     )%     8      %
prior quarter
Current
quarter vs        (11    )%     (10    )%     (7     )%     (7     )%     (10    )%
prior year
quarter
                                                                        
Fixed Price
Trading (4)
as % of total     69     %      68     %      68     %      66     %      65     %
gross
merchandise
volume

eBay's classifieds websites, brands4friends and Shopping.com are not included
in these metrics.

      All users, excluding users of Half.com, StubHub, and our Korean
(1)  subsidiary, who bid on, bought, listed or sold an item within the
      previous 12-month period. Users may register more than once, and as a
      result, may have more than one account.
      Total value of all successfully closed items between users on
(2)   Marketplaces trading platforms during the quarter, regardless of whether
      the buyer and seller actually consummated the transaction, excluding
      vehicles gross merchandise volume.
      Total value of all successfully closed vehicle transactions between
(3)   users on Marketplaces trading platforms during the quarter, regardless
      of whether the buyer and seller actually consummated the transaction.
      Primarily, total gross merchandise volume related to eBay's “Buy It Now”
(4)   feature on Marketplaces trading platforms relative to total gross
      merchandise volume during the quarter.


eBay Inc.
Unaudited Enterprise Supplemental Operating Data

                  Three Months Ended
                   June 30,  March 31,  December 31,  September   June 30,
                                                         30,
                   2013      2013       2012          2012        2012
                   (In millions, except percentages)
GeC Merchandise    $  815     $  807      $  1,595       $  698       $ 674
Sales (1)
Current quarter       1   %      (49 %)      129    %       4    %      (6  %)
vs prior quarter
Current quarter
vs prior year         21  %      13  %       17     %       16   %    N/A
quarter

      Represents the retail value of all sales transactions, inclusive of
      freight charges and net of allowance for returns and discounts, which
(1)  flow through the Enterprise ecommerce services platform, whether we
      record the full amount of such transaction as a product sale or a
      percentage of such transaction as a service fee.
      

                                  eBay Inc.
                               Business Outlook
                   (In Millions, Except Per Share Amounts)

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 its most recent annual report on
Form10-K and subsequent quarterly reports on Form10-Q, copies of which may
be obtained by visiting the company's investor relations website at
http://investor.ebayinc.com or the SEC's website at www.sec.gov.

                                
                                         Three Months Ending
                                         September 30, 2013
              (In millions, except per   GAAP               Non-GAAP (a)
              share amounts)
              Net Revenue                $3,850 - $3,950      $3,850 - $3,950
              Diluted EPS                $0.49 - $0.51        $0.61 - $0.63
                                                              
                                                              
                                         Twelve Months Ending
                                         December 31, 2013
              (In millions, except per   GAAP                 Non-GAAP (b)
              share amounts)
              Net Revenue                $16,000 -            $16,000 -
                                         $16,500              $16,500
              Diluted EPS                $2.21 - $2.26        $2.70 - $2.75
                                                              

      Estimated non-GAAP amounts above for the three months ending September
      30, 2013, reflect adjustments that exclude the estimated amortization of
      acquired intangible assets of approximately $95-$105 million, estimated
(a)  stock-based compensation expense and employer payroll taxes on
      stock-based compensation expense of approximately $145-$155 million, and
      the accretion of a note receivable of approximately $15 million as well
      as the related tax impact.

      Estimated non-GAAP amounts above for the 12 months ending December 31,
      2013, reflect adjustments that exclude the estimated amortization of
      acquired intangible assets of approximately $380-$400 million, estimated
(b)   stock-based compensation expense and employer payroll taxes on
      stock-based compensation expense of approximately $580-$620 million, and
      the accretion of a note receivable of approximately $25 million as well
      as the related tax impact.
      

                                  eBay Inc.
                  Non-GAAPMeasures 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 margin, non-GAAP effective tax
rate, and free cash flow.

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 can be found in the tables included in this press
release.

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, significant gains or losses from the disposal/acquisition of a
business, 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 margin 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 is dependent on the company's stock price and
the timing and size of exercises by employees of their stock options and the
vesting of their restricted stock, 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, 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. In addition, the company's
results are also impacted by hedge transactions related to unique movements of
cash from significant business acquisitions or dispositions. The company
excludes the impact of the accretion of a note receivable associated with the
disposal of certain businesses. 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.

Tax effect of non-GAAP adjustments. This amount is used to present stock-based
compensation and the other amounts described above on an after-tax basis
consistent with the presentation of non-GAAP net income.

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, and
repurchase stock. 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.


eBay Inc.
Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin

                                            Three Months Ended
                                             June 30,            June 30,
                                             2013                 2012
                                             (In millions, except percentages)
GAAP operating income                        $    750             $   695
Stock-based compensation expense and         168                  129
related employer payroll taxes
Amortization of acquired intangible assets   19                   19
within cost of net revenues
Amortization of acquired intangible assets   82                  84        
within operating expenses
Total non-GAAP operating income              269                 232       
adjustments
Non-GAAP operating income                    $    1,019          $   927   
Non-GAAP operating margin                    26.3         %       27.3      %


Reconciliation of GAAP Net Income to Non-GAAP Net Income and
GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate

                                      Three Months Ended
                                       June 30,              June 30,
                                       2013                   2012
                                       (In millions, except per share amounts)
GAAP income before income taxes        $    756               $    851
GAAP provision for income taxes        (116         )         (159         )
GAAP net income                        $    640               $    692
Non-GAAP adjustments to net income:
Non-GAAP operating income              269                    232
adjustments (see table above)
Accretion of note receivable           (5           )         (5           )
Amortization of intangibles of         2                      —
investments
Gain on investment                     (5           )         —
Gain on divested business              —                      (118         )
Tax effect of non-GAAP adjustments     (79          )         (71          )
Non-GAAP net income                    $    822               $    730
                                                              
Diluted net income per share:
GAAP                                   $    0.49             $    0.53    
Non-GAAP                               $    0.63             $    0.56    
Shares used in GAAP and non-GAAP
diluted net income per-share           1,313                 1,309        
calculation
                                                              
GAAP effective tax rate                15           %         19           %
Tax effect of non-GAAP adjustments     4            %         5            %
to net income
Non-GAAP effective tax rate            19           %         24           %


Reconciliation of Operating Cash Flow to Free Cash Flow

                                           Three Months Ended
                                            June 30,   June 30,
                                            2013        2012
                                            (In millions)
Net cash provided by operating activities   $ 1,011     $  768
Less: Purchases of property and equipment   (353    )   (357   )
Free cash flow                              $ 658      $  411 

Contact:

eBay Inc.
Investor Relations Contact:
Tracey Ford
tford@ebay.com
Tom Hudson
thhudson@ebay.com
or
Media Relations Contact:
Amanda Miller
press@ebay.com
or
Investor Information Request:
408-376-7493
or
Company News:
http://www.ebayinc.com/news
or
Investor Relations website:
http://investor.ebayinc.com
 
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