*Revenue of
*Gross Merchandise Volume of
*GAAP and Non-GAAP EPS per diluted share of
*GAAP and Non-GAAP operating margin of 22.5% and 29.9%, respectively
*Returned over
*Board of Directors declared a quarterly dividend of
"In 2022, we made significant progress on our multi-year strategic journey," said
"Our Q4 results demonstrate the continued resilience of our marketplace amid economic uncertainty," 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 22.5% and 29.9%, respectively.
*Generated
*Returned over
*Issued
Full Year Financial Highlights
*Revenue was
*GMV was
*GAAP net loss from continuing operations was
*Non-GAAP net income from continuing operations was
*GAAP and Non-GAAP operating margin was 24.0% and 30.0%, respectively.
*Generated
*Sold shares in
*Returned over
Business Highlights
Revenue Initiatives
*
*The company's total advertising offerings generated over
*For sellers who use Promoted Listings Advanced,
*During the quarter,
*In Australia,
Tech-Led Reimagination of the Platform
*
*
*To further improve trust for Motors Parts and Accessories (P&A) buyers,
*In Q4,
*
*
*In
Impact
*In 2022,
*In recognition of the company's sustainability efforts,
*During the quarter,
*
*The company launched the
*The
*
Fourth Quarter and Full Year 2022 Financial Highlights (presented in millions, except per share data and percentages)
Fourth Quarter
Full Year
2022
2021
Change
2022
2021
Change
Net revenues
(4) %
(6) %
GAAP - Continuing Operations
Income (loss) from continuing
operations
**
**
Earnings (loss) per diluted share
from continuing operations
**
**
Non-GAAP - Continuing
Operations
Net income
(10) %
(13) %
Earnings per diluted share
2 %
2 %
** Not meaningful
Other Selected Financial and Operational ResultsOperating margin - GAAP operating margin decreased to 22.5% for the fourth quarter of 2022, compared to 26.3% for the same period last year. Non-GAAP operating margin decreased to 29.9% in the fourth quarter of 2022, compared to 31.6% for the same period last year.Taxes - The GAAP effective tax rate for continuing operations for the fourth quarter of 2022 was 19.1%, compared to 23.1% for the fourth quarter of 2021. The non-GAAP effective tax rate for continuing operations for the fourth quarter of 2022 was 16.5%(1).Cash flow - The company generated
Business Outlook
In billions, except per share data and percentages
Q1 2023 Guidance
Revenue
Organic FX-Neutral Y/Y Growth
0% - 2%
Diluted GAAP EPS
Diluted Non-GAAP EPS
Dividend DeclarationeBay's Board of Directors has declared a cash dividend of
(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 investors.ebayinc.com or the
Unaudited Condensed Consolidated Balance Sheet
2022
2021
(In millions)
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
2,625
5,944
Equity investment in
2,692
-
Customer accounts and funds receivable
763
681
Other current assets
1,056
1,107
Total current assets
9,290
9,111
Long-term investments
1,797
2,575
Property and equipment, net
1,238
1,236
4,262
4,178
Operating lease right-of-use assets
513
289
Deferred tax assets
3,169
3,255
Equity investment in
-
5,391
Other assets
581
591
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt
Accounts payable
261
262
Customer accounts and funds payable
768
707
Accrued expenses and other current liabilities
1,866
1,927
Income taxes payable
226
371
Total current liabilities
4,271
4,622
Operating lease liabilities
418
200
Deferred tax liabilities
2,245
3,116
Long-term debt
7,721
7,727
Other liabilities
1,042
1,183
Total liabilities
15,697
16,848
Total stockholders' equity
5,153
9,778
Total liabilities and stockholders' equity
Unaudited Condensed Consolidated Statement of Income
Three Months Ended
Year Ended
2022
2021
2022
2021
(In millions, except per share amounts)
Net revenues
Cost of net revenues (1)
681
694
2,680
2,650
Gross profit
1,829
1,919
7,115
7,770
Operating expenses:
Sales and marketing (1)
554
569
2,136
2,170
Product development (1)
340
337
1,330
1,325
General and administrative (1)
288
206
963
921
Provision for transaction losses
81
119
332
422
Amortization of acquired intangible assets
1
-
4
9
Total operating expenses
1,264
1,231
4,765
4,847
Income from operations
565
688
2,350
2,923
Gain (loss) on equity investments and warrant, net
319
(1,875)
(3,786)
(2,365)
Interest and other, net
(55)
26
(165)
(160)
Income (loss) from continuing operations before income
taxes
829
(1,161)
(1,601)
398
Income tax benefit (provision)
(158)
268
327
(146)
Income (loss) from continuing operations
671
(893)
(1,274)
252
Income (loss) from discontinued operations, net of income
taxes
1
2,862
5
13,356
Net income (loss)
Income (loss) per share - basic
Continuing operations
Discontinued operations
0.00
4.72
0.01
20.48
Net income (loss) per share - basic
Income (loss) per share - diluted:
Continuing operations
Discontinued operations
0.00
4.72
0.01
20.16
Net income (loss) per share - diluted
Weighted average shares:
Basic
541
606
558
652
Diluted
544
606
558
663
(1) Includes stock-based compensation as follows:
Cost of net revenues
Sales and marketing
16
13
73
83
Product development
62
49
222
196
General and administrative
37
38
148
151
Unaudited Condensed Consolidated Statement of Cash Flows
Three Months Ended
Year Ended
2022
2021
2022
2021
(In millions)
Cash flows from operating activities:
Net income (loss)
(Income) from discontinued operations, net of income taxes
(1)
(2,862)
(5)
(13,356)
Adjustments:
Provision for transaction losses
81
119
332
422
Depreciation and amortization
107
122
442
502
Stock-based compensation
128
112
494
477
Loss (gain) on investments and other, net
14
(120)
21
(159)
Deferred income taxes
27
(721)
(780)
(680)
Change in fair value of warrant
(16)
29
230
(354)
Change in fair value of equity investment in
(282)
1,573
2,691
3,070
Change in fair value of equity investment in Adyen
-
10
261
10
Change in fair value of equity investment in
(5)
3
294
3
Change in fair value of equity investment in
(28)
109
293
(486)
Loss on impairment of equity investment in
-
160
-
160
Loss on extinguishment of debt
-
-
-
10
Changes in assets and liabilities, net of acquisition effects
(11)
(28)
(377)
(134)
Net cash provided by continuing operating activities
686
475
2,627
3,093
Net cash used in discontinued operating activities
(2)
(182)
(373)
(436)
Net cash provided by operating activities
684
293
2,254
2,657
Cash flows from investing activities:
Purchases of property and equipment
(153)
(103)
(449)
(444)
Purchases of investments
(3,311)
(7,058)
(18,534)
(22,161)
Maturities and sales of investments
2,379
5,018
20,626
18,770
Proceeds from sale of shares in
8
2,325
8
2,325
Proceeds from sale of shares in Adyen
-
-
800
-
Proceeds from sale of shares in
-
-
287
114
Acquisition of TCGplayer, net of cash acquired
(208)
-
(208)
-
Settlement of foreign exchange derivative instruments in equity
investments
-
85
-
85
Exercise of options under warrant
-
(110)
-
(110)
Other
(9)
(9)
(71)
4
Net cash provided by (used in) continuing investing activities
(1,294)
148
2,459
(1,417)
Net cash provided by discontinued investing activities
-
2,637
2
5,080
Net cash provided by (used in) investing activities
(1,294)
2,785
2,461
3,663
Cash flows from financing activities:
Proceeds from issuance of common stock
32
36
87
93
Repurchases of common stock
(315)
(3,089)
(3,143)
(7,055)
Payments for taxes related to net share settlements of restricted
stock units and awards
(30)
(50)
(160)
(236)
Payments for dividends
(119)
(107)
(489)
(466)
Proceeds from issuance of long-term debt, net
1,143
-
1,143
2,478
Repayment of debt
-
-
(1,355)
(1,156)
Net funds receivable and payable activity
33
(99)
125
(208)
Other
-
(1)
-
(7)
Net cash provided by (used in) continuing financing activities
744
(3,310)
(3,792)
(6,557)
Net cash provided by discontinued financing activities
-
23
-
25
Net cash provided by (used in) financing activities
744
(3,287)
(3,792)
(6,532)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
32
(6)
(57)
24
Net increase (decrease) in cash, cash equivalents and restricted cash
166
(215)
866
(188)
Cash, cash equivalents and restricted cash at beginning of period
2,106
1,621
1,406
1,594
Cash, cash equivalents and restricted cash at end of period
Unaudited Summary of Consolidated Net Revenues
Three Months Ended
2022
2022
2022
2022
2021
(In millions, except percentages)
Total net revenues (1)(2)(3)
Current quarter vs prior year quarter
(4) %
(5) %
(9) %
(6) %
5 %
Percent from international
51 %
50 %
51 %
51 %
52 %
(1) Hedge gain/(loss)
$ -
(2) Foreign currency impact
(3)
Beginning in the fourth quarter of 2022, we present revenues generated from our Marketplace GMV and from 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.
Unaudited Supplemental Operating Data
Three Months Ended
2022
2022
2022
2022
2021
(In millions, except percentages)
Active Buyers (1)
134
135
138
142
147
Current quarter vs prior year quarter
(9) %
(11) %
(12) %
(13) %
(9) %
Active Buyers excluding GittiGidiyor
and TCGplayer (2)
132
133
135
138
143
Current quarter vs prior year quarter
(8) %
(10) %
(11) %
(12) %
(8) %
Gross Merchandise Volume (3)
Current quarter vs prior year quarter
(9) %
(7) %
(13) %
(14) %
(2) %
International
Current quarter vs prior year quarter
(15) %
(15) %
(22) %
(24) %
(16) %
Total Gross Merchandise Volume
Current quarter vs prior year quarter
(12) %
(11) %
(18) %
(20) %
(10) %
(1)
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. Revenue guidance is provided on an FX-Neutral basis and excludes incremental revenue from acquisitions or dispositions for the twelve-month period following such acquisitions or dispositions. 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 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 Revenue
Diluted EPS from continuing operations
(a) Estimated non-GAAP amounts above for the three months ending
estimated amortization of acquired intangible assets of approximately
expense and associated employer payroll tax expense of approximately
our GAAP and non-GAAP tax rate of approximately
assume any gains or losses on our equity investments.
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 applied to current year transactional currency amounts. The company defines organic FX-Neutral revenue growth as reported revenue growth, excluding incremental revenue from acquisitions or dispositions for the twelve-month period following such acquisitions or dispositions and foreign exchange rate effects.
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.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income*
Three Months Ended
Year Ended
2022
2021
2022
2021
(In millions, except percentages)
GAAP operating income
Stock-based compensation expense and related employer
payroll taxes
130
115
507
489
Amortization of acquired intangible assets within cost of net
revenues and operating expenses
5
-
9
9
Other significant gains, losses or charges
50
23
73
58
Total non-GAAP operating income adjustments
185
138
589
556
Non-GAAP operating income
Non-GAAP operating margin
29.9 %
31.6 %
30.0 %
33.4 %
*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
2022
2021
2022
2021
(In millions, except per share amounts and percentages)
GAAP income (loss) from continuing operations before income
taxes
GAAP (provision) benefit for income taxes
(158)
268
327
(146)
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)
Loss on investments
(20)
275
861
(361)
Change in fair market value of warrant
(16)
29
230
(354)
Change in fair value of equity investment in
(282)
1,573
2,691
3,070
Other significant gains, losses or charges
-
(71)
(1)
(85)
Income tax effects and adjustments
43
(404)
(784)
(417)
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
544
606
558
663
Shares used in non-GAAP diluted net income per-share
calculation
544
615
562
663
GAAP effective tax rate - Continuing operations
19.1 %
23.1 %
20.4 %
36.6 %
Income tax effects and adjustments to net income (loss) from
continuing operations
(2.6) %
(5.8) %
(3.9) %
(19.2) %
Non-GAAP effective tax rate - Continuing operations
16.5 %
17.3 %
16.5 %
17.4 %
Reconciliation of Operating Cash Flow to Free Cash Flow
Three Months Ended
Year Ended
2022
2021
2022
2021
(In millions)
Net cash provided by continuing operating activities
Less: Purchases of property and equipment
(153)
(103)
(449)
(444)
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) 2023 M2 COMMUNICATIONS, source