eBay Inc. reports fourth quarter and full year 2017 results

eBay delivers record fourth quarter driven by strong holiday performance

Source: Marko Greitschus / pixelio.de

eBay Inc., a global commerce leader, delivered revenue for the quarter ended December 31, 2017 of $2.6 billion, increasing 9% on an as-reported basis and 7% on a foreign exchange (FX) neutral basis, primarily driven by gross merchandise volume (GMV) of $24.4 billion, up 10% on an as-reported basis and 7% on an FX-Neutral basis.

During the quarter, eBay delivered GAAP net loss from continuing operations of $2.6 billion, or $(2.51) per diluted share primarily driven by a $3.1 billion tax charge attributable to the enactment of the Tax Cuts and Jobs Act. Non-GAAP net income from continuing operations was $618 million, or $0.59 per diluted share. The company generated $988 millionof operating cash flow and $796 million of free cash flow from continuing operations while also repurchasing $922 million of its common stock in the quarter.

"Q4 was a record quarter for eBay, representing the fifth quarter in a row of volume acceleration in our US Marketplace," said Devin Wenig, President and CEO of eBay Inc. "We have made great progress transforming eBay while delivering meaningful growth and we expect further acceleration in 2018 as we continue to execute our strategy."

In the fourth quarter, eBay grew active buyers by 5% across its platforms, for a total of 170 million global active buyers. Underlying total eBay Inc. performance, the Marketplace platforms delivered $23.0 billion of GMV and $2.1 billion of revenue. Marketplace GMV was up 9% on an as-reported basis and 6% on an FX-Neutral basis, driven by strong holiday performance in the US and continued expansion of new user experiences, which led to revenue growth of 8% on an as-reported basis and 6% on an FX-Neutral basis. StubHub drove GMV of $1.4 billion, up 16% on an as-reported basis and 15% on an FX-Neutral basis, and revenue of $307 million, up 10% on both an as-reported basis and FX-Neutral basis driven by a strong concerts and sports landscape. Classifieds platforms delivered another quarter of double-digit growth with revenue of $244 million, up 21% on an as-reported basis and 13% on an FX-Neutral basis, driven primarily by strength in Germany.

For the full year 2017, eBay Inc. delivered revenue of $9.6 billion, growing 7% on both an as-reported basis and FX-Neutral basis primarily driven by GMV of $88.4 billion, up 6% on both an as-reported basis and FX-Neutral basis. The company delivered strong operating and free cash flow on a continuing operations basis, generating $3.1 billion and $2.5 billion, respectively, during 2017. eBay also returned $2.7 billion of capital to shareholders through repurchases of its common stock.

Business Outlook

Please note that eBay's 2018 Business Outlook includes the impact of adopting the Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers.

Exhibit A, included in this document, presents a reconciliation of the impact of adoption on eBay's 2017 and 2016 Income Statement to enable investors to better understand normalized growth comparisons for the company's 2018 Business Outlook.

First quarter 2018 — The company expects net revenue between $2.57 billion and $2.61 billion, representing FX-Neutral growth of 7% - 9%, with GAAP earnings per diluted share from continuing operations in the range of $0.37- $0.41 and non-GAAP earnings per diluted share from continuing operations in the range of $0.52 - $0.54.

Full year 2018 — The company expects net revenue between $10.9 billion and $11.1 billion, representing FX-Neutral growth of 7% - 9%, with GAAP earnings per diluted share from continuing operations in the range of $1.65 - $1.75and non-GAAP earnings per diluted share from continuing operations in the range of $2.25 - $2.30.

In January 2018, eBay's board of directors authorized an additional $6.0 billion stock repurchase program, with no expiration from the date of authorization. The company's stock repurchase program is intended to programmatically offset the impact of dilution from its equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of its common stock to reduce its outstanding share count. Any share repurchases under the company's stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means at times and in such amounts as management deems appropriate and will be funded from the company's working capital or other financing alternatives.