Ebay Inc. said its GSI Commerce segment, which was acquired in the second quarter of 2011, contributed $237 million in revenue for its first quarter. GSI generated $715 million in global e-commerce (GeC) merchandise sales during the quarter. Same-store sales grew 26 percent year over year, reflecting strong e-commerce sales from retail clients.
Overall, eBay Inc. reported that revenue for the first quarter ended March 31, increased 29 percent to $3.3 billion, compared to the same period of 2011. The company reported first quarter net income on a GAAP basis of $570 million, or 44 cents per diluted share, and non-GAAP net income of $725 million, or 55 cents per diluted share. The year-over-year increase in first quarter GAAP and non-GAAP earnings per diluted share was driven primarily by strong top-line growth, partially offset by increased investment in the shopping experience and the impact of acquisitions.
“The first quarter was a strong start to the year for us with momentum continuing in our Marketplaces, PayPal and GSI Commerce businesses,” said eBay Inc. President and CEO John Donahoe. “We believe that innovation in retail today is technology driven, and consumers are embracing smarter, easier, better ways to shop. We are enabling commerce in this new retail environment, supporting and partnering with sellers of all sizes and giving consumers worldwide the ability to shop anytime, anywhere, for whatever they want.”
The company's PayPal business delivered strong first quarter performance. PayPal ended the quarter with 109.8 million active registered accounts, a 12 percent increase over the first quarter of 2011. PayPal revenue increased 32 percent year over year, driven primarily by increased penetration on eBay as well as continued merchant and consumer adoption. PayPal's net total payment volume (TPV) grew 24 percent year over year to $34 billion. PayPal continues to invest in innovation, focusing on its core platform as well as mobile and point of sale initiatives.
The company's Marketplaces business also delivered strong first quarter performance. Gross merchandise volume (GMV) excluding vehicles increased 12 percent year over year to $16 billion. Sold items increased 17 percent compared to the first quarter of 2011, reflecting the continued impact of improvements to eBay's core technology that are designed to make it easier and faster for shoppers to browse and buy.
First Quarter 2012 Financial Highlights (presented in millions, except per share data and percentages)
| First Quarter | ||||||||
| 2012 | 2011 | Change | ||||||
| GAAP | ||||||||
| Net revenue | $3,277 | $2,546 | $731 | 29% | ||||
| Net income | $570 | $476 | $94 | 20% | ||||
| Earnings per diluted share | $0.44 | $0.36 | $0.08 | 21% | ||||
| Non-GAAP | ||||||||
| Net income | $725 | $619 | $106 | 17% | ||||
| Earnings per diluted share | $0.55 | $0.47 | $0.08 | 18% | ||||
| First Quarter | ||||||||
| 2012 | 2011 | Change | ||||||
| Business Units | ||||||||
| Payments | ||||||||
| Net revenue | $1,309 | $993 | $316 | 32% | ||||
| Net total payment volume | $33,857 | $27,362 | $6,495 | 24% | ||||
| Merchant Services | $22,433 | $17,567 | $4,866 | 28% | ||||
| On eBay | $11,424 | $9,795 | $1,629 | 17% | ||||
| Marketplaces | ||||||||
| Net revenue | $1,728 | $1,553 | $175 | 11% | ||||
| Gross merchandise volume (excl. vehicles) | $16,206 | $14,496 | $1,710 | 12% | ||||
| U.S. | $6,366 | $5,631 | $735 | 13% | ||||
| International | $9,840 | $8,865 | $975 | 11% | ||||
| GSI | ||||||||
| Net revenue | $237 | $- | $237 | N/A | ||||
| GeC Merchandise Sales | $715 | $- | $715 | N/A | ||||
Other Selected Financial Results
- Operating margin – GAAP operating margin decreased to 19.9 percent for the first quarter of 2012, compared to 22.2 percent for the same period last year. Non-GAAP operating margin decreased to 26.9 percent for the quarter, compared to 29.4 percent for the same period last year. The decrease in GAAP and non-GAAP operating margin was due primarily to the impact of acquisitions and business mix.
- Taxes – The GAAP effective tax rate for the first quarter of 2012 was 17 percent, compared to 16 percent for the first quarter of 2011. For the first quarter of 2012 and 2011, the non-GAAP effective tax rate was 20 percent and 19 percent, respectively.
- Cash flow – The company generated $531 million of operating cash flow and $289 million of free cash flow during the first quarter, which were negatively impacted by a one-time tax payment of approximately $300 million related to the gain on the sale of our remaining equity interest in Skype in fourth quarter 2011.
- Stock repurchase program – The company repurchased approximately $240 million of its common stock in the first quarter.
- Cash and cash equivalents and non-equity investments – The company's cash and cash equivalents and non-equity investments portfolio totaled $7.8 billion at March 31, 2012 up from $7.5 billion at December 31, 2011.
Business Outlook
- Second quarter 2012 – eBay expects net revenues in the range of $3.25 – $3.35 billion with GAAP earnings per diluted share in the range of 49 – 51 cents and non-GAAP earnings per diluted share in the range of 53 – 55 cents.
- Full year 2012 – eBay now expects net revenues in the range of $13.8 – $14.1 billion with GAAP earnings per diluted share in the range of $1.91 – $1.96 and non-GAAP earnings per diluted share in the range of $2.30 – $2.35.
