eBay Reports Record Revenue for First Quarter

San Jose, California - (Cheap Web Hosting Directory) - April 24, 2007 - E-commerce company, eBay Inc., has released its first quarter 2007 financial results, reporting record Q1 net revenues of $1.77 billion, with a Q1 GAAP diluted EPS of $0.27, and non-GAAP diluted EPS of $0.33.

Meg Whitman, President and Chief Executive Officer of eBay Inc. remarked, ”This first quarter of 2007 was a very strong one for the company. The strength of our core businesses, as well as the significant traction we’re beginning to see across our newer businesses, helped us deliver great results across the board.”

In addition, eBay reported record consolidated Q1-07 net revenues of $1.77 billion, representing a growth rate of 27% year over year. GAAP operating income was $468 million, an increase of 45% year over year, and represented 26.5% of net revenues. Non-GAAP operating income in Q1-07 was $593 million, representing a 33.6% operating margin and a 29% year-over-year increase.

GAAP net income in Q1-07 increased 52% year over year to $377 million, or $0.27 earnings per diluted share. Non-GAAP net income increased 34% year over year to $460 million, or $0.33 earnings per diluted share. GAAP and non-GAAP earnings per diluted share increased 59% and 39% year over year, respectively.

The company purchased approximately 10 million shares of its common stock at a total cost of approximately $333 million during the quarter and may purchase up to an additional $2.0 billion of common stock through January 2009 under its stock repurchase program.

eBay reported that its Marketplaces business had another solid quarter, highlighted by good conversion rates and ASPs, and great results from our non-Gross Merchandise Volume (GMV) driven businesses, which include Shopping.com, Rent.com and our Classifieds portfolio. Marketplaces net revenues totaled a record $1.25 billion in Q1-07, a growth rate of 23% over the $1.02 billion reported in Q1-06. The eBay platform confirmed registered user base at the end of Q1-07 totaled 233 million, representing a 21% increase over the 193 million registered users reported at the end of Q1-06.

eBay’s users generated a total of 588 million listings in Q1-07, 2% higher than the 575 million listings reported in Q1-06. These listings led to eBay GMV of $14.28 billion in Q1-07, representing a 14% year-over-year increase from the $12.50 billion reported in Q1-06.

PayPal had a excellent quarter, with robust Total Payment Volume (TPV) growth, driven by increased eBay penetration around the world and another outstanding performance from its Merchant Services business. PayPal net revenues totaled $439 million in Q1-07, a growth rate of 31% over the $335 million reported in Q1-06. PayPal had 143 million total accounts at the end of Q1-07, a 36% increase from the 105 million reported at the end of Q1-06. Those accounts helped drive record TPV of $11.36 billion in Q1-07, a 30% increase from the $8.77 billion reported in Q1-06. PayPal Merchant Services contributed a record $4.38 billion to the $11.36 billion in global TPV in Q1-07, representing a 51% increase from the $2.91 billion reported in Q1-06.

Q1-07 was a very productive quarter for Skype, with continued momentum in user growth, and the launch of several new products intended to build community engagement and fuel Skype monetization over time. Skype net revenues totaled $79 million in Q1-07, a growth rate of 123% over the $35 million reported in Q1-06. Skype had 196 million registered users at the end of Q1-07, representing a 107% increase from the 95 million users at the end of Q1-06.

GAAP operating margin increased to 26.5% in Q1-07, up from 23.2% in Q1-06. Non-GAAP operating margin increased to 33.6% in Q1-07, from 33.1% in Q1-06. The year-over-year increase in non-GAAP operating margin is the result of continued expense leverage and productivity and the benefit of a weaker U.S. dollar, which was offset by the negative gross margin mix impact coming from our higher growth, lower margin businesses of PayPal and Skype.

The GAAP effective tax rate for Q1-07 was 24%, which was a decrease from 29% for Q1-06 and 28% in Q4-06. The non-GAAP effective tax rate in Q1-07 was 26%, which was a decrease from 29% for Q1-06 and Q4-06. The lower tax rates in Q1-07 resulted primarily from expansion of our international operations and tax regulations affecting the allocation of costs to our international businesses. During Q1-07, the company implemented Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes which resulted in a reclassification of certain tax liabilities from current to non-current on the balance sheet and had no impact on net income.

Cash Flows - GAAP operating cash flows decreased 3% year over year to $564 million in Q1-07. Free cash flow increased to $479 million in Q1-07 compared to $451 million in Q1-06. The company’s cash, cash equivalents, and investments totaled approximately $3.50 billion at the end of Q1-07.

Bob Swan, Chief Financial Officer at eBay Inc. added, ”Our Q1 results reflect a strong start to 2007. We delivered solid revenue growth, expanded operating margins and strong earnings and free cash flow, while deploying capital to strengthen our business with our acquisition of StubHub and our continued share repurchase program.”

Second Quarter 2007 - eBay expects consolidated net revenues for Q2 2007 to be in the range of $1.750 billion to $1.800 billion. Non-GAAP earnings per diluted share for Q2 2007 are expected to be in the range of $0.31 to $0.33. These amounts assume a US dollar to Euro exchange rate of $1.30.

Full Year 2007 - eBay now expects consolidated net revenues for 2007 to be in the range of $7.200 billion to $7.450 billion. Non-GAAP operating margin for 2007 is expected to be 33%. Non-GAAP earnings per diluted share for 2007 are now expected to be in the range of $1.30 to $1.34. These amounts assume a US dollar to Euro exchange rate of $1.30.

A live webcast of the conference call, together with a slide presentation which 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.ebay.com. In addition, an archive of the webcast will be accessible through the same link.

Founded in 1995, eBay created communities built on commerce, sustained by trust, and inspired by opportunity. eBay enables ecommerce on a local, national and international basis with an array of websites, including the eBay Marketplaces, PayPal, Skype, Kijiji, Rent.com and Shopping.com.

To learn more, please visit: www.ebay.com.