Slide 1: Q3 2020 Financial Highlights
Q3 2020 FINANCIAL HIGHLIGHTS October 28, 2020
Slide 2: Disclosures
DISCLOSURES This presentation contains non-GAAP measures relating to our performance. You can find the reconciliation of these measures, except for FX-Neutral basis, to the nearest comparable GAAP measures in the appendix at the end of this presentation. All growth rates represent year-over-year com
Slide 3: CFO Comments
CFO COMMENTS
Slide 4: Q3 Guidance Reconciliation
Q3 GUIDANCE RECONCILIATION July 28, 2020 Implied Q3 2020 Guidance Guidance excl. Classifieds* Low High Classifieds Low High Impact Revenue. $2.64 $2.71 $(0.26)B $2.38 $2.45 (in billions) . Y/Y Growth. 13% 16% 14% 18% Organic FX-Neutral Y/Y Growth. 14% 17% 16% 19% Non-GAAP EPS. $0.81 $0.87 $(0.13) $0
Slide 5: FY Guidance Reconciliation
FY GUIDANCE RECONCILIATION July 28, 2020 Classifieds Implied FY 2020 Guidance Guidance Impact excl. Classifieds* Revenue (in billions) $10.56 - $10.75 $(0.97) $9.59 - $9.78 Y/Y Growth 9-11% 11-13% Organic FX-Neutral Y/Y Growth 12-14% 14-16% Non-GAAP Operating Margin 30.5% - 31.5% (0.5)pts 30.0% - 31
Slide 6: Q3 Highlights
Q3 HIGHLIGHTS • Revenue of $2.6B, up 25% Y/Y (+26% Y/Y Organic FX-Neutral) • GAAP EPS of $0.88 and Non-GAAP EPS of $0.85 • GAAP operating margin of 26%, up 6pts Y/Y • Non-GAAP operating margin of 31%, up 4pts Y/Y • Generated $716M of Operating Cash Flow and $584M of Free Cash Flow • Returned $811M t
Slide 7: Active Buyers
ACTIVE BUYERS (millions) 182 183 173 174 174 174 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 T12M Y/Y Growth 4% 4% 2% 2% 5% 5% 7 All reported results are from continuing operations
Slide 8: GMV
GMV ($ millions) 21,484 20,489 21,966 21,259 27,135 25,049 Int’l 16,646 15,259 • Q3 FX-Neutral B2C GMV up 19% Y/Y and 13,695 14,272 13,628 FX-Neutral C2C GMV 13,155 up 28% Y/Y US 7,789 7,334 7,694 7,631 10,489 9,790 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 US Y/Y Growth (6)% (6)% (9)% (4)% 35% 33% Int’l
Slide 9: Revenue
REVENUE ($ millions) 2,156 2,083 2,236 2,129 2,668 2,606 • Q3 FX-Neutral Transaction Revenue 221 251 up 28% Y/Y … decelerating 5pts MS&O 269 254 259 229 Q/Q • Q3 FX-Neutral MS&O 2,447 2,355 Revenue down 1% 1,887 1,829 1,977 1,900 Y/Y, driven by B4F divestiture in 2019 Transaction and KO 1P growth ..
Slide 10: Non-GAAP Expenses
NON-GAAP EXPENSES (% of revenue) Operating Expense at 44.6%, down ~3pts Y/Y Cost of Revenue Sales & Marketing Product Development General & Admin Transaction Losses 24.9% 24.7% 26.7% 24.4% 9.7% 9.6% 8.7% 8.3% 3.3% 2.3% Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Volume leverage, Volu
Slide 11: Non-GAAP EPS
NON-GAAP EPS • Q3 Non-GAAP Operating Margin up 4pts Y/Y, with volume leverage and continued cost control being offset by investments in payments and marketing $1.02 • Q3 Non-GAAP EPS Y/Y $0.85 growth driven by higher $0.66 $0.69 revenue and net $0.54 $0.52 benefit of share repurchases, partially off
Slide 12: Free Cash Flow
FREE CASH FLOW ($ millions) • Q3 FCF down 18% Y/Y 836 driven by timing of cash 709 taxes, partially offset by 565 584 higher earnings 517 461 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Y/Y Growth ** ** ** 59% 81% (18)% CapEx % of Revenue 6% 4% 6% 5% 4% 5% FCF % of Revenue 21% 34% 25% 24% 31% 22% 12 Calcula
Slide 13: 2020 Cash & Debt
2020 CASH & DEBT Capital Allocation Tenets • Preserve financial flexibility to execute on strategy and drive long-term value creation $4.1 • Drive organic growth while balancing profitability Debt Net Debt • Supplement organic growth with disciplined acquisitions and investments Q3 20 Ending Cash an
Slide 14: Classifieds Transaction Update
CLASSIFIEDS TRANSACTION UPDATE $11.2B Key Updates Share Value $2.0 Appreciation • Expect to close in Q1’2021, subject to regulatory $9.2B approvals • Value based on 44% expected share ownership • Expect ~$2.0B cash proceeds net of tax at close ADE @ ADE @ $6.7 Original $6.7 151 NOK 115 NOK Share Val
Slide 15: Guidance
GUIDANCE Q4 20 Q4 Guidance Context Low High • Revenue growth driven by: Revenue. • Low double digit Marketplace Volume growth and (in billions) . $2.64 $2.71 Managed Payments contribution to growth of ~8 pts Y/Y Growth. 18% 21% • Non-GAAP EPS growth driven by: Organic FX-Neutral Y/Y Growth. 19% 22%
Slide 16: Q&A
Q&A
Slide 17: Appendix
APPENDIX
Slide 18: Internet Sales Tax Impact on MP US GMV
INTERNET SALES TAX IMPACT ON MP US GMV 39% US GMV 37% Growth x IST ~ 4 pts ~ 4 pts IST Impact +2% 35% US GMV 33% Growth -3% ~ 6 pts -3% -5% -6% ~ 3 pts ~ 1 pt ~ 6 pts ~ 1 pt -4% -7% -6% -6% -9% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 New States: 3 5 14 11 5 1 2 Total States: 3 8 22 33 38 39 41 Lar
Slide 19: Reconciliations
RECONCILIATIONS
Slide 20: GAAP to Non-GAAP Quarterly Reconciliations: Operating Margin
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS OPERATING MARGIN Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2019 2019 2019 2020 2020 2020 (in millions, except percentages) GAAP operating income 464 408 478 565 790 $ 679 Stock-based compensation expense and rel
Slide 21: GAAP to Non-GAAP Quarterly Reconciliations: Net Income / EPS
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS NET INCOME / EPS Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2019 2019 2019 2020 2020 2020 (in millions, except per share data) GAAP Income from continuing operations 377 210 469 431 709 $ 621 Stock-based compensa
Slide 22: GAAP to Non-GAAP Quarterly Reconciliations: Statement of Income
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS STATEMENT OF INCOME Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Reported Non-GAAP Entries Non-GAAP Reported Non-GAAP Entries Non-GAAP (in millions, except per share data and percentages) Net revenues $ 2,606 $ - $ 2,606 $ 2,0
Slide 23: Calculation of Free Cash Flow
CALCULATION OF FREE CASH FLOW Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2019 2019 2019 2020 2020 2020 (in millions, except percentages) Net cash provided by continuing operating activities 590 801 694 614 933 716 Less: Purchases of property and equipment
Slide 24: Reconciliation of Total Revenue
RECONCILIATION OF TOTAL REVENUE Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2019 2019 2019 2020 2020 2020 (in millions, except percentages) Net Revenues by Type Net Transaction Revenues (2) $ 1,887 $ 1,829 $ 1,977 $ 1,900 $ 2,447 $ 2,355 Marketing services
Slide 25: Reconciliation of Organic FX-Neutral Revenue
RECONCILIATION OF ORGANIC FX-NEUTRAL REVENUE Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2019 2019 2019 2020 2020 2020 As Reported Revenue Growth 1% (1)% (3)% (1)% 24 % 25 % Acquisition/Disposition Impact —% 1% 2% 2% 2% 1% Foreign Currency Impact 2% 2% 1%
Slide 26: GAAP to Non-GAAP Reconciliations: Guidance
GAAP TO NON-GAAP RECONCILIATIONS GUIDANCE Three Months Ending December 31, 2020 (in billions, except per share amounts) GAAP Non-GAAP (a) Net Revenue $2.64 - $2.71 $2.64 - $2.71 Diluted EPS $0.58 - $0.64 $0.78 - $0.84 Twelve Months Ending December 31, 2020 (in billions, except per share amounts) GAA
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