Slide 1: Q3 2019 Financial Highlights
Q3 2019 FINANCIAL HIGHLIGHTS October 23, 2019
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 Highlights
Q3 HIGHLIGHTS • Revenue of $2.6B, flat Y/Y (up 2% FX-Neutral) • GAAP EPS of $0.37 and Non-GAAP EPS of $0.67 • GAAP operating margin of 20%, down 1pt Y/Y • Non-GAAP operating margin of 27%, flat Y/Y • Generated $1.0B of Operating Cash Flow and $913M of Free Cash Flow • Returned $1.1B to shareholders
Slide 5: Trailing 12-Month Active Buyers
TRAILING 12-MONTH ACTIVE BUYERS (millions) 183 182 179 180 177 175 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Y/Y Growth 4% 4% 4% 4% 4% 4% 5
Slide 6: GMV
GMV ($ millions) 23,629 22,719 24,641 22,589 22,601 21,721 14,357 14,883 13,708 13,701 13,768 13,232 Int’l 9,272 9,011 9,758 8,888 8,833 8,489 US Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 US Y/Y Growth 5% 3% (1)% (6)% (5)% (6)% Int’l FX-Neutral Y/Y Growth 7% 7% 5% 3% 2% 1% Total FX-Neutral Y/Y Growth 7% 5
Slide 7: Revenue
REVENUE ($ millions) 2,640 2,649 2,877 2,643 2,687 2,649 582 563 560 535 557 534 • Q3 FX-Neutral MS&O Transaction Revenue up 3% Y/Y … down 1pt Q/Q 2,295 • Q3 FX-Neutral MS&O 2,077 2,089 2,108 2,130 2,115 Transaction Revenue down 2% Y/Y ... down 6pts Q/Q, with 2pts driven by asset disposition Q2 18 Q
Slide 8: Marketplace GMV & Revenue
MARKETPLACE GMV & REVENUE ($ millions) 23,231 • Q3 FX-Neutral B2C GMV GMV 22,569 21,482 21,571 21,484 down 2% Y/Y and FX- 20,489 Neutral C2C GMV down 316 2% Y/Y 298 301 277 270 254 MS&O • Q3 FX-Neutral Revenue Transaction Revenue up 4% Y/Y, down 1pt Q/Q • Q3 FX-Neutral MS&O Transaction 1,837 1,803 1
Slide 9: Payments Progress
PAYMENTS PROGRESS $501M 20,000+ 84% $273M $220M 6,000+ $137M Q2 19 Q3 19 Q4 18 Q1 19 Q2 19 Q3 19 GMV Intermediated # Sellers in Program GMV intermediated to date = $1.1B Grew total sellers in the program by nearly 260% Q/Q Q3 US GMV exit* penetration = 9.4% 9 * Exit defined as last month of the quar
Slide 10: StubHub GMV & Revenue
STUBHUB GMV & REVENUE ($ millions) • Q3 FX-Neutral GMV 1,410 flat Y/Y, down 6pts Q/Q, on a softer GMV 1,237 1,232 concerts and theater 1,117 1,060 1,018 event landscape 1 3 3 3 1 1 3 5 20 • Q3 FX-Neutral MS&O 2 25 5 5 53 6 21 21 Transaction Revenue 96 1 Revenue 1 6 1 61 6 7 7 7 flat Y/Y 286 311 286
Slide 11: Classifieds Revenue
CLASSIFIEDS REVENUE ($ millions) • Q3 FX-Neutral Revenue up 8% Y/Y, down 4pts Q/Q, driven by display advertising headwinds 271 259 263 265 254 256 • Segment Margin up 2pts Y/Y driven by operating leverage and marketing reductions Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Rev Y/Y Growth. 18% 8% 8% 4% 5% 4%
Slide 12: Non-GAAP Expenses
NON-GAAP EXPENSES (% of revenue) Operating Expense at 50.3%, down ~1pt Y/Y Cost of Revenue Sales & Marketing Product Development General & Admin 23.1% 31.2% 29.5% 9.9% 10.0% 7.7% 7.9% 22.3% Q3 18 Q3 19 Q3 18 Q3 19 Q3 18 Q3 19 Q3 18 Q3 19 Lower Marketplaces Investments in site on-platform marketing P
Slide 13: Non-GAAP EPS
NON-GAAP EPS • Q3 Non-GAAP Operating Margin up 20bps Y/Y, more than offsetting 20bps of FX pressure $0.71 $0.67 $0.68 $0.67 • Q3 Non-GAAP EPS Y/Y $0.56 growth driven by net $0.53 benefit of share repurchases and improved cost control, partially offset by payments investments Q2 18 Q3 18 Q4 18 Q1 19
Slide 14: Free Cash Flow
FREE CASH FLOW ($ millions) • Q3 FCF up 140% Y/Y driven by lower cash 1,104 taxes, working capital 913 timing and lower CapEx 607 381 368 188 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Y/Y Growth (64)% (47)% 39% 9% 223% 140% CapEx % of Revenue 7% 7% 5% 7% 5% 4% FCF % of Revenue 7% 14% 38% 14% 23% 34% 14 Ca
Slide 15: 2019 Cash & Debt
2019 CASH & DEBT Capital Allocation Tenets $4.2B • Preserve financial flexibility to execute on strategy and drive long-term value creation Debt Q3 19 Ending Cash and • Drive organic growth while balancing profitability Investments* ($3.6B) • Supplement organic growth with disciplined acquisitions a
Slide 16: Guidance
GUIDANCE Q4 19 Q4 Guidance Context Low High • Non-GAAP EPS growth driven by: Revenue. $2.77 $2.82 • Net benefit of share repurchase program (in billions) . ~11pts Y/Y Growth. (4)% (2)% • Operational productivity more than offset by Organic FX-Neutral Y/Y Growth. investment in payments and FX (1)% 1%
Slide 17: Q&A
Q&A
Slide 18: Reconciliations
RECONCILIATIONS
Slide 19: 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, 2018 2018 2018 2019 2019 2019 (in millions, except percentages) GAAP operating income $ 406 $ 556 $ 681 $ 609 $ 561 $ 532 Stock-based compensation expen
Slide 20: 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, 2018 2018 2018 2019 2019 2019 (in millions, except per share data) GAAP Income from continuing operations $ 638 $ 720 $ 763 $ 521 $ 403 $ 310 Stock-base
Slide 21: GAAP to Non-GAAP Quarterly Reconciliations: Statement of Income
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS STATEMENT OF INCOME September 30, 2019 September 30, 2018 Non-GAAP Non-GAAP Reported Entries Non-GAAP Reported Entries Non-GAAP (in millions, except per share data and percentages) Net revenues $ 2,649 $ — $ 2,649 $ 2,649 $ — $ 2,649 Cost of net revenues 62
Slide 22: 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, 2018 2018 2018 2019 2019 2019 (in millions) Net cash provided by continuing operating activities $ 372 $ 560 $ 1,234 $ 550 $ 744 $ 1,009 Less: Purchases of property and equipment, ne
Slide 23: Reconciliation of Total Revenue
RECONCILIATION OF TOTAL REVENUE Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2018 2018 2018 2019 2019 2019 Net Revenues by Type (in millions) Net Transaction Revenues: Marketplace (2) $ 1,837 $ 1,803 $ 1,984 $ 1,885 $ 1,887 $ 1,829 StubHub 240 286 311 223 2
Slide 24: Reconciliation of Organic Revenue
RECONCILIATION OF ORGANIC REVENUE Three months ended June 30, September 30, December 31, March 31, June 30, September 30, 2018 2018 2018 2019 2019 2019 As Reported Revenue Growth 9% 6% 6% 2% 2% 0% Acquisition/Disposition Impact (0)% (1)% (1)% (1)% (0)% 1% Foreign Currency Impact (3)% (0)% (1)% 2% 2%
Slide 25: GAAP to Non-GAAP Reconciliations: Guidance
GAAP TO NON-GAAP RECONCILIATIONS GUIDANCE Three Months Ending December 31, 2019 (in billions, except per share amounts) GAAP Non-GAAP (a) Net Revenue $2.77 - $2.82 $2.77 - $2.82 Diluted EPS $0.55 - $0.60 $0.73 - $0.76 Twelve Months Ending December 31, 2019 (in billions, except per share amounts) GAA
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