Slide 1: Q1 2020 Financial Highlights
Q1 2020 FINANCIAL HIGHLIGHTS April 29, 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: Deploying over $100M to support employees, communities and customers
DEPLOYING OVER $100M TO SUPPORT EMPLOYEES, COMMUNITIES AND CUSTOMERS WHEN NEEDED MOST Employees Communities Customers ❖ Nearly all global employees are ❖ Matching up to $1M in donations ❖ Deferring fees for hundreds of working from home made to Feeding America, Direct thousands of eBay sellers to Re
Slide 4: CFO Comments
CFO COMMENTS
Slide 5: Q1 Highlights
Q1 HIGHLIGHTS • Revenue of $2.4B, down 2% Y/Y (+2% Y/Y Organic FX-Neutral) • GAAP EPS of $0.64 and Non-GAAP EPS of $0.77 • GAAP operating margin of 26%, up 1pt Y/Y • Non-GAAP operating margin of 32%, flat Y/Y • Generated $702M of Operating Cash Flow and $604M of Free Cash Flow • Returned $4.1B to sh
Slide 6: Trailing 12-Month Active Buyers
TRAILING 12-MONTH ACTIVE BUYERS (millions) 174 174 174 173 171 170 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Y/Y Growth 4% 4% 4% 4% 2% 2% 6 All reported results are from continuing operations
Slide 7: Marketplace GMV
MARKETPLACE GMV ($ millions) 23,231 21,571 21,484 20,489 21,966 21,259 Int’l 14,821 13,646 13,695 13,155 14,272 13,628 • Q1 FX-Neutral B2C GMV up 1% Y/Y and FX-Neutral C2C GMV flat Y/Y US 8,410 7,925 7,789 7,334 7,694 7,631 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 US Y/Y Growth (1)% (7)% (6)% (6)% (9)% (
Slide 8: Revenue
REVENUE ($ millions) 2,563 2,413 2,423 2,343 2,500 2,374 579 • Q1 FX-Neutral MS&O 528 536 514 523 474 Transaction Revenue up 3% Y/Y … up 2pts Q/Q • Q1 FX-Neutral MS&O Transaction 1,984 1,885 1,887 1,829 1,977 1,900 Revenue down 8% Y/Y, with 6pts driven by divestiture of B4F... down 1pt Q/Q Q4 18 Q1
Slide 9: Marketplace Revenue
MARKETPLACE REVENUE ($ millions) 2,300 2,162 2,157 2,083 2,236 2,130 316 MS&O 277 270 254 259 230 • Q1 FX-Neutral Transaction Revenue up 3% Y/Y, up 2pts Q/Q • Q1 FX-Neutral MS&O Transaction 1,984 1,885 1,887 1,829 1,977 1,900 Revenue down 15% Y/Y, up 2pts Q/Q • Segment Margin flat Y/Y Q4 18 Q1 19 Q2
Slide 10: Classifieds Revenue
CLASSIFIEDS REVENUE ($ millions) • Q1 FX-Neutral Revenue flat Y/Y, down 6pts Q/Q, driven by continued display advertising headwinds and Motors revenue pressure driven by 271 COVID-19 263 265 269 256 248 • Segment Margin down 3pts Y/Y, driven primarily by increased reserves related to COVID-19 Q4 18
Slide 11: Non-GAAP Expenses
NON-GAAP EXPENSES (% of revenue) Operating Expense at 46.8%, flat Y/Y Cost of Revenue Sales & Marketing Product Development General & Admin Transaction Losses 21.8% 21.6% 25.9% 24.7% 9.5% 9.6% 8.4% 8.2% 4.3% 2.8% Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Lower on-platform Operating
Slide 12: Non-GAAP EPS
NON-GAAP EPS • Q1 Non-GAAP Operating Margin flat Y/Y, with marketing reductions offset by COVID-19 impacts and FX pressure $0.74 $0.77 $0.63 $0.65 $0.66 $0.64 • Q1 Non-GAAP EPS Y/Y growth driven by net benefit of share repurchases, revenue growth and improved cost structure Q4 18 Q1 19 Q2 19 Q3 19 Q
Slide 13: Free Cash Flow
FREE CASH FLOW ($ millions) • Q1 FCF up 54% Y/Y driven by higher 1,028 earnings and timing of 837 capex spend and 626 604 working capital 562 392 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Y/Y Growth 18% 20% 237% 109% (39)% 54% CapEx % of Revenue 5% 7% 5% 4% 5% 4% FCF % of Revenue 40% 16% 23% 36% 25% 25% 1
Slide 14: 2020 Cash & Debt
2020 CASH & DEBT Ample Liquidity $5.2 • Received $4.1B in proceeds from sale of StubHub, subject to working capital adjustments Debt Net Debt Q1 20 Ending Cash and • Repurchased $4.0B of shares and paid cash Investments* $(3.5) dividends of $114M in Q1 • $3.2B of authorization remaining** $(8.7) • A
Slide 15: Protecting Our Capital Structure
PROTECTING OUR CAPITAL STRUCTURE Capital Allocation Tenets Targets • Preserve financial flexibility to execute on • Maintain current BBB+ rating strategy and drive long-term value creation • Targeting mid-term leverage of approximately • Drive organic growth while balancing profitability 1.5x net de
Slide 16: Q2 Guidance
Q2 GUIDANCE Q2 20 Q2 Guidance Context Low High • Revenue growth driven by: • Marketplace Volume and Revenue growth in high-single Revenue. $2.38 $2.48 digits (in billions) . • Classifieds Revenue contracting between 30% and 40% Y/Y Growth. (2)% 2% • Non-GAAP EPS growth driven by: Organic FX-Neutral
Slide 17: 2020 Guidance
2020 GUIDANCE FY 2020 Current context on Full Year outlook Revenue $9.56B - $9.76B • Given dynamic environment, no revisions to Revenue, Margin and EPS guidance Y/Y Growth (1)% - 1% • Dynamics that could pressure low end of FY range: • Marketplace Volume growth regressing to levels below Q1, Organic
Slide 18: Q&A
Q&A
Slide 19: Appendix
APPENDIX
Slide 20: Internet Sales Tax Impact on MP US GMV
INTERNET SALES TAX IMPACT ON MP US GMV US GMV +2% Growth x IST ~ 6 pt IST Impact -3% -3% -5% US GMV ~ 3 pt ~ 6 pt -4% Growth -6% ~ 1 pt ~ 1 pt -6% -9% -7% -6% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 New States: 3 5 14 11 5 Total States: 3 8 22 33 38 Large States: NY CA, TX 20
Slide 21: Reconciliations
RECONCILIATIONS
Slide 22: GAAP to Non-GAAP Quarterly Reconciliations: Operating Margin
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS OPERATING MARGIN Three months ended December 31, March 31, June 30, September 30, December 31, March 31, 2018 2019 2019 2019 2019 2020 (in millions, except percentages) GAAP operating income $ 607 $ 593 $ 558 $ 512 $ 589 $ 629 Stock-based compensation expen
Slide 23: GAAP to Non-GAAP Quarterly Reconciliations: Net Income / EPS
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS NET INCOME / EPS Three months ended December 31, March 31, June 30, September 30, December 31, March 31, 2018 2019 2019 2019 2019 2020 (in millions, except per share data) GAAP Income from continuing operations $ 708 $ 516 $ 400 $ 291 $ 526 $ 485 Stock-base
Slide 24: GAAP to Non-GAAP Quarterly Reconciliations: Statement of Income
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS STATEMENT OF INCOME Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Non-GAAP Non-GAAP Reported Entries Non-GAAP Reported Entries Non-GAAP (in millions, except per share data and percentages) Net revenues $ 2,374 $ - $ 2,374 $ 2,413 $ - $
Slide 25: Calculation of Free Cash Flow
CALCULATION OF FREE CASH FLOW Three months ended December 31, March 31, June 30, September 30, December 31, March 31, 2018 2019 2019 2019 2019 2020 (in millions) Net cash provided by continuing operating activities $ 1,155 $ 572 $ 695 $ 931 $ 763 $ 702 Less: Purchases of property and equipment, net
Slide 26: Reconciliation of Total Revenue
RECONCILIATION OF TOTAL REVENUE Three months ended December 31, March 31, June 30, September 30, December 31, March 31, 2018 2019 2019 2019 2019 2020 (in millions) Net Revenues by Type Net Transaction Revenues: Marketplace (2) $ 1,984 $ 1,885 $ 1,887 $ 1,829 $ 1,977 $ 1,900 Total net transaction rev
Slide 27: Reconciliation of Organic Revenue
RECONCILIATION OF ORGANIC REVENUE Three months ended December 31, March 31, June 30, September 30, December 31, March 31, 2018 2019 2019 2019 2019 2020 As Reported Revenue Growth 7% 3% 1% (1)% (2)% (2)% Acquisition/Disposition Impact (1)% (1)% (0)% 1% 2% 1% Foreign Currency Impact (1)% 2% 3% 2% 2% 3
Slide 28: GAAP to Non-GAAP Reconciliations: Guidance
GAAP TO NON-GAAP RECONCILIATIONS GUIDANCE Three Months Ending June 30, 2020 (in billions, except per share amounts) GAAP Non-GAAP (a) Net Revenue $2.38 - $2.48 $2.38 - $2.48 Diluted EPS $0.50 - $0.57 $0.73 - $0.80 Twelve Months Ending December 31, 2020 (in billions, except per share amounts) GAAP No
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