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eBay Auctions Off The Skeptics

eBay (EBAY-NASDAQ) reported earnings: $0.33 EPS & R$1.77 Billion versus estimates of $0.30 & $1.72 Billion.

Guidance: Q2 $0.31 to $0.33 and EPS $1.75 to $1.80 Billion versus $0.31 & $1.75 Billion estimates; 2007 guidance was put at $1.30 to $1.34 EPS and Revenues $7.2 to $7.4 Billion versus $1.29 & $7.25 Billion estimates.

STRONG METRICS: 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 company purchased approximately 10 million shares of its common stock at a total cost of approximately $333 million during the quarter (may purchase up to additional $2 Billion in shares through JAN. 2009).

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 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.

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.

The company is actually seeing shares surge in after hours, up 5% at $36.25 and its shares are up from $30.07 at the close 2006.

Jon C. Ogg
April 18, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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