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eBay releases 2020 fourth quarter and full year financial reports, performance exceeds expectations

2021-02-04 77
Revenue was US$2.9 billion, a year-on-year increase of 28%. Excluding the impact of exchange rate changes, it also increased by 28% year-on-year

The total transaction volume was US$26.6 billion, a year-on-year increase of 21%, excluding the impact of exchange rate changes, a year-on-year increase of 18%

Diluted earnings per share for continuing operations based on and not based on U.S. GAAP are US$1.12 and US$0.86, respectively

Operating profit margins based on and not based on U.S. GAAP are 23.6% and 28.1%, respectively

In the fourth quarter, it returned $529 million to shareholders, including $419 million in the form of stock buybacks and $110 million in cash dividends.

The board of directors announced that it will pay a quarterly dividend of US$0.18 per share, an increase of 13% over the previous quarterly dividend; and expand the size of the stock repurchase authorization by an additional US$4 billion

February 3, 2021-San Jose, California, USA-eBay Inc. (NASDAQ: EBAY), a global business leader connecting hundreds of millions of buyers and sellers, today announced the ending of December 31, 2020 Financial results for the fourth quarter and full year.

"I am proud that eBay can serve our buyers, sellers and the community, especially in the context of the global epidemic," said Jamie Iannone, CEO of eBay. "We have brought to an end this year with strong financial performance, but what I am most encouraged is that we have been able to provide small businesses with all kinds of support-providing them with tools, resources, and reaching global data. The opportunity for hundreds of millions of buyers. We will continue to invest in products and technologies in order to provide our customers with the best market platform in the world."



eBay releases 2020 fourth quarter and full year financial reports, performance exceeds expectations


Financial Highlights for the Fourth Quarter
Revenue was US$2.9 billion, a year-on-year increase of 28%. Excluding the impact of exchange rate changes, it also increased by 28% year-on-year.

The total transaction volume (GMV) was US$26.6 billion, an increase of 21% year-on-year, and an 18% year-on-year growth excluding the impact of exchange rate changes.

Continuing operations have calculated a net profit of US$781 million based on US GAAP, and a diluted earnings per share of US$1.12.

Continuing operations have a net profit of US$600 million and a diluted earnings per share of US$0.86, which is not calculated based on US GAAP.

Operating cash flow from continuing operations was US$883 million, and free cash flow from continuing operations was US$715 million.

The number of annual active buyers increased by 7%, and the total number of active buyers worldwide reached 185 million.

Financial Highlights for the Year
· Revenue of 10.3 billion US dollars, a year-on-year increase of 19%, excluding the impact of exchange rate changes, a year-on-year increase of 20%.

· The total transaction volume was US$100 billion, a year-on-year increase of 17%. Excluding the impact of exchange rate changes, it was also a year-on-year increase of 17%.

· Operating profit margins calculated based on and not based on US GAAP were 26.4% and 31.3%, respectively.

· Repurchased common stock worth approximately US$5.1 billion and distributed cash dividends of US$447 million.

Business highlights
Business initiatives

eBay continues to expand its managed payment services globally, announcing the launch of managed payment services for sellers in Greater China, and will further support individual sellers in the United States, the United Kingdom and Germany to use managed payment services. In the fourth quarter, more than 38% of transactions on global platforms were processed through managed payment services, and more than 50% of US sellers have moved to managed payments. At the end of the fourth quarter, eBay had more than 1 million sellers worldwide transferred to managed payment services.

In the fourth quarter, the Promoted Listings service achieved revenues of more than $215 million, an increase of 60% year-on-year, and a 57% year-on-year increase excluding the impact of exchange rate changes.

eBay’s total advertising revenue reached a new milestone in 2020, with annual revenue exceeding $1 billion.

Technology-led platform development

eBay recently launched the authenticity guarantee service "Authenticity Guarantee" (Authenticity Guarantee) for watches, and quickly extended this service to sports shoes. In the United States, this new service is driving the growth of these two types of products. From the third quarter to the fourth quarter, the total transaction volume of eBay's luxury watch category achieved double-digit growth, and the sports shoe category achieved a triple-digit year-on-year growth in the fourth quarter.

For holiday shoppers on eBay’s platform, refurbished gifts have become a hot shopping trend. In eBay's newly launched "Certified Refurbished" service, many branded products have been sold out.

Building on the success of the United States, eBay launched an optimized "Brand Outlet" experience (Brand Outlet) in the United Kingdom, where 150 fashion brands provide ultra-low discount products.

In 2020, the eBay application has been downloaded more than 50 million times.

Adhering to the promise of making eBay the preferred platform for sellers, eBay has launched a simplified C2C seller landing page and an upgraded seller search page to improve the seller experience and increase the completion rate of listings.

eBay has added some new features to simplify the sales process and improve the experience. For example, the QR code of eBay shipping labels allows sellers to download the mobile code, scan it at the nearest post office or retailer, and then print the logistics label. eBay has also expanded account multi-user access by adding "Shipping Labels" and "Shipping Tracking", providing seller employees with access to complete order fulfillment.

eBay announced the establishment of an exclusive partnership with Optoro, a leader in return processing technology, to simplify the resale process of returns and excess inventory, and to provide support to the seller community by accelerating the speed of resale.

In the fourth quarter, eBay’s "Seller Initiated Offers" feature has generated more than $1 billion in total transactions since January 1, 2020.

The total transaction value of eBay’s "purchase APIs" reached US$5 billion, an increase of US$4 billion from December 2019.

Influence

eBay announced the launch of the "Up & Running Grants" program, which will build on eBay's long-term commitment to small businesses and economic empowerment to provide a $10,000 reward program to small business sellers on the eBay platform in the United States.

After the outbreak, eBay cooperated with the National Health Service (NHS), Department For Health And Social Care, Royal Mail, Clipper and Unipart to create a The new platform quickly and efficiently distributes personal protective equipment to frontline personnel. In the fourth quarter, the NHS personal protective equipment portal, supported by eBay, reached an important milestone, providing more than 1 billion personal protective equipment to more than 45,000 social care workers in the UK.

In order to create economic opportunities in the epidemic, eBay has partnered with the Federation of Small Business and Adecco Working Ventures to increase employment opportunities for 1,000 young British people.

eBay was recognized for its commitment to environmental and corporate responsibility, was included in the Dow Jones Sustainability Index (Dow Jones Sustainability Index) World and North America Index, and included in the Carbon Disclosure Project (Carbon Disclosure Project) A list.

2020 is a record year for "eBay for Charity", raising nearly $123 million in global charity donations.

General business update

eBay announced the appointment of two new executives: Julie Loeger (Julie Loeger) as global chief growth officer, and Cornelius Boone as chief personnel officer.

eBay announced the launch of a series of procedures for exploring, reviewing and evaluating strategic options for its Korean business. eBay is considering various options to bring maximum value to shareholders and create future growth opportunities for this business.

Regarding the transfer of the Classifieds business to Adevinta, eBay believes that, subject to regulatory approval, the transaction is still expected to be completed in the first quarter of 2021.

Other financial and operational performance

Operating profit margin: In the fourth quarter of 2020, the operating profit margin based on US GAAP rose to 23.6%, compared to 21.4% in the same period last year. In the fourth quarter of 2020, the operating profit margin, which is not calculated based on US GAAP, rose to 28.1%, compared with 27.9% in the same period last year.

Taxation: In the fourth quarter of 2020, the effective tax rate for continuing operations calculated based on US GAAP was 29.5%, compared to 4.9% in the same period in 2019. In the fourth quarter of 2020, the effective tax rate for continuing operations that was not calculated on the basis of US GAAP was 16.9%, compared with 4.7% in the same period in 2019.

Cash flow: In the fourth quarter of 2020, eBay’s operating cash flow from continuing operations was US$883 million, and free cash flow from continuing operations was US$715 million.

Return of capital: eBay repurchased approximately $419 million of common stock in the fourth quarter of 2020, and the total number of common stocks repurchased exceeded 8 million. As of December 31, 2020, the total value of eBay’s authorized remaining repurchasable shares is US$2 billion. In the fourth quarter of 2020, eBay also distributed a cash dividend of $110 million.

Cash, cash equivalents and non-equity investments: As of December 31, 2020, eBay’s cash, cash equivalents, and non-equity investment portfolio totaled US$4.1 billion.

Business outlook
eBay provides the following guidelines for continuing operations in the first quarter of 2021:

Net revenue is expected to be between US$2.94 billion and US$2.99 billion, with an organic growth rate of 35% to 37% excluding the impact of exchange rate changes;

It is expected that the diluted earnings per share from continuing operations calculated based on US GAAP will be between US$0.81 and US$0.86;

It is expected that the diluted earnings per share from continuing operations that are not calculated based on US GAAP will be between US$1.03 and US$1.08.

Declare dividends
eBay’s board of directors announced that it will pay a cash dividend of $0.18 per common share, which will be paid on March 19, 2021 to shareholders of record as of March 1, 2021.
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