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eBay Inc. (EBAY)
Q1 2009 Earnings Call
April 22, 2009 5:00 pm ET
Mark Rowen – Vice President, Investor Relations
John Donahoe – President and Chief Executive Officer
Bob Swan – Chief Financial Officer
Scott Devitt – Morgan Stanley
Christa Quarles - Thomas Weisel
Mark Mahaney - Citigroup
Doug Anmuth - Barclays Capital
Jeffrey Lindsay - Sanford Bernstein
James Mitchell – Goldman Sachs
Justin Post – BAS-ML
Heath Terry – FBR Capital Markets
Analyst for Youssef Squali - Jefferies & Company
Previous Statements by EBAY
» eBay Q3 2009 Earnings Call Transcript
» eBay Q2 2009 Earnings Call Transcript
» eBay Inc. Q4 2008 Earnings Call Transcript
Good afternoon. Thank you for joining us and welcome to eBay's earnings release conference call for the first quarter of 2009. Joining me today on the call are John Donahoe, our President and Chief Executive Officer, and Bob Swan, our Chief Financial Officer.
We are providing a slide presentation to accompany Bob's commentary during the call. This conference call is also being broadcast on the Internet and both the presentation and call are available through the Investor Relations section of the eBay website at investor.eBay.com.
Before we begin, I'd like to remind you that during the course of this conference call we will discuss some non-GAAP measures in talking about our company's performance. You can find the reconciliation of those measure to the nearest comparable GAAP measures in the slide presentation accompanying the conference call.
In addition, management may make forward-looking statements relating to our future performance that are based on our current expectations, forecasts, and assumptions, and involve risks and uncertainties, including those relating to the company's ability to grow its businesses, user base and user activity. Our actual results may differ materially from those discussed in this call for a variety of reasons including, but not limited to, the impact of recent global economic events and the global economic downturn, foreign exchange rate fluctuations, changes in political, business, and economic conditions, the impact and integration of recent and future acquisitions, our increasing need to grow revenues from existing users in established markets, an increasingly competitive environment for our businesses, the complexity of managing a growing company with a broad range of businesses, our need to manage regulatory tax, IP, and litigation risks, including risks specific to PayPal and the financial industry and risks specific to Skype's technology and to the VoIP industry, and our need to upgrade our technology and customer service infrastructure at reasonable costs, while adding new features and maintaining site stability.
You can find more information about factors that could affect our operating results in our most recent annual reports on our Form 10-K and our subsequent quarterly reports on Form 10-Q available at investor.eBay.com. You should not unduly rely on any forward-looking statements and we assume no obligation to update them. All information in the presentation is as of April 22, 2009, and we do not intend and undertake no duty to update this presentation.
And with that, I'll turn it over to John.
Good afternoon everyone and welcome to our Q1 earnings call. We delivered solid Q1 results, exceeding expectations in a tough economy. Revenue was just over $2.0 billion and our non-GAAP EPS was $0.39. We managed our expenses well during the quarter and generated free cash flow of close to $600.0 million. All in all, we are a strong company operating in a challenging global environment.
I think it’s fair to say that we have had an active start to 2009. In addition to executing against our priorities, we held an analyst day at which we detailed our three-year growth plans. And last week we made some important announcements that reinforced those plans and move us forward strategically.
Before discussing our Q1 results in greater detail, let me recap the strategies and priorities we outlined at our analyst meeting last month.
Our company connects buyers and sellers and we are focusing our portfolio on two core growth engines that accomplish this: payments and e-commerce. PayPal is the leading online global payments network and we intend to approximately double this business over the next three years. PayPal has unmatched advantages and will be the leader in online global payments.
eBay is competitively positioning itself where we can win in the $500.0 billion secondary market. We are fixing the foundation of our core eBay marketplace by improving trust, value, and selection and we are transforming the user experience.
We are also growing other formats, such as classifieds and Stuff hub that connect buyers and sellers. Overall, we expect our total eBay marketplaces business to grow slower than the market this year but with the market in 2010 and faster than the market in 2011. Skype is a great stand-alone business and we’re moving to maximize its potential and value. And we are elevating the role of technology across our company to deliver more innovative user experiences, and last but not least, we are managing our company with operating discipline and accountability.
Since announcing our three-year growth plans a month ago, we have taken action where it is consistent with our strategy. We are focusing our portfolio by divesting assets that are not closely aligned with our two core growth businesses, such as Skype and Stumble Upon. And we are strengthening our core eBay business by signing an agreement to acquire Gmarket, Korea’s largest marketplace.