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eBay Inc. (EBAY)
Q1 2010 Earnings Call
April 21, 2010 5:00 pm ET
Mark Rowen - Vice President, Investor Relations
John J. Donahoe - President, Chief Executive Officer, Director
Robert H. Swan - Chief Financial Officer, Senior Vice President - Finance
Spencer Wang – Credit Suisse
Doug Anmuth - Barclays
Gene Munster – Piper Jaffray
Collin Sebastian – Lazard Capital Markets
Imran Khan - J.P. Morgan
Justin Post – Bank of America/Merrill Lynch
James Mitchell - Goldman Sachs
Stephen Ju - RBC Capital Markets
Mark Mahaney - Citi
Previous Statements by EBAY
» eBay Q4 2009 Earnings Call Transcript
» eBay Q3 2009 Earnings Call Transcript
» eBay Q2 2009 Earnings Call Transcript
Thank you, operator. Good afternoon. Thank you for joining us and welcome to eBay's earnings release conference call for the first quarter 2010. 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.ebayinc.com.
Before we begin, I would 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 measures to the nearest comparable GAAP measures in the slide presentation accompanying this 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. These statements include, but are not limited to, statements regarding expected financial results for the second quarter and full year of 2010; the focus of the payments and Marketplaces business units going forward; and future growth in the Marketplaces and payments businesses.
Our actual results may differ materially from those discussed in this call for a variety of reasons including, but not limited to; the continuation or worsening of the global economic downturn; changes in political, business and economic conditions; foreign exchange rate fluctuations; 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 an increasingly large enterprise with a broad range of businesses; our need to manage regulatory tax, IP and litigation risks, including risks specific to PayPal, Bill Me Later, and the financial 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 report on our Form 10-K and our subsequent quarterly reports on Form 10-Q, available at investor.ebayinc.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 21, 2010 and we do not intend and undertake no duty to update this presentation.
With that said, let me turn the call over to John.
Thank you, Mark and good afternoon everyone. Welcome to our Q1 earnings call. Today I will talk about our results and our continued progress towards achieving our three-year growth objectives. Bob will then provide more details on the quarter and our guidance before we take questions.
I will start by providing context. Last year we set out clear three-year growth and profitability goals for 2009 to 2011. Goals to strengthen our position in our two core businesses, eBay and PayPal and to achieve strong financial performance. We are achieving these goals by focusing our company on three themes. First, we are becoming a more customer focused company. We are driving improvements to our user experience and we are measuring our success with three customer oriented metrics; net promoter score, velocity and market share. I have tied a portion of our leadership compensation to customer satisfaction.
Second, we are becoming a more technology driven company and we are increasing our commitment to innovation. This is evident with the opening of the PayPal platform which is driving payments innovation and it is demonstrated in mobile which is experiencing widespread adoption and driving significant e-commerce payment volume. We have made good strides with our technology innovation and we are just getting started.
Third, we are committed to operating more efficiently by taking $2 billion out of our cost structure over the three-year period and reinvesting it in our highest growth priorities. Our first quarter results reflect another strong step towards our goals. Revenue was up 18% and non-GAAP EPS was up 15% on an apples-to-apples basis taking Skype out. We are off to a good start in 2010.
Now let’s take a brief look at what we accomplished in each business unit. With PayPal we are well on our way to turning PayPal into the leader in online global payments. Approximately 8 million merchants worldwide accept PayPal benefiting from the higher conversion rates that PayPal delivers with more than 84 million active registered accounts using 24 currencies across 190 countries. PayPal had another exceptional quarter posting record Q1 results and strengthening our global competitive position.
PayPal’s deepened penetration on eBay, gained global market share, signed a significant deal with China UnionPay and drove mobile payments innovation. Thousands of developers are using PayPal’s open platform which has already generated $30 million in TPV. PayPal is now a convenient and easy to use payments choice for Facebook users and advertisers.