eBay Inc. (EBAY)

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eBay (EBAY)

Q4 2011 Earnings Call

January 18, 2012 5:00 pm ET


John J. Donahoe - Chief Executive Officer, President, President of Auction Business Unit, Interim President of Ebay Marketplaces, Interim President of Paypa and Director

Jennifer Ceran -

Robert H. Swan - Chief Financial Officer and Senior Vice President of Finance


Mark S. Mahaney - Citigroup Inc, Research Division

Spencer Wang - Crédit Suisse AG, Research Division

Heath P. Terry - Goldman Sachs Group Inc., Research Division

Brian J. Pitz - UBS Investment Bank, Research Division

Youssef H. Squali - Jefferies & Company, Inc., Research Division

Thomas Forte - Telsey Advisory Group LLC

Ross Sandler - RBC Capital Markets, LLC, Research Division

Scott W. Devitt - Morgan Stanley, Research Division



Good day, ladies and gentlemen, and welcome to eBay's Q4 2011 Earnings Call. [Operator Instructions] And as a reminder, today's conference call is being recorded. Now I would look to turn the conference over to your host, Jennifer Ceran, Vice President of Investor Relations.

Jennifer Ceran

Thank you, and good afternoon, everyone. Thank you for joining us, and welcome to eBay's earning release conference call for the fourth quarter and full year 2011. Joining me today on the call are John Donahoe, our President and Chief Executive Officer; and Bob Swan, our Chief Financial Officer.

We're providing a slide presentation to accompany Bob's commentary during the call. All gross rates mentioned in John and Bob's prepared remarks represent year-over-year comparison, unless they clarify otherwise. The conference call is also being broadcast on the Internet, and both the presentation and call are available through the Investor Relations section of the website at investor.ebayinc.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.

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 measures to the nearest comparable GAAP measures in the slide presentation accompanying this conference call. In addition, management will 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 fourth quarter and full year 2012, our 3-year outlook and the future growth in the Payments, Marketplaces and GSI businesses.

Our actual results may differ materially from those discussed in this call for a variety of reasons including, but not limited to: global economic events; changes in political, business and economic conditions, including any further downturn or crisis in Europe; foreign exchange rate fluctuations; our ability to integrate, manage and grow businesses recently acquired or that may be acquired in the future, including GSI; our increasing need to grow revenues from existing users, particularly in more established markets and increasingly competitive environment for our businesses; the complexity of managing an increasingly large enterprise with a broad range of businesses at different stages of maturity; 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 timely upgrade our technology and customer service infrastructure at reasonable costs while adding new products and features and maintaining site stability and performance.

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 rely on any forward-looking statements. All information in this presentation is as of January 18, 2012, and we do not intend and undertake no duty to update this information.

With that, let me turn the call over to John.

John J. Donahoe

Thanks, Jenny. Good afternoon, everyone, and welcome to our Q4 and full year earnings call. We had a strong fourth quarter and a strong finish to an excellent year. We're delivering on our commitments and our vision of enabling commerce. Our 2011 results highlight the competitive portfolio of global commerce businesses that comprise our company today. eBay, PayPal, GSI and X.commerce are reinventing how people shop and pay. And we're positioning ourselves as an effective partner to retailers of all sizes.

2011 marked an inflection point for shopping. Online and offline retail are rapidly blending into a seamless multichannel world. Consumers are driving this change and technology is enabling it. In this new retail world, our company has powerful global commerce platforms to deliver technology-driven innovation to retailers and consumers. We're leveraging shopping technologies, such as Milo, Where and RedLaser, with a strong leadership position in mobile commerce and payments, and we're innovating in social and local commerce.

For consumers and retailers, we intend to make shopping more locally convenient and more globally accessible. This means enabling retailers of all sizes to reach consumers when, where and how those consumers want to shop. New retail is anytime, anywhere. And in this fluid environment, we will help retailers compete, but we will never compete with them.

At the beginning of last year, we laid out bold 3-year growth goals. Our strong performance in 2011 was a big down payment toward these goals. And we have increased confidence in our outlook. I will talk more about what this means for 2012 and 2013 in these remarks.

Now let's take a look at our results for Q4. We had a strong close to the year. Q4 revenue grew 35% and non-GAAP EPS was up 17%. All of our businesses performed well. PayPal had another strong quarter, eBay had solid growth in its core markets and GSI had a great holiday season driving strong growth for its merchant clients. Both PayPal and eBay now have over 100 million active accounts and active users. And during this holiday season, both PayPal and eBay set new records during peak shopping periods.

Read the rest of this transcript for free on seekingalpha.com