2. This presentation contains non-GAAP measures relating to the company's performance. You
can find the reconciliation of those measures to the nearest comparable GAAP measures in the
appendix at the end of this presentation.
This presentation may make forward-looking statements regarding matters that involve risk and
uncertainty, 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 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, regulatory, tax, as well as IP and other litigation
risks (including risks specific to PayPal and the financial industry, and risks specific to Skype’s
technology and to the VoiP industry), our need to upgrade our technology and customer service
infrastructure at reasonable cost while adding new features and maintaining site stability,
foreign-exchange-rate fluctuations, changes in political, business, and economic conditions, and
the impact and integration of recent and future acquisitions.
You can find more information about factors that could affect our results in our annual report on
our Form 10-K and our quarterly reports on Form 10-Q (available at http://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 January 23, 2008, and we do not
intend, and undertake no duty, to update this presentation.
®
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3. Q4 07 Summary
Very good quarter financially …
• Strong revenue growth… first $2B quarter
• Stronger non-GAAP earnings growth
• Excellent free cash flow
• Share repurchases:
>$300M in Q4… ~$3.2B since July ’06
• Approved for additional $2B share repurchase program
• Caps off extremely strong year financially
®
2
4. Q4 07 Summary… Strong Top-line Growth
Revenue
(in $millions)
2,181
1,889
1,834
1,768
1,720
1,390 1,411 1,449
1,329
Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Reported Y/Y Growth 42% 35% 30% 31% 29% 27% 30% 30% 27%
Organic Y/Y Growth 34% 30% 21% 20% 21% 21% 23% 23% 18%
®
3 Note: Calculation of Organic Y/Y growth is included in the Appendix of this presentation
5. Q4 07 Summary... Stronger Earnings Growth
Non-GAAP EPS
(in $)
0.45
0.41*
0.33 0.34
0.31
0.26
0.24 0.24 0.24
Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Reported Y/Y Growth 44% 20% 10% 28% 29% 39% 40% 59% 45%
Non-GAAP Op. Margin 34.0% 33.1% 32.6% 32.1% 33.4% 33.6% 32.4% 31.4% 34.6%
®
Note: Calculations of Non-GAAP EPS and Non-GAAP Op. Margins are included in the Appendix of this presentation
4
*$0.04 EPS from one-time tax benefit
6. Q4 07 Summary… Excellent Free Cash Flow Generation
Free Cash Flow
(in $millions)
665
529 533
510
479
451
428
367 385
Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Reported Y/Y Growth 44% 56% -10% -14% 24% 6% 45% 32% 26%
Capex % of Revenue 7% 10% 11% 9% 6% 5% 7% 6% 6%
FCF % of Revenue 32% 32% 26% 27% 31% 27% 29% 27% 30%
®
5 Note: Calculation of FCF is included in the Appendix of this presentation
8. Business Update… Marketplaces Operating Metrics
Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Active Users (in millions)
Active user growth ex-China/
Global Active Users* 79.8 81.8 82.9 83.3 83.0 83.2 Taiwan was 7% y/y.
Y/Y Growth 17% 14% 10% 7% 4% 2%
Focus on re-engaging users
New Listings (in millions)
US 261 272 258 244 254 281
Y/Y Growth 16% 4% -2% -8% -2% 3% Int’l listings ex-China/Taiwan
Int'l 323 339 330 316 301 357 grew 10% y/y
Y/Y Growth 38% 19% 6% -5% -7% 5% Global listings ex-China/
Taiwan grew 7% y/y
Total Listings 584 610 588 559 556 637
Y/Y Growth 27% 12% 2% -6% -5% 4%
GMV (in $millions)
US 6,112 6,777 6,736 6,700 6,729 7,331
Y/Y Growth 13% 14% 8% 10% 10% 8%
Int'l 6,528 7,657 7,545 7,764 7,666 8,883
Y/Y Growth 21% 26% 20% 14% 17% 16% Int’l exposure increasingly
Fx Neutral Y/Y Growth 16% 17% 11% 8% 9% 8% important
Total GMV 12,639 14,434 14,281 14,464 14,395 16,213
Y/Y Growth 17% 20% 14% 12% 14% 12%
Fx Neutral Y/Y Growth 15% 16% 10% 9% 9% 8%
Notes:
•*Global active users number reflects all users, excluding users of StubHub, Half.com and IAC, who bid on, bought, or listed an item within the ®
7 previous 12-month period.
•More information on these metrics can be found on Page 10 of our Earnings Press Release dated January 23, 2008
9. Q4 Listings to Marketplaces Revenue Walk
0.4%
5.2%
• Shopping.com
• Classifieds
3.4%
• Advertising
21.3%
4.3%
0.4%
3.1% 12.3%
4.4%
New Listings China/Taiwan Conversion FX Q4'07 Y/Y GMV StubHub Non-GMV Biz Pricing, Q4'07 Y/Y
Growth StubHub Rate & ASP Growth China/Taiwan Format Shift, Revenue
Other Growth
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10. Diversifying Marketplaces Revenue Streams
Shopping.com Advertising* Classifieds
+26% +182% +104%
Q4 06 Q4 07 Q4 06 Q4 07 Q4 06 Q4 07
®
9 *Advertising revenue represents all Advertising from Marketplaces, excluding “Other” revenue and advertising realized on Shopping.com and Classifieds sites
11. Pricing… Listening and Responding to Buyers
and Sellers
Lower prices will stimulate marketplace supply – enhance selection
Hypotheses Photos will enhance buyer experience onsite
Reduction in Final Value Fee (back end)
Reduction in Insertion Fee (front end)
Primary
Tests Free Gallery Photo
Impact on key metrics
Minimal in Final Value test (A)
Observations Good lift in Insertion Fee test (A)
Conversion improvement in Free Gallery test
Sellers more interested in reducing upfront fee risk… back-end success
fee reductions are secondary
Conclusions
Buyers like pervasive photos across all listings
New 2008 Price Restructure … specifically addresses our conclusions
Action Plan Announcement upcoming to Sellers next week
®
10 (A) Key Metrics include New Listings and Sold Items.
13. Business Update… PayPal Operating Metrics
Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Active Registered Accounts (in millions)
Global Active Accounts 47.2 49.4 51.3 52.8 54.8 57.3 Holiday promotions helped
Y/Y Growth 21% 20% 18% 16% 16% 16% drive active user growth
Net TPV (in $millions)
On eBay 5,516 6,754 6,665 6,460 6,513 7,928
Y/Y Growth 27% 26% 19% 18% 18% 17%
Merchant Services 3,129 3,686 4,112 4,621 5,055 6,116 Third consecutive quarter of
Y/Y Growth 59% 56% 50% 57% 62% 66% accelerating TPV
Total Net TPV 8,645 10,439 10,777 11,080 11,569 14,044
Y/Y Growth 37% 36% 30% 32% 34% 35%
On-eBay Penetration Rate
Continued benefits from
Global 50.7% 51.6% 52.3% 51.9% 53.6% 54.0%
synergies
Transaction rates
Transaction exp 1.13% 1.13% 1.15% 1.18% 1.21% 1.18% Leveraging technology to
minimize transaction loss
Transaction loss 0.37% 0.43% 0.33% 0.31% 0.27% 0.27%
Notes:
•Global Active Registered Accounts reflects all registered accounts, excluding non registered users, that successfully sent or received at least one payment or
payment reversal through PayPal within the previous 12-month period.
•TPV has been adjusted to Net TPV, which is the total dollar volume of payments, net of payment reversals successfully completed through the PayPal system during
the quarter, excluding the payment gateway business.
•Transaction exp and transaction loss are expressed as % of Net TPV.
•Penetration Rate has been adjusted to reflect the total dollar volume of addressable GMV paid using PayPal in relation to the total dollar volume of addressable GMV.
®
12 •More information on these metrics can be found on Page 11 of our Earnings Press Release dated January 23, 2008
14. Business Update… Skype Revenue and Operating Metrics
Revenue
($millions and Y/Y growth)
Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Registered Users (in millions) 136 171 196 220 246 276
Y/Y Growth -- 129% 107% 94% 81% 61%
Skype to Skype Minutes (in billions) 7.5 9.5 10.9 10.8 9.8 11.9
115
Y/Y Growth -- 80% 53% 41% 31% 26%
98
90
79
66 Skype Out Minutes (in billions) 1.1 1.5 1.3 1.3 1.4 1.6
50 Y/Y Growth -- 182% 98% 57% 25% 10%
Q306 Q406 Q107 Q207 Q307 Q407
y/y growth
123% 103% 96% 76%
Notes:
• Total user number reflects users that may have registered through non-Skype based web sites. ®
13 • Skype-to-Skype minutes are estimated; prior period amounts are updated to conform to current estimation methodology.
• More information on these metrics can be found on Page 12 of our Earnings Press Release dated January 23, 2008.
15. Total Non-GAAP Operating Expenses
Sales & Marketing Product Development General & Admin.
(% of Revenue) (% of Revenue) (% of Revenue)
25.6% 14.4%
6.9%
6.5%
12.9%
23.0%
Q406 Q407 Q406 Q407 Q406 Q407
• Leveraged technology • Improvements to buyer • Leveraged existing
• Positive mix shift experience infrastructure
• Product enhancements
Q4 Non-GAAP Op Inc: $755M +31%
Q4 Non-GAAP Net Inc: $611M +42%
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16. Q4 07 Cash Flow / Capital Allocation… Share
Repurchase Update
Cash Balance / Flows Free Cash Flow / Other Movements
(in $billions)
• Strong free cash flow driven by earnings
expansion
0.3 • $128M in capital expenditures
0.7
0.5
0.7 • Proceeds from stock option exercises
• Skype earn-out… settled in Q3, paid in Q4
5.0
4.4 Q4 Share Repurchases
• Repurchased ~9 million shares at an average
price of ~$33.83
Q307 Ending FCF Equity Gains* / Share Skype Earnout Q407 Ending
Cash Option Repurchase Cash
Exercise /
Other
®
Note: Cash balance includes cash, cash equivalents and investments
15
*Equity Gains include changes in market value of minority stake in MercadoLibre
17. FY 07 Summary… Great Year Financially
(in $millions)
Revenues (in $)
EPS Free Cash Flow
(in $millions)
2,187
1.53*
7,672
1,732
5,970 1,574
1.05
4,552 0.86
FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 FY 05 FY 06 FY 07
Reported Y/Y Growth 39% 31% 29% 42% 21% 46% 59% 10% 26%
Reported Non-GAAP Op. Margin 35.5% 32.8% 33.1%
®
Note: Calculation of Non-GAAP EPS, Non-GAAP Op. Margin, and FCF is included in the Appendix of this presentation
16
*FY 07 EPS includes one-time $0.04 tax benefit