Stock Analysis on Net
Stock Analysis on Net

eBay Inc. (NASDAQ:EBAY)

This company has been moved to the archive! The financial data has not been updated since October 24, 2019.

Common-Size Income Statement

eBay Inc., common-size consolidated income statement

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12 months ended: Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net revenues 100.00 100.00 100.00 100.00 100.00
Cost of net revenues -22.17 -23.23 -22.35 -20.61 -32.02
Gross profit 77.83% 76.77% 77.65% 79.39% 67.98%
Sales and marketing -31.56 -26.29 -26.37 -26.39 -20.04
Product development -11.96 -12.79 -12.41 -10.74 -11.17
General and administrative -10.52 -10.78 -10.02 -13.06 -10.29
Provision for transaction losses -2.66 -2.84 -2.57 -3.15 -5.35
Amortization of acquired intangible assets -0.46 -0.40 -0.38 -0.48 -1.50
Operating expenses -57.16% -53.10% -51.75% -53.82% -48.35%
Income from operations 20.68% 23.68% 25.89% 25.57% 19.63%
Interest income 1.64 1.85 1.39 1.13 0.74
Interest expense -3.03 -3.05 -2.51 -1.68 -0.69
Gains on investments and sale of business 6.17 1.20 14.96 3.12 0.00
Other -0.16 0.11 0.92 -0.14 0.04
Interest and other, net 4.62% 0.11% 14.77% 2.43% 0.09%
Income from continuing operations before income taxes 25.29% 23.79% 40.66% 28.00% 19.72%
Income tax (provision) benefit -1.77 -34.37 40.47 -5.34 -19.47
Income (loss) from continuing operations 23.53% -10.58% 81.13% 22.66% 0.26%
Income (loss) from discontinued operations, net of income taxes 0.02 -0.04 -0.21 -2.58 0.00
Net income (loss) 23.54% -10.62% 80.92% 20.08% 0.26%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

The financial performance from 2014 to 2018 is characterized by an initial expansion in gross margins followed by increasing operational costs and significant volatility in net income due to non-operating items and tax fluctuations.

Gross Profitability
A substantial improvement in gross margin occurred between 2014 and 2015, as the cost of net revenues dropped from 32.02% to 20.61%. For the remainder of the period, gross profit remained relatively stable, fluctuating between 76.77% and 79.39% of net revenues.
Operating Expenditure Trends
Operating expenses exhibited an upward trend, increasing from 48.35% of net revenues in 2014 to 57.16% in 2018. This growth was primarily driven by sales and marketing expenses, which rose from 20.04% to 31.56% over the five-year period. In contrast, product development and general and administrative expenses remained relatively constant, while the provision for transaction losses declined from 5.35% to 2.66%.
Operational Income
Income from operations peaked in 2016 at 25.89% of net revenues. However, a gradual decline is observed thereafter, reaching 20.68% by 2018, reflecting the impact of increased spending on sales and marketing.
Net Income and Non-Operating Factors
Net income demonstrated extreme volatility, ranging from a loss of 10.62% in 2017 to a peak of 80.92% in 2016. The 2016 surge was driven by non-operating gains on investments and the sale of business (14.96%) combined with a significant income tax benefit of 40.47%. The 2017 loss was primarily attributable to a high income tax provision of 34.37% of net revenues. By 2018, net income normalized to 23.54%.

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