Name: eBay Inc. (NASDAQ:EBAY) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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eBay Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Net revenues	10,746)	9,567)	8,979)	8,592)	17,902)
Cost of net revenues	(2,382)	(2,222)	(2,007)	(1,771)	(5,732)
Gross profit	8,364)	7,345)	6,972)	6,821)	12,170)
Sales and marketing	(3,391)	(2,515)	(2,368)	(2,267)	(3,587)
Product development	(1,285)	(1,224)	(1,114)	(923)	(2,000)
General and administrative	(1,131)	(1,031)	(900)	(1,122)	(1,843)
Provision for transaction losses	(286)	(272)	(231)	(271)	(958)
Amortization of acquired intangible assets	(49)	(38)	(34)	(41)	(268)
Operating expenses	(6,142)	(5,080)	(4,647)	(4,624)	(8,656)
Income from operations	2,222)	2,265)	2,325)	2,197)	3,514)
Interest income	176)	177)	125)	97)	133)
Interest expense	(326)	(292)	(225)	(144)	(123)
Gains on investments and sale of business	663)	115)	1,343)	268)	—)
Other	(17)	11)	83)	(12)	7)
Interest and other, net	496)	11)	1,326)	209)	17)
Income from continuing operations before income taxes	2,718)	2,276)	3,651)	2,406)	3,531)
Income tax (provision) benefit	(190)	(3,288)	3,634)	(459)	(3,485)
Income (loss) from continuing operations	2,528)	(1,012)	7,285)	1,947)	46)
Income (loss) from discontinued operations, net of income taxes	2)	(4)	(19)	(222)	—)
Net income (loss)	2,530)	(1,016)	7,266)	1,725)	46)

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).

A significant structural shift in revenue is observed between 2014 and 2015, where net revenues decreased from 17,902 million US$ to 8,592 million US$. Following this contraction, a consistent upward trend emerged, with revenues growing annually to reach 10,746 million US$ by December 31, 2018. Gross profit followed a similar trajectory, declining sharply in 2015 before recovering steadily to 8,364 million US$ in 2018, maintaining a high gross margin throughout the period.

Operating Income and Expense Trends: Income from operations experienced a decline from 3,514 million US$ in 2014 to 2,197 million US$ in 2015. From 2015 to 2018, operating income remained relatively stagnant, fluctuating within a narrow range between 2,222 million US$ and 2,325 million US$. This indicates that while revenues grew after 2015, operating expenses scaled proportionally, neutralizing potential gains in operational profitability.
Operating Expenditure Analysis: Sales and marketing expenses showed a notable increase in 2018, rising to 3,391 million US$ from 2,515 million US$ in 2017. Product development costs also trended upward from 2015 to 2018, growing from 923 million US$ to 1,285 million US$. Conversely, general and administrative expenses remained more stable, showing a general decline from 2014 levels and stabilizing around 1,131 million US$ by 2018.
Non-Operating Impact and Net Income Volatility: Net income exhibited extreme volatility, largely driven by non-operating items and tax adjustments rather than core operational performance. A peak in net income occurred in 2016 at 7,266 million US$, driven by a significant gain on investments and sale of business (1,343 million US$) and a substantial income tax benefit of 3,634 million US$. This was followed by a net loss of 1,016 million US$ in 2017, primarily resulting from a large income tax provision of 3,288 million US$.
Financial Obligations and Interest: A steady increase in interest expense is observed, rising from 123 million US$ in 2014 to 326 million US$ in 2018. While interest income remained relatively stable, the growing gap between interest income and interest expense suggests an increasing cost of debt over the five-year period.

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