Analysis of Geographic Areas
eBay Inc. operates in 2 regions: U.S. and International.
Area Asset Turnover
eBay Inc., asset turnover by geographic area
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| U.S. | 2.63 | 2.55 | 2.35 | 2.17 | 2.91 |
| International | 42.21 | 34.23 | 33.20 | 42.83 | 41.08 |
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 analysis of area asset turnover reveals a significant divergence in operational efficiency and asset utilization between the U.S. and International segments from 2014 to 2018.
- U.S. Asset Turnover Trends
- The U.S. market experienced an initial decline in asset turnover, falling from 2.91 in 2014 to a period low of 2.17 in 2015. Following this contraction, a consistent recovery pattern was observed, with the ratio increasing steadily to 2.35 in 2016, 2.55 in 2017, and 2.63 in 2018. Although the trend turned positive after 2015, the ratio remained below the 2014 peak throughout the remainder of the period.
- International Asset Turnover Trends
- The International segment maintained substantially higher turnover ratios than the domestic market. An initial increase from 41.08 in 2014 to 42.83 in 2015 was followed by a significant downturn, with the ratio dropping to 33.20 in 2016 and 34.23 in 2017. A sharp recovery occurred in 2018, as the turnover ratio rose to 42.21, effectively returning to the levels seen in 2015.
- Comparative Regional Analysis
- A stark contrast in asset intensity is evident between the two geographic areas. The International segment's asset turnover is orders of magnitude higher than that of the U.S. segment, indicating a significantly more asset-light operational model abroad. While both regions experienced a dip in efficiency around 2016, the International segment demonstrated greater volatility but a more robust capacity for rapid recovery.
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Area Asset Turnover: U.S.
eBay Inc.; U.S.; area asset turnover calculation
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net revenues | 4,373) | 4,091) | 3,866) | 3,624) | 8,495) |
| Long-lived tangible assets | 1,661) | 1,603) | 1,643) | 1,668) | 2,924) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.63 | 2.55 | 2.35 | 2.17 | 2.91 |
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).
1 2018 Calculation
Area asset turnover = Net revenues ÷ Long-lived tangible assets
= 4,373 ÷ 1,661 = 2.63
Between 2014 and 2018, the U.S. geographic area experienced a significant structural shift characterized by a sharp contraction in both revenue and asset bases in 2015, followed by a period of steady recovery and improved operational efficiency.
- Net Revenue Trends
- Net revenues underwent a substantial decline from US$ 8,495 million in 2014 to US$ 3,624 million in 2015. Subsequent years showed a consistent recovery, with revenues increasing annually to US$ 3,866 million in 2016, US$ 4,091 million in 2017, and reaching US$ 4,373 million by the end of 2018.
- Long-lived Tangible Asset Base
- Long-lived tangible assets decreased sharply from US$ 2,924 million in 2014 to US$ 1,668 million in 2015. Following this reduction, the asset base remained relatively stagnant for the remainder of the period, with minimal fluctuations between US$ 1,603 million and US$ 1,661 million through 2018.
- Area Asset Turnover Performance
- The area asset turnover ratio dropped from 2.91 in 2014 to 2.17 in 2015, indicating a decline in the efficiency of asset utilization relative to revenue generation. However, a positive trend emerged from 2016 onward, with the ratio climbing steadily to 2.35 in 2016, 2.55 in 2017, and 2.63 in 2018. This upward trajectory suggests that the organization successfully increased its revenue output while maintaining a stabilized asset base.
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Area Asset Turnover: International
eBay Inc.; International; area asset turnover calculation
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net revenues | 6,373) | 5,476) | 5,113) | 4,968) | 9,407) |
| Long-lived tangible assets | 151) | 160) | 154) | 116) | 229) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 42.21 | 34.23 | 33.20 | 42.83 | 41.08 |
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).
1 2018 Calculation
Area asset turnover = Net revenues ÷ Long-lived tangible assets
= 6,373 ÷ 151 = 42.21
Analysis of the international segment reveals a significant reduction in both net revenues and long-lived tangible assets between 2014 and 2015. Following this sharp contraction, net revenues entered a period of consistent annual growth, increasing from 4,968 million US dollars in 2015 to 6,373 million US dollars by 2018. Long-lived tangible assets remained relatively stable following the 2015 decline, fluctuating within a range of 116 million to 160 million US dollars.
- Area Asset Turnover Volatility
- The area asset turnover ratio exhibited a non-linear trend over the five-year period. After an initial peak of 42.83 in 2015, the ratio experienced a notable decline to 33.20 in 2016. This downward movement indicates a temporary decrease in the efficiency with which long-lived tangible assets were utilized to generate revenue.
- Efficiency Recovery
- A recovery trend is observed starting in 2017, with the ratio ascending to 42.21 by December 31, 2018. This return to levels comparable to those seen in 2014 and 2015 suggests a restoration of capital efficiency. The growth in net revenues during the final two years of the period outpaced the growth in the tangible asset base, resulting in an improved asset turnover profile.
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Net revenues
eBay Inc., net revenues by geographic area
US$ in millions
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| U.S. | 4,373) | 4,091) | 3,866) | 3,624) | 8,495) |
| International | 6,373) | 5,476) | 5,113) | 4,968) | 9,407) |
| Total | 10,746) | 9,567) | 8,979) | 8,592) | 17,902) |
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).
Analysis of total net revenues reveals a significant structural shift between 2014 and 2015, followed by a period of sustained growth. Total net revenues fell from $17,902 million in 2014 to $8,592 million in 2015, representing a substantial contraction. However, from 2015 to 2018, revenues grew steadily each year, reaching $10,746 million by the end of the period.
- U.S. Market Performance
- After a sharp decline in 2015 to $3,624 million, U.S. net revenues exhibited a consistent annual increase. Revenues grew to $3,866 million in 2016, $4,091 million in 2017, and reached $4,373 million in 2018, indicating a stable recovery and gradual expansion in the domestic market.
- International Market Performance
- The international segment has consistently outperformed the U.S. market in terms of absolute revenue. Following the 2015 decrease to $4,968 million, international revenues grew more aggressively than domestic revenues, climbing to $5,113 million in 2016, $5,476 million in 2017, and $6,373 million in 2018.
- Geographic Revenue Distribution
- International operations served as the primary driver of total net revenue throughout the analyzed timeframe. By 2018, international revenues accounted for approximately 59% of total net revenue, demonstrating a higher growth velocity and a greater contribution to the overall revenue stream compared to the U.S. segment.
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Long-lived tangible assets
eBay Inc., long-lived tangible assets by geographic area
US$ in millions
| Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | |
|---|---|---|---|---|---|
| U.S. | 1,661) | 1,603) | 1,643) | 1,668) | 2,924) |
| International | 151) | 160) | 154) | 116) | 229) |
| Total | 1,812) | 1,763) | 1,797) | 1,784) | 3,153) |
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 reduction in total long-lived tangible assets occurred between 2014 and 2015, followed by a period of relative stability from 2015 through 2018. The total asset base decreased from 3,153 million US$ in 2014 to 1,784 million US$ in 2015, representing a decline of approximately 43%. Following this sharp contraction, the total values remained consistent, fluctuating slightly to end at 1,812 million US$ by December 31, 2018.
- Domestic Asset Trends
- The U.S. market accounts for the vast majority of long-lived tangible assets. A substantial decrease is observed between 2014 and 2015, where assets fell from 2,924 million US$ to 1,668 million US$. From 2015 to 2018, the U.S. asset levels remained stable, with a minor dip in 2017 to 1,603 million US$ before recovering to 1,661 million US$ at the end of the period.
- International Asset Trends
- International long-lived tangible assets represent a small fraction of the overall portfolio. These assets declined from 229 million US$ in 2014 to 116 million US$ in 2015. A moderate recovery was noted between 2016 and 2017, peaking at 160 million US$, before settling at 151 million US$ in 2018.
- Geographic Concentration
- The distribution of assets is heavily skewed toward the United States. In 2014, U.S. assets constituted approximately 92.7% of the total. By 2018, this concentration remained high, with U.S. assets comprising approximately 91.7% of the total long-lived tangible asset base, indicating a consistent strategic reliance on domestic infrastructure.
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