8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 20, 2005

eBay Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 000-24821
(Commission File Number) 77-0430924
(I.R.S. Employer
Identification No.)

2145 Hamilton Avenue
San Jose, CA 95125
(Address of principal executive offices)

(408) 376-7400
(Registrant’s telephone number, including area code)

Not Applicable.
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition

     The information in this report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934.

     On April 20, 2005, eBay Inc. announced its financial results for the quarter ended March 31, 2005. A copy of eBay’s press release announcing its financial results and certain other information is attached as Exhibit 99.1 to this report.

     The attached press release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. To supplement our consolidated financial statements presented in accordance with GAAP, eBay uses non-GAAP measures of gross profit, operating income, net income, earnings per share, cash flows and its effective tax rate, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance the investors’ overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of our core operating results. In addition, because we have historically reported certain non-GAAP results to investors, we believe the inclusion of non-GAAP numbers provides consistency in our financial reporting. These measures should be considered in addition to results prepared in accordance with GAAP, but are not a substitute for, or superior to, GAAP results. Consistent with our historical practice, the non-GAAP measures included in the attached press release have been reconciled to the nearest GAAP measure.

     The attached press release also contains forward-looking statements relating to eBay’s performance during the remainder of fiscal year 2005. A more thorough discussion of certain factors which may affect eBay’s operating results is included under the captions “Risk Factors That May Affect Results of Operations and Financial Condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in eBay’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. Additional information will be included under those captions in eBay’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, which will be filed with the SEC on or about April 27, 2005.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits.

The following exhibit is furnished with this report:

99.1   Press release dated April 20, 2005 containing financial results for eBay Inc. for the quarter ended March 31, 2005, and forward-looking statements relating to eBay’s performance during the remainder of fiscal year 2005.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	eBay Inc. (Registrant)
Date: April 20, 2005	/s/ Michael R. Jacobson
	Name: Michael R. Jacobson
	Title: Senior Vice President, Legal Affairs,
	General Counsel and Secretary

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INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Press release dated April 20, 2005 containing financial information for eBay Inc. for the quarter ended March 31, 2005, and forward-looking statements relating to eBay’s performance during the remainder of fiscal year 2005.

EX-99.1

Exhibit 99.1

eBAY INC. ANNOUNCES FIRST QUARTER 2005 FINANCIAL RESULTS

- Company Reports Record Q1 Net Revenues of $1.032 Billion -
- - Achieves Q1 GAAP Diluted EPS of $0.19 and Pro Forma Diluted EPS of $0.20 -
- - Raises 2005 Net Revenues, Operating Margin and EPS Guidance -

San Jose, CA, April 20, 2005 - eBay Inc. (Nasdaq: EBAY; www.ebay.com), the World’s Online Marketplace, reported financial results for its quarter ended March 31, 2005.

eBay reported record consolidated Q1-05 net revenues of $1.032 billion, up 36% year over year; operating income of $335.6 million, up 26% year over year, representing a 33% operating margin; and pro forma operating income of $367.4 million, up 28% year over year, representing a 36% pro forma operating margin.

Consolidated net income in Q1-05 was $256.3 million, or $0.19 per diluted share. eBay’s pro forma consolidated net income, excluding certain items, was $275.5 million, or $0.20 per diluted share.

These results exceeded the high end of the company’s guidance of $1.030 billion for net revenues, $0.17 for earnings per diluted share, and $0.18 for pro forma earnings per diluted share. These results and guidance reflect the two-for-one split of all outstanding shares of eBay’s common stock, which was effective in Q1-05.

“A record jump in registered users, record GMV, tremendous PayPal growth, and record net revenues all highlighted a wonderful quarter for eBay,” said Meg Whitman, President and CEO of eBay. “The eBay community is thriving, and we’re in an excellent position to deliver on both the top line and profit goals we’ve set out for 2005 and beyond.”

Key Financial and Operating Metrics

Consolidated Net Revenues - Consolidated net revenues totaled a record $1.032 billion, which represented an increase of 36% from the $756.2 million reported in Q1-04.

.	U.S. Marketplace Net Revenues - U.S. Marketplace net revenues totaled $404.8 million in Q1-05, representing 20% year-over-year growth.
.	International Marketplace Net Revenues - International Marketplace net revenues totaled $393.8 million in Q1-05, representing 52% year-over-year growth.
.	Payments Net Revenues - Payments net revenues totaled $233.1 million in Q1-05, representing 47% year-over-year growth.

     Confirmed Registered Users - Cumulative confirmed registered users at the end of Q1-05 totaled 147.1 million, representing a 40% increase over the 104.8 million users reported at the end of Q1-04.

eBay Announces Q1-05 Earnings (cont.)

Active Users - Active users, the number of users on the eBay platform who bid, bought, or listed an item within the previous 12 month period, increased to 60.5 million in Q1-05, a 34% increase over the 45.1 million active users reported in the same period a year ago.

Listings - New listings totaled a record 431.8 million in Q1-05, 32% higher than the 327.7 million listings reported in Q1-04. New listings in Q1-05 included 32.0 million new eBay Stores listings, compared to 8.0 million new eBay Stores listings in Q1-04.

Gross Merchandise Volume (GMV) – GMV, the total value of all successfully closed listings on eBay’s trading platforms, was $10.6 billion, representing a 32% year-over-year increase from the $8.0 billion reported in Q1-04.

Total Payments Accounts - PayPal’s business had 71.6 million total accounts at the end of Q1-05, which included all accounts and users whether registered or not, a 57% increase from the 45.6 million reported in Q1-04.

Total Payment Volume (TPV) – TPV, the dollar volume of payments initiated through the PayPal system, was $6.2 billion in Q1-05, a 44% increase from the $4.3 billion reported in Q1-04.

Operating Income - Operating income was $335.6 million, or 33% of net revenues, a 26% increase over the $266.7 million reported in Q1-04. Pro forma operating income increased 28% year over year to $367.4 million, or 36% of net revenues.

GAAP Net Income - GAAP net income increased 28% year over year to $256.3 million, or $0.19 per diluted share.

Pro Forma Net Income - Pro forma net income increased 31% year over year to $275.5 million, or $0.20 per diluted share.

Operating and Free Cash Flows - Operating cash flows totaled $495.4 million. Free cash flows totaled $289.4 million, representing operating cash flows less capital expenditures of $79.6 million and the payment of a lease obligation for our headquarters facility of $126.4 million.

Key Category Performance* - Based on Q1-05 GMV, the eBay Marketplace has twelve categories that delivered $1 billion or more in worldwide annualized GMV: eBay Motors at $12.9 billion; Consumer Electronics at $3.4 billion; Computers at $3.2 billion; Clothing & Accessories at $3.1 billion; Books/Movies/Music at $2.7 billion; Home & Garden at $2.2 billion; Collectibles at $2.2 billion; Sports at $1.9 billion; Toys at $1.7 billion; Jewelry & Watches at $1.6 billion; Business & Industrial at $1.4 billion; and Cameras & Photo at $1.3 billion.

Fixed Price Trading - eBay’s fixed price trading contributed approximately $3.2 billion or 30% of total GMV during Q1-05, primarily from eBay’s “Buy It Now” feature and from Half.com.

* For further detail on the eBay Marketplace’s current annualized $1 billion categories, including trended data, please see the metrics section on eBay’s Investor Relations website at http://investor.ebay.com/fundamentals.cfm.

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eBay Announces Q1-05 Earnings (cont.)

eBay Stores - At the end of Q1-05, eBay hosted approximately 264,000 stores worldwide, with approximately 158,000 stores hosted on the U.S. site.

Consolidated Financial and Operating Summary

eBay reported record consolidated net revenues of $1.032 billion in Q1-05, representing a 36% year-over-year increase. On a year-over-year basis, consolidated net revenues reflected a foreign currency translation benefit in Q1-05 of approximately $24.9 million. On a sequential basis, consolidated net revenues reflected a foreign currency translation benefit in Q1-05 of approximately $10.6 million.

Gross profit was $845.4 million, or 82% of net revenues, consistent with the percentage reported in Q1-04, and higher than the 81% reported in Q4-04. The sequential percentage increase was primarily a result of an increase in the Payments segment gross margin.

Sales and marketing expenses totaled $271.3 million, or 26% of net revenues, up from the 25% reported in Q1-04, but down from the 29% reported in Q4-04. The year-over-year percentage increase was primarily a result of international expansion and industry-wide increases in Internet marketing rates, which was partially offset by marketing efficiencies. The sequential percentage decrease was primarily the result of various efficiencies achieved in our marketing campaigns during Q1-05.

Product development expenses totaled $73.8 million, or 7% of net revenues, consistent with the percentage reported in Q1-04 and in Q4-04.

General and administrative costs totaled $136.4 million, or 13% of net revenues, up from the 12% of net revenues reported in both Q1-04 and Q4-04. The year-over-year percentage increase was primarily a result of increases in headcount in our trust and safety and corporate functions. The sequential percentage increase was primarily the result of higher performance-based compensation in Q1-05.

Income from operations totaled $335.6 million during Q1-05, a 26% increase over the $266.7 million reported in Q1-04. On a pro forma basis, income from operations totaled $367.4 million, a 28% increase over the $286.4 million reported in Q1-04. Included in both the GAAP and pro forma Q1-05 consolidated income from operations was a $12.8 million year-over-year net benefit from changes in foreign exchange rates. On a sequential basis, both the GAAP and pro forma consolidated income from operations reflected a foreign currency translation benefit in Q1-05 of approximately $6.8 million.

Interest and other income, net, totaled $22.4 million in Q1-05, down from the $23.5 million reported in Q1-04. Interest and other income, net, in Q1-04 included one-time gains of approximately $11.2 million relating to certain contract amendments. Without these gains, interest and other income, net, would have shown an increase in Q1-05 from Q1-04 of approximately $10.1 million which was primarily the result of increased interest income earned on larger cash, cash equivalents, and investment balances.

The GAAP effective tax rate for Q1-05 was 28%, down from the GAAP effective tax rate of 30% for Q1-04. The pro forma effective tax rate for Q1-05 was 29%, down from the pro forma effective tax rate of 31% for Q1-

3

eBay Announces Q1-05 Earnings (cont.)

04. The lower GAAP and pro forma effective tax rates for Q1-05, as compared to Q1-04, reflects an increased profit contribution from the company’s international operations.

During Q1-05, operating cash flow of $495.4 million and proceeds from the exercise of employee stock options of $179.3 million were used to fund the purchase of property and equipment of $79.6 million, the payment of a lease obligation for our headquarters facility of $126.4 million, the acquisition of businesses of $445.0 million and additional net investment purchases of $122.4 million. The company’s cash and investments totaled over $3.4 billion at the end of Q1-05.

Business Outlook

The following updated guidance reflects current business trends and exchange rates, as well as the impact of the two-for-one stock split of eBay’s common stock, which was effective in Q1-05. The guidance does not include the impact of potential acquisitions.

Net Revenues - eBay now expects consolidated net revenues for 2005 in the range of $4.270 billion to $4.360 billion. From a quarterly perspective, eBay now expects consolidated net revenues in the range of $1.025 billion to $1.050 billion in Q2-05, $1.035 billion to $1.060 billion in Q3-05 and $1.180 billion to $1.220 billion in Q4-05.

GAAP Diluted EPS - eBay now estimates GAAP earnings per diluted share for the full year 2005 in the range of $0.71 to $0.73, an increase from the previous guidance of $0.68 to $0.70. This increase in guidance implies an increase to the GAAP operating margin of approximately 1%. From a quarterly perspective, eBay now estimates GAAP earnings per diluted share of $0.16 in Q2-05, in the range of $0.16 to $0.17 in Q3-05 and $0.20 to $0.21 in Q4-05. The estimated earnings per diluted share does not include the impact of expensing stock options upon the adoption of Financial Accounting Standards Board Statement No. 123(R) “Share-Based Payment.”

Pro Forma Diluted EPS - eBay now estimates pro forma earnings per diluted share for the full year 2005 in the range of $0.76 to $0.78, an increase from the previous guidance of $0.74 to $0.76. This increase in guidance implies an increase to the pro forma operating margin of approximately 1%. From a quarterly perspective, eBay now estimates pro forma earnings per diluted share of $0.18 in Q2-05, in the range of $0.18 to $0.19 in Q3-05, and $0.21 to $0.22 in Q4-05.

Capital Expenditures - eBay continues to expect its capital expenditures in the range of $340 million to $400 million for the full year 2005, which is 8% to 9% of eBay’s guidance for net revenues. These expected capital expenditures for 2005 excludes the payment of a lease obligation for our headquarters facility in Q1-05 of approximately $126 million.

Quarterly Conference Call

eBay will host a conference call to discuss first quarter results at 2 pm Pacific Time today. A live webcast of the conference call can be accessed through the company’s Investor Relations website at http://investor.ebay.com. In addition, an archive of the webcast will be accessible through the same link.

4

eBay Announces Q1-05 Earnings (cont.)

Non-GAAP Measures

To supplement the company’s consolidated financial statements presented in accordance with GAAP, eBay uses non-GAAP measures of certain components of financial performance, including gross profit, operating income, net income, earnings per share, cash flows, and effective tax rate, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance investors’ overall understanding of the company’s current financial performance and the company’s prospects for the future. Specifically, the company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. In addition, because eBay has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency in the company’s financial reporting. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. Consistent with the company’s historical practice, the non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.

About eBay

eBay is The World’s Online Marketplace®. Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay. eBay enables trade on a local, national and international basis with customized sites in markets around the world. Through an array of services, such as its payment solution provider PayPal, eBay is enabling global e-commerce for an ever-growing online community.

Forward-Looking Statements

This press release contains forward-looking statements relating to the future performance of eBay and its consolidated subsidiaries. Those statements involve risks and uncertainties, and the company’s actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to: the company’s need to manage an increasingly large company with a broad range of businesses of varying degrees of maturity; the company’s need to increasingly achieve growth from its existing users as well as from new users in its more established markets; the company’s ability to deal with the increasingly competitive e-commerce environment, including competition for its sellers from other trading sites and other means of selling, and competition for its buyers from other merchants, online and offline; the company’s ability to upgrade and develop its systems, infrastructure and customer service capabilities to accommodate growth at a reasonable cost; the litigation, regulatory, credit card association, and other risks specific to PayPal; the company’s need to manage other regulatory, tax, and litigation risks even as its product offerings expand and its services are offered in more jurisdictions; the company’s ability to maintain site stability and performance on all of its sites while adding new products and features in a timely fashion; the
company’s ability to profitably expand its model to new types of merchandise and sellers; the company’s ability to profitably expand outside of the U.S.; fluctuations in foreign exchange rates; the costs and benefits of recent and future acquisitions and other commercial transactions; and, the need to manage the integration of recent and future acquisitions. The forward looking statements in this release do not include the potential impact of any acquisitions that may be completed after the date hereof.

5

eBay Announces Q1-05 Earnings (cont.)

More information about factors that could affect the company’s operating results is included under the captions “Risk Factors That May Affect Results of Operations and Financial Condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company’s investor relations site at http://investor.ebay.com. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the company on the date hereof. eBay assumes no obligation to update such statements.

Investor Relations Contact:	Tracey Ford	408-376-7205
Media Relations Contact:	Hani Durzy	408-376-7458
Investor Information Request:	408-376-7493
Company News:	http://www.businesswire.com
Investor Relations Website:	http://investor.ebay.com

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eBay Inc.
Unaudited Condensed Consolidated Balance Sheet
(U.S. Dollars In Thousands)

	December 31,		March 31,
	2004		2005
ASSETS
Current assets
Cash and cash equivalents	$	1,330,045	$	1,216,772
Short-term investments		682,004		799,037
Accounts receivable, net		240,856		270,435
Funds receivable from customers		123,424		209,379
Restricted cash and investments		155,405		30,554
Other current assets		379,415		421,875
Total current assets		2,911,149		2,948,052
Long-term investments		1,266,289		1,417,576
Restricted cash and investments		1,418		1,076
Property and equipment, net		709,773		693,460
Goodwill		2,709,794		3,078,177
Intangible assets, net		362,909		402,864
Other assets		29,719		47,953
	$	7,991,051	$	8,589,158
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	37,958	$	58,766
Funds payable and amounts due to customers		331,805		484,623
Accrued expenses and other current liabilities		421,969		440,220
Deferred revenue and customer advances		50,439		42,806
Short-term obligations		124,272		—
Income taxes payable		118,427		122,691
Total current liabilities		1,084,870		1,149,106
Deferred tax liabilities, net		135,971		170,434
Other liabilities		37,773		34,761
Minority interests		4,096		51
Total liabilities		1,262,710		1,354,352
Total stockholders’ equity		6,728,341		7,234,806
	$	7,991,051	$	8,589,158

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eBay Inc.
Unaudited Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)

	Three Months Ended
	March 31,
	2004			2005
Net revenues	$	756,239		$	1,031,724
Cost of net revenues		134,358			186,369
Gross profit		621,881			845,355
Operating expenses:
Sales and marketing		192,690			271,349
Product development		52,698			73,789
General and administrative		90,636			136,389
Payroll tax on employee stock options		5,146			5,731
Amortization of acquired intangible assets		13,963			22,523
Total operating expenses		355,133			509,781
Income from operations		266,748			335,574
Interest and other income, net		23,499			22,403
Interest expense		(2,331	)		(1,720	)
Income before income taxes and minority interests		287,916			356,257
Provision for income taxes		(85,756	)		(99,948	)
Minority interests		(2,060	)		(18	)
Net income	$	200,100		$	256,291
Net income per share:
Basic	$	0.15		$	0.19
Diluted	$	0.15		$	0.19
Weighted average shares:
Basic		1,305,002			1,343,442
Diluted		1,347,596			1,382,150

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eBay Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Income
(U.S. Dollars In Thousands, Except Per Share Amounts)

	Three Months Ended									Three Months Ended
	March 31, 2004									March 31, 2005
	Reported			Pro Forma Entries			Pro Forma			Reported			Pro Forma Entries			Pro Forma
Net revenues	$	756,239		$	—		$	756,239		$	1,031,724		$	—		$	1,031,724
Cost of net revenues		134,358			(24)	(a)		134,334			186,369			(78)	(a)		186,291
Gross profit		621,881			24			621,905			845,355			78			845,433
Operating expenses:
Sales and marketing		192,690			(75)	(a)		192,615			271,349			—			271,349
Product development		52,698			(189)	(a)		52,509			73,789			(322)	(a)		73,467
General and administrative		90,636			(268)	(a)		90,368			136,389			(3,196)	(a)		133,193
Payroll tax on employee stock options		5,146			(5,146)	(b)		—			5,731			(5,731)	(b)		—
Amortization of acquired intangible assets		13,963			(13,963)	(c)		—			22,523			(22,523)	(c)		—
Total operating expenses		355,133			(19,641	)		335,492			509,781			(31,772	)		478,009
Income from operations		266,748			19,665			286,413			335,574			31,850			367,424
Interest and other income, net		23,499			—			23,499			22,403			—			22,403
Interest expense		(2,331	)		—			(2,331	)		(1,720	)		—			(1,720	)
Income before income taxes and minority interests		287,916			19,665			307,581			356,257			31,850			388,107
Provision for income taxes		(85,756	)		(8,979)	(d)		(94,735	)		(99,948	)		(12,603)	(d)		(112,551	)
Minority interests		(2,060	)		—			(2,060	)		(18	)		—			(18	)
Net income	$	200,100		$	10,686		$	210,786		$	256,291		$	19,247		$	275,538
Net income per share:
Basic	$	0.15					$	0.16		$	0.19					$	0.21
Diluted	$	0.15					$	0.16		$	0.19					$	0.20
Weighted average shares:
Basic		1,305,002						1,305,002			1,343,442						1,343,442
Diluted		1,347,596						1,347,596			1,382,150						1,382,150
Operating margin		35	%		3	%		38	%		33	%		3	%		36	%

Notes:

(a)	Non-cash stock based compensation expense
(b)	Employer payroll taxes on employee non-qualified stock option gains
(c)	Amortization of acquired intangible assets
(d)	Income taxes associated with certain pro forma entries

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eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(U.S. Dollars In Thousands)

	Three Months Ended
	March 31,
	2004			2005
Cash flows from operating activities:
Net income	$	200,100		$	256,291
Adjustments:
Provision for doubtful accounts and authorized credits		15,604			22,024
Provision for transaction losses		11,644			18,579
Depreciation and amortization		55,685			79,660
Amortization of unearned stock-based compensation		556			3,596
Tax benefit on the exercise of employee stock options		76,640			84,992
Minority interests		2,060			18
Changes in assets and liabilities, net of acquisition effects:
Accounts receivable		(15,054	)		(54,162	)
Funds receivable from customers		(61,691	)		(77,333	)
Other current assets		(115,745	)		1,203
Other non-current assets		(4,667	)		(8,361	)
Deferred tax liabilities, net		(2,621	)		2,240
Accounts payable		42,341			20,909
Funds payable and amounts due to customers		143,652			168,928
Accrued expenses and other liabilities		2,024			(21,838	)
Deferred revenue and customer advances		7,850			(6,975	)
Income taxes payable		7,867			5,648
Net cash provided by operating activities		366,245			495,419
Cash flows from investing activities:
Purchases of property and equipment, net		(70,912	)		(79,584	)
Purchases of investments		(823,783	)		(368,094	)
Maturities and sales of investments		517,428			245,665
Purchases of intangibles and other non-current assets		(945	)		—
Acquisitions, net of cash acquired		(34,663	)		(445,008	)
Net cash used in investing activities		(412,875	)		(647,021	)
Cash flows from financing activities:
Proceeds from issuance of common stock, net		173,089			179,279
Payment of headquarters facility lease obligation		—			(126,390	)
Principal payments on long-term obligations		(1,147	)		(1,849	)
Net cash provided by financing activities		171,942			51,040
Effect of exchange rate changes on cash and cash equivalents		(5,117	)		(12,711	)
Net increase (decrease) in cash and cash equivalents		120,195			(113,273	)
Cash and cash equivalents at beginning of period		1,381,513			1,330,045
Cash and cash equivalents at end of period	$	1,501,708		$	1,216,772
Net cash provided by operating activities	$	366,245		$	495,419
Less: Purchases of property and equipment, net		(70,912	)		(79,584	)
Less: Payment of headquarters facility lease obligation		—			(126,390	)
Free cash flow	$	295,333		$	289,445

10

eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(U.S. Dollars In Thousands, Except Percentages)

Net Revenues by Type

	March 31,			June 30,			September 30,			December 31,			March 31,
	2004			2004			2004			2004			2005
Net Transaction Revenues
U.S. Marketplace	$	326,217		$	319,119		$	330,643		$	362,736		$	388,759
Current quarter vs prior quarter		12	%		(2	%)		4	%		10	%		7	%
Current quarter vs prior year quarter		39	%		32	%		29	%		24	%		19	%
International Marketplace		257,090			273,740			282,294			344,348			387,187
Current quarter vs prior quarter		22	%		6	%		3	%		22	%		12	%
Current quarter vs prior year quarter		87	%		76	%		82	%		64	%		51	%
Payments		155,513			158,815			166,282			200,203			227,097
Current quarter vs prior quarter		19	%		2	%		5	%		20	%		13	%
Current quarter vs prior year quarter		67	%		60	%		56	%		53	%		46	%
Total net transaction revenues		738,820			751,674			779,219			907,287			1,003,043
Current quarter vs prior quarter		17	%		2	%		4	%		16	%		11	%
Current quarter vs prior year quarter		59	%		51	%		51	%		43	%		36	%
Advertising and other non-transaction revenues
U.S. Marketplace		12,353			15,361			16,700			16,718			16,089
Current quarter vs prior quarter		7	%		24	%		9	%		0	%		(4	%)
Current quarter vs prior year quarter		63	%		75	%		67	%		45	%		30	%
International Marketplace		2,400			3,705			4,222			5,961			6,605
Current quarter vs prior quarter		6	%		54	%		14	%		41	%		11	%
Current quarter vs prior year quarter		83	%		159	%		140	%		164	%		175	%
Payments		2,666			2,672			5,735			5,816			5,987
Current quarter vs prior quarter		37	%		0	%		115	%		1	%		3	%
Current quarter vs prior year quarter		32	%		24	%		183	%		198	%		125	%
Total advertising and other non-transaction revenues		17,419			21,738			26,657			28,495			28,681
Current quarter vs prior quarter		11	%		25	%		23	%		7	%		1	%
Current quarter vs prior year quarter		59	%		76	%		93	%		81	%		65	%
Total net revenues	$	756,239		$	773,412		$	805,876		$	935,782		$	1,031,724
Current quarter vs prior quarter		17	%		2	%		4	%		16	%		10	%
Current quarter vs prior year quarter		59	%		52	%		52	%		44	%		36	%

In subsequent periods, the disclosure on this page will be eliminated from our earnings release.

11

eBay Inc.
Unaudited Summary of Consolidated Net Revenues
(U.S. Dollars In Thousands, Except Percentages)

Net Revenues by Segment

	March 31,			June 30,			September 30,			December 31,			March 31,
	2004			2004			2004			2004			2005
U.S. Marketplace	$	338,570		$	334,481		$	347,343		$	379,454		$	404,848
Current quarter vs prior quarter		12	%		(1	%)		4	%		9	%		7	%
Current quarter vs prior year quarter		40	%		33	%		31	%		25	%		20	%
International Marketplace		259,490			277,444			286,516			350,309			393,792
Current quarter vs prior quarter		22	%		7	%		3	%		22	%		12	%
Current quarter vs prior year quarter		87	%		77	%		83	%		65	%		52	%
Payments		158,179			161,487			172,017			206,019			233,084
Current quarter vs prior quarter		19	%		2	%		7	%		20	%		13	%
Current quarter vs prior year quarter		66	%		59	%		59	%		55	%		47	%
Percent of Payments revenue which is international		26.2	%		28.7	%		30.1	%		33.0	%		35.0	%
Total net revenues	$	756,239		$	773,412		$	805,876		$	935,782		$	1,031,724
Current quarter vs prior quarter		17	%		2	%		4	%		16	%		10	%
Current quarter vs prior year quarter		59	%		52	%		52	%		44	%		36	%

Net Revenues by Geography

	March 31,			June 30,			September 30,			December 31,			March 31,
	2004			2004			2004			2004			2005
U.S. net revenues	$	455,355		$	449,571		$	467,545		$	517,465		$	556,246
Current quarter vs prior quarter		12	%		(1	%)		4	%		11	%		7	%
Current quarter vs prior year quarter		43	%		36	%		33	%		28	%		22	%
% of total		60	%		58	%		58	%		55	%		54	%
International net revenues		300,884			323,841			338,331			418,317			475,478
Current quarter vs prior quarter		24	%		8	%		4	%		24	%		14	%
Current quarter vs prior year quarter		91	%		82	%		88	%		72	%		58	%
% of total		40	%		42	%		42	%		45	%		46	%
Total net revenues	$	756,239		$	773,412		$	805,876		$	935,782		$	1,031,724
Current quarter vs prior quarter		17	%		2	%		4	%		16	%		10	%
Current quarter vs prior year quarter		59	%		52	%		52	%		44	%		36	%

12

eBay Inc.
eBay Unaudited Supplemental Operating Data
(In Millions, Except Percentages)

	March 31,			June 30,			September 30,			December 31,			March 31,
	2004			2004			2004			2004			2005
Confirmed Registered Users (1)		104.8			114.0			125.0			135.5			147.1
Current quarter vs prior quarter		10	%		9	%		10	%		8	%		9	%
Current quarter vs prior year quarter		52	%		51	%		46	%		43	%		40	%
Active Users (2)		45.1			48.0			51.7			56.1			60.5
Current quarter vs prior quarter		9	%		6	%		8	%		9	%		8	%
Current quarter vs prior year quarter		45	%		41	%		38	%		36	%		34	%
Number of Non-Stores Listings (3)		319.7			315.9			327.7			376.6			399.8
Current quarter vs prior quarter		12	%		(1	%)		4	%		15	%		6	%
Current quarter vs prior year quarter		48	%		43	%		42	%		31	%		25	%
Number of Stores Listings (3)		8.0			16.4			20.3			28.0			32.0
Current quarter vs prior quarter		57	%		105	%		24	%		38	%		14	%
Current quarter vs prior year quarter		158	%		332	%		395	%		449	%		300	%
Gross Merchandise Volume (4)	$	8,039		$	8,012		$	8,307		$	9,810		$	10,602
Current quarter vs prior quarter		14	%		0	%		4	%		18	%		8	%
Current quarter vs prior year quarter		51	%		42	%		44	%		39	%		32	%

Marktplaats.nl in the Netherlands, mobile.de in Germany, and Rent.com in the United States are not included in these metrics.

(1)	Cumulative total of all users who have completed the registration process on one of eBay’s trading platforms.
(2)	All users, excluding users of Baazee.com, Half.com, Internet Auction, Marktplaats.nl, mobile.de, and Rent.com, who bid on, bought, or listed an item within the previous 12-month period. Includes users of eBay EachNet in China since the migration to the eBay platform in September 2004.
(3)	All listings on eBay’s trading platforms during the quarter, regardless of whether the listing subsequently closed successfully.
(4)	Total value of all successfully closed listings between users on eBay’s trading platforms during the quarter, regardless of whether the buyer and seller actually consummated the transaction.

13

eBay Inc.
PayPal Unaudited Supplemental Operating Data
(In Millions, Except Percentages)

	March 31,			June 30,			September 30,			December 31,			March 31,
	2004			2004			2004			2004			2005
Total accounts (1)		45.6			50.4			56.7			63.8			71.6
Current quarter vs prior quarter		13	%		11	%		13	%		13	%		12	%
Current quarter vs prior year quarter		67	%		62	%		61	%		58	%		57	%
Active accounts (2)		14.5			15.5			17.4			20.2			22.1
Total number of payments (3)		79.2			77.7			83.4			99.6			110.4
Current quarter vs prior quarter		16	%		(2	%)		7	%		19	%		11	%
Current quarter vs prior year quarter		57	%		45	%		45	%		46	%		39	%
Total payment volume (4)	$	4,321		$	4,350		$	4,637		$	5,607		$	6,233
Current quarter vs prior quarter		16	%		1	%		7	%		21	%		11	%
Current quarter vs prior year quarter		64	%		53	%		52	%		51	%		44	%
Auction as % of total payment volume		70	%		69	%		70	%		71	%		71	%
Transaction rates:
Transaction revenue rate		3.60	%		3.64	%		3.59	%		3.57	%		3.64	%
Transaction processing expense rate		1.25	%		1.34	%		1.30	%		1.27	%		1.15	%
Transaction loss rate		0.27	%		0.25	%		0.22	%		0.31	%		0.30	%

(1)	Cumulative total of all personal, premier, or business accounts opened, excluding accounts that have been closed or locked, and users that made payments using PayPal but have not registered.
(2)	All accounts, and users whether registered or not, that sent or received at least one payment through the PayPal system during the quarter.
(3)	Total number of payments initiated through the PayPal system during the quarter, regardless of whether the payment was actually sent successfully, or was reversed, rejected, or pending at the end of the quarter.
(4)	Total dollar volume of payments initiated through the PayPal system during the quarter, regardless of whether the payment was actually sent successfully, or was reversed, rejected, or was pending at the end of the quarter.

14

eBay Inc.
Guidance Summary
(In Millions, Except Per Share Amounts And Percentages)

The guidance figures provided below and elsewhere in this press release are approximate in nature because eBay’s future performance is difficult to predict. Such guidance is based on information available on the date hereof, and eBay assumes no obligation to update it.

eBay’s future performance involves risks and uncertainties, and the company’s actual results could differ materially from such guidance. Some of the factors that could affect the company’s operating results are set forth under the caption “Forward-Looking Statements” above in this press release. More information about factors that could affect eBay’s operating results is included under the captions “Risk Factors That May Affect Results of Operations and Financial Condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its most recent annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company’s investor relations site at http://investor.ebay.com.

	Three months ending June 30, 2005 (c)
	GAAP		Adjustments			Pro Forma (a)
Net revenues	$	1,025 - $1,050		—		$	1,025 - $1,050
Diluted EPS	$	0.16	$	0.02	(b)	$	0.18

	Three months ending September 30, 2005 (c)
	GAAP		Adjustments			Pro Forma (a)
Net revenues	$	1,035 - $1,060		—		$	1,035 - $1,060
Diluted EPS	$	0.16 - $0.17	$	0.02	(b)	$	0.18 - $0.19

	Three months ending December 31, 2005 (c)
	GAAP		Adjustments			Pro Forma (a)
Net revenues	$	1,180 - $1,220		—		$	1,180 - $1,220
Diluted EPS	$	0.20 - $0.21	$	0.01	(b)	$	0.21- $0.22

	Year ending December 31, 2005 (c)
	GAAP			Adjustments			Pro Forma (a)
Net revenues	$	4,270 - $4,360			—		$	4,270 - $4,360
Operating margin		32	%		3%	(a)		35	%
Diluted EPS*	$	0.71- $0.73		$	$0.05	(b)	$	0.76- $0.78
Effective tax rate		28% - 29	%					29% - 30	%

*	Please note that the sum of the quarters may not total to the full year EPS because the quarterly EPS is calculated using the respective results and weighted average shares for each quarter, and the full year EPS is calculated using the results and weighted average shares for the full year.
(a)	Pro forma guidance reflects estimated quarterly adjustments for amortization of acquired intangible assets of approximately $20 - $23 million, payroll taxes on employee stock options of approximately $2 - $5 million, stock based compensation of approximately $2 million and other adjustments estimated to result in an operating margin adjustment of approximately 2 - 3% for each of the quarters in the year ending December 31, 2005.
(b)	Net of tax, the above pro forma items are estimated to result in a $0.01 - $0.02 per diluted share adjustment for each of the quarters in the year ending December 31, 2005.
(c)	The estimated earnings per diluted share does not include the impact of expensing stock options upon the adoption of Financial Accounting Standards Board Statement No. 123(R) “Share-Based Payment.”

15