Ebay Inc. · NASDAQ:EBAY
Ebay — Investor Day (2022)
37 slides from Ebay's investor day presentation, Jun 2, 2022
Slide 1: The Path to Sustainable Growth at Scale
The Path to Sustainable Growth at Scale Steve Priest Chief Financial Officer
Slide 2: eBay Is a Global Leader in Commerce
eBay Is a Global Leader in Commerce 147M 190+ 17M Buyers Markets Sellers © 2022 eBay. All rights reserved. Note: Active Buyers and Active Sellers are trailing 12-month measures as of 12/31/2021. 2
Slide 3: eBay Is Where Scaled Demand Meets Scaled Supply
eBay Is Where Scaled Demand Meets Scaled Supply 60M+ 1.5B+ Weekly visitors Listings 80% Large businesses, Organic small businesses & consumers 10% Free 10% Paid © 2022 eBay. All rights reserved. Note: Average weekly visitors and total active listings as of 12/31/21. 3
Slide 4: Top Categories Each > $10B in Annual GMV
Top 5 Categories Each > $10B in Annual GMV $10B+ $10B+ $10B+ $10B+ $10B+ Motors Electronics Collectibles Home & Fashion Parts & Garden Accessories © 2022 eBay. All rights reserved. Note: 2021 GMV for Top 5 categories under current definition. 4
Slide 5: eBay Is Far Larger Than Its Vertical Competitors
eBay Is Far Larger Than Its Vertical Competitors eCommerce Competitors GMV | 2021, $B $87B $83B ~$33B ~$107B Est. Market Market Cap Cap eBay Peers Peers © 2022 eBay. All rights reserved. Source(s): Company reports, SEC documents, FactSet, E-commerce DB, Pitchbook, and sell-side research estimates. M
Slide 6: eBay Has Best-in-Class Margins in eCommerce
eBay Has Best-in-Class Margins in eCommerce 2021 Operating Margins among eCommerce marketplaces 33% 28% 28% 28% 28% 20% 19% 14% -13% 3% -7% -1% -21% +1.5% -11% -25% -19% Non-GAAP Operating Margin % -32% GAAP Operating Margin % -46% © 2022 eBay. All rights reserved. Source(s): Company filings, FactSe
Slide 7: 2021 Sustainability Milestones
2021 Sustainability Milestones 100% Carbon neutrality for scope 1 & 2 emissions 540,000 Metric tons of CO2 emissions avoided this year through Recommerce 2030 Science-based reduction targets 90% scope 1 & 2, 20% scope 3 © 2022 eBay. All rights reserved. 7
Slide 8: Where We Were
Where We Were
Slide 9: Top-Line Growth, But Operating Income Flat
Top-Line Growth, But Operating Income Flat Revenue, Non-GAAP Operating Income | 2016-2019, $B 10.7 10.8 9.9 9.3 30.0% 28.4% 28.2% 27.2% 2.8 2.8 2.9 3.0 2016 2017 2018 2019 Non-GAAP Operating Income Revenue Non-GAAP Op. Margin © 2022 eBay. All rights reserved. Note: Revenue, Non-GAAP Operating Income
Slide 10: New In-Season Growth Was Short-Lived
New In-Season Growth Was Short-Lived eBay GMV and Active Buyer growth | 2015-2019 10% 8% 3% 6% 5% (2)% 6% 4% 2% 0% -2% -4% Q4'15 Q2'16 Q4'16 Q2'17 Q4'17 Q2'18 Q4'18 Q2'19 Q4'19 GMV growth Y/Y (FXN) Active Buyer growth Y/Y © 2022 eBay. All rights reserved. Note: GMV, revenue, and trailing 12-month bu
Slide 11: Advertising Revenue Doubled in 4 Years
Advertising Revenue Doubled in 4 Years eBay Total Advertising Revenue | 2017-2021, $M $1,094 $973 $213 $239 $706 $627 $547 $313 $430 $881 $734 Other Ads Revenue* $469 $393 $197 PL Revenue $78 2017 2018 2019 2020 2021 Ads % Penetration of GMV 0.8% 0.8% 1.0% 1.1% 1.3% © 2022 eBay. All rights reserved.
Slide 12: Payments Created Significant Value
Payments Created Significant Value Payments GMV migration % over 18-month rollout Exited 2021 with: 100% >90% $2B revenue in FY’21 71% 25% Operating 52% Margin run-rate 38% $1.5B in Adyen >20% shares & warrants Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 © 2022 eBay. All rights reserved. Notes: GMV migratio
Slide 13: Divestitures Created Over $20B in Value
Divestitures Created Over $20B in Value $4.1 Deal value $13.3 Total $20.4 at closing $3.0 © 2022 eBay. All rights reserved. Note: Deal values as of closing date; include value of cash and retained equity. StubHub deal closed in February 2020; eBay Classified Group closed in June 2021; sale of eBay K
Slide 14: Replaced Lost Op. Income and Increased Margins
Replaced Lost Op. Income and Increased Margins Non-GAAP Operating Income | 2019-2021, $B 3.5 3.0 3.1 2.3 35.2% 33.4% 31.5% 28.2% 2019 2019 2020 2021 (as reported) (ex-dispositions) (ex-dispositions) (ex-dispositions) Non-GAAP Operating Income Non-GAAP Op. Margin © 2022 eBay. All rights reserved. Not
Slide 15: Build / Buy / Partner Approach
Build / Buy / Partner Approach Advertising Stack Computer Vision Technology The Vault Build Buy Partner © 2022 eBay. All rights reserved. Note: Adyen and Payoneer partnerships are related to Managed Payments. Bidadoo investment announced in September 2021. Sneakercon acquisition announced in Novembe
Slide 16: Capital Allocation History
Capital Allocation History Free Cash Flow and Capital Returns | 2019-2021, $B 7.5 0.5 5.5 5.5 0.5 0.4 ~$19B Total Capital 7.0 Returns 2.5 2.6 5.0 5.1 1.9 2019 2020 2021 Free Cash Flow Cash Dividend Share Repurchases © 2022 eBay. All rights reserved. Note: Free Cash Flow is restated for dispositions.
Slide 17: Where We Are Today
Where We Are Today
Slide 18: eBay in a Stronger Position than Pre-Pandemic
eBay in a Stronger Position than Pre-Pandemic GMV by year | 2019-2022E, $B +3.3% 87.6 87.4 CAGR 79.4 72.1 2019 2020 2021 2022E (Guidance Midpoint) © 2022 eBay. All rights reserved. Note: All GMV figures under current definition, restated for dispositions 18
Slide 19: $1.1T TAM in Top Markets Alone
$1.1T TAM in Top 3 Markets Alone; eBay Aligned with Largest & Fastest Growing Portion Online Retail Market Size | US, UK, DE, 2021-2024 Non-NIS, FY’24 - $750B FY’24 Branded NIS, FY’24 - $600B +$175B +9% CAGR $1.4T +$100B +6% CAGR Non-New In Branded New Season In Season FY’21 TAM FY’21 $1.1T FY’21 $5
Slide 20: Sneakers Turnaround Validates Focus Category Strategy
Sneakers Turnaround Validates +73% CAGR Focus Category Strategy Indexed $100+ Sneaker GMV | US, 2015-2021 -10% CAGR 100 2015 2016 2017 2018 2019 2020 2021 © 2022 eBay. All rights reserved. Note: Columns represent historical GMV for sneakers over $100 in the US (under current definition), indexed to
Slide 21: Cross-Category Shopping Drives Higher Spend
Cross-Category Shopping Drives Higher Spend Key ~Avg. Spend Avg. spend per buyer for Focus Category shoppers | US, 2021 Other Primary Categories Category All All P&A All eBay Trading Card Buyers Buyers Buyers ~$1,200 ~$700 ~$2,900 $500+ $100+ $2K+ Watch Handbag Sneaker Buyers Buyers Buyers ~$18,000
Slide 22: 19M Enthusiast Buyers Driving Roughly 71% of GMV
19M Enthusiast Buyers Driving Roughly 71% of GMV T12M Active Buyers by Group, in Millions 162 151 148 21 147 2021 GMV 18 17 9 19 Contribution 9 9 (On-Platform) 8 36 31 32 34 6% 20% 3% 71% 84 85 81 76 7 9 10 10 2018 2019 2020 2021 Off-platform Low-value Mid-value High Value - Other BWS High Value - E
Slide 23: Where We're Going
Where We’re Going
Slide 24: Key Investor Questions
Key Investor Questions: Long-term GMV growth? Incremental Ads & Payments Revenue? Operating income growth? Approach to capital allocation? © 2022 eBay. All rights reserved. 24
Slide 25: GMV Growth 2022-2024
GMV Growth 2022-2024 Guidance Context -5% to -8% • H1'22 negative mid-teens due to COVID GMV Growth 2022 FXN lapping • H2'22 flat to modestly positive +3% to +4% • 2022 exit at +2% to +3% growth GMV Growth 2023 FXN • Focus category coverage from ~20% entering 2022 to ~50% at 2024 exit ~+5% • Focus c
Slide 26: Revenue Growth 2022-2024
Revenue Growth 2022-2024 Guidance Context 0% to 3% • Throughout 2022-2024, revenue will Revenue Growth 2022 FXN outpace GMV due to Ads and Payments • 2022 driven primarily by full year benefits 5% to 6% of payments migration • Advertising revenue to double by Revenue Growth 2023 FXN 2025, CAGR ~20%
Slide 27: Margin Growth 2022-2024
Margin Growth 2022-2024 Guidance Context 30 – 31% • Continue to maintain attractive margins Non-GAAP Operating Margin 2022 as we invest in our business • $300M structural cost program to fund 31 – 32% investments in growth strategy • Total margin expansion of +100bps Non-GAAP Operating Margin 2024 b
Slide 28: Capital Allocation Outlook
Capital Allocation Outlook Guidance Context ~$7B • Build / buy / partner approach FCF (3 years 2022-2024) • Long-term tenets & targets unchanged • Target BBB+ rating • 1.5x net debt ~125% • < 3x gross debt to EBITDA • Cash balance target $3.5B Capital returns as % FCF • Strong balance sheet and FCF
Slide 29: EPS Outlook
EPS Outlook Guidance Context $4.20 – $4.40 Non-GAAP EPS 2022 • EPS growth acceleration from 2022-2024 as revenue and margins improve ~10% • Approximately two-thirds of EPS growth driven by operating income Non-GAAP EPS Growth 2023 • Additional EPS contribution from capital returns ~15% Non-GAAP EPS
Slide 30: eBay's Building Blocks for Sustainable Growth
eBay's Building Blocks for Sustainable Growth GMV Revenue EPS Capital Allocation ESG Marketing & Product Build/Buy/Partner Focus Categories Volume Growth Recommerce Investment Framework Operating Income Opportunistic Share Enthusiast Buyers Advertising Sustainability Goals Growth Buyback Structural
Slide 31: eBay's 3-Year Outlook
eBay’s 3-Year Outlook 2022 2023 2024 GMV -5 to -8% 3 - 4% ~5% Revenue 0 - 3% 5 - 6% 7 - 8% EPS $4.20 - $4.40 10% ~15% Free Cash Flow ~$7B over 3 years Capital Return 125% average © 2022 eBay. All rights reserved. Note: Please refer to our Q4’21 earnings presentation for more information regarding as
Slide 32: Investor Day
INVESTOR DAY
Slide 33: Appendix
INVESTOR DAY
Slide 34: GAAP to Non-GAAP Reconciliations: Operating Margin
GAAP to Non-GAAP Reconciliations Operating Margin Twelve months ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2016 2017 2017 2019 2019 2020 2021 (as restated under ASC 606 adoption FY'16-17, as reported FY'18-19) (restated)* GAAP operating income $
Slide 35: Reconciliation of Total Revenue ($M)
Reconciliation of Total Revenue ($M) Twelve months ended December 31, December 31, December 31, December 31, December 31, December 31, December 31, 2016 2017 2017 2019 2019 2020 2021 (as restated under ASC 606 adoption FY'16-17, as reported FY'18-19) (restated)* Net Revenues by Type Net Transaction
Slide 36: Calculation of Free Cash Flow
Calculation of Free Cash Flow Twelve months ended December 31, December 31, December 31, 2019 2020 2021 (in millions) Net cash provided by continuing operating activities $ 2,416 $ 3,004 $ 3,093 Less: Purchases of property and equipment, net (508) (463) (444) Free cash flow from continuing operation
Slide 37: GAAP to Non-GAAP Reconciliations: Guidance
GAAP to Non-GAAP Reconciliations Guidance Twelve Months Ending December 31, 2022 (in billions, except per share amounts) GAAP Non-GAAP (a) Net Revenue $10.3 - $10.5 $10.3 - $10.5 Diluted EPS $3.15 - $3.35 $4.20 - $4.40 Twelve Months Ending December 31, 2023 (year over year growth) GAAP Non-GAAP (a)