EX-99.1 2 exhibit991erebayq12025.htm EX-99.1 Document


Exhibit 99.1
ebaynotma03a.jpg
eBay Inc. Reports First Quarter 2025 Results

•Revenue of $2.6 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis
•Gross Merchandise Volume ("GMV") of $18.8 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis
•GAAP and Non-GAAP earnings per diluted share of $1.06 and $1.38, respectively
•GAAP and Non-GAAP operating margins of 23.8% and 29.8%, respectively
•Returned $759 million to stockholders in Q1, including $625 million of share repurchases and $134 million paid in cash dividends


San Jose, California, April 30, 2025 – eBay Inc. (Nasdaq: EBAY), a global commerce leader that connects millions of buyers and sellers around the world, today reported financial results for its first quarter ended March 31, 2025.

“eBay’s first quarter results were ahead of expectations, as we delivered our fourth consecutive quarter of positive GMV growth,” said Jamie Iannone, Chief Executive Officer at eBay. “Our Focus Categories and geo-specific investments are driving momentum in the business, and we continue to innovate – leveraging Al to make our marketplace more efficient and intuitive for customers.”

“We exceeded our quarterly financial metrics and continue to invest for the long-term health of our marketplace,” said Steve Priest, Chief Financial Officer at eBay. “Our teams have done a tremendous job executing on our strategy, while navigating a dynamic demand environment.”

First Quarter Financial Highlights

•Revenue was $2.6 billion, up 1% on an as-reported basis and up 2% on a foreign exchange ("FX") neutral basis.
•GMV was $18.8 billion, up 1% on an as-reported basis and up 2% on an FX-Neutral basis.
•GAAP net income from continuing operations was $505 million, or $1.06 per diluted share.
•Non-GAAP net income from continuing operations was $657 million, or $1.38 per diluted share.
•GAAP and Non-GAAP operating margins were 23.8% and 29.8%, respectively.
•Generated $787 million of operating cash flow and $644 million of free cash flow.
•Returned $759 million to stockholders, including $625 million of share repurchases and $134 million paid in cash dividends.

Business Highlights

•eBay rolled out a simplified, AI-powered listing flow to all consumer-to-consumer ("C2C") customers in the U.S., U.K. and Germany, leveraging eBay’s magical listing technology to improve the ease, speed and quality of listing creation.
•The company expanded its Authenticity Guarantee service in Japan to include watches and jewelry, reinforcing eBay’s value proposition of trust and selection, and increasing customer confidence for luxury items on a global scale.
•As part of eBay’s strategic partnership with Collectors and its subsidiary PSA, the companies have streamlined the grading process for raw trading cards. Integrated with eBay’s Authenticity Guarantee, the PSA grading service makes it even more seamless for hobbyists to determine the value of their trading card purchases.
•In celebration of Pokémon Day, eBay launched the “Evolving Shop,” a curated shopping experience, enabling collectibles enthusiasts to discover rare trading cards and coveted merchandise inspired by the beloved Pokémon, Eevee, and its evolutions.
•eBay closed the acquisition of Caramel, an end-to-end online automotive transaction solution provider. Caramel’s innovative technology handles all the complexities of a vehicle sale, improving trust and safety across the platform.
•eBay introduced enhanced customer safeguards alongside a buyer protection fee on listings from U.K. based C2C sellers, increasing trust with 24/7 customer support and enabling buyers to complete transactions with confidence.
•The company's total advertising offerings generated $442 million of revenue in the first quarter, representing 2.4% of GMV. First-party advertising products on the eBay platform delivered $418 million of revenue in the first quarter, up 13% on an as-reported basis and up 14% on an FX-Neutral basis.
•eBay announced a collaboration with OpenAI on its AI agent, Operator, which acts as a virtual assistant, autonomously performing tasks, including online shopping, connecting users to eBay’s unique inventory and expanding seller reach.
•eBay partnered with Meta to integrate eBay listings on Facebook Marketplace in the U.S., Germany and France, providing sellers broader visibility and the chance to reach a new audience of buyers.



Impact

•Through eBay for Charity, buyers and sellers contributed more than $46 million globally in Q1.
•eBay partnered with Condé Nast to launch the Vogue Vintage Market: a curated collection of vintage pieces, including items sourced directly on eBay, which successfully raised $500,000 to aid Los Angeles wildfire relief efforts.
•eBay was named to Fortune’s “Most Innovative Companies” list for 2025 for the third year in a row.

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First Quarter 2025 Financial Highlights (presented in millions, except per share data and percentages)
First Quarter
20252024Change
eBay Inc.
Net revenues$2,585 $2,556 $29 1 %
GAAP – Continuing Operations
Net income
$505 $439 $66 15 %
Earnings per diluted share
$1.06 $0.85 $0.21 25 %
Non-GAAP – Continuing Operations
Net income$657 $648 $9 1 %
Earnings per diluted share$1.38 $1.25 $0.13 10 %

Other Selected Financial and Operational Results
•Operating margin – GAAP operating margin decreased to 23.8% for the first quarter of 2025, compared to 24.7% for the same period last year. Non-GAAP operating margin decreased to 29.8% for the first quarter of 2025, compared to 30.3% for the same period last year.
•Taxes – The GAAP effective tax rate for continuing operations for the first quarter of 2025 was 20.4%, compared to 18.1% for the first quarter of 2024. The non-GAAP effective tax rate for continuing operations for the first quarter of 2025 was 16.5%(1).
•Cash flow – The company generated $787 million of operating cash flow and $644 million of free cash flow during the first quarter of 2025.
•Capital returns – The company repurchased $625 million of its common stock, or approximately 9 million shares, in the first quarter of 2025. The company's total repurchase authorization remaining as of March 31, 2025 was approximately $2.7 billion. The company also paid cash dividends of $134 million during the first quarter of 2025.
•Cash and cash equivalents and non-equity investments – The company's cash and cash equivalents and non-equity investments portfolio totaled $6.2 billion as of March 31, 2025.

Business Outlook
eBay is providing the following guidance for the second quarter 2025.
In billions, except per share data and percentages
Q2 2025 Guidance
Revenue
$2.59 - $2.66
FX-Neutral Y/Y Growth
(1)% - 2%
Gross Merchandise Volume
$18.6 - $19.1
FX-Neutral Y/Y Growth
(1)% - 2%
Diluted GAAP EPS
$0.87 - $0.94
Diluted Non-GAAP EPS
$1.24 - $1.31

Dividend Declaration
•eBay's Board of Directors declared a second quarter 2025 cash dividend of $0.29 per share of the company's common stock. The dividend is payable on June 13, 2025 to stockholders of record as of May 30, 2025.

(1) We use a non-GAAP effective tax rate for evaluating our operating results. Based on our current long-term projections, we are using a non-GAAP tax rate of 16.5%. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.
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Quarterly Conference Call and Webcast

eBay Inc. will host a conference call to discuss first quarter 2025 results at 2:30 p.m. Pacific Time today. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company's Investor Relations website at https://investors.ebayinc.com. In addition, an archive of the webcast will be accessible for at least three months through the same link.

eBay Inc. uses its Investor Relations website at https://investors.ebayinc.com and social media channels as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor this website, in addition to following our press releases, Securities and Exchange Commission (SEC) filings, public conference calls and webcasts.

About eBay

eBay Inc. (Nasdaq: EBAY) is a global commerce leader that connects people and builds communities to create economic opportunity for all. Our technology empowers millions of buyers and sellers in more than 190 markets around the world, providing everyone the opportunity to grow and thrive. Founded in 1995 in San Jose, California, eBay is one of the world's largest and most vibrant marketplaces for discovering great value and unique selection. In 2024, eBay enabled $75 billion of gross merchandise volume. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.

Presentation

All growth rates represent year-over-year comparisons, except as otherwise noted. All amounts in tables are presented in U.S. dollars, rounded to the nearest million, except as otherwise noted. As a result, certain amounts may not sum or recalculate using the rounded dollar amounts provided. References to “revenue” refer to “net revenues” as reported in the company’s consolidated statement of income.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as “non-GAAP financial measures” by the SEC: non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income and margin, non-GAAP effective tax rate, free cash flow and FX-Neutral basis. These non-GAAP financial measures are presented on a continuing operations basis. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles (GAAP). For a reconciliation of these non-GAAP financial measures, except for figures in this press release presented on an “FX-Neutral basis,” to the nearest comparable GAAP measures, see “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP Operating Income to Non-GAAP Operating Income,” “Reconciliation of GAAP Net Income to Non-GAAP Net Income and GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate” and “Reconciliation of Operating Cash Flow to Free Cash Flow” included in this press release. For figures in this press release reported “on an FX-Neutral basis,” we calculate the year-over-year impact of foreign currency movements using prior period foreign currency rates, excluding hedging activity, applied to current year transactional currency amounts.

Forward-Looking Statements

This press release contains forward-looking statements relating to, among other things, the future performance of eBay Inc. and its consolidated subsidiaries that are based on the company's current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of eBay Inc. and its consolidated subsidiaries, including management's vision for the future of eBay and our ability to accomplish our vision, expected financial results for the second quarter and full year 2025 and expected drivers thereof, the future growth in our business, our ability to drive sustainable long-term growth, the effects and potential of current and contemplated strategic initiatives and offerings including with respect to artificial intelligence, payment plans and options and partnerships with other companies, the effects of new product features or programs, the effects of geopolitical events, tariffs and global trade policy, foreign currency volatility, and inflationary pressure on our business and operations and our ability to respond to such effects, operating efficiency and margins, reinvestments, dividends and share repurchases. Actual results could differ materially from those expressed or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: fluctuations in, and our ability to predict, our results of operations and cash flows; our ability to convert visits into sales for our sellers, attract and retain sellers and buyers and execute on our business strategy; our ability to compete in the markets in which we participate; our ability to generate revenue from our foreign operations and expand in international markets; the impact of inflationary pressure, changing tariff policy, fluctuations in foreign currency exchange rates, elevated interest rates and geopolitical events such as the ongoing wars in Ukraine and in the Middle East, terrorist activities and public health events; our ability to keep pace with rapid technological developments or continue to innovate and create new initiatives to provide new programs, products and services; our ability to operate and continuously develop our payments system and financial services offerings; the impact of evolving domestic and
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foreign government laws, regulations, rules and standards that affect us, our business and/or our industry, including the impact of potential changes in tariffs or sanctions and escalating trade wars; our reliance on third-party providers; our ability to protect or enforce our intellectual property rights; our ability to deal effectively with fraudulent activities on our platforms; the impact of any security breaches, cyberattacks or system failures and resulting interruptions; our ability to attract, retain and develop highly skilled employees; our ability to accomplish or accurately track and report results related to our sustainability and similar goals; current and potential litigation and regulatory and government inquiries, investigations and disputes involving us or our industry; our ability to generate sufficient cash flow to service our indebtedness; the impact of evolving sales and other tax regimes in various jurisdictions and anticipated tax liabilities; and the success of our recent and potential acquisitions, dispositions, joint ventures, strategic partnerships and strategic investments.

The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

More information about factors that could affect the company's operating results is included under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company's Investor Relations website at https://investors.ebayinc.com or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the company on the date hereof. The company assumes no obligation to update such statements.
  
Investor Relations Contact:John Egbertir@ebay.com
Media Relations Contact:
Emma McCulloch
press@ebay.com
Company News:https://www.ebayinc.com/stories/news/ 
Investor Relations website:https://investors.ebayinc.com 


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eBay Inc.
Unaudited Condensed Consolidated Balance Sheet
 
 March 31,
2025		December 31,
2024
 (In millions)
ASSETS
Current assets:  
Cash and cash equivalents$3,031 $2,433 
Short-term investments1,760 3,457 
Customer accounts and funds receivable1,287 962 
Other current assets794 715 
Total current assets6,872 7,567 
Long-term investments2,586 2,439 
Property and equipment, net1,293 1,263 
Goodwill4,357 4,269 
Operating lease right-of-use assets419 427 
Deferred tax assets2,920 2,936 
Other assets507 464 
Total assets$18,954 $19,365 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:  
Short-term debt$994 $1,673 
Accounts payable292 257 
Customer accounts and funds payable1,353 1,018 
Accrued expenses and other current liabilities2,217 2,184 
Income taxes payable1,024 966 
Total current liabilities5,880 6,098 
Operating lease liabilities302 320 
Deferred tax liabilities1,413 1,405 
Long-term debt5,751 5,752 
Other liabilities658 632 
Total liabilities14,004 14,207 
Total stockholders' equity4,950 5,158 
Total liabilities and stockholders' equity$18,954 $19,365 

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eBay Inc.
Unaudited Condensed Consolidated Statement of Income

 Three Months Ended
March 31,
 20252024
 (In millions, except per share amounts)
Net revenues$2,585 $2,556 
Cost of net revenues (1)
723 700 
Gross profit1,862 1,856 
Operating expenses:
Sales and marketing (1)
536 541 
Product development (1)
362 351 
General and administrative (1)
261 238 
Provision for transaction losses81 91 
Amortization of acquired intangible assets6 4 
Total operating expenses1,246 1,225 
Income from operations616 631 
Interest and other:
Loss on equity investments and warrant, net
(2)(97)
Interest expense
(61)(66)
Interest income and other, net
81 68 
Income from continuing operations before income taxes
634 536 
Income tax provision
(129)(97)
Income from continuing operations
505 439 
Loss from discontinued operations, net of income taxes
(2)(1)
Net income
$503 $438 
Income per share – basic:
Continuing operations$1.08 $0.85 
Discontinued operations— — 
Net income per share – basic
$1.08 $0.85 
Income per share – diluted:
Continuing operations$1.06 $0.85 
Discontinued operations— — 
Net income per share – diluted
$1.06 $0.85 
Weighted average shares:
Basic467 516 
Diluted475 519 
(1) Includes stock-based compensation as follows:
Cost of net revenues$13 $13 
Sales and marketing20 23 
Product development65 64 
General and administrative38 46 
$136 $146 
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eBay Inc.
Unaudited Condensed Consolidated Statement of Cash Flows

 Three Months Ended
March 31,
 20252024
 (In millions)
Cash flows from operating activities:
Net income$503 $438 
Loss from discontinued operations, net of income taxes2 1 
Adjustments:
Provision for transaction losses81 91 
Depreciation and amortization79 76 
Stock-based compensation136 146 
Deferred income taxes31 40 
Change in fair value of warrant— (149)
Change in fair value of equity investment in Adevinta— 234 
Loss on investments and other, net
2 12 
Changes in assets and liabilities, net of acquisition effects(47)(274)
Net cash provided by operating activities787 615 
Cash flows from investing activities:
Purchases of property and equipment(143)(143)
Purchases of investments(3,043)(3,312)
Maturities of investments
4,587 3,703 
Acquisitions and other
(89)2 
Net cash provided by investing activities
1,312 250 
Cash flows from financing activities:
Repurchases of common stock(615)(453)
Payments for taxes related to net share settlements of restricted stock units and awards(69)(51)
Payments for dividends(134)(139)
Repayment of senior notes
(800)— 
Proceeds from issuance of commercial paper
568 — 
Repayment of commercial paper
(441)— 
Net funds receivable and payable activity243 (28)
Other— (15)
Net cash used in financing activities(1,248)(686)
Effect of exchange rate changes on cash, cash equivalents and restricted cash19 (11)
Net increase in cash, cash equivalents and restricted cash
870 168 
Cash, cash equivalents and restricted cash at beginning of period3,286 2,493 
Cash, cash equivalents and restricted cash at end of period$4,156 $2,661 
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eBay Inc.
Unaudited Summary of Consolidated Net Revenues

Three Months Ended
March 31,
2025		December 31,
2024		September 30,
2024		June 30,
2024		March 31,
2024
(In millions, except percentages)
Total net revenues (1)(2)
$2,585 $2,579 $2,576 $2,572 $2,556 
Current quarter vs prior year quarter1 %1 %3 %1 %2 %
Percent from international48 %48 %49 %50 %49 %
(1) Hedge gain/(loss)$8 $(23)$(11)$(10)$(10)
(2) Foreign currency impact$(21)$5 $(6)$(11)$14 


eBay Inc.
Unaudited Supplemental Operating Data

Three Months Ended
March 31,
2025		December 31,
2024		September 30,
2024		June 30,
2024		March 31,
2024
(In millions, except percentages)
Active Buyers (1)
134 134 133 132 132 
Current quarter vs prior year quarter1 %1 %1 %0 %(1)%
Gross Merchandise Volume (2)
U.S.$9,066 $9,043 $8,740 $8,798 $8,974 
Current quarter vs prior year quarter1 %2 %1 %1 %0 %
International$9,687 $10,277 $9,566 $9,620 $9,649 
Current quarter vs prior year quarter0 %6 %2 %1 %3 %
Total Gross Merchandise Volume$18,753 $19,320 $18,306 $18,418 $18,623 
Current quarter vs prior year quarter1 %4 %2 %1 %1 %

(1)Active Buyers consist of all buyers who paid for a transaction on our Marketplace platforms within the previous 12-month period. Buyers may register more than once, and as a result, may have more than one account. Our acquisitions completed during the periods shown have not materially impacted Active Buyers.
(2)Gross Merchandise Volume consists of the total value of all paid transactions between users on our Marketplace platforms during the applicable period inclusive of shipping fees and taxes.



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eBay Inc.
Business Outlook

The guidance figures provided below and elsewhere in this press release are forward-looking statements, reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature because the company's future performance is difficult to predict. Such guidance is based on information available on the date of this press release, and the company assumes no obligation to update it.
The company's future performance involves risks and uncertainties, and the company's actual results could differ materially from the information below and elsewhere in this press release. 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 the company's operating results is included under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting eBay's investor relations website at https://investors.ebayinc.com or the SEC's website at www.sec.gov.
eBay Inc.
Three Months Ending
June 30, 2025
(In billions, except per share amounts)GAAP
Non-GAAP (a)
Net revenues
$2.59 - $2.66
$2.59 - $2.66
Diluted EPS
$0.87 - $0.94
$1.24 - $1.31
Gross Merchandise Volume
$18.6 - $19.1
(a) Estimated non-GAAP amounts above for the three months ending June 30, 2025 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $13 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $160-$170 million and estimated adjustment between our GAAP and non-GAAP tax rate of approximately $20-$30 million. The estimated GAAP diluted EPS above does not assume any gains or losses on our remaining equity investments.
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eBay Inc.
Non-GAAP Measures of Financial Performance
To supplement the company's condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income and margin, non-GAAP effective tax rate, free cash flow and figures in this press release presented on an "FX-Neutral basis." These non-GAAP financial measures are presented on a continuing operations basis.
These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the company's results of operations in conjunction with the corresponding GAAP measures.
Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release, except for figures in this press release presented on an “FX-Neutral basis,” can be found in the tables included in this press release. For figures in this press release reported on an "FX-Neutral basis,” the company calculates the year-over-year impact of foreign currency movements using prior period foreign currency rates, excluding hedging activity, applied to current year transactional currency amounts.
These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and its prospects for the future. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, or net purchases of property and equipment, as the case may be, that may not be indicative of its core operating results and business outlook. In addition, because the company has historically reported certain non-GAAP results to investors, the company believes that the inclusion of non-GAAP measures provides consistency in the company's financial reporting.
For its internal budgeting process, and as discussed further below, the company's management uses financial measures that do not include stock-based compensation expense, employer payroll taxes on stock-based compensation, amortization or impairment of acquired intangible assets, impairment of goodwill, amortization of deferred tax assets associated with the realignment of its legal structure and related foreign exchange effects, significant gains or losses from the disposal/acquisition of a business, certain gains and losses on investments including changes in fair value, changes in foreign currency exchange rates and the impact of any related foreign exchange derivative instruments, gains or losses associated with a warrant agreement that the company entered into with Adyen, restructuring-related charges and the income taxes associated with the foregoing. In addition to the corresponding GAAP measures, the company's management also uses the foregoing non-GAAP measures in reviewing the financial results of the company.
The company excludes the following items from non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income and margin and non-GAAP effective tax rate:
Stock-based compensation expense and related employer payroll taxes. This expense consists of expenses for stock options, restricted stock and employee stock purchases. The company excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash expenses that management does not believe are reflective of ongoing operating results. The related employer payroll taxes are dependent on the company's stock price and the vesting of restricted stock by employees and the timing and size of stock option exercises, over which management has limited to no control, and as such management does not believe it correlates to the company's operation of the business.
Amortization or impairment of acquired intangible assets, impairment of goodwill, certain amortization of deferred tax assets and related foreign exchange effects, significant gains or losses and transaction expenses from the acquisition or disposal of a business and certain gains or losses on investments. The company incurs amortization or impairment of acquired intangible assets and goodwill in connection with acquisitions and may incur significant gains or losses from the acquisition or disposal of a business and therefore excludes these amounts from its non-GAAP measures. The company also excludes certain gains and losses on investments. The company excludes the non-cash amortization of deferred tax assets associated with the realignment of its legal structure, which is not reduced by the effects of the Tax Cuts and Jobs Act, and related foreign exchange effects. The company excludes these items because management does not believe they correlate to the ongoing operating results of the company's business.
Restructuring. These charges consist of expenses for employee severance and other exit and disposal costs. The company excludes significant restructuring charges primarily because management does not believe they are reflective of ongoing operating results.
Other certain significant gains, losses, or charges that are not indicative of the company’s core operating results. These are significant gains, losses, or charges during a period that are the result of isolated events or transactions which have not occurred frequently in the past and are not expected to occur regularly or be repeated in the future. The company excludes these amounts from its results primarily because management does not believe they are indicative of its current or ongoing operating results. These amounts include changes in fair value and the related change in foreign currency exchange rates of equity securities with readily determinable fair values, globally.
Change in fair market value of warrant. These are gains or losses associated with a warrant agreement that the company entered into with Adyen, which are attributable to changes in fair value during the period.
Income tax effects and adjustments. We use a non-GAAP tax rate for evaluating our operating results. Based on our current long-term projections, we are using a non-GAAP tax rate of 16.5%. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.
In addition to the non-GAAP measures discussed above, the company also uses free cash flow. Free cash flow represents operating cash flows less purchases of property and equipment. The company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property, buildings, and equipment, which can then be used to, among other things, invest in the company's business, make strategic acquisitions, repurchase stock and pay dividends. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in the company's cash balance for the period and does not exclude certain non-discretionary expenditures, such as mandatory debt service requirements.
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eBay Inc.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income*

Three Months Ended
March 31,
20252024
(In millions, except percentages)
GAAP operating income$616 $631 
Stock-based compensation expense and related employer payroll taxes143 150 
Amortization of acquired intangible assets within cost of net revenues and operating expenses12 8 
Restructuring— (9)
Legal matters
— (6)
Total non-GAAP operating income adjustments155 143 
Non-GAAP operating income$771 $774 
GAAP operating margin
23.8 %24.7 %
Non-GAAP operating margin29.8 %30.3 %
*Presented on a continuing operations basis

Reconciliation of GAAP Net Income to Non-GAAP Net Income and
GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate

Three Months Ended
March 31,
20252024
(In millions, except per share amounts and percentages)
GAAP income from continuing operations before income taxes
$634 $536 
GAAP provision for income taxes
(129)(97)
GAAP net income from continuing operations
$505 $439 
Non-GAAP adjustments to net income from continuing operations:
Non-GAAP operating income from continuing operations adjustments (see table above)$155 $143 
Change in fair value of equity investment in Adevinta— 234 
Change in fair value of other equity investments
(3)12 
Change in fair value of warrant
— (149)
Income tax effects and adjustments— (31)
Non-GAAP net income from continuing operations$657 $648 
Diluted net income from continuing operations per share:
GAAP$1.06 $0.85 
Non-GAAP$1.38 $1.25 
Shares used in GAAP diluted net income per share calculation
475 519 
Shares used in non-GAAP diluted net income per share calculation475 519 
GAAP effective tax rate – Continuing operations20.4 %18.1 %
Income tax effects and adjustments to net income from continuing operations
(3.9)%(1.6)%
Non-GAAP effective tax rate – Continuing operations16.5 %16.5 %

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Reconciliation of Operating Cash Flow to Free Cash Flow

Three Months Ended
March 31,
20252024
(In millions)
Net cash provided by operating activities
$787 $615 
Less: Purchases of property and equipment(143)(143)
Free cash flow$644 $472 
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