eBay Inc. (EBAY)
Q3 2009 Earnings Call Transcript
October 21, 2009 5:00 p.m. ET

Executives

Mark Rowen - Vice President, Investor Relations
John J. Donahoe - President and Chief Executive Officer
Robert H. Swan - Senior Vice President, Finance and Chief Financial Officer

Analysts

Mark Mahaney - Citigroup
Christa Quarles - Thomas Weisel Partners
Jeffrey Lindsay - Sanford C. Bernstein & Co., Inc.
Brian Pitz - UBS
James Mitchell - Goldman Sachs
Imran Khan - J.P. Morgan
Youssef Squali - Jefferies & Company
Sandeep Aggarwal - Collins Stewart Llc
Benjamin Schachter - Broadpoint AmTech
Scott Devitt - Morgan Stanley

Presentation

Operator

Ladies and gentlemen, good day. Welcome to eBay''s third quarter 2009 earnings results conference call. This call is being recorded.

And at this time, I''d like to turn the call over to Mark Rowen, Vice President of Investor Relations. Please go ahead, sir.

Mark Rowen

Thank you, Operator. Good afternoon. Thank you for joining us and welcome to eBay''s earnings release conference call for the third quarter of 2009. Joining me on today''s call are John Donahoe, our Chief Executive Officer; and Bob Swan, our Chief Financial Officer.

We are providing a slide presentation to accompany Bob''s commentary during the call. This conference call is also being broadcast on the Internet and both the presentation and call are available through the investor relations section of the eBay website at investor.ebayinc.com.

Before we begin, I''d like to remind you that during the course of this conference call, we''ll discuss some non-GAAP measures in talking about our company''s performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the slide presentation accompanying the conference call.

In addition, management may make forward-looking statements relating to our future performance that are based on our current expectations, forecasts, and assumptions, and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the fourth quarter of 2009, anticipated future stability and growth in the Marketplace''s business unit, and the sale of Skype.

Our actual results may differ materially from those discussed in this call for a variety of reasons, including, but not limited to, the impact of recent global economic events and the global economic downturn, foreign exchange rate fluctuations, changes in political, business, and economic conditions, the impact and integration of recent and future acquisitions, the impact of divestitures, including Skype. Our increasing need to grow revenues from existing users and established markets, an increasingly competitive environment for our businesses, the complexity of managing an increasingly large enterprise with a broad range of businesses, our need to manage regulatory, tax, IP, and litigation risks, including risks specific to PayPal, Bill Me Later, and the financial industry, and our need to upgrade our technology and customer service infrastructure at reasonable cost while adding new features and maintaining site stability.

You can find more information about factors that could affect our operating results in our most recent annual report on our Form 10-K and subsequent quarterly reports on Form 10-Q, also available at investor.ebayinc.com.

You should not unduly rely on any forward-looking statements, and we assume no obligation to update them. All information in the presentation is as of October 21, 2009, and we do not intend and undertake no duty to update this presentation.

Now, let me turn the call over to John.

John J. Donahoe

Thank you, Mark. And good afternoon, everyone. And welcome to our Q3 earnings call. Our Q3 revenues topped $2.2 billion with organic growth up 5% over the prior year. Our non-GAAP EPS was $0.38, and we generated free cash flow of $563 million during the quarter. These are strong results for a strong company getting stronger. Our strategies are working, and I continue to be pleased with our pace, our progress and our performance. Our teams are executing well against the three-year growth strategies we outlined earlier this year.