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  • Giuliana Rancic Launches Single-Serving Wine Glasses for Just Enough

    Giuliana Rancic Launches Single-Serving Wine Glasses for Just Enough

    Giulina Rancic, the Fashion Police and E! News co-host, has hit on an idea that only an Italian girl could come up with.

    Rancic was born in Naples, Italy. Rancic is 40 years old. If you do the math, wine is definitely in the equation. Rancic’s new innovation is individual stacked cups of wine.

    “Moms these days are busier than ever and a lot of us are juggling a million things a day,” Rancic told People. “When we come home at the end of the night we deserve that one perfect glass of wine.”

    The product is called XO, G. Right now it comes in Italian Pinot Grigio, South of France Rose and French Pinot Noir. the idea is that you don’t have to open a bottle, you just open a single glass.

    Their website says it best:

    “There’s a time and a place for enjoying a full bottle of wine… But sometimes, 9pm on a Monday night isn’t it. With Xo, G, you can finally enjoy that delicious glass of wine without worrying about overindulging. Our 4 shatterproof, pre-filled glasses of premium wine are perfect for those times when just one glass is enough.”

    “You hear stories of how Italians give wine to their children and it’s true, it was always on the table,” Rancic says. “It was never taboo in my household, I’ve always respected wine and I really savor it.”

  • Is Social Media Very Good For Ecommerce Conversions?

    Is Social Media Very Good For Ecommerce Conversions?

    Social media might not be all that great for ecommerce. At least not yet. Sure, it’s wonderful for branding and general marketing, but as far as getting actual conversions, the channel is severely lacking, according to some sources.

    Do you see significant conversions from social media referrals? How does it stack up to other channels like search and email? Let us know in the comments.

    Bounce Exchange conducted a survey, and found that 83% of online marketers believe social media marketing is important for their businesses, but after analyzing over $1 billion U.S. ecommerce transactions, it found that social media marketing efforts only account for about 1.2% of total site conversions.

    Among its other findings:

  • 53% of social media marketers do not measure the success of their investments in social
  • Social conversion rates are 51% lower than sites’ overall average rates
  • Followers are often engaging in content that is not directly related to the ultimate product
  • Click rates on follow and share buttons are very low and often distract shoppers which cause shopping cart abandonment
  • Bounce Exchange also brings up the fact that Facebook has all but killed the organic reach of Page post (but you already know all about that), though according to Mark Zuckerberg, Facebook “still overall a very good, organic and free way to reach and communicate with your customers.”

    He didn’t actually say it was a very good way to “sell to customers”.

    While the success of ecommerce conversions through social media channels will obviously vary greatly by business, it could trend towards the more positive in the months and years to come. This is starting to become an actual focus of social platforms.

    As you may know, Facebook and Twitter are both testing buy buttons, which enable brands to give customers direct calls to action in their News Feeds and timelines. See something cool that you really want to own as you’re doing your daily browsing (which let’s be honest, occurs multiple times throughout the day)? Just click buy and get it without jumping through extra hoops. Both buttons should be significant in improving conversions from mobile devices.

    In fact, we had a pretty good conversation about that with ChannelAdvisor CEO Scot Wingo a while back. Facebook’s in particular could be just what mobile commerce is looking for. This is the kind of thing you’re inevitably going to start seeing more of in your News Feed:

    Here’s an example of a tweet with the button.

    Even Tumblr has launched its own buy button and other similar call to action buttons that it is showing for content from a few select sites:

    It’s early days for the social media buy button, so it’s hard to say just how successful it’ll be (and even that could vary by platform), but the major players seem to agree that there’s some real potential with it. Even if it means paid social media marketing, buttons like Twitter’s and Facebook’s (and maybe Tumblr’s eventually as it expands) could help in the social ROI department. It’s going to be very interesting to watch how consumers interact with them.

    It could be that while these features will help social conversions, they could end up doing little to help social compete with other channels overall. People aren’t typically looking to shop when they hop on Facebook, Twitter, or Tumblr. They’re looking for content to consume. It’s not like search where they’re seeking products out.

    Do you consider social media to be a good channel for ecommerce conversions today? Do you think these buy buttons will make for significant improvements? Share your thoughts in the comments.

  • AOL Acquires Video Platform Vidible

    AOL Acquires Video Platform Vidible

    AOL announced that it has acquired video management and exchange platform Vidible to expand its global scale in video distribution, discovery, and management.

    More specifically, AOL says the pick-up enables it to expand its video stack with new video content management tools, and increase availability and management of premium video to publishers and content owners via a self-serve platform. It also adds a video content exchange, which will fit into the company’s monetization platforms, including ONE by AOL. Finally, it adds what AOL describes as “an A+ team of proven operators and top-notch product and technical leaders.”

    “AOL is focused on transforming the digital media environment by creating an open marketplace for video,” said Dermot McCormack, President of AOL Video and Studios. “We are thrilled to welcome the Vidible team to AOL as we accelerate our mission of providing our partners the platform and tools they need to better create, curate, syndicate and monetize their content across the globe. ”

    “We’re excited to be joining AOL, a company that is at the forefront of video, “ added Vidible co-founder and President Tim Mahlman. “The combination of AOL Video and Vidible accelerates our vision of making content management and syndication available to video content creators and publishers everywhere.”

    Vidible’s content exchange includes over 300,000 videos and over 800 million monthly video plays.

    Terms of the deal were not disclosed.

    Image via Vidible

  • Mila Kunis, Ashton Kutcher Join Michael J. Fox, Rihanna in Annie Cameos

    Mila Kunis, Ashton Kutcher Join Michael J. Fox, Rihanna in Annie Cameos

    Mila Kunis and Ashton Kutcher are in the new Annie remake. Kinda, sorta.

    The new Annie, which stars Jamie Foxx and Quvenzhané Wallis’ as Will Stacks and Annie, respectively, features several celebrities in cameos, including new parents Kunis and Kutcher. Foxx’s character is a parallel to the classic Daddy Warbucks character from previous incarnations of the Annie story.

    Michael J. Fox plays himself in the film, in a scene in which he endorses the fictional New York City mayor. This scene no doubt hearkens back to Fox’s role in ABC’s “Spin City” sitcom as Mike Flaherty, the Deputy Mayor of New York. Fox played that role for the first four seasons of the show with Barry Bostwick as the Mayor of New York.

    According to the New York Daily News, Mila Kunis and Ashton Kutcher are tucked a bit deeper into the film. They are actually in a film within the film.

    The Annie film includes as scene where Stacks and Annie go to a premiere event for a movie called Moonquake Lake. Kunis and Kutcher are leads in that film. In a Moonquake Lake scene, the two are confronted by pop star Rihanna playing a villain covered in blue makeup. But Kunis and Kutcher are also present in character at the premiere event.

    IMDb lists Kunis role as “Andrea Alvin,” while Kutcher is “Simon Goodspeed.” There is currently no listing for Rihanna nor her birth name, Robyn Rihanna Fenty. She is not even listed in the “uncredited” section.

    In the trailer below, you can see Kunis and Kutcher on the Moonquake Lake movie poster if you pause at 1:21 and again at 1:22.

  • Cisco Earnings Released, CFO Out

    Cisco Earnings Released, CFO Out

    Cisco just reported its Q1 earnings for the quarter ended October 25. In a return to growth, the company reported its strongest Q1 revenue ever at $12.2 billion, which is up 1% year-over-year. Earnings per share were $0.35 GAAP and $0.54 non-GAAP.

    Cisco also announced that executive vice president and CFO Frank Calderoni is stepping down at the beginning of the new year, and that it will appoint senior vice president, Business Technology and Operations Finance Kelly A. Kramer to succeed him.

    “We are pleased with our results and are very comfortable in our strategy to deliver innovative solutions which enable the next generation of IT and the Internet of Everything. This was our strongest Q1 ever in terms of revenue, non-GAAP operating income, and non-GAAP EPS,” said Cisco chairman and CEO John Chambers. “We continue to make progress towards becoming the #1 IT company in the world. We are still in a tough environment, but seeing encouraging trends as cities, businesses, governments and schools are becoming more digitized. Our solutions continue to drive positive outcomes and enable productivity through the combination of collaboration, mobility, security and efficiency across our customers’ businesses.”

    Here’s the release in its entirety:

    SAN JOSE, CA — Nov 12, 2014 – Cisco (NASDAQ: CSCO)

    • Q1 Revenue: $12.2 billion (increase of 1% year over year)
    • Q1 Earnings per Share: $0.35 GAAP; $0.54 non-GAAP

    Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its first quarter results for the period ended October 25, 2014. Cisco reported first quarter revenue of $12.2 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.8 billion or $0.35 per share, and non-GAAP net income of $2.8 billion or $0.54 per share.

    “We are pleased with our results and are very comfortable in our strategy to deliver innovative solutions which enable the next generation of IT and the Internet of Everything. This was our strongest Q1 ever in terms of revenue, non-GAAP operating income, and non-GAAP EPS,” stated Cisco chairman and CEO John Chambers. “We continue to make progress towards becoming the #1 IT company in the world. We are still in a tough environment, but seeing encouraging trends as cities, businesses, governments and schools are becoming more digitized. Our solutions continue to drive positive outcomes and enable productivity through the combination of collaboration, mobility, security and efficiency across our customers’ businesses.”

    GAAP Results
    Q1 2015 Q1 2014 Vs. Q1 2014
    Revenue $ 12.2 billion $ 12.1 billion 1.3 %
    Net Income $ 1.8 billion $ 2.0 billion (8.4 )%
    Earnings per Share $ 0.35 $ 0.37 (5.4 )%
    Non-GAAP Results
    Q1 2015 Q1 2014 Vs. Q1 2014
    Net Income $ 2.8 billion $ 2.9 billion (2.3 )%
    Earnings per Share $ 0.54 $ 0.53 1.9 %

    A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table following the Consolidated Statements of Operations.

    Cisco will discuss first quarter results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.

    CFO Transition
    Frank Calderoni recently notified Cisco of his decision to step down as executive vice president and chief financial officer of Cisco, effective January 1, 2015. Cisco plans to appoint Kelly A. Kramer to succeed Mr. Calderoni. She is currently senior vice president, Business Technology and Operations Finance of Cisco.

    Cash and Cash Equivalents and Investments

    • Cash flows from operations were $2.5 billion for the first quarter of fiscal 2015, compared with $3.6 billion for the fourth quarter of fiscal 2014, and compared with $2.6 billion for the first quarter of fiscal 2014.
    • Cash and cash equivalents and investments were $52.1 billion at the end of the first quarter of fiscal 2015, compared with $52.1 billion at the end of the fourth quarter of fiscal 2014, and compared with $48.2 billion at the end of the first quarter of fiscal 2014.

    Dividends and Stock Repurchase Program

    • During the first quarter of fiscal 2015, Cisco paid a cash dividend of $0.19 per common share, or $973 million.
    • Cisco repurchased approximately 41 million shares of common stock under the stock repurchase program at an average price of $24.58 per share for an aggregate purchase price of $1.0 billion during the first quarter of fiscal 2015. As of October 25, 2014, Cisco had repurchased and retired 4.3 billion shares of Cisco common stock at an average price of $20.66 per share for an aggregate purchase price of approximately $89.5 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $7.5 billion with no termination date.

    “We had a solid quarter delivering results for Q1 consistent with our expectations,” stated Frank Calderoni, Cisco executive vice president and chief financial officer. “Our strong cash flow, balance sheet, and ongoing commitment to return capital to shareholders demonstrates the strength of our financial strategy.”

    Internet of Everything

    • Cisco unveiled new Cisco® Connected Transportation Solutions designed to offer a safer and more productive commuter experience via the Internet of Everything (IoE).
    • Cisco and the City of Berlin announced an IoE Innovation Center, to be located in Berlin, which will focus on manufacturing, transport and logistics.
    • Marking the next phase of its expansion in India, Cisco unveiled the “Cisco Smart City” as a blueprint for the future of smart and connected communities in India.
    • Cisco announced new Connected Safety and Security solutions that add intelligence and analytics from the core to the edge to help protect cities and businesses.
    • Cisco outlined an expansion of its fog computing strategy with the second phase of its IOx platform for industrial scale Internet of Things (IoT) deployments.
    • Addressing the growing demand for IoE skills, the Cisco Networking Academy announced the first global IoE curriculum.

    Fast IT

    • Cisco broadened its storage networking portfolio to address the massive data growth across small-to cloud-scale storage networks.
    • Cisco introduced innovations to its Unified Computing System™ business, delivering a broader and more powerful portfolio of technologies to help customers capitalize on rapidly changing landscapes in business and IT.
    • Cisco introduced ASA with FirePOWER — the industry’s first threat-focused next-generation firewall.
    • Cisco announced that it has added the support of more than 30 additional companies to its Intercloud ecosystem, expanding the reach of the global Intercloud by 250 additional data centers in 50 countries.
    • Cisco announced that Shell has deployed the Cisco Secure Ops Solution to increase security maturity level by improving its cyber security and risk management while lowering costs of delivery and operations.
    • Cisco expanded its Videoscape™ Virtualized Video Processing solution, the industry’s first fully orchestrated and virtualized solution, to enable faster, cost-effective scaling for multi-screen video workers.

    Innovation

    • Cisco and Red Hat announced a new integrated infrastructure solution for OpenStack-based cloud deployments.
    • Cisco completed the acquisition of Metacloud, Inc. Metacloud’s OpenStack-based cloud platform is expected to help accelerate Cisco’s strategy to build the world’s largest global Intercloud.
    • Cisco completed the acquisition of Memoir Systems enabling the proliferation of affordable, fast memory for existing Cisco switch ASICs and helping advance Cisco’s ASIC innovations necessary to meet next-generation IT requirements.

    Editor’s Notes:

    • Q1 fiscal year 2015 conference call to discuss Cisco’s results along with its business outlook will be held on Wednesday, November 12, 2014 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
    • Conference call replay will be available from 4:00 p.m. Pacific Time, November 12, 2014 to 11:59 p.m. Pacific Time, on November 19, 2014 at 1-800-835-3804 (United States) or 1-402-280-1654 (international). The replay will also be available via webcast from November 12, 2014 through January 16, 2015 on the Cisco Investor Relations website at http://investor.cisco.com.
    • Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, November 12, 2014. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations website at http://investor.cisco.com.

    About Cisco
    Cisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. For ongoing news, please go to http://thenetwork.cisco.com.

    This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as our strategy, our goal to become the #1 IT company, return of capital to shareholders and the ability of our solutions to drive positive outcomes and enable productivity in our customers’ businesses) and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, including our foundational priorities, and in certain geographical locations; the timing of orders and manufacturing and customer lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, intellectual property, antitrust, shareholder and other matters, and governmental investigations; natural catastrophic events; a pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco’s most recent report on Form 10-K filed on September 9, 2014. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco’s most recent report on Form 10-K as it may be amended from time to time. Cisco’s results of operations for the three months ended October 25, 2014 are not necessarily indicative of Cisco’s operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

    This release includes non-GAAP net income, non-GAAP effective tax rates, non-GAAP net income per share data, non-GAAP inventory turns and free cash flow.

    These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles 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. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco’s results of operations in conjunction with the corresponding GAAP measures.

    Cisco believes that the presentation of non-GAAP net income, non-GAAP effective tax rates, and non-GAAP net income per share data, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. In addition, Cisco believes that the presentation of non-GAAP inventory turns provides useful information to investors and management regarding financial and business trends relating to inventory management based on the operating activities of the periods presented. Cisco believes that the presentation of free cash flow, which it defines as the net cash provided by operating activities less cash used to acquire property and equipment, to be a liquidity measure that provides useful information to management and investors because of its intent to return a stated percentage of free cash flow to shareholders in the form of dividends and stock repurchases. Cisco further regards free cash flow as a useful measure because it reflects cash that can be used to, among other things, invest in its business, make strategic acquisitions, repurchase common stock, and pay dividends on its common stock, after deducting capital investments.

    For its internal budgeting process, Cisco’s management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, impact to cost of sales from purchase accounting adjustments to inventory, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation and other contingencies, the income tax effects of the foregoing, and significant tax matters. Cisco’s management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

    Copyright © 2014 Cisco and/or its affiliates. All rights reserved. Cisco, the Cisco logo, Unified Computing System, and Videoscape are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

    CONSOLIDATED STATEMENTS OF OPERATIONS
    (In millions, except per-share amounts)
    (Unaudited)
    Three Months Ended
    October 25,
    2014
    October 26,
    2013
    REVENUE:
    Product $ 9,435 $ 9,397
    Service 2,810 2,688
    Total revenue 12,245 12,085
    COST OF SALES:
    Product 3,919 3,747
    Service 993 931
    Total cost of sales 4,912 4,678
    GROSS MARGIN 7,333 7,407
    OPERATING EXPENSES:
    Research and development 1,583 1,724
    Sales and marketing 2,515 2,411
    General and administrative 504 515
    Amortization of purchased intangible assets 71 65
    Restructuring and other charges 318 237
    Total operating expenses 4,991 4,952
    OPERATING INCOME 2,342 2,455
    Interest income 179 169
    Interest expense (139 ) (140 )
    Other income (loss), net (22 ) 56
    Interest and other income (loss), net 18 85
    INCOME BEFORE PROVISION FOR INCOME TAXES 2,360 2,540
    Provision for income taxes 532 544
    NET INCOME $ 1,828 $ 1,996
    Net income per share:
    Basic $ 0.36 $ 0.37
    Diluted $ 0.35 $ 0.37
    Shares used in per-share calculation:
    Basic 5,112 5,378
    Diluted 5,156 5,430
    Cash dividends declared per common share $ 0.19 $ 0.17
    RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
    (In millions, except per-share amounts)
    Three Months Ended
    October 25,
    2014
    October 26,
    2013
    GAAP net income $ 1,828 $ 1,996
    Adjustments to cost of sales:
    Share-based compensation expense 48 43
    Amortization of acquisition-related intangible assets 181 167
    Patent portfolio charge 188
    Total adjustments to GAAP cost of sales 417 210
    Adjustments to operating expenses:
    Share-based compensation expense 325 269
    Amortization of acquisition-related intangible assets 71 65
    Acquisition-related/divestiture costs 101 308
    Significant asset impairments and restructurings 318 237
    Total adjustments to GAAP operating expenses 815 879
    Total adjustments to GAAP income before provision for income taxes 1,232 1,089
    Income tax effect of non-GAAP adjustments (258 ) (218 )
    Non-GAAP net income $ 2,802 $ 2,867
    Diluted net income per share:
    GAAP $ 0.35 $ 0.37
    Non-GAAP $ 0.54 $ 0.53
    RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE TAX RATE
    Three Months Ended
    October 25,
    2014
    October 26,
    2013
    GAAP effective tax rate 22.5 % 21.4 %
    Tax effect of non-GAAP adjustments to net income (0.5 )% (0.4 )%
    Non-GAAP effective tax rate 22.0 % 21.0 %
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)
    October 25,
    2014
    July 26,
    2014
    ASSETS
    Current assets:
    Cash and cash equivalents $ 4,387 $ 6,726
    Investments 47,720 45,348
    Accounts receivable, net of allowance for doubtful accounts of $276 at October 25, 2014 and $265 at July 26, 2014 4,375 5,157
    Inventories 1,676 1,591
    Financing receivables, net 4,265 4,153
    Deferred tax assets 2,689 2,808
    Other current assets 1,284 1,331
    Total current assets 66,396 67,114
    Property and equipment, net 3,233 3,252
    Financing receivables, net 3,691 3,918
    Goodwill 24,364 24,239
    Purchased intangible assets, net 3,066 3,280
    Other assets 3,228 3,331
    TOTAL ASSETS $ 103,978 $ 105,134
    LIABILITIES AND EQUITY
    Current liabilities:
    Short-term debt $ 1,357 $ 508
    Accounts payable 1,022 1,032
    Income taxes payable 94 159
    Accrued compensation 2,638 3,181
    Deferred revenue 9,449 9,478
    Other current liabilities 5,496 5,451
    Total current liabilities 20,056 19,809
    Long-term debt 19,615 20,401
    Income taxes payable 1,504 1,851
    Deferred revenue 4,295 4,664
    Other long-term liabilities 1,793 1,748
    Total liabilities 47,263 48,473
    Total equity 56,715 56,661
    TOTAL LIABILITIES AND EQUITY $ 103,978 $ 105,134
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)
    Three Months Ended
    October 25,
    2014
    October 26,
    2013
    Cash flows from operating activities:
    Net income $ 1,828 $ 1,996
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation, amortization, and other 596 591
    Share-based compensation expense 369 309
    Provision for receivables 43 23
    Deferred income taxes 236 130
    Excess tax benefits from share-based compensation (71 ) (55 )
    (Gains) losses on investments and other, net 29 (108 )
    Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
    Accounts receivable 723 361
    Inventories (107 ) 22
    Financing receivables (2 ) (37 )
    Other assets 5 28
    Accounts payable (5 ) (29 )
    Income taxes, net (398 ) (389 )
    Accrued compensation (495 ) (460 )
    Deferred revenue (328 ) (307 )
    Other liabilities 68 574
    Net cash provided by operating activities 2,491 2,649
    Cash flows from investing activities:
    Purchases of investments (9,761 ) (8,835 )
    Proceeds from sales of investments 3,450 4,733
    Proceeds from maturities of investments 3,906 4,058
    Acquisition of businesses, net of cash and cash equivalents acquired (184 ) (2,447 )
    Purchases of investments in privately held companies (50 ) (134 )
    Return of investments in privately held companies 42 33
    Acquisition of property and equipment (285 ) (315 )
    Proceeds from sales of property and equipment 3 156
    Other 2 (4 )
    Net cash used in investing activities (2,877 ) (2,755 )
    Cash flows from financing activities:
    Issuances of common stock 353 444
    Repurchases of common stock – repurchase program (1,088 ) (1,898 )
    Shares repurchased for tax withholdings on vesting of restricted stock units (342 ) (286 )
    Short-term borrowings, original maturities less than 90 days, net (4 ) (2 )
    Issuances of debt 4
    Repayments of debt (3 )
    Excess tax benefits from share-based compensation 71 55
    Dividends paid (973 ) (914 )
    Other 33 32
    Net cash used in financing activities (1,953 ) (2,565 )
    Net decrease in cash and cash equivalents (2,339 ) (2,671 )
    Cash and cash equivalents, beginning of period 6,726 7,925
    Cash and cash equivalents, end of period $ 4,387 $ 5,254
    Supplemental cash flow information:
    Cash paid for interest $ 263 $ 221
    Cash paid for income taxes, net $ 694 $ 803
    CASH AND CASH EQUIVALENTS AND INVESTMENTS
    (In millions)
    October 25,
    2014
    July 26,
    2014
    Cash and cash equivalents and investments:
    Cash and cash equivalents $ 4,387 $ 6,726
    Fixed income securities 45,923 43,396
    Publicly traded equity securities 1,797 1,952
    Total $ 52,107 $ 52,074
    RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
    TO FREE CASH FLOW (NON-GAAP)
    (In millions)
    Three Months Ended
    October 25,
    2014
    July 26,
    2014
    October 26,
    2013
    Net cash provided by operating activities $ 2,491 $ 3,612 $ 2,649
    Acquisition of property and equipment (285 ) (325 ) (315 )
    Free cash flow $ 2,206 $ 3,287 $ 2,334
    DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK
    (In millions, except per-share amounts)
    DIVIDENDS STOCK REPURCHASE PROGRAM TOTAL
    Quarter Ended Per Share Amount Shares Weighted-Average Price per Share Amount Amount
    Fiscal 2015
    October 25, 2014 $ 0.19 $ 973 41 $ 24.58 $ 1,013 $ 1,986
    Fiscal 2014
    July 26, 2014 $ 0.19 $ 974 61 $ 25.11 $ 1,514 $ 2,488
    April 26, 2014 0.19 974 90 $ 22.24 2,005 2,979
    January 25, 2014 0.17 896 185 $ 21.73 4,020 4,916
    October 26, 2013 0.17 914 84 $ 23.65 2,000 2,914
    Total $ 0.72 $ 3,758 420 $ 22.71 $ 9,539 $ 13,297
    ACCOUNTS RECEIVABLE AND DSO
    (In millions, except DSO)
    October 25,
    2014
    July 26,
    2014
    October 26,
    2013
    Accounts receivable, net $ 4,375 $ 5,157 $ 5,188
    Days sales outstanding in accounts receivable (DSO) 33 38 39
    INVENTORIES
    (In millions)
    October 25,
    2014
    July 26,
    2014
    October 26,
    2013
    Inventories:
    Raw materials $ 173 $ 77 $ 80
    Work in process 3 5 7
    Finished goods:
    Distributor inventory and deferred cost of sales 654 595 619
    Manufactured finished goods 535 606 464
    Total finished goods 1,189 1,201 1,083
    Service-related spares 275 273 257
    Demonstration systems 36 35 39
    Total $ 1,676 $ 1,591 $ 1,466
    INVENTORY TURNS AND RECONCILIATION OF GAAP TO NON-GAAP
    COST OF SALES USED IN INVENTORY TURNS
    (In millions, except annualized inventory turns)
    Three Months Ended
    October 25,
    2014
    July 26,
    2014
    October 26,
    2013
    Annualized inventory turns – GAAP 12.0 12.7 12.7
    Cost of sales adjustments (1.0 ) (0.6 ) (0.6 )
    Annualized inventory turns – non-GAAP 11.0 12.1 12.1
    GAAP cost of sales $ 4,912 $ 4,952 $ 4,678
    Cost of sales adjustments:
    Share-based compensation expense (48 ) (49 ) (43 )
    Amortization of acquisition-related intangible assets (181 ) (180 ) (167 )
    Acquisition-related/divestiture costs (1 )
    Patent portfolio charge (188 )
    Non-GAAP cost of sales $ 4,495 $ 4,722 $ 4,468
    DEFERRED REVENUE
    (In millions)
    October 25,
    2014
    July 26,
    2014
    October 26,
    2013
    Deferred revenue:
    Service $ 9,029 $ 9,640 $ 8,896
    Product:
    Unrecognized revenue on product shipments and other deferred revenue 4,056 3,924 3,628
    Cash receipts related to unrecognized revenue from two-tier distributors 659 578 683
    Total product deferred revenue 4,715 4,502 4,311
    Total $ 13,744 $ 14,142 $ 13,207
    Reported as:
    Current $ 9,449 $ 9,478 $ 9,212
    Noncurrent 4,295 4,664 3,995
    Total $ 13,744 $ 14,142 $ 13,207
    SUMMARY OF SHARE-BASED COMPENSATION EXPENSE
    (In millions)
    Three Months Ended
    October 25,
    2014
    October 26,
    2013
    Cost of sales – product $ 11 $ 10
    Cost of sales – service 37 33
    Share-based compensation expense in cost of sales 48 43
    Research and development 119 92
    Sales and marketing 147 123
    General and administrative 59 54
    Restructuring and other charges (4 ) (3 )
    Share-based compensation expense in operating expenses 321 266
    Total share-based compensation expense $ 369 $ 309
    Income tax benefit for share-based compensation $ 94 $ 78


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  • Microsoft Open Sources, Expands .NET To Linux, Mac

    Microsoft announced that it is open sourcing the full server-side .NET stack, and expanding .NET to run on Linux and Mac OS. The company also released Visual Studio Community 2013, which is a free edition of Visual Studio that provides access to the core toolset.

    “With billions of devices in the market today, developers need tools that target many different form factors and platforms,” said S. Somasegar, corporate vice president of Microsoft’s Developer Division. “Through Visual Studio and .NET we are committed to delivering a comprehensive end-to-end solution for developers to build and manage applications across multiple devices and platforms.”

    Included in the .NET server stack open sourcing are: ASP.NET, the .NET compiler, the .NET Core Runtime, Framework and Libraries.

    The company says it will work closely with the open source community, taking contributions for future improvements to .NET, and will work through the .NET Foundation.

    Non-enterprise application developers who wish to get started with VIsual Studio Community can do so here. Microsoft is also previewing Visual Studio 2015 and .NET 2015.

    Finally, the company announced the preview of ASP.NET 5.0, which it describes as a “streamlined framework and runtime optimized for cloud and server workloads.”

    Image via .NET Foundation

  • Michelle Monaghan On “Romantic” Nicholas Sparks Role

    Michelle Monaghan has several successful credits under her belt, including Source Code and The Bourne Supremacy, but after her intriguing star-turn on the HBO megahit True Detective earlier this year, her name is everywhere. And now that she’s starring in a Nicholas Sparks adaptation, her talent is about to reach a huge audience who likely have their tissues at the ready.

    The actress sat down for an interview with Refinery29.com recently and spoke a bit about the role, saying she’s not sure where The Best Of Me stacks up against hits like The Notebook, but that it’s definitely one that will tug at the emotions.

    “It is Nicholas Sparks, so he definitely has that formula of knowing how to tap into people’s hearts. I would agree that it’s a tearjerker, but I don’t know how it sizes up to The Notebook. It’s definitely emotional, beautiful, passionate, and heartrending. If you’re a fan of The Notebook, then you’re going to love this movie,” she said.

    Monaghan also talked about how different the role was for her, considering so many of the characters she’s played have been restrained, in a way. As Maggie Hart on True Detective, she was a woman caught between her love for her two daughters and her troubled marriage to a man who grew more distant with each passing day. Here, she’s able to tap into a softer side.

    “For me, this film allowed me to tap into my romantic side, which is something I haven’t been able to do in previous roles. I’ve never been able to do a love story, and this is such a timeless love story. Several of the characters that I’ve played have had a lot of restraint or have been very stoic. I love that this character feels and is expressive. It’s really nice to play that side of myself,” she said.

    While The Best Of Me has gotten mixed reviews–as many adaptations of Sparks’ work does–the performance that Monaghan and co-star James Marsden give has consistently been praised, with their chemistry mentioned in several reviews.

  • eBay Earnings Released, Revenue Up 12%

    eBay Earnings Released, Revenue Up 12%

    eBay released its earnings report for the third quarter with revenue growth of 12%. Payments volume was up 29% while eBay Marketplaces volume growth was 9%.

    As you probably know, eBay and PayPal are splitting up next year.

    eBay CEO John Donahoe said, “Rapidly changing competitive environments in commerce and payments underscore the opportunities for eBay and PayPal, and highlight how each business will benefit from the focus and agility of being an independent company. PayPal had another strong quarter, and its mobile payments leadership and momentum continued with mobile volume up 72 percent to $12 billion. PayPal is on track to process 1 billion mobile transactions in 2014.”

    “And eBay continues to focus on enhancing its competitive position, improving the experience for buyers and sellers and investing in consumer engagement,” he added. “As we prepare to separate eBay and PayPal in 2015, our teams are focused on strong execution to ensure each business is set up for long-term success.”

    eBay Enterprise gross merchandise sales grew 14% with revenue reaching $259 million.

    Here’s the release in its entirety:

    SAN JOSE, Calif.–()–Global commerce platform and payments leader eBay (Nasdaq: EBAY) today reported that revenue for the third quarter ended September 30, 2014 increased 12% to $4.4 billion, compared to the same period in 2013. GAAP earnings of $673 million or $0.54 per diluted share, and Non-GAAP earnings of $848 million or $0.68 per diluted share, were driven by accelerating enabled commerce volume growth and double-digit revenue growth.

    “Rapidly changing competitive environments in commerce and payments underscore the opportunities for eBay and PayPal, and highlight how each business will benefit from the focus and agility of being an independent company”

    eBay Inc.’s enabled commerce volume (ECV) increased 27% in the third quarter to $63 billion. Mobile ECV advanced 67% to $14 billion representing 21% of volume. eBay Inc. mobile downloads since inception exceeded 282 million, attracting 7.3 million new customers in the quarter. Cross-border trade grew 27%, representing $14 billion, or 22%, of total company ECV.

    “Rapidly changing competitive environments in commerce and payments underscore the opportunities for eBay and PayPal, and highlight how each business will benefit from the focus and agility of being an independent company,” said eBay Inc. President and CEO John Donahoe. “PayPal had another strong quarter, and its mobile payments leadership and momentum continued with mobile volume up 72 percent to $12 billion. PayPal is on track to process 1 billion mobile transactions in 2014. And eBay continues to focus on enhancing its competitive position, improving the experience for buyers and sellers and investing in consumer engagement. As we prepare to separate eBay and PayPal in 2015, our teams are focused on strong execution to ensure each business is set up for long-term success.”

    PayPal net total payment volume (TPV) grew 29% with Merchant Services volume up 37% and on-eBay volume up 9%. Revenue grew to $2.0 billion. PayPal gained 4.4 million new active registered accounts to end the quarter at 157 million, up 14%. Global on-eBay penetration increased to 80.5%. Mobile payment volume grew 72% to $12 billion, representing 20% of TPV. Active accounts acquired on mobile were 2.9 million. Newly rebranded PayPal Credit grew 29%. PayPal also rolled out new product innovations like its One Touch offering making it simpler and easier to check-out and pay with PayPal.

    eBay Marketplaces gross merchandise volume (GMV) grew 9%, with the U.S. up 7% and international up 11%. Revenue grew to $2.2 billion. Marketplaces gained 3.4 million new buyers to end the quarter with 152 million active buyers, up 13%. The selection of items available on Marketplaces grew to over 800 million listings, including both platform and non-platform offerings, reflecting the success of improved selling initiatives, particularly on mobile. Marketplaces mobile volume grew 41% to $7 billion. Fixed price sales grew 15% and now represent 79% of the total sales on the platform.

    eBay Enterprise gross merchandise sales (GMS) grew 14%. Revenue grew to $259 million. Enterprise enabled its clients to grow same-store sales 13%.

    Third Quarter 2014 Financial Highlights (presented in millions, except per share data and percentages)
    Third Quarter
    2014 2013 Change
    eBay Inc.
    Net revenue $4,353 $3,892 $461 12%
    Enabled commerce volume (ECV) $63,056 $49,727 $13,329 27%
    GAAP
    Net income $673 $689 $(16) (2%)
    Earnings per diluted share $0.54 $0.53 $0.01 2%
    Non-GAAP
    Net income $848 $837 $11 1%
    Earnings per diluted share $0.68 $0.64 $0.04 6%
    Business Units
    Payments
    Net revenue $1,950 $1,620 $330 20%
    Net total payment volume (TPV) $56,576 $43,837 $12,739 29%
    Marketplaces
    Net revenue $2,156 $2,027 $129 6%
    Gross merchandise volume (GMV) $20,075 $18,345 $1,730 9%
    Enterprise
    Net revenue $259 $252 $7 3%
    Gross merchandise sales (GMS) $900 $787 $113 14%

    Other Selected Financial and Operational Results

    • Operating margin — GAAP operating margin decreased to 17.9% for the third quarter of 2014, compared to 20.5% for the same period last year. Non-GAAP operating margin decreased to 23.7% in the third quarter, compared to 26.8% for the same period last year.
    • Taxes — The GAAP effective tax rate for the third quarter of 2014 was 15.9%, compared to 21.1% for the third quarter of 2013. For the third quarter of 2014 and 2013, the non-GAAP effective tax rate was 19.2% for both periods.
    • Cash flow — The company generated $1.4 billion of operating cash flow and $0.9 billion of free cash flow during the third quarter of 2014.
    • Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $15.1 billion at September 30, 2014, up from $12.8 billion at December 31, 2013.

    Business Outlook

    • Fourth quarter 2014 — The company expects net revenues in the range of $4,850 – $4,950 million with GAAP earnings per diluted share in the range of $0.73 – $0.76 and non-GAAP earnings per diluted share in the range of $0.88 – $0.91.
    • Full year 2014 — The company is reducing full year revenue guidance to $17.85 – $17.95 billion.

    Quarterly Conference Call and Webcast

    eBay Inc. will host a conference call to discuss third quarter 2014 results at 2:00 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 athttp://investor.ebayinc.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.

    eBay Inc. uses its Investor Relations website at http://investor.ebayinc.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor, in addition to following press releases, SEC filings, public conference calls and webcasts.

    About eBay Inc.

    eBay Inc. (NASDAQ: EBAY) is a global commerce and payments leader, providing a robust platform where merchants of all sizes can compete and win. Founded in 1995 in San Jose, Calif., eBay Inc. connects millions of buyers and sellers and enabled $205 billion* of commerce volume in 2013. We do so through eBay, one of the world’s largest online marketplaces, which allows users to buy and sell in nearly every country on earth; through PayPal, which enables individuals and businesses to securely, easily and quickly send and receive digital payments; and through eBay Enterprise, which enables omnichannel commerce, multichannel retailing and digital marketing for global enterprises in the U.S. and internationally. We also reach millions through specialized marketplaces such as StubHub, the world’s largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.

    * This adjusted number reflects decision to remove vehicles and real estate GMV from ongoing total GMV and ECV metrics (previously stated ECV for 2013 was $212 billion, incorporating vehicles and real estate GMV).

    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 millions, except as otherwise noted. As a result, certain amounts may not sum or recalculate using the rounded dollar amounts provided.

    Non-GAAP Financial Measures

    This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission (SEC): non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin, non-GAAP effective tax rate and free cash flow. 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 to the nearest comparable GAAP measures, see “Business Outlook,” “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin,” “Reconciliation of GAAP Net Income to Non-GAAP Net Income and Reconciliation of 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.

    Forward-Looking Statements

    This press release contains forward-looking statements relating to, among other things, the planned separation of eBay Inc.’s Marketplaces and PayPal businesses and 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 completion and timing of any such separation, the future performance of the Marketplaces and Payments businesses on a standalone business if the separation is completed, expected financial results for the fourth quarter and full year 2014, the future growth in the Payments, Marketplaces and Enterprise businesses, mobile payments and mobile commerce. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. There is no assurance as to the timing of the spin-off or whether it will be completed. Other factors that could cause or contribute to such differences include, but are not limited to: whether the operational, marketing and strategic benefits of the separation can be achieved; whether the costs and expenses of the separation can be controlled within expectations; changes in political, business and economic conditions, any European, Asian or general economic downturn or crisis and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; the company’s need to successfully react to the increasing importance of mobile payments and mobile commerce and the increasing social aspect of commerce; the company’s ability to deal with the increasingly competitive ecommerce 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; changes to the company’s capital allocation or management of operating cash; the company’s need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; the effect of management changes and business initiatives; the company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; any changes the company may make to its product offerings; the competitive, regulatory, payment card association-related and other risks specific to PayPal and PayPal Credit (formerly Bill Me Later), especially as PayPal continues to expand geographically and introduce new products and as new laws and regulations related to financial services companies come into effect; the company’s ability to timely upgrade and develop its technology systems, infrastructure and customer service capabilities at reasonable cost; 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; and the company’s ability to profitably integrate, manage and grow businesses that have been acquired or may be acquired in the future. 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 http://investor.ebayinc.com or the SEC’s website at www.sec.gov. All information in this release is as of October 15, 2014. 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.

    eBay Inc.
    Unaudited Condensed Consolidated Balance Sheet
    September 30,
    2014
    December 31,
    2013
    (In millions)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 4,790 $ 4,494
    Short-term investments 5,601 4,531
    Accounts receivable, net 755 899
    Loans and interest receivable, net 3,162 2,789
    Funds receivable and customer accounts 9,962 9,260
    Other current assets 1,384 1,310
    Total current assets 25,654 23,283
    Long-term investments 5,875 4,971
    Property and equipment, net 2,825 2,760
    Goodwill 9,220 9,267
    Intangible assets, net 642 941
    Other assets 260 266
    Total assets $ 44,476 $ 41,488
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Short-term debt $ 250 $ 6
    Accounts payable 339 309
    Funds payable and amounts due to customers 9,962 9,260
    Accrued expenses and other current liabilities 5,617 2,799
    Deferred revenue 185 158
    Income taxes payable 138 107
    Total current liabilities 16,491 12,639
    Deferred and other tax liabilities, net 709 841
    Long-term debt 7,346 4,117
    Other liabilities 120 244
    Total liabilities 24,666 17,841
    Total stockholders’ equity 19,810 23,647
    Total liabilities and stockholders’ equity $ 44,476 $ 41,488
    eBay Inc.
    Unaudited Condensed Consolidated Statement of Income
      Three Months EndedSeptember 30, Nine Months EndedSeptember 30,
    2014 2013 2014 2013
    (In millions, except per share amounts)
    Net revenues $ 4,353 $ 3,892 $ 12,981 $ 11,517
    Cost of net revenues (1) 1,389 1,224 4,132 3,587
    Gross profit 2,964 2,668 8,849 7,930
    Operating expenses:
    Sales and marketing (1) 923 755 2,642 2,223
    Product development (1) 511 433 1,491 1,318
    General and administrative (1) 442 415 1,368 1,242
    Provision for transaction and loan losses 249 185 685 553
    Amortization of acquired intangible assets 58 81 210 245
    Total operating expenses 2,183 1,869 6,396 5,581
    Income from operations 781 799 2,453 2,349
    Interest and other, net 20 74 24 89
    Income before income taxes 801 873 2,477 2,438
    Provision for income taxes (128 ) (184 ) (3,454 ) (432 )
    Net income (loss) $ 673 $ 689 $ (977 ) $ 2,006
    Net income (loss) per share:
    Basic $ 0.54 $ 0.53 $ (0.78 ) $ 1.55
    Diluted $ 0.54 $ 0.53 $ (0.78 ) $ 1.53
    Weighted average shares:
    Basic 1,242 1,295 1,258 1,296
    Diluted 1,251 1,310 1,258 1,314
    (1) Includes stock-based compensation as follows:
    Cost of net revenues $ 19 $ 9 $ 56 $ 45
    Sales and marketing 46 38 133 112
    Product development 57 42 167 120
    General and administrative 51 51 132 135
    $ 173 $ 140 $ 488 $ 412
    eBay Inc.
    Unaudited Condensed Consolidated Statement of Cash Flows
    Three Months EndedSeptember 30, Nine Months EndedSeptember 30,
    2014 2013 2014 2013
    (In millions)
    Cash flows from operating activities:
    Net income (loss) $ 673 $ 689 $ (977 ) $ 2,006
    Adjustments:
    Provision for transaction and loan losses 249 185 685 553
    Depreciation and amortization 365 357 1,120 1,033
    Stock-based compensation 173 140 488 412
    Gain on sale of RueLaLa and ShopRunner (75 ) (75 )
    Deferred income taxes (64 ) (89 ) 2,996 258
    Changes in assets and liabilities, net of acquisition effects (28 ) 127 (276 ) (905 )
    Net cash provided by operating activities 1,368 1,334 4,036 3,282
    Cash flows from investing activities:
    Purchases of property and equipment (427 ) (317 ) (902 ) (969 )
    Changes in principal loans receivable, net (261 ) (212 ) (493 ) (395 )
    Purchases of investments (3,238 ) (3,702 ) (6,879 ) (5,726 )
    Maturities and sales of investments 1,330 912 4,594 2,710
    Acquisitions, net of cash acquired (20 ) (70 ) (59 ) (85 )
    Repayment of Kynetic note receivable and sale of RueLaLa and ShopRunner 485 485
    Other (6 ) (14 )
    Net cash provided by (used in) investing activities (2,616 ) (2,904 ) (3,745 ) (3,994 )
    Cash flows from financing activities:
    Proceeds from issuance of common stock 24 57 178 301
    Repurchases of common stock (8 ) (146 ) (3,476 ) (1,088 )
    Excess tax benefits from stock-based compensation 4 19 90 180
    Tax withholdings related to net share settlements of restricted stock units and awards (14 ) (21 ) (224 ) (247 )
    Proceeds from issuance of debt 3,482 3,482
    Net borrowings under commercial paper program (1,200 )
    Funds receivable and customer accounts, net 75 (61 ) (702 ) (979 )
    Funds payable and amounts due to customers, net (75 ) 61 702 979
    Other (7 ) (7 )
    Net cash provided by (used in) financing activities 2,281 (91 ) 43 (854 )
    Effect of exchange rate changes on cash and cash equivalents (77 ) 86 (38 ) 29
    Net (decrease) increase in cash and cash equivalents 956 (1,575 ) 296 (1,537 )
    Cash and cash equivalents at beginning of period 3,834 6,855 4,494 6,817
    Cash and cash equivalents at end of period $ 4,790 $ 5,280 $ 4,790 $ 5,280
    eBay Inc.
    Unaudited Summary of Consolidated Net Revenues
    Net Revenues by Type (1) Three Months Ended
    September 30, June 30, March 31, December 31, September 30,
    2014 2014 2014 2013 2013
    Net transaction revenues (In millions, except percentages)
    Marketplaces $ 1,707 $ 1,722 $ 1,727 $ 1,828 $ 1,609
    Current quarter vs prior quarter (1 )% % (6 )% 14  % 2  %
    Current quarter vs prior year quarter 6  % 9 % 11 % 13  % 13  %
    Percent of Marketplaces revenue from international 57  % 58 % 58 % 57  % 55  %
    Payments 1,783 1,741 1,700 1,693 1,493
    Current quarter vs prior quarter 2  % 2 % % 13  % 1  %
    Current quarter vs prior year quarter 19  % 18 % 19 % 18  % 18 %
    Percent of Payments revenue from international 56  % 56 % 56 % 57  % 56  %
    Enterprise 199 207 208 333 185
    Current quarter vs prior quarter (4 )% % (38 )% 80  % (5 )%
    Current quarter vs prior year quarter 8  % 7 % 12 %  % 9  %
    Percent of Enterprise revenue from international 4  % 4 % 4 % 3  % 4  %
    Total net transaction revenues 3,689 3,670 3,635 3,854 3,287
    Current quarter vs prior quarter 1  % 1 % (6 )% 17  % 1  %
    Current quarter vs prior year quarter 12  % 13 % 14 % 14  % 15  %
    Marketing services and other revenues
    Marketplaces 449 452 428 471 418
    Current quarter vs prior quarter (1 )% 6 % (9 )% 13  % (1 )%
    Current quarter vs prior year quarter 7  % 7 % 6 % 8  % 10  %
    Percent of Marketplaces revenue from international 70  % 72 % 71 % 69  % 70  %
    Payments 167 205 145 143 127
    Current quarter vs prior quarter (19 )% 41 % 1 % 13  % (15 )%
    Current quarter vs prior year quarter 31  % 38 % 27 % 31  % 25  %
    Percent of Payments revenue from international 4  % 3 % 3 % 4  % 3  %
    Enterprise 60 60 61 74 67
    Current quarter vs prior quarter  % (2 )% (17 )% 11  % 2  %
    Current quarter vs prior year quarter (10 )% (9 )% (1 )% (3 )% (1 )%
    Percent of Enterprise revenue from international  % % %  %  %
    Total marketing services and other revenues 676 717 634 688 612
    Current quarter vs prior quarter (6 )% 13 % (8 )% 12  % (4 )%
    Current quarter vs prior year quarter 10  % 12 % 10 % 11  % 11  %
    Elimination of inter-segment net revenue (2) (12 ) (21 ) (7 ) (12 ) $ (7 )
    Total net revenues $ 4,353 $ 4,366 $ 4,262 $ 4,530 $ 3,892
    Current quarter vs prior quarter  % 2 % (6 )% 16  %  %
    Current quarter vs prior year quarter 12  % 13 % 14 % 13  % 14  %
    (1) During the first quarter of 2014, we changed our reportable segments based on changes in our organizational structure which reflect the integration of our Magento platform into our Enterprise segment. Prior to this change, Magento was reported in corporate and other. Also during the quarter, we revised our internal management reporting of certain Marketplaces transactions to align more closely with our related operating metrics. Related to this change, we reclassified our Marketplaces vehicles and real estate revenues from net transaction revenues to marketing services and other revenues. Prior period amounts have been revised to conform to the current period segment reporting structure.
    (2) Represents revenue generated between our reportable segments.
    Net Revenues by Geography (1) Three Months Ended
    September 30, June 30, March 31, December 31, September 30,
    2014 2014 2014 2013 2013
    (In millions, except percentages)
    U.S. net revenues $ 2,050 $ 2,047 $ 1,998 $ 2,180 $ 1,873
    Current quarter vs prior quarter % 2 % (8 )% 16 % %
    Current quarter vs prior year quarter 9 % 9 % 12 % 11 % 14 %
    Percent of total 47 % 47 % 47 % 48 % 48 %
    International net revenues 2,303 2,319 2,264 2,350 2,019
    Current quarter vs prior quarter (1 )% 2 % (4 )% 16 % 1 %
    Current quarter vs prior year quarter 14 % 16 % 16 % 16 % 15 %
    Percent of total 53 % 53 % 53 % 52 % 52 %
    Total net revenues $ 4,353 $ 4,366 $ 4,262 $ 4,530 $ 3,892
    Current quarter vs prior quarter % 2 % (6 )% 16 % %
    Current quarter vs prior year quarter 12 % 13 % 14 % 13 % 14 %
    (1) Revenues are attributed to U.S. and international geographies primarily based upon the country in which the seller, payment recipient, customer, website that displays advertising, or other service provider, as the case may be, is located.
    eBay Inc.
    Unaudited eBay Inc. Supplemental Operating Data
    Three Months Ended
    September 30, June 30, March 31, December 31, September 30,
    2014 2014 2014 2013 2013
    (In millions, except percentages)
    ECV (1) $63,056 $61,639 $58,495 $59,607 $49,727
    Current quarter vs prior quarter 2 % 5 % (2 %) 20 % 2 %
    Current quarter vs prior year quarter 27 % 26 % 24 % 23 % 23 %

    During the first quarter of 2014, we revised our internal management reporting of certain Marketplaces transactions to align more closely with our related operating metrics. Related to this change, we correspondingly excluded vehicles and real estate gross merchandise volume from our total gross merchandise volume. Prior period amounts have been revised to conform to the current period segment reporting structure.

    (1) Includes Marketplaces GMV (excluding vehicles and real estate), Payments Merchant Services Net TPV and eBay Enterprise Gross Merchandise Sales not earned on eBay or paid for via PayPal or PayPal Credit (formerly Bill Me Later) during the period; excludes volume transacted through the Magento platform. PayPal Merchant Services Net TPV is the total dollar volume of payments, net of payment reversals, successfully completed through our payments networks, including PayPal Credit, Venmo, and payments processed through Braintree’s full stack payments platform during the period, excludes PayPal’s and Braintree’s payment gateway businesses and payments for transactions on our Marketplaces platforms.
    eBay Inc.
    Unaudited Payments Supplemental Operating Data
    Three Months Ended
    September 30, June 30, March 31, December 31, September 30,
    2014 2014 2014 2013 2013
    (In millions, except percentages)
    Active registered accounts (1) 156.9 152.5 148.4 142.6 137.4
    Current quarter vs prior quarter 3 % 3 % 4 % 4 % 4 %
    Current quarter vs prior year quarter 14 % 15 % 16 % 16 % 17 %
    Net number of payments (2) 894.6 850.2 834.4 846.1 729.4
    Current quarter vs prior quarter 5 % 2 % (1 )% 16 % 4 %
    Current quarter vs prior year quarter 23 % 21 % 22 % 22 % 24 %
    Net total payment volume (3) $56,576 $55,046 $52,006 $51,973 $43,837
    Current quarter vs prior quarter 3 % 6 % % 19 % 2 %
    Current quarter vs prior year quarter 29 % 29 % 27 % 25 % 25 %
    On eBay net total payment volume as % of net total payment volume 25 % 27 % 29 % 29 % 30 %
    Merchant Services net total payment volume as % of net total payment volume 75 % 73 % 71 % 71 % 70 %
    Take rate (4) 3.45 % 3.53 % 3.55 % 3.53 % 3.70 %
    Transaction rates (5)
    Expense rate 0.95 % 0.95 % 0.99 % 0.97 % 1.05 %
    Loss rate 0.33 % 0.28 % 0.27 % 0.32 % 0.30 %
    Margin rate 62.8 % 65.1 % 64.6 % 63.5 % 63.4 %
    Loan portfolio rates
    Risk adjusted margin (6) 16.8 % 16.6 % 16.2 % 15.8 % 16.1 %
    Net charge-off rate (7) 5.3 % 5.5 % 5.4 % 6.3 % 5.5 %
    90-day delinquency rate (8) 3.3 % 2.7 % 2.8 % 2.9 % 3.2 %
    (1) All registered accounts that successfully sent or received at least one payment or payment reversal through our payments networks, including PayPal Credit and Venmo, but excluding users of Braintree’s unbranded payment checkout solutions, within the last 12 months and which are currently able to transact.
    (2) Total number of payments, net of payment reversals, successfully completed through our payments networks, including PayPal Credit, Venmo and payments processed through Braintree’s full stack payments platform during the period; excludes payments sent or received through PayPal’s and Braintree’s payment gateway businesses.
    (3) Total dollar volume of payments, net of payment reversals, successfully completed through our payments networks, including PayPal Credit, Venmo, and payments processed through Braintree’s full stack payments platform during the period; excludes payments sent or received through PayPal’s and Braintree’s payment gateway businesses.
    (4) Take Rate reflects total net revenues earned through our payments networks, including PayPal Credit, Braintree, Venmo, PayPal’s payment gateway business, subscription fees and other net revenues, divided by Net Total Payment Volume.
    (5) Expense Rate reflects third party payment processing expenses and other related service costs, divided by Net Total Payment Volume.
    Loss Rate reflects expense associated with our customer protection programs, fraud, chargebacks and merchant credit losses, bad debt expense associated with our accounts receivable balances and loan reserves associated with our loan receivables balances, divided by Net Total Payment Volume.
    Margin Rate reflects Take Rate less Expense Rate and Loss Rate, divided by Take Rate.
    (6) The risk adjusted margin represents annualized credit portfolio revenue, excluding contra-revenue incentives to customers or merchants, less cost of funds and less net credit and fraud losses during the period, divided by average loan receivables for the period.
    (7) Net charge-off rate is the annualized ratio of net credit losses over the average daily loan receivables balance during the period. Net credit losses are the principal loan losses, exclusive of interest and late fee write offs, less recoveries of previously charged off balances.
    (8) 90-day delinquency rate is the end of period PayPal Credit account balances that have missed three or more consecutive payments, divided by total ending loan receivables.
    eBay Inc.
    Unaudited Marketplaces Supplemental Operating Data
    Three Months Ended
    September 30, June 30, March 31, December 31, September 30,
    2014 2014 2014 2013 2013
    (In millions, except percentages)
    Active Buyers (1) 152.3 148.9 145.1 140.3 134.9
    Current quarter vs prior quarter 2  % 3 % 3 % 4 % 3 %
    Current quarter vs prior year quarter 13  % 14 % 14 % 14 % 13 %
    Gross Merchandise Volume (2) $20,075 $20,485 $20,545 $21,503 $18,345
    Current quarter vs prior quarter (2 )% % (4 )% 17 % %
    Current quarter vs prior year quarter 9  % 12 % 12 % 13 % 13 %
    U.S. GMV as % of total GMV 39  % 39 % 40 % 39 % 40 %
    International GMV as % of total GMV 61  % 61 % 60 % 61 % 60 %

    eBay’s classifieds web sites, brands4friends and Shopping.com are not included in these metrics.

    During the first quarter of 2014, we revised our internal management reporting of certain Marketplaces transactions to align more closely with our related operating metrics. Related to this change, we reclassified our Marketplaces vehicle and real estate revenue from net transaction revenues to marketing services and other revenues. Prior period amounts have been revised to conform to the current period segment reporting structure.

    (1) All buyers (including buyers of Half.com, StubHub, GittiGidiyor, and our Korean subsidiary) who successfully closed a transaction within the previous 12-month period. Buyers may register more than once, and as a result, may have more than one account.
    (2) Total value of all successfully closed transactions between users on Marketplaces platforms during the period regardless of whether the buyer and seller actually consummated the transaction; excludes vehicles and real estate gross merchandise volume.
    eBay Inc.
    Unaudited Enterprise Supplemental Operating Data
    Three Months Ended
    September 30, June 30, March 31, December 31, September 30,
    2014 2014 2014 2013 2013
    (In millions, except percentages)
    Gross Merchandise Sales (1) $900 $940 $936 $1,771 $787
    Current quarter vs prior quarter (4 %) % (47 %) 125 % (3 %)
    Current quarter vs prior year quarter 14 % 15 % 16 % 11 % 13 %
    (1) Represents the retail value of all sales transactions, inclusive of freight charges and net of allowance for returns and discounts, which flow through our Enterprise commerce technologies, whether we record the full amount of such transaction as a product sale or a percentage of such transaction as a service fee; excludes volume transacted through the Magento platform.

    eBay Inc.
    Business Outlook
    (In Millions, Except Per Share Amounts)

    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 its 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 http://investor.ebayinc.com or the SEC’s website at www.sec.gov.

    Three Months Ending
    December 31, 2014
    (In millions, except per share amounts) GAAP Non-GAAP (a)
    Net Revenue $4,850 – $4,950 $4,850 – $4,950
    Diluted EPS $0.73 – $0.76 $0.88 – $0.91
    (a) Estimated non-GAAP amounts above for the three months ending December 31, 2014, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $70 – $80 million and estimated stock-based compensation expense and employer payroll taxes on stock-based compensation expense of approximately $170 – $180 million as well as the related tax impact.

    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 margin, non-GAAP effective tax rate, and free cash flow.

    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 can be found in the tables included in this press release.

    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, significant gains or losses from the disposal/acquisition of a business, certain gains and losses on investments, 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 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 is dependent on the company’s stock price and the timing and size of exercises by employees of their stock options and the vesting of their restricted stock, 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, 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 impact of the accretion of a note receivable associated with the disposal of certain businesses. 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.

    Tax effect of non-GAAP adjustments. This amount is used to present stock-based compensation and the other amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income.

    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, and repurchase stock. 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.

    eBay Inc.
    Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin
    Three Months Ended
    September 30, September 30,
    2014 2013
    (In millions, except percentages)
    GAAP operating income $ 781 $ 799
    Stock-based compensation expense and related employer payroll taxes 173 141
    Amortization of acquired intangible assets within cost of net revenues 20 19
    Amortization of acquired intangible assets within operating expenses 58 81
    Total non-GAAP operating income adjustments 251 241
    Non-GAAP operating income $ 1,032 $ 1,040
    Non-GAAP operating margin 23.7 % 26.8 %
    Reconciliation of GAAP Net Income to Non-GAAP Net Income and
    GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate
    Three Months Ended
    September 30, September 30,
    2014 2013
    (In millions, except per share amounts)
    GAAP income before income taxes $ 801 $ 873
    GAAP provision for income taxes (128 ) (184 )
    GAAP net income $ 673 $ 689
    Non-GAAP adjustments to net income:
    Non-GAAP operating income adjustments (see table above) 251 241
    Accretion of note receivable (5 )
    Amortization of intangibles of investments 1 2
    Gain on sale of RueLaLa and ShopRunner (75 )
    Other (3 )
    Tax effect of non-GAAP adjustments (74 ) (15 )
    Non-GAAP net income $ 848 $ 837
    Diluted net income per share:
    GAAP $ 0.54 $ 0.53
    Non-GAAP $ 0.68 $ 0.64
    Shares used in GAAP and non-GAAP diluted net income per-share calculation 1,251 1,310
    GAAP effective tax rate 16  % 21  %
    Tax effect of non-GAAP adjustments to net income 3  % (2 )%
    Non-GAAP effective tax rate 19  % 19  %
    Reconciliation of Operating Cash Flow to Free Cash Flow
    Three Months Ended
    September 30, September 30,
    2014 2013
    (In millions)
    Net cash provided by operating activities $ 1,368 $ 1,334
    Less: Purchases of property and equipment (427 ) (317 )
    Free cash flow $ 941 $ 1,017

     

    Image via eBay

  • Scott Disick, Batman and Sin City

    Scott Disick recently shared with People magazine that he wants to be Batman for Halloween, and while that’s not necessarily a great role for him to play (after all, Batman helps people, and Scott Disick very clearly needs the help of others–some of them professionals) it is in strong contention right now.

    Disick and girlfriend Kourtney Kardashian reportedly dress up to complement whatever son Mason and daughter Penelope want to be for Halloween each year, so maybe the kids are thinking along the lines of little criminals or perhaps the Joker as some of their options this year?

    Lord Disick and his lady left the kids behind this weekend and enjoyed some time away in Sin City. While there they met up with Bruce Jenner. Kourtney Kardashian’s mom, Kris Jenner, just filed for divorce from Bruce a little more than two weeks ago.

    People reports that Bruce Jenner’s long hair was ‘flowing,’ and that he arrived with sons Brody and Brandon Jenner–meeting Kourtney and Scott Disick at Stack.

    “He seemed really reflective,” a patron told the magazine. “He chimed in a few times but really just let everyone else do the talking. Some girl told him she liked his hair as he left the restaurant and he smiled. That was really the only time he showed any real emotion.”

    The Las Vegas weekend for Kourtney Kardashian came down to watching Scott Disick–her prospective Batman in waiting–leave her behind while he drank at listened to music at Mirage’s 1 OAK nightclub. On the up side, she got to bask in the glow of her stepfather’s shiny locks. Do you suppose Kourtney wishes she’d simply stayed home with the kids and sent Scott Disick on to Sin City without her?

    At least the Keeping Up With the Kardashians and Kourtney and Khloe Take the Hamptons star had a little girl power in her corner while she was there.

    Loading

    Vegas baby with bae. ❤️

    View on Instagram

    Do you think Scott Disick can pull off his Batman role for Halloween? Hopefully he lays off the booze long enough to maneuver his Batmobile.

  • Twitter Adds Location Controls For Native Ads On MoPub

    Twitter announced some new location control features for creating and managing native ads with its MoPub. This is the result of an integration with technology from Namo Media.

    “MoPub’s new location control features are the first tools that lets you find the perfect mix of content and ads for your app simply and quickly,” says Twitter’s Kevin Weil . “You can now choose the position of your ads and how often an ad appears in your content stream directly in the MoPub UI. This means you can experiment with ads in new and different parts of your app and see the results on your revenue immediately, without any engineering work or waiting for user app updates. We believe this gives publishers a better opportunity to balance content with ads tailored for their app – without compromising on revenue or the user experience.”

    “We have also simplified the integration to a couple lines of code, making setting up native ads almost as simple as any standard ad format,” says Twitter’s Gabor Cselle on the MoPub blog. “Our lightweight SDK ensures that your ads are displayed in the right location and at the right time powerful caching capabilities.”

    The features are part of MoPub’s full stack platform for native ads, which lets developers work directly with advertisers and connect with them programmatically. They work with multiple native ad networks.

    MoPub opened up its native advertising offering in April. More on that here.

    Images via Twitter

  • Pepperoni Pizza Cake: Make Your Own

    How much do you like pizza? Enough to stack several on top of each other, bake them together and call them a cake? A crazy recipe has taken the Internet by storm and pizza lovers and foodies all over the world are ready to try it.

    The pepperoni pizza cake recipe and others like it will likely be copied by many pizza restaurants, but if you can’t wait for that you can always follow the recipe and make your own.

    The pizza cake appears to have originated at Canadian pizza chain Boston Pizza. Food blog So Good found the concoction, and tried its own version earlier this year. The recipe has been passed around, and has now found its way into the mainstream with a post from Pillsbury. Check out their recipe below:

    The recipe is as follows:

    Step 1:
    “Preheat oven to 400 degrees. Start by finding a pan that has tall sides, like this cake pan. The bottom does not need to be removable like this one. It could even be a square pan, if you can’t find a circular one.”

    Step 2:
    “Start by unrolling your pizza dough and pressing it out into an even layer. Cut out three 6-inch circles (or the size needed to fit the bottom of your pan).”

    Step 3:
    “Bake the circles on a lightly greased baking sheet for just eight minutes, then remove them from the pan and cool. Open up the second pizza dough and cut two 6-inch circles along the long side of the dough, bake for eight minutes and then cool. Cut a long strip on the opposite side of the remaining pizza dough. Make sure the dough is a half inch taller than the height of your pan, and cut it into a long strip.”

    Step 4:
    “Line the round pan with parchment paper, so that parchment paper comes up and over the sides of the pan. Carefully drape the pizza dough inside the pan, to line the sides, leaving that extra half inch of the dough hanging over the outside edge. Take one of the cooked and cooled pizza dough circles and place it in the bottom of the pan.”

    Step 5:
    “Now is a great time to let the kids help! Have them spread pizza sauce on the bottom layer, followed by a layer of pepperoni. Place a layer of shredded mozzarella cheese on top, followed by another precooked pizza dough circle.”

    Step 6:
    “Repeat the process, until you reach the top layer. Finish the cake by spreading pizza sauce, mozzarella, and then pepperoni. Use the dough that is hanging over the edge of the pan to create a crust, by rolling it over on top of the top layer of pizza.”

    Step 7:
    “Bake for 20 to 25 minutes or until the sides of the pizza are fully cooked. If the top of the pizza crust is becoming too dark while baking, use a strip of aluminum foil to cover the crust to prevent it from burning. Once it’s fully cooked, carefully remove the pizza from the pan by pulling up on the parchment paper. Let the pizza cool for five minutes before using a sharp knife to cut slices, like you would a cake.”

    Of course, you can always change the toppings if you don’t like pizza or prefer something else and you can tweak the recipe any way you want to make it to your liking or that of your family.

    Do you think the pepperoni pizza cake looks delicious or like a hospital visit waiting to happen?

  • Drones: Movies, TV Set to Receive Filming Approval from FAA

    Drones: Movies, TV Set to Receive Filming Approval from FAA

    The Federal Aviation Administration is poised to approve exemptions for seven aerial photo and video production companies, allowing them to lawfully operate their unmanned aircraft systems for the purposes of filming movies and television shows.

    Both Bloomberg and Reuters quote sources familiar with the matter who say the FAA will let these seven production companies fly their small drones on closed sets. The administration is expected to make the official announcement as early as Thursday.

    The seven production companies first petitioned the FAA for exemptions back in June, with the help of the MPAA. The film and television industry had been pushing for this for a long time, but those were the first formal requests. FIlm and TV companies argue that not only are drones a most cost-effective way to achieve aerial shots (as opposed to let’s say, a helicopter), but it would allow them to shoot in the US, instead of having to go outside the country to film in areas with more lenient rules regulating unmanned aircraft.

    The film industry is just one of many looking to employ UAS these days. You probably already know about Amazon, who recently petitioned the FAA for an exemption from its commercial drone ban. Amazon, of course, is trying to build a fleet of delivery drones – which the company says will one day we as commonplace as mail trucks.

    Other industries like precision agriculture, power line and pipeline inspection, and oil and gas flare stack inspection are also pushing into the drone game. In June, the first FAA-approved commercial drone flight over land was handed to AeroVironment’s Puma AE, which BP will use to survey pipelines in Alaska.

    Image via VidMuze, YouTube

  • With The New Buy Button, Will Twitter Become An Effective E-Commerce Tool?

    With The New Buy Button, Will Twitter Become An Effective E-Commerce Tool?

    Everyone is trying to figure out mobile commerce, and the big news is that Twitter just unveiled its role in that – a new Buy button, which will enable users to buy goods and services right from tweets. Twitter joins Facebook and Pinterest, who are both trying some new social media-based approaches. Which one will be the most successful? Regardless of that, businesses are soon going to have some new great opportunities to make sales.

    Do you think Twitter’s “buy” button is going to have a major impact on consumers buying products from their mobile devices? Do you intend to make use of it as it becomes available? Let us know in the comments.

    Last month, Twitter was said to be readying the launch of its much-anticipated “buy” button, and on Monday, the company made the official announcement. Granted, it’s still just a test at this point.

    Twitter says it’s testing a way for users to discover and buy products on its service, and that for now, only a small percentage of users in the U.S will see tweets with a “buy” button from select Twitter partners. The feature will let users buy things directly from a tweet.

    “This is an early step in our building functionality into Twitter to make shopping from mobile devices convenient and easy, hopefully even fun,” says group product manager Tarun Jain. “Users will get access to offers and merchandise they can’t get anywhere else and can act on them right in the Twitter apps for Android and iOS; sellers will gain a new way to turn the direct relationship they build with their followers into sales.”

    “In our test, an entire purchase can be completed in just a few taps,” Jain says. “After tapping the ‘Buy’ button, you will get additional product details and be prompted to enter your shipping and payment information. Once that’s entered and confirmed, your order information is sent to the merchant for delivery.”

    Twitter says the number of users with access to the feature will grow over time, even in the testing stage apparently.

    Twitter’s current platform partners include Fancy, Gumroad, Musictoday, and Stripe. Brand partners include: Beartooth, Brad Paisley, Burberry, Dan+Shay, Death From Above 1979, Demi Lovato, DonorsChoose, Eminem, GLAAD, GLIDE, Global Citizen, The Home Depot, Hunter Hayes, Kiesza, Keith Urban, The Nature Conservancy, Megadeth, Mike Stud, Panic! At The Disco ,Pharrell, Paramore, (RED), Ryan Adams, Soundgarden, The New Pornographers, Twenty One Pilots, Wiz Khalifa, and 9/11 Day.

    Twitter notes that users’ payment and shipping info is encrypted and “safely stored” after the first transaction. This means that after the first time you use the buy button, you won’t have to keep entering in your info. You can remove the info from your account if you choose.

    Once you’re set up to use Twitter to buy stuff, the process of doing so should be very easy. After that, it’s a matter of seeing the tweets that are offering things you want to buy. This is going to be a major incentive for businesses to use Promoted Tweets.

    Facebook is also testing a buy button with similar functionality, but Facebook’s system for delivering content to users is quite different. In the end, however, strategies might not be so different after all.

    By reducing Pages’ organic reach in the News Feed, Facebook has essentially made the game of visibility one of pay-to-play. When you’re trying to get people to buy things from Facebook posts, you’re almost certainly going to have to sponsor your posts.

    Twitter, on the other hand, enables accounts to get their tweets in front of every single follower. They don’t algorithmically filter the timeline – at least not yet. It’s looking like that will change in the future, much to the chagrin of users, but while Twitter currently doesn’t filter things, very little content is actually being seen by a Twitter account’s entire audience as it is.

    Twitter recently made organic tweet analytics available to everyone, and it put the spotlight on just how much reach most tweets are actually getting, and it’s not much. Ultimately, Twitter visibility is a pay-to-play game as well, and will probably be even more so going forward.

    Facebook already has a lot of great targeting options, and Twitter is getting better, but recent research has shown that email marketing is driving mobile purchases much more than social media so far. People responding to email marketing and people going directly to e-commerce sites saw the highest share of purchases from phones, according to a recent report from Custora. It will be interesting to see if the emerging “buy” features from the popular social networks change that landscape.

    Do you see Twitter becoming an effective e-commerce tool for businesses? Do you expect many people to use it for buying? How will it stack up to Facebook? Email? Share your thoughts in the comments.

    Images via Twitter, Facebook

  • Obama Approval Rating Hits Record Low in California

    When some people think of California, they think of a state overrun with liberals. That may be true to an extent, but according to a new poll, President Barack Obama’s approval rating has hit a record low of 44.5 percent. This isn’t as low as former President George W. Bush’s approval rating got to in the state (down to 28 percent at one point), but it’s awfully low for a blue state.

    The August Field Poll asked the opinions of 642 registered voters. Just over 44 percent of voters approved of Obama’s job, and 43.2 percent of voters disapproved; 12.3 percent of voters were undecided. As a bit of a comparison, sixty percent of Californians voted for Obama in 2012.

    Check out the poll below:

    The poll also included the racial makeup of the voters. Obama’s job performance was approved by 40.3 percent of white people and by 80 percent of African Americans. As far as political ideology goes, 11.9 percent of voters that identify as strongly conservatives approve of Obama, while 79.2 percent of people that identify as strongly liberal approve of Obama.

    As you can see from the tweets below, it Obama’s low approval rating didn’t come as much of a surprise:

    Since Obama’s approval rating is at a low in the blue state of California, how does he stack up as far as the rest of the country is concerned? According to a Gallup poll taken in the last week of August, 41 percent of voters approve of Obama. Obama was down to a 40 percent approval rating earlier this year.

    Some people have speculated why Obama’s approval rating has dropped a little lately, and many think it has to do with the president’s handling of the terror group ISIS. This group is responsible for the beheading of American journalists James Foley and Steven J. Sotloff. Obama reportedly knew about the group’s rise over the past year, but did nothing to stop it, nor has he come up with a course of action yet.

  • Clayton Kershaw Hopes to Continue Domination of MLB

    Each year, MLB teams play 162 regular season games. Due to this plethora of contests, most players never feel performance nerves until the end of the season when their team is trying to cement a playoff spot or is vying to win a pennant. However, one can be certain that the member of the Los Angeles Angels are quaking in their cleats awaiting tonight’s matchup against the Los Angeles Dodgers. The reason for said nerves? None other than Clayton Kershaw.

    Kershaw, a left-handed pitcher for the Dodgers, has been dominant this season, to say the least. Kershaw was awarded NL Pitcher of the Month in June due to his outstanding stat line – 6-0 record with a 0.82 ERA, 61 strikeouts and four walks in 44 innings. If that wasn’t impressive enough, Kershaw was also named NL Pitcher of the Month for July due to an equally stellar performance – 4-0 record with a 1.07 ERA, 43 strikeouts, and four walks in 42 innings. During the month of June, Kershaw held opponents to a .165 batting average, ranking second best in the Majors.

    Here are some nice Tweets to put Kershaw’s performance into perspective:

    For the 2014 season, Kershaw has a .237 on-base percentage, compared to his opponents who boast a paltry .220 OBP.

    Perhaps most impressive of all is the fact that Kershaw missed the entire month of April this year due to a back injury. (Not even Tiger Woods has been able to overcome such luck.)

    Tonight, Kershaw goes for his 14th win of the season. If he is able to defeat the Dodgers crosstown rivals, the Angels, he will be the first MLB pitcher to reach 14 wins this season. A win tonight would also make 11 straight wins for the lefty and would hopefully stack his impressive 2014 stat-line (1.71 ERA with 150 strikeouts and 15 walks in 121 1/3 innings) even more.

    Perhaps the Angels only hope is to replace Kershaw’s baseballs with phoney, rubber ones. As Kershaw proved late last month, he is no William Tell.

    Image via Wikimedia Commons

  • Twitter Acquires Machine Learning Company Madbits

    Twitter Acquires Machine Learning Company Madbits

    Twitter has made another acquisition, picking up Madbits, which specializes in deep learning/machine learning, and has been working on technologies that can help extract information from raw media, such as images.

    This is the kind of thing that a company like Twitter could obviously put to good use with the amount of such raw media that saturates the service every day, or every second for that matter.

    Madbits talks about joining Twitter on its site (via GigaOm, which first reported on the acquisition).

    Over this past year, we’ve built visual intelligence technology that automatically understands, organizes and extracts relevant information from raw media. Understanding the content of an image, whether or not there are tags associated with that image, is a complex challenge. We developed our technology based on deep learning, an approach to statistical machine learning that involves stacking simple projections to form powerful hierarchical models of a signal.

    We prototyped and tested about ten different applications, and as we’ve prepared to launch publicly, we’ve decided to bring the technology to Twitter, a company that shares our ambitions and vision and will help us scale this technology.

    We are excited to join the folks at Twitter to merge our efforts and see this technology grow to its full potential.

    Twitter also mentioned on its earnings call on Tuesday that it has completed its previously announced acquisition of Tap Commerce. The company also announced a couple weeks ago that it has acquired CardSpring.

    Terms of the deal were not disclosed.

    Image via Twitter

  • Twitter Revenue Up 124%, Monthly Active Users Up 24%

    Twitter just released its earnings report for the second quarter. This is the company’s third such report since going public last year.

    The company beat analysts’ estimates, and stock is quickly taking off.

    Revenue was was $312 million, up 124% year-over-year.

    Net loss for the quarter was $145 million, and non-GAAP net income was $15 million. GAAP EPS were ($0.24) and non-GAAP EPS were $0.02.

    Average monthly active users were 271 million as of June 30, up 24% year-over-year. Mobile MAUs were 211 million, up 29%, and representing 78% of all MAUs. Timeline views hit 173 billion, up 15%.

    Ad revenue per thousand timeline views hit $1.60, up 100% year-over-year.

    CEO Dick Costolo said, “Our strong financial and operating results for the second quarter show the continued momentum of our business. We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an even broader audience.”

    Ad revenue growth has been driven by higher engagement, Costolo said on the conference call.

    Costolo is really proud of how Twitter performed during the World Cup. They had 2 billion tweet impressions off of Twitter during World Cup (in addition to all the on-property tweeting).

    They have a team working on building fast service in developing markets.

    The size of Twitter’s audience is two to three times that of just the monthly active user base, Costolo said. He said they believe that puts them in the top ten of digital audiences in the world. Total audience and reach represent a “significant opportunity” and they’ll continue to invest in maximizing the size of its audience.

    “We will position ourselves to reach the largest audience in the world and every person on the planet,” he said.

    Twitter has a sales presence in over 40 countries.

    The company noted on the call that it has closed the recently announced acquisition of Tap Commerce.

    During the Q&A, Costolo said they’re not monetizing the off-site Twitter audience yet.

    The company says that it helps make other brands better as opposed to “disrupting” them.

    They didn’t benefit from new MAU growth because of the World Cup, apparently. It drove engagement from existing users.

    You’ll continue to see other experiments like the “buy” button.

    Here’s the release in its entirety:

    SAN FRANCISCO, Calif. – July 29, 2014 – Twitter, Inc. (NYSE: TWTR) today announced financial results for the second quarter ended June 30, 2014.

    • Q2 revenue of $312 million, up 124% year-over-year
    • Q2 net loss of $145 million and non-GAAP net income of $15 million
    • Q2 GAAP EPS of ($0.24) and non-GAAP EPS of $0.02
    • Q2 adjusted EBITDA of $54 million, representing an adjusted EBITDA margin of 17%

    “Our strong financial and operating results for the second quarter show the continued momentum of our business,” said Dick Costolo, CEO of Twitter. “We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an even broader audience.”

    For information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

    Second Quarter 2014 Operational Highlights

    • Average Monthly Active Users (MAUs) were 271 million as of June 30, 2014, an increase of 24% year-over-year.
    • Mobile MAUs reached 211 million in the second quarter of 2014, an increase of 29% year-over-year, representing 78% of total MAUs.
    • Timeline views reached 173 billion for the second quarter of 2014, an increase of 15% year-over-year.
    • Advertising revenue per thousand timeline views reached $1.60 in the second quarter of 2014, an increase of 100% year-over-year.

    Second Quarter 2014 Product Highlights

    • Twitter introduced new product experiences that were built around the World Cup, including real-time scoring, push notifications, event and match timelines, and a voting ballot feature. In addition, Twitter launched new web profiles and the ability to send private messages within Vine.
    • Twitter launched a number of new advertiser tools including mobile app promotions, which allow mobile app developers to drive installs and engagements on Twitter, and website cards, which allow advertisers to easily surface website content within a Tweet and drive relevant traffic to any page of their site such as their home page, product page, or an important blog post.
    • Twitter continued the international expansion of its advertising products, expanding state/region geo-targeting to help marketers meet local advertising objectives in additional countries including the UK, France, and Indonesia, among others, and launching its self service ad platform for small and medium sized businesses in Spain, Israel and South Africa.
    • Twitter closed the acquisition of Gnip, a leading provider of social data, and entered into agreements to acquire several other companies including TapCommerce, a leader in mobile retargeting and re-engagement advertising, and SnappyTV, a platform for video editing and distribution.

    Second Quarter 2014 Financial Highlights

    Revenue – Revenue for the second quarter of 2014 totaled $312 million, an increase of 124% compared to $139 million in the same period last year.

    • Advertising revenue totaled $277 million, an increase of 129% year-over-year.
    • Mobile advertising revenue was 81% of total advertising revenue.
    • Data licensing and other revenue totaled $35 million, an increase of 90% year-over-year.
    • International revenue totaled $102 million, an increase of 168% year-over-year.
    • International revenue was 33% of total revenue.

    Net loss – GAAP net loss was $145 million for the second quarter of 2014 compared to a net loss of $42 million in the same period last year. Twitter’s GAAP net loss included $158 million of stock-based compensation expense.

    Adjusted EBITDA – Adjusted EBITDA was $54 million for the second quarter of 2014, an increase of 461% compared to $10 million in the same period last year.

    Non-GAAP net income / loss – Non-GAAP net income was $15 million for the second quarter of 2014 compared to a Non-GAAP net loss of $16 million in the same period last year.

    EPS – Basic and diluted GAAP EPS was ($0.24) for the second quarter of 2014 compared to ($0.32) in the same period last year.

    Non-GAAP EPS – Non-GAAP EPS was $0.02 for the second quarter of 2014 compared to ($0.12) in the year ago period.

    Capital expenditures – Purchases of property and equipment for the second quarter of 2014 were $44 million. Additionally, $31 million of equipment was financed through capital leases during the second quarter of 2014.

    Cash, cash equivalents and marketable securities – As of June 30, 2014, cash, cash equivalents and marketable securities were approximately $2.1 billion, compared to $2.2 billion as of March 31, 2014.

    Outlook

    Twitter’s outlook for the third quarter of 2014 is as follows:

    • Revenue is projected to be in the range of $330 million to $340 million.
    • Adjusted EBITDA is projected to be in the range of $40 million to $45 million.
    • Stock-based compensation expense is projected to be in the range of $180 million to $190 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Twitter’s revised outlook for the full year of 2014 is as follows:

    • Revenue is projected to be in the range of $1,310 million to $1,330 million.
    • Adjusted EBITDA is projected to be in the range of $210 million to $230 million.
    • Capital expenditures are projected to be in the range of $330 million to $390 million.
    • Stock-based compensation expense is projected to be in the range of $640 million to $690 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Webcast and Conference Call Details
    Twitter will host a conference call today, Tuesday, July 29, 2014, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss financial results. Questions submitted via Twitter, directed to @TwitterIR, using the hashtag #TWTRearnings will be considered during the Q&A portion of the conference call in addition to questions submitted by conference call participants. A live webcast of the conference call, Twitter’s financial results and supplemental slides will be accessible from the Investor Relations page of Twitter’s website at investor.twitterinc.com. A replay will be archived and accessible at the same website after the conference call. Twitter has used, and intends to continue to use, its Investor Relations website (investor.twitterinc.com), as well as certain Twitter accounts (@dickc, @twitter and @twitterIR), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    About Twitter, Inc.
    Twitter (NYSE: TWTR) is a global platform for public self-expression and conversation in real time. By developing a fundamentally new way for people to create, distribute and discover content, we have democratized content creation and distribution, enabling any voice to echo around the world instantly and unfiltered. The service can be accessed at Twitter.com, via the Twitter mobile application and via text message. Available in more than 35 languages, Twitter has 271 million monthly active users. For more information, visit discover.twitter.com or follow @twitter.

    Forward Looking Statements
    This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Twitter’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter’s strategies and business plans and Twitter’s expectations regarding its revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the third quarter and full year 2014. Twitter’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that: our user base and engagement do not continue to grow; advertisers reduce or discontinue their spending on Twitter; data partners reduce or discontinue their purchases of data licenses from Twitter; and Twitter experiences expenses that exceed its expectations. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Twitter’s Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed with the Securities and Exchange Commission. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014. The forward-looking statements in this press release are based on information available to Twitter as of the date hereof, and Twitter disclaims any obligation to update any forward-looking statements, except as required by law.

    Non-GAAP Financial Measures
    To supplement Twitter’s financial information presented in accordance with generally accepted accounting principles in the United States, or GAAP, Twitter considers certain financial measures that are not prepared in accordance with GAAP, including adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP EPS. Twitter defines adjusted EBITDA as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization expense, interest and other expenses and provision (benefit) for income taxes; and Twitter defines non-GAAP net income (loss) as net loss adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets and the income tax effects related to acquisitions. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.

    Twitter uses the non-GAAP financial measures of adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP EPS in evaluating its operating results and for financial and operational decision-making purposes. Twitter believes that adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP EPS help identify underlying trends in its business that could otherwise be masked by the effect of the expenses that we exclude in adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP EPS. Twitter also believes that adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP EPS provide useful information about its operating results, enhance the overall understanding of Twitter’s past performance and future prospects and allow for greater transparency with respect to key metrics used by Twitter’s management in its financial and operational decision-making. Twitter uses these measures to establish budgets and operational goals for managing its business and evaluating its performance. Twitter is presenting these non-GAAP financial measures to assist investors in seeing Twitter’s operating results through the eyes of management, and because it believes that these measures provide an additional tool for investors to use in comparing Twitter’s core business operating results over multiple periods with other companies in its industry.

    These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies.

    For future periods, Twitter is unable to provide a reconciliation of adjusted EBITDA to net loss as a result of the uncertainty regarding, and the potential variability of, depreciation and amortization expense, interest and other expenses and provision (benefit) for income taxes, that are expected to be incurred in the future.

    Contacts
    Investors:
    Nils Erdmann
    ir@twitter.com

    Press:
    Jim Prosser
    jprosser@twitter.com

    Image via Twitter

  • eBay Earnings Released, Revenue Up 13%

    eBay just released its earnings report for the second quarter with revenue growth of 13%, commerce volume growth of 26%, GAAP and non-GAAP EPS growth of 9%, and the announcement that it has repurchased $1.7 billion in stock.

    Revenue was up 13% year-over-year at $4.4 billion. GAAP earnings increased to $676 million, and non-GAAP earnings increased to $868 million.

    CEO John Donahoe said, “In a challenging second quarter, our commerce and payments platforms delivered strong enabled commerce volume growth of 26 percent. PayPal generated another strong quarter while eBay’s growth was hampered by its global password reset for all users. We continued our momentum in the four competitive commerce battlegrounds of mobile, local, global and data. We delivered new experiences for PayPal and eBay customers, extended PayPal and eBay into new markets, made it simple and easy for developers to integrate PayPal and offered new ways to help merchants grow.”

    Here’s the release in its entirety:

    SAN JOSE, Calif.–()–Global commerce platform and payments leader eBay Inc. (NASDAQ: EBAY) today reported that revenue for the second quarter ended June 30, 2014 increased 13% to $4.4 billion, compared to the same period in 2013. GAAP earnings increased to $676 million or $0.53 per diluted share, and non-GAAP earnings increased to $868 million or $0.69 per diluted share driven by strong enabled commerce volume growth.

    “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

    eBay Inc.’s commerce ecosystem continued to gain share, with total company enabled commerce volume (ECV) increasing 26% in the second quarter to $62 billion. Mobile ECV advanced 68% to $12 billion representing 20% of volume. Mobile downloads since inception were 260 million and attracted 6.6 million new customers in the quarter. Cross-border trade grew 26%, representing $13 billion, or 22%, of total company ECV.

    “In a challenging second quarter, our commerce and payments platforms delivered strong enabled commerce volume growth of 26 percent,” said eBay Inc. President and CEO John Donahoe. “PayPal generated another strong quarter while eBay’s growth was hampered by its global password reset for all users. We continued our momentum in the four competitive commerce battlegrounds of mobile, local, global and data. We delivered new experiences for PayPal and eBay customers, extended PayPal and eBay into new markets, made it simple and easy for developers to integrate PayPal and offered new ways to help merchants grow.”

    PayPal net total payment volume (TPV) grew 29% with Merchant Services volume up 35% and on-eBay volume up 13%. Revenue grew to $1.9 billion. PayPal gained 4.0 million new active registered accounts to end the quarter at 152 million, up 15%. Global on-eBay penetration increased to 79.8%. PayPal signed a deal with GE to extend its relationship offering a dual branded retail credit card and committed to purchase the loan portfolio in 2016 for an estimated $1 billion, based on the size of the portfolio at that time. This provides PayPal with flexibility to expand its credit offerings to consumers and merchants while improving its ability to manage transaction expense and reinvest back into the business to accelerate payment volume growth.

    eBay Marketplaces gross merchandise volume (GMV) grew 12%, with the U.S. up 10% and International up 14%. Revenue grew to $2.2 billion. Marketplaces gained 3.8 million new buyers to end the quarter with 149 million active buyers, up 14%. Top rated sellers in the company’s three largest markets grew their same-store sales 14% and offered free shipping on 56.4% of transactions across those markets. The selection of items available on Marketplaces grew to over 700 million listings, including both platform and non-platform offerings, reflecting the success of improved selling initiatives, particularly on mobile.

    eBay Enterprise gross merchandise sales (GMS) grew 15%. Revenue grew to $267 million. Enterprise enabled its clients to grow same-store sales 14%.

    Second Quarter 2014 Financial Highlights (presented in millions, except per share data and percentages)
    Second Quarter
    2014 2013 Change
    eBay Inc.
    Net revenue $4,366 $3,877 $489 13%
    Enabled commerce volume (ECV) $61,639 $48,776 $12,863 26%
    GAAP
    Net income $676 $640 $36 6%
    Earnings per diluted share $0.53 $0.49 $0.04 9%
    Non-GAAP
    Net income $868 $822 $46 6%
    Earnings per diluted share $0.69 $0.63 $0.06 9%
    Business Units
    Payments
    Net revenue $1,946 $1,624 $322 20%
    Net total payment volume (TPV) $55,046 $42,813 $12,233 29%
    Marketplaces
    Net revenue $2,174 $2,001 $173 9%
    Gross merchandise volume (GMV) $20,485 $18,276 $2,209 12%
    Enterprise
    Net revenue $267 $260 $7 3%
    Gross merchandise sales (GMS) $940 $815 $125 15%

    Other Selected Financial and Operational Results

    • Operating margin — GAAP operating margin decreased to 18.2% for the second quarter of 2014, compared to 19.3% for the same period last year. Non-GAAP operating margin decreased to 24.4% in the second quarter, compared to 26.3% for the same period last year.
    • Taxes — The GAAP effective tax rate for the second quarter of 2014 was 15.8%, compared to 15.3% for the second quarter of 2013. For the second quarter of 2014 and 2013, the non-GAAP effective tax rate was 19.4% and 19.2%, respectively.
    • Cash flow — The company generated $1.5 billion of operating cash flow and $1.2 billion of free cash flow during the second quarter of 2014.
    • Stock repurchase programs — The company repurchased 32.4 million shares of its common stock for approximately $1.7 billion in the second quarter of 2014. As of June 30, 2014, the company’s remaining share repurchase authorization was approximately $2.2 billion.
    • Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $12.4 billion at June 30, 2014, down from $12.8 billion at December 31, 2013.

    Business Outlook

    • Third quarter 2014 — The company expects net revenues in the range of $4,300 – $4,400 million with GAAP earnings per diluted share in the range of $0.51 – $0.53 and non-GAAP earnings per diluted share in the range of $0.65 – $0.67.
    • Full year 2014 — The company expects net revenues in the range of $18,000 – $18,300 million with GAAP earnings per diluted share in the range of $0.04 – $0.09 and non-GAAP earnings per diluted share in the range of $2.95 – $3.00.

    Quarterly Conference Call and Webcast

    eBay Inc. will host a conference call to discuss second quarter 2014 results at 2:00 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 athttp://investor.ebayinc.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.

    eBay Inc. uses its Investor Relations website at http://investor.ebayinc.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor, in addition to following press releases, SEC filings, public conference calls and webcasts.

    About eBay Inc.

    eBay Inc. (NASDAQ: EBAY) is a global commerce and payments leader, providing a robust platform where merchants of all sizes can compete and win. Founded in 1995 in San Jose, Calif., eBay Inc. connects millions of buyers and sellers and enabled $205 billion* of commerce volume in 2013. We do so through eBay, one of the world’s largest online marketplaces, which allows users to buy and sell in nearly every country on earth; through PayPal, which enables individuals and businesses to securely, easily and quickly send and receive digital payments; and through eBay Enterprise, which enables omnichannel commerce, multichannel retailing and digital marketing for global enterprises in the U.S. and internationally. We also reach millions through specialized marketplaces such as StubHub, the world’s largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.

    * This adjusted number reflects decision to remove vehicles and real estate GMV from ongoing total GMV and ECV metrics (previously stated ECV for 2013 was $212 billion, incorporating vehicles and real estate GMV).

    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 millions, except as otherwise noted. As a result, certain amounts may not sum or recalculate using the rounded dollar amounts provided.

    Non-GAAP Financial Measures

    This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission (SEC): non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin, non-GAAP effective tax rate and free cash flow. 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 to the nearest comparable GAAP measures, see “Business Outlook,” “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin,” “Reconciliation of GAAP Net Income to Non-GAAP Net Income and Reconciliation of 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.

    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 expected financial results for the third quarter and full year 2014, and the future growth in the Payments, Marketplaces and Enterprise businesses, mobile payments and mobile commerce, the company’s plans regarding its stock repurchase programs, and the impact of the cyberattack on the company’s results of operations. The company’s actual results could differ materially from those predicted 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: changes in political, business and economic conditions, any European, Asian or general economic downturn or crisis (including any economic disruption or sanctions related to Ukraine or Russia) and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; the company’s need to successfully react to the increasing importance of mobile payments and mobile commerce and the increasing social aspect of commerce; the company’s ability to deal with the increasingly competitive ecommerce 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; changes to the company’s capital allocation or management of operating cash; the company’s need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; the effect of management changes and business initiatives; the company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; any changes the company may make to its product offerings; the competitive, regulatory, payment card association-related and other risks specific to PayPal and Bill Me Later, especially as PayPal continues to expand geographically and introduce new products and as new laws and regulations related to financial services companies come into effect; the company’s ability to timely upgrade and develop its technology systems, infrastructure and customer service capabilities at reasonable cost; 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; and the company’s ability to profitably integrate, manage and grow businesses that have been acquired or may be acquired in the future. 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 http://investor.ebayinc.com or the SEC’s website at www.sec.gov. All information in this release is as of July 16, 2014. 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.

    eBay Inc.
    Unaudited Condensed Consolidated Balance Sheet
    June 30, December 31,
    2014 2013
    (In millions)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 3,834 $ 4,494
    Short-term investments 3,535 4,531
    Accounts receivable, net 765 899
    Loans and interest receivable, net 2,939 2,789
    Funds receivable and customer accounts 10,037 9,260
    Other current assets 1,268 1,310
    Total current assets 22,378 23,283
    Long-term investments 6,217 4,971
    Property and equipment, net 2,685 2,760
    Goodwill 9,367 9,267
    Intangible assets, net 714 941
    Other assets 279 266
    Total assets $ 41,640 $ 41,488
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Short-term debt $ 1,203 $ 6
    Accounts payable 312 309
    Funds payable and amounts due to customers 10,037 9,260
    Accrued expenses and other current liabilities 5,693 2,799
    Deferred revenue 183 158
    Income taxes payable 110 107
    Total current liabilities 17,538 12,639
    Deferred and other tax liabilities, net 774 841
    Long-term debt 4,118 4,117
    Other liabilities 240 244
    Total liabilities 22,670 17,841
    Total stockholders’ equity 18,970 23,647
    Total liabilities and stockholders’ equity $ 41,640 $ 41,488
    eBay Inc.
    Unaudited Condensed Consolidated Statement of Income
    Three Months Ended June 30, Six Months Ended June 30,
    2014 2013 2014 2013
    (In millions, except per share amounts)
    Net revenues $ 4,366 $ 3,877 $ 8,628 $ 7,625
    Cost of net revenues (1) 1,392 1,211 2,743 2,363
    Gross profit 2,974 2,666 5,885 5,262
    Operating expenses:
    Sales and marketing (1) 914 771 1,719 1,468
    Product development (1) 500 451 980 885
    General and administrative (1) 461 419 926 827
    Provision for transaction and loan losses 232 193 436 368
    Amortization of acquired intangible assets 73 82 152 164
    Total operating expenses 2,180 1,916 4,213 3,712
    Income from operations 794 750 1,672 1,550
    Interest and other, net 9 6 4 15
    Income before income taxes 803 756 1,676 1,565
    Provision for income taxes (127 ) (116 ) (3,326 ) (248 )
    Net income (loss) $ 676 $ 640 $ (1,650 ) $ 1,317
    Net income (loss) per share:
    Basic $ 0.54 $ 0.49 $ (1.30 ) $ 1.02
    Diluted $ 0.53 $ 0.49 $ (1.30 ) $ 1.00
    Weighted average shares:
    Basic 1,258 1,297 1,267 1,296
    Diluted 1,267 1,313 1,267 1,316
    (1) Includes stock-based compensation as follows:
    Cost of net revenues $ 20 $ 23 $ 37 $ 36
    Sales and marketing 45 41 87 74
    Product development 59 46 110 78
    General and administrative 42 51 81 84
    $ 166 $ 161 $ 315 $ 272
    eBay Inc.
    Unaudited Condensed Consolidated Statement of Cash Flows
    Three Months Ended June 30, Six Months Ended June 30,
    2014 2013 2014 2013
    (In millions)
    Cash flows from operating activities:
    Net income (loss) $ 676 $ 640 $ (1,650 ) $ 1,317
    Adjustments:
    Provision for transaction and loan losses 232 193 436 368
    Depreciation and amortization 373 347 755 676
    Stock-based compensation 166 161 315 272
    Deferred income taxes (48 ) (103 ) 3,060 347
    Changes in assets and liabilities, net of acquisition effects 95 (227 ) (248 ) (1,032 )
    Net cash provided by operating activities 1,494 1,011 2,668 1,948
    Cash flows from investing activities:
    Purchases of property and equipment (269 ) (353 ) (475 ) (652 )
    Changes in principal loans receivable, net (230 ) (154 ) (232 ) (183 )
    Purchases of investments (2,380 ) (598 ) (3,641 ) (2,024 )
    Maturities and sales of investments 1,258 750 3,264 1,798
    Acquisitions, net of cash acquired (35 ) (7 ) (39 ) (15 )
    Other (5 ) (9 ) (6 ) (14 )
    Net cash provided by (used in) investing activities (1,661 ) (371 ) (1,129 ) (1,090 )
    Cash flows from financing activities:
    Proceeds from issuance of common stock 99 142 154 244
    Repurchases of common stock (1,657 ) (466 ) (3,468 ) (942 )
    Excess tax benefits from stock-based compensation 26 45 86 161
    Tax withholdings related to net share settlements of restricted stock units and awards (106 ) (73 ) (210 ) (226 )
    Net borrowings under commercial paper program 1,200 1,200
    Funds receivable and customer accounts, net (389 ) (115 ) (777 ) (918 )
    Funds payable and amounts due to customers, net 389 115 777 918
    Other (7 )
    Net cash provided by (used in) financing activities (445 ) (352 ) (2,238 ) (763 )
    Effect of exchange rate changes on cash and cash equivalents 31 37 39 (57 )
    Net (decrease) increase in cash and cash equivalents (581 ) 325 (660 ) 38
    Cash and cash equivalents at beginning of period 4,415 6,530 4,494 6,817
    Cash and cash equivalents at end of period $ 3,834 $ 6,855 $ 3,834 $ 6,855
    eBay Inc.
    Unaudited Summary of Consolidated Net Revenues
    Net Revenues by Type (1) Three Months Ended
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
    Net transaction revenues (In millions, except percentages)
    Marketplaces $ 1,722 $ 1,727 $ 1,828 $ 1,609 $ 1,578
    Current quarter vs prior quarter % (6 )% 14 % 2 % 2 %
    Current quarter vs prior year quarter 9 % 11 % 13 % 13 % 11 %
    Percent of Marketplaces revenue from international 58 % 58 % 57 % 55 % 55 %
    Payments 1,741 1,700 1,693 1,493 1,475
    Current quarter vs prior quarter 2 % % 13 % 1 % 3 %
    Current quarter vs prior year quarter 18 % 19 % 18 % 18 % 20 %
    Percent of Payments revenue from international 56 % 56 % 57 % 56 % 56 %
    Enterprise 207 208 333 185 194
    Current quarter vs prior quarter % (38 )% 80 % (5 )% 4 %
    Current quarter vs prior year quarter 7 % 12 % % 9 % 18 %
    Percent of Enterprise revenue from international 4 % 4 % 3 % 4 % 5 %
    Total net transaction revenues 3,670 3,635 3,854 3,287 3,247
    Current quarter vs prior quarter 1 % (6 )% 17 % 1 % 2 %
    Current quarter vs prior year quarter 13 % 14 % 14 % 15 % 15 %
    Marketing services and other revenues
    Marketplaces 452 428 471 418 423
    Current quarter vs prior quarter 6 % (9 )% 13 % (1 )% 5 %
    Current quarter vs prior year quarter 7 % 6 % 8 % 10 % 9 %
    Percent of Marketplaces revenue from international 72 % 71 % 69 % 70 % 71 %
    Payments 205 145 143 127 149
    Current quarter vs prior quarter 41 % 1 % 13 % (15 )% 32 %
    Current quarter vs prior year quarter 38 % 27 % 31 % 25 % 21 %
    Percent of Payments revenue from international 3 % 3 % 4 % 3 % 3 %
    Enterprise 60 61 74 67 66
    Current quarter vs prior quarter (2 )% (17 )% 11 % 2 % 6 %
    Current quarter vs prior year quarter (9 )% (1 )% (3 )% (1 )% (1 )%
    Percent of Enterprise revenue from international % % % % %
    Total marketing services and other revenues 717 634 688 612 638
    Current quarter vs prior quarter 13 % (8 )% 12 % (4 )% 10 %
    Current quarter vs prior year quarter 12 % 10 % 11 % 11 % 10 %
    Elimination of inter-segment net revenue (2) (21 ) (7 ) (12 ) $ (7 ) $ (8 )
    Total net revenues $ 4,366 $ 4,262 $ 4,530 $ 3,892 $ 3,877
    Current quarter vs prior quarter 2 % (6 )% 16 % % 3 %
    Current quarter vs prior year quarter 13 % 14 % 13 % 14 % 14 %
    (1) During the first quarter of 2014, we changed our reportable segments based on changes in our organizational structure which reflect the integration of our Magento platform into our Enterprise segment. Prior to this change, Magento was reported in corporate and other. Also during the quarter, we revised our internal management reporting of certain Marketplaces transactions to align more closely with our related operating metrics. Related to this change, we reclassified our Marketplaces vehicles and real estate revenues from net transaction revenues to marketing services and other revenues. Prior period amounts have been revised to conform to the current period segment reporting structure.
    (2) Represents revenue generated between our reportable segments.
    Net Revenues by Geography (1) Three Months Ended
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
    (In millions, except percentages)
    U.S. net revenues $ 2,047 $ 1,998 $ 2,180 $ 1,873 $ 1,870
    Current quarter vs prior quarter 2 % (8 )% 16 % % 5 %
    Current quarter vs prior year quarter 9 % 12 % 11 % 14 % 16 %
    Percent of total 47 % 47 % 48 % 48 % 48 %
    International net revenues 2,319 2,264 2,350 2,019 2,007
    Current quarter vs prior quarter 2 % (4 )% 16 % 1 % 2 %
    Current quarter vs prior year quarter 16 % 16 % 16 % 15 % 12 %
    Percent of total 53 % 53 % 52 % 52 % 52 %
    Total net revenues $ 4,366 $ 4,262 $ 4,530 $ 3,892 $ 3,877
    Current quarter vs prior quarter 2 % (6 )% 16 % % 3 %
    Current quarter vs prior year quarter 13 % 14 % 13 % 14 % 14 %
    (1) Revenues are attributed to U.S. and international geographies primarily based upon the country in which the seller, payment recipient, customer, website that displays advertising, or other service provider, as the case may be, is located.
    eBay Inc.
    Unaudited eBay Inc. Supplemental Operating Data
    Three Months Ended
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
    (In millions, except percentages)
    ECV (1) $61,639 $58,495 $59,607 $49,727 $48,776
    Current quarter vs prior quarter 5 % (2 %) 20 % 2 % 4 %
    Current quarter vs prior year quarter 26 % 24 % 23 % 23 % 22 %
    During the first quarter of 2014, we revised our internal management reporting of certain Marketplaces transactions to align more closely with our related operating metrics. Related to this change, we correspondingly excluded vehicles and real estate gross merchandise volume from our total gross merchandise volume. Prior period amounts have been revised to conform to the current period segment reporting structure.
    (1) Includes Marketplaces GMV (excluding vehicles and real estate), Payments Merchant Services Net TPV and eBay Enterprise Gross Merchandise Sales not earned on eBay or paid for via PayPal or Bill Me Later during the period; excludes volume transacted through the Magento platform. PayPal Merchant Services Net TPV is the total dollar volume of payments, net of payment reversals, successfully completed through our payments networks, including Bill Me Later, Venmo, and payments processed through Braintree’s full stack payments platform during the period, excludes PayPal’s and Braintree’s payment gateway businesses and payments for transactions on our Marketplaces platforms.
    eBay Inc.
    Unaudited Payments Supplemental Operating Data
    Three Months Ended
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
    (In millions, except percentages)
    Active registered accounts (1) 152.5 148.4 142.6 137.4 132.4
    Current quarter vs prior quarter 3 % 4 % 4 % 4 % 4 %
    Current quarter vs prior year quarter 15 % 16 % 16 % 17 % 17 %
    Net number of payments (2) 850.2 834.4 846.1 729.4 700.6
    Current quarter vs prior quarter 2 % (1 )% 16 % 4 % 3 %
    Current quarter vs prior year quarter 21 % 22 % 22 % 24 % 24 %
    Net total payment volume (3) $55,046 $52,006 $51,973 $43,837 $42,813
    Current quarter vs prior quarter 6 % % 19 % 2 % 4 %
    Current quarter vs prior year quarter 29 % 27 % 25 % 25 % 24 %
    On eBay net total payment volume as % of net total payment volume 27 % 29 % 29 % 30 % 30 %
    Merchant Services net total payment volume as % of net total payment volume 73 % 71 % 71 % 70 % 70 %
    Take rate (4) 3.53 % 3.55 % 3.53 % 3.70 % 3.79 %
    Transaction rates (5)
    Expense rate 0.95 % 0.99 % 0.97 % 1.05 % 1.04 %
    Loss rate 0.28 % 0.27 % 0.32 % 0.30 % 0.31 %
    Margin rate 65.1 % 64.6 % 63.5 % 63.4 % 64.4 %
    Loan portfolio rates
    Risk adjusted margin (6) 16.6 % 16.2 % 15.8 % 16.1 % 16.2 %
    Net charge-off rate (7) 5.5 % 5.4 % 6.3 % 5.5 % 5.6 %
    90-day delinquency rate (8) 2.7 % 2.8 % 2.9 % 3.2 % 2.7 %
    (1) All registered accounts that successfully sent or received at least one payment or payment reversal through our payments networks, including Bill Me Later and Venmo, but excluding users of Braintree’s unbranded payment checkout solutions, within the last 12 months and which are currently able to transact.
    (2) Total number of payments, net of payment reversals, successfully completed through our payments networks, including Bill Me Later, Venmo, and payments processed through Braintree’s full stack payments platform during the period; excludes payments sent or received through PayPal’s and Braintree’s payment gateway businesses.
    (3) Total dollar volume of payments, net of payment reversals, successfully completed through our payments networks, including Bill Me Later, Venmo, and payments processed through Braintree’s full stack payments platform during the period; excludes payments sent or received through PayPal’s and Braintree’s payment gateway businesses.
    (4) Take Rate reflects total net revenues earned through our payments networks, including Bill Me Later, Braintree, Venmo, PayPal’s payment gateway business, subscription fees and other net revenues, divided by Net Total Payment Volume.
    (5) Expense Rate reflects third party payment processing expenses and other related service costs, divided by Net Total Payment Volume.
    Loss Rate reflects expense associated with our customer protection programs, fraud, chargebacks and merchant credit losses, bad debt expense associated with our accounts receivable balances, and loan reserves associated with our loan receivables balances, divided by Net Total Payment Volume.
    Margin Rate reflects Take Rate less Expense Rate and Loss Rate, divided by Take Rate.
    (6) The risk adjusted margin represents annualized credit portfolio revenue, excluding contra-revenue incentives to customers or merchants, less cost of funds and less net credit and fraud losses during the period, divided by average loans receivable for the period.
    (7) Net charge-off rate is the annualized ratio of net credit losses over the average daily loan receivables balance during the period.  Net credit losses are the principal loan losses, exclusive of interest and late fee write offs, less recoveries of previously charged off balances.
    (8) 90-day delinquency rate is the end of period Bill Me Later account balances that have missed three or more consecutive payments, divided by total ending loan receivables.
    eBay Inc.
    Unaudited Marketplaces Supplemental Operating Data
    Three Months Ended
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
    (In millions, except percentages)
    Active Buyers (1) 148.9 145.1 140.3 134.9 130.8
    Current quarter vs prior quarter 3 % 3 % 4 % 3 % 3 %
    Current quarter vs prior year quarter 14 % 14 % 14 % 13 % 13 %
    Gross Merchandise Volume (2) $20,485 $20,545 $21,503 $18,345 $18,276
    Current quarter vs prior quarter % (4 )% 17 % % %
    Current quarter vs prior year quarter 12 % 12 % 13 % 13 % 13 %
    U.S. GMV as % of total GMV 39 % 40 % 39 % 40 % 40 %
    International GMV as % of total GMV 61 % 60 % 61 % 60 % 60 %
    eBay’s classifieds web sites, brands4friends and Shopping.com are not included in these metrics.
    During the first quarter of 2014, we revised our internal management reporting of certain Marketplaces transactions to align more closely with our related operating metrics. Related to this change, we reclassified our Marketplaces vehicle and real estate revenue from net transaction revenues to marketing services and other revenues. Prior period amounts have been revised to conform to the current period segment reporting structure.
    (1) All buyers (including buyers of Half.com, StubHub, GittiGidiyor, and our Korean subsidiary) who successfully closed a transaction within the previous 12-month period. Buyers may register more than once, and as a result, may have more than one account.
    (2) Total value of all successfully closed transactions between users on Marketplaces platforms during the period regardless of whether the buyer and seller actually consummated the transaction; excludes vehicles and real estate gross merchandise volume.
    eBay Inc.
    Unaudited Enterprise Supplemental Operating Data
    Three Months Ended
    June 30, March 31, December 31, September 30, June 30,
    2014 2014 2013 2013 2013
    (In millions, except percentages)
    Gross Merchandise Sales (1) $940 $936 $1,771 $787 $815
    Current quarter vs prior quarter % (47 %) 125 % (3 %) 1 %
    Current quarter vs prior year quarter 15 % 16 % 11 % 13 % 21 %
    (1) Represents the retail value of all sales transactions, inclusive of freight charges and net of allowance for returns and discounts, which flow through our Enterprise commerce technologies, whether we record the full amount of such transaction as a product sale or a percentage of such transaction as a service fee; excludes volume transacted through the Magento platform.

    eBay Inc.
    Business Outlook
    (In Millions, Except Per Share Amounts)

    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 its 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 http://investor.ebayinc.com or the SEC’s website atwww.sec.gov.

    Three Months Ending
    September 30, 2014
    (In millions, except per share amounts) GAAP Non-GAAP (a)
    Net Revenue $4,300 – $4,400 $4,300 – $4,400
    Diluted EPS $0.51 – $0.53 $0.65 – $0.67
    Twelve Months Ending
    December 31, 2014
    GAAP Non-GAAP (b)
    Net Revenue $18,000 – $18,300 $18,000 – $18,300
    Diluted EPS $0.04 – $0.09 $2.95 – $3.00
    (a) Estimated non-GAAP amounts above for the three months ending September 30, 2014, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $70 – $80 million and estimated stock-based compensation expense and employer payroll taxes on stock-based compensation expense of approximately $165 – $175 million as well as the related tax impact.
    (b) Estimated non-GAAP amounts above for the twelve months ending December 31, 2014, reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $340 – $360 million and estimated stock-based compensation expense and employer payroll taxes on stock-based compensation expense of approximately $675 – $695 million as well as the related tax impact.

    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 margin, non-GAAP effective tax rate, and free cash flow.

    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 can be found in the tables included in this press release.

    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, significant gains or losses from the disposal/acquisition of a business, certain gains and losses on investments, 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 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 is dependent on the company’s stock price and the timing and size of exercises by employees of their stock options and the vesting of their restricted stock, 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, 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 impact of the accretion of a note receivable associated with the disposal of certain businesses. 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.

    Tax effect of non-GAAP adjustments. This amount is used to present stock-based compensation and the other amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income.

    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, and repurchase stock. 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.

    eBay Inc.
    Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin
    Three Months Ended
    June 30, June 30,
    2014 2013
    (In millions, except percentages)
    GAAP operating income $ 794 $ 750
    Stock-based compensation expense and related employer payroll taxes 177 168
    Amortization of acquired intangible assets within cost of net revenues 22 19
    Amortization of acquired intangible assets within operating expenses 73 82
    Restructuring
    Total non-GAAP operating income adjustments 272 269
    Non-GAAP operating income $ 1,066 $ 1,019
    Non-GAAP operating margin 24.4 % 26.3 %
    Reconciliation of GAAP Net Income to Non-GAAP Net Income and
    GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate
    Three Months Ended
    June 30, June 30,
    2014 2013
    (In millions, except per share amounts)
    GAAP income before income taxes $ 803 $ 756
    GAAP provision for income taxes (127 ) (116 )
    GAAP net income $ 676 $ 640
    Non-GAAP adjustments to net income:
    Non-GAAP operating income adjustments (see table above) 272 269
    Accretion of note receivable (5 )
    Amortization of intangibles of investments 2 2
    Other significant gains, losses or charges (5 )
    Tax effect of non-GAAP adjustments (82 ) (79 )
    Non-GAAP net income $ 868 $ 822
    Diluted net income per share:
    GAAP $ 0.53 $ 0.49
    Non-GAAP $ 0.69 $ 0.63
    Shares used in GAAP and non-GAAP diluted net income per-share calculation 1,267 1,313
    GAAP effective tax rate 16 % 15 %
    Tax effect of non-GAAP adjustments to net income 3 % 4 %
    Non-GAAP effective tax rate 19 % 19 %
    Reconciliation of Operating Cash Flow to Free Cash Flow
    Three Months Ended
    June 30, June 30,
    2014 2013
    (In millions)
    Net cash provided by operating activities $ 1,494 $ 1,011
    Less: Purchases of property and equipment (269 ) (353 )
    Free cash flow $ 1,225 $ 658

    Image via eBay

  • EPA Says Rolling Coal Is Illegal

    EPA Says Rolling Coal Is Illegal

    If you’ve ever been stopped at a red light behind or beside a big truck, you know well the scramble to roll up the windows when that behemoth starts rolling and exhaust comes spewing from its stacks. If, like me, you are not given to fits of road rage, you figure this is an innocent side effect of driving a diesel truck, and no reason to get your blood pressure up. Just pass the guy and get back to relatively clean air.

    But what if you found out that this guy was deliberately spewing more smoke into the air, and into the faces of you and your family, than he needed to? What if you found out that he had, in fact, deliberately altered his vehicle just to get laughs at you choking on his smoke?

    That’s some douchebaggery, by definition. Would it matter to you if the guy told you that he had a political point to make, an axe to grind with environmentalists?

    Me neither.

    But that is exactly what passes for “activism” in some of the less-enlightened parts of our Republic. While some people laugh about liberal environmentalists chaining themselves to trees to stall logging activities, or marching against mountaintop clearing, some think that “rolling coal”, the practice of modifying one’s injection pump on a diesel engine so that it spews even more smoke, is a valid form of free speech.

    Some of these paragons of higher learning seek out hybrid cars to dish out their free speech on.

    Well, the EPA says belching out poison gases is not protected free speech. According to the EPA website:

    It is a violation of the [Clean Air Act] to manufacture, sell, or install a part for a motor vehicle that bypasses, defeats, or renders inoperative any emission control device. For example, computer software that alters diesel fuel injection timing is a defeat device. Defeat devices, which are often sold to enhance engine performance, work by disabling a vehicle’s emission controls, causing air pollution. As a result of EPA enforcement, some of the largest manufacturers of defeat devices have agreed to pay penalties and stop the sale of defeat devices.

    The CAA prohibits anyone from tampering with an emission control device on a motor vehicle by removing it or making it inoperable prior to or after the sale or delivery to the buyer. A vehicle’s emission control system is designed to limit emissions of harmful pollutants from vehicles or engines. EPA works with manufacturers to ensure that they design their components with tamper-proofing, addresses trade groups to educate mechanics about the importance of maintaining the emission control systems, and prosecutes cases where significant or imminent harm is occurring.

    Image via YouTube

  • Brock Lesnar: Why He’s A Perfect Plan B

    Brock Lesnar: Why He’s A Perfect Plan B

    Let the speculation run amok!

    Perhaps the only thing that professional wrestling fans like more than watching matches is discussing rumors and talking smack.

    For the past few days, social media and wrestling websites have been abuzz over the speculation that Triple H will announce that his Plan B after Battleground will be none other than Brock Lesnar and not Seth Rollins.

    Rumors initially began to circulate after Lesnar defeated The Undertaker. Yes, fans were crushed that the streak came to an end, however we can’t deny Lesnar’s massive presence in the ring.

    There are plenty of reasons why making Lesnar Plan B is a good idea. The Inquisitr provides six very compelling arguments. But, let’s start at the very basics. What makes the WWE so great is the tension that the characters create. Bringing in Lesnar as Plan B will ultimately create incredible friction.

    Additionally, if Lesnar is Plan B, it could possibly bring Cesaro back into the fold. A Cesaro versus Lesnar match sounds like a tasty battle.

    But what about putting John Cena in a place where he totally shines…as the underdog. “Cena always works best when the cards are stacked against him. That’s when he’s at his most likable. Plus, he has a tense history with Lesnar in WWE programming, and putting him up against the former UFC Heavyweight Champion would be one heck of a mountain for the original doctor of thuganomics.”

    Image via YouTube Screenshot

  • Twitter Is Acquiring TapCommerce

    Twitter is acquiring mobile retargeting company TapCommerce, as first reported by Re/code . While not officially disclosed, the price is said to be “in the ballpark” of $100 million.

    TapCommerce and Twitter both just announced the acquisition in a blog post from each company.

    “Our team built our app retargeting technology from the ground-up exclusively for mobile, and our demand-side platform now processes over 15 billion targeted ad impression bids each day, across 50,000 apps worldwide,” says TapCommerce co-founder and CEO Brian Long. “Our focus on creating engaging brand experiences for mobile consumers aligns perfectly with Twitter’s product and core values, making TapCommerce a natural fit in Twitter’s expanding mobile advertising stack.”

    “In addition to numerous other exchanges and networks, the TapCommerce platform is already deeply integrated with MoPub, Twitter’s mobile-focused RTB ad exchange. We look forward to growing our role as an integral part of the Twitter Publisher Network,” he adds. “For our existing customers, your TapCommerce experience will not change. Being a part of the Twitter team will allow us to dedicate more resources to developing our product and expanding our services, so that you can continue to deliver even more value from your campaigns.”

    Here’s how TapCommerce describes itself:

    TapCommerce is the leader in mobile retargeting. We’re trusted by the most successful mobile brands to deliver customers, revenue, and return on investment across mobile platforms.

    TapCommerce is a venture-backed mobile technology company headquartered in New York City’s Union Square.

    “Since the announcement of our acquisition of MoPub last September, we’ve been laying out our vision for how advertising across the mobile ecosystem can work better for marketers, app developers, and (most importantly) users,” says Twitter VP of Global Online Sales Richard Alfonsi.

    “Together with the TapCommerce team, Twitter will be able to offer mobile app marketers more robust capabilities for app re-engagement, tools and managed service solutions for real-time programmatic buying, and better measurement capabilities,” he writes. “Combined with our other ad solutions, advertisers will be able to drive conversions and ROI with mobile consumers on and off of Twitter, across the full user lifecycle — from acquiring new users through app installs, to engaging existing users who already have the advertisers’ apps on their device. And if you’re an everyday mobile user, we expect this will mean better and more relevant ads in the apps you use.”

    TapCommerce raised $10.5 million in funding in November it what TechCrunch called the “mobile ad retargeting land grab”. It claims to work with over 40 of the top 100 grossing apps in the e-commerce, travel, lifestyle, and gaming industries.

    Image via Facebook