eBay Announces First Quarter 2002 Financial Results

-- Company Reports Record Net Revenues and Transaction Revenues --

-- Achieves Record Pro Forma EPS of $0.18 and Pro Forma Operating Margin of 30 Percent --

-- Company Raises 2002 Pro Forma EPS Guidance --

San Jose, CA, April 18, 2002 – eBay Inc. (NASDAQ: EBAY; www.ebay.com), the world’s online marketplaceTM, reported financial results for its first quarter ended March 31, 2002. eBay reported consolidated net revenues totaling a record $245.1 million. This represents a 59% increase over the $154.1 million generated in the same period last year. Consolidated net income for the quarter was a record $47.6 million, or $0.17 per diluted share. eBay’s pro forma consolidated net income, excluding certain charges, was a record $50.6 million, or $0.18 per diluted share.

“The company`s focus and ability to execute allowed us to deliver record revenues and record profitability for the quarter,” said Meg Whitman, President and CEO of eBay. “These results demonstrate that the momentum in our core transaction business is stronger than ever.”

Based on the company’s most recent performance, eBay now believes that net revenues for Q2-02 will range between $260 and $265 million, bringing its first half 2002 net revenue guidance to between $505 and $510 million, representing the high end of previous guidance. eBay also believes that Q2-02 pro forma earnings per diluted share will approximate $0.17, bringing its first half 2002 guidance to approximately $0.35. This earnings level represents an increase of $0.03 to $0.04 from the company’s previous guidance of $0.31 to $0.32 per diluted share.

For the full year 2002, eBay expects that net revenues will approximate $1.1 billion, representing the high end of its previous guidance of $1.05 billion to $1.1 billion. On the bottom line, eBay now believes that pro forma earnings per diluted share could range between $0.73 and $0.75, reflecting a $0.03 to $0.04 increase from previous guidance.

Key Financial and Operating Metrics

Online Transaction Revenues – eBay reported record net online transaction revenues, which exclude revenues from third party advertising and end-to-end services, of $213.7 million, representing 65% year-over-year growth from the $129.7 million reported in Q1-01.

Gross Profit – eBay reported record gross profit totaling $203.8 million or 83% of net revenues during the quarter, up from the 82% gross profit reported in Q1-01.

Pro Forma Operating Income – eBay reported record pro forma operating income totaling $74.4 million, or 30% of net revenues. This represents a 113% increase over Q1-01 pro forma operating income of $35.0 million, or 23% of Q1-01 net revenues.

Pro Forma Net Income – eBay reported record pro forma net income totaling $50.6 million, or $0.18 per diluted share. This earnings level represents a 65% increase over Q1-01 pro forma net income of $30.6 million.

Operating and Free Cash Flows – eBay reported a record $92.3 million in operating cash flows, 147% higher than the $37.4 million reported in Q1-01. Free cash flows for Q1-02 were a record $80.8 million, 203% higher than the $26.7 million reported in Q1-01.

Gross Merchandise Sales – eBay users transacted a record $3.11 billion in gross merchandise sales, or GMS, during the first quarter, representing a 57% year-over-year increase from the $1.98 billion reported in Q1-01.

Listings – eBay hosted a record 138.0 million listings during the quarter, representing a 55% year-over- year increase from the 89.0 million reported in Q1-01.

Registered Users – eBay added 4.6 million new confirmed registered users, offset by approximately 1.0 million user IDs eliminated as part of the company’s Half.com integration efforts and enhanced user registration policies. Cumulative confirmed registered users at the end of Q1-02 totaled a record 46.1 million, representing a 55% increase over the 29.7 million users reported at the end of Q1-01.

Key Execution Highlights

U.S. Online Net Revenues – U.S. online net transaction revenues totaled $161.9 million in Q1-02, representing 16% sequential and 45% year-over-year growth. Including net revenues from third party advertising and end-to-end services, total U.S. online net revenues were $185.0 million, representing 8% sequential and 43% year-over-year growth.

International Net Revenues – Net revenues from international operations totaled $53 million in Q1- 02, or 21% of consolidated net revenues. Highlighting the quarter were 46% sequential net revenue growth in the United Kingdom, 35% sequential net revenue growth in Germany and 23% sequential net revenue growth in Canada. In total, international net revenues grew 31% sequentially and 194% on a year-over-year basis.

International Profitability – On a fully allocated basis, eBay’s international business achieved a double-digit operating margin, after turning profitable for the first time in Q4-01. Also during the quarter, the company’s United Kingdom operations achieved profitability for the first time, complementing the company’s existing profitable operations in Germany and Canada.

Asia Expansion – The company advanced its Asia business strategy through the acquisition of NeoCom and its leading online auction sites in Taiwan, and through the acquisition of a 33 percent interest in EachNet, China’s largest online marketplace. In addition, Internet Auction Company, eBay’s majority-owned subsidiary in South Korea, reported record net revenues and improved financial results.

Key Category Performance – The company achieved strong sequential and year-over-year growth in gross merchandise sales across virtually all top-level categories. Globally, eBay’s ten largest categories in Q1-02 were: eBay Motors, Computers, Consumer Electronics, Book/Movies/Music, Collectibles, Sports, Toys, Clothing & Accessories, Jewelry & Gemstones and Antiques & Art.

Based on Q1-02 annualized gross merchandise sales, eBay now has four categories that each represent greater than $1 billion businesses – eBay Motors with $2.5 billion, Computers with $1.4 billion, Consumer Electronics with $1.2 billion and Books/Movies/Music with $1.1 billion.

Fixed-Price Trading – eBay’s fixed price offerings continue to drive seller success and contributed more than 19% of total gross merchandise sales during Q1-02. GMS on completed “Buy It Now” auctions remained constant, even as eBay introduced a $.05 fee. In addition, over 25,000 users are currently paying monthly subscription fees for the merchandising capability offered by eBay Stores.