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	Press Releases for January 2003

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eBay Inc. Announces Fourth Quarter and Year End 2002 Financial Results - January 16, 2003

Achieves Record GAAP and Pro Forma Diluted EPS of $0.28

Raises 2003 Net Revenue and EPS Guidance

San Jose, CA,- eBay Inc. (Nasdaq: EBAY; www.ebay.com), the world's online marketplace, reported financial results for its fourth quarter and year ended December 31, 2002.

eBay reported consolidated net revenues for Q4-02 totaling a record $413.9 million. Consolidated net income for the quarter was a record $87.0 million, or $0.28 per diluted share. eBay's pro forma consolidated net income, excluding certain items, was a record $87.6 million, or $0.28 per diluted share, exceeding the company's October 30, 2002 guidance for pro forma earnings per diluted share of $0.22 to $0.23.

During Q4-02, consolidated net transaction revenues increased 122% year over year to a record $396.5 million, driven by 58% year-over-year transaction revenue growth in the core eBay U.S. business, 173% year-over-year transaction revenue growth internationally, and a $72.6 million transaction revenue contribution from PayPal.

For the full year, eBay generated consolidated net revenues of $1.21 billion, a 62% increase over the $748.8 million reported in 2001. Consolidated net income increased 176% year over year to $249.9 million, or $0.85 per diluted share. On a pro forma basis, eBay reported consolidated net income of $254.9 million, or $0.87 per diluted share, a 78% year-over-year increase from the $0.49 reported in 2001.

"Our Q4 results capped our most successful year ever," said Meg Whitman, President and CEO of eBay. "Our success goes hand in hand with the success of our vibrant community of users. The strength of our community, the growth of e-commerce, and our commitment to business excellence, all led to these great results."

Key Financial and Operating Metrics
Transaction Revenues - Consolidated net transaction revenues totaled a record $396.5 million, representing 122% year-over-year quarterly growth from the $178.9 million reported in Q4-01.

Gross Profit - Gross profit totaled a record $331.3 million, or 80% of quarterly net revenues, down from the 82% reported in Q4-01, reflecting an improved 86% gross margin for the core eBay business, offset by the lower margin PayPal business.

Operating Income - Operating income for Q4-02 totaled a record $113.9 million or 28% of net revenues, representing a 174% increase over the $41.6 million reported in Q4-01. Pro forma operating income totaled a record $132.4 million, or 32% of net revenues which compares favorably to the 25% margin reported in Q4-01.

GAAP Net Income - GAAP net income totaled a record $87.0 million, or $0.28 per diluted share. This earnings level represents a 235% increase over the $25.9 million reported in Q4-01.

Pro Forma Net Income - Pro forma net income totaled a record $87.6 million, or $0.28 per diluted share. This earnings level represents a 128% increase over the $38.5 million reported in Q4-01.

Operating and Free Cash Flows - Operating cash flows totaled a record $182.9 million, a 119% increase from the $83.7 million reported in Q4-01. Free cash flows for Q4-02 totaled $138.6 million, a 98% increase from the $69.9 million reported in Q4-01.

Gross Merchandise Sales - eBay users transacted a record $4.60 billion in gross merchandise sales (GMS), which is the total value of items sold, during the fourth quarter, representing a 68% year-overyear increase from the $2.74 billion reported in Q4-01.

Listings - eBay hosted a record 195 million listings during the quarter, representing a 55% year-overyear increase from the 126 million reported in Q4-01.

Registered Users - Cumulative confirmed registered users at the end of Q4-02 totaled a record 61.7 million, a sequential increase of 6.8 million users and a 46% increase over the 42.4 million users reported at the end of Q4-01.

Active Users - The number of users on the eBay platform who bid, bought or listed over the trailing twelve months increased to 27.7 million in Q4-02, a 56% increase over the 17.8 million active users for the same period a year ago.

Key Execution Highlights
eBay U.S. Online Net Revenues - eBay U.S. net online transaction revenues totaled $211.4 million in Q4-02, reflecting 58% year-over-year growth and the fourth consecutive quarter of year-over-year acceleration. Including net revenues from third party advertising and end-to-end services, total eBay U.S. online net revenues totaled $224.0 million, representing 35% year-over-year growth.

eBay International Online Net Revenues - Net revenues from international transactions totaled $107.4 million in Q4-02, representing 173% year-over-year growth. Including net revenues from third party advertising, total international net revenues were $109.1 million, representing 172% year-over-year growth.

Payments Net Revenues - For the period from October 4, 2002 through December 31, 2002, PayPal recorded net revenues of $74.7 million, driven by total payment volume of $2.14 billion. Compared to the full quarter Q4-01, PayPal's net revenues grew 86% year-over-year and its total payment volume grew 77% year-over-year. In Q4-02, 66% of total payment volume came from eBay and other online trading sites, up from 58% in Q3-02. In addition, eBay's Billpoint payment service generated $5.1 million in net revenues in Q4-02. On a combined basis, total Q4-02 Payments net revenues were $79.8 million. eBay continues to expect that its Billpoint operations will be completely phased-out during the first half of 2003.

Key Category Performance - Based on Q4-02 annualized GMS, eBay has five categories that generate more than $1 billion in worldwide GMS: eBay Motors at $4.3 billion, Computers at $1.9 billion, Consumer Electronics at $1.8 billion, Books/Movies/Music at $1.4 billion, and Sports at $1.2 billion.

Fixed Price Trading - eBay's fixed price offerings continue to drive seller success and increase the volume of trade on eBay. In aggregate, these offerings contributed approximately $1.1 billion or 24% of total GMS during Q4-02, primarily from eBay's "Buy it Now" feature.

eBay Stores - More than 43,000 sellers on eBay.com and more than 42,000 sellers internationally are currently taking advantage of the enhanced merchandising capabilities of eBay Stores.

Consolidated Financial and Operating Summary
eBay reported record net revenues of $413.9 million in Q4-02, representing an 89% year-over-year increase. The strong Q4-02 performance was attributed to a combination of a strong online holiday shopping season, effective integrated marketing programs and a substantial increase in user activity. Revenues from third party advertisers declined 64% year-over-year to $10.3 million and now represent approximately 2% of net revenues.

Gross profit as a percentage of net revenues was 80%, down from the 84% level reported in Q3-02, and the 82% level reported in Q4-01. The reported gross profit percentage reflects an improvement in the core eBay margin to 86%, offset by lower margin PayPal transaction revenues.

Sales and marketing expenses totaled $108.7 million, or 26% of net revenues, down from 30% reported in Q3-02 and 33% reported in Q4-01. The sequential dollar increase in sales and marketing expense was attributed to the company's integrated holiday marketing campaigns combined with the incremental expenses from the PayPal business. The decrease as a percent of net revenues reflects modest leverage in the core eBay business and much lower marketing spending as a percentage of revenues at PayPal.

Product development costs totaled $31.8 million, or approximately 8% of net revenues, consistent with the 8% of net revenues reported in Q3-02 and down from the 10% of net revenues reported in Q4-01. Product development expense reflects an actual spending increase combined with the incremental expenses from the PayPal business, partially offset by $2.8 million of required capitalization for major site and product development efforts.

General and administrative costs totaled $63.3 million, or about 15% of net revenues, up slightly from the 14% of net revenues reported for both Q3-02 and Q4-01. The sequential percentage increase primarily reflects the addition of PayPal, including PayPal's transaction losses which represented approximately 10% of PayPal net revenues.

Income from operations totaled $113.9 million during Q4-02, a 174% increase over the $41.6 million reported in Q4-01. On a pro forma basis, income from operations totaled $132.4 million, or 32% of Q4- 02 consolidated net revenues, comparing favorably to the $55.4 million and 25% of net revenues reported in Q4-01. The Q4-02 pro forma operating margin for the core eBay business, which excludes PayPal, was 35%, an approximate 10 percentage point year-over-year improvement. The Q4-02 pro forma operating margin for the PayPal business approximated 20%.

Net interest and other income totaled $24.0 million in Q4-02, up from the $6.1 million reported in Q3- 02. The sequential increase primarily reflects the gains on the sale of Kruse International, certain real estate properties, and an equity investment in a privately-held company. Excluding these one-time gains, eBay reported pro forma net interest and other income of $6.6 million in Q4-02.

eBay reported a consolidated pro forma tax provision of $49.3 million. As expected, the Q4-02 effective pro forma tax rate was 36%, consistent with the 36% effective tax rate in Q3-02 and down from the 40% rate in Q4-01. The lower year-over-year effective tax rate reflects the increasing profit contribution from the company's international operations.

eBay's balance sheet remains strong. At the end of Q4-02, the company had more than $1.8 billion in aggregate corporate cash and investments and total assets of more than $4.1 billion.

The company reported $182.9 million in operating cash flows, 119% higher than the $83.7 million reported in Q4-01, reflecting primarily increased profitability.

Free cash flows during Q4-02 totaled $138.6 million, 98% higher than the $69.9 million reported in Q4- 01. Capital expenditures in Q4-02 totaled $44.3 million, relating primarily to the purchase of siterelated hardware and software, the expansion of the company's data warehouse, the build-out of PayPal's new customer service center, and the required capitalization of certain product development costs.

Business Outlook
Net Revenues - The company now expects that revenues for 2003 could be as high as $1.9 billion, $70 million higher than the upper end of the company's most recent guidance. This higher revenue outlook derives from the strength of eBay's U.S., International and Payments businesses. From a quarterly perspective, eBay believes that Q1-03 revenues could be about $440 million, Q2-03 $460 million, Q3- 03 $480 million and Q4-03 $520 million.

GAAP Diluted EPS - eBay now expects that earnings per diluted share for the full year 2003 could be as high as $1.12, $0.07 higher than the upper end of the company's previously guided range. From a quarterly perspective, eBay expects GAAP earnings per diluted share to be $0.26 in Q1-03, $0.27 in Q2-03, $0.27 in Q3-03 and $0.32 in Q4-03.

Pro Forma Diluted EPS - eBay now believes that amortization of intangible assets, stock-based compensation expenses and other pro forma items, primarily related to the PayPal acquisition, will be $19.0 million in Q1-03, $17.0 million in Q2-03, $18.0 million in Q3-03 and $16.0 million in Q4-03. Excluding these charges and the related pro forma tax effect, the company's pro forma earnings per diluted share for the full year 2003 could be as high as $1.27, $0.12 higher than the upper end of the range eBay has most recently indicated. From a quarterly perspective, eBay expects pro forma earnings per diluted share to be $0.30 in Q1-03, $0.30 in Q2-03, $0.31 in Q3-03 and $0.36 in Q4-03. This pro forma earnings pattern reflects both eBay's natural seasonality as well as the pattern of investments that the company intends to make in 2003.

Effective Tax Rate - In 2003, eBay anticipates a decline in its effective tax rate to 34% due to the increased profit contribution from its international business.