Q2 2019 FINANCIAL HIGHLIGHTS
July 17, 2019
DISCLOSURES
This presentation contains non-GAAP measures relating to our performance. You can find the reconciliation of these measures to the nearest comparable GAAP measures in the appendix at the end of this presentation. All growth rates represent year-over-year comparisons, except as otherwise noted.
This presentation contains forward-looking statements that are based on our current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of eBay Inc. and its consolidated subsidiaries, including expected financial results for the third quarter and full year 2019 and the future growth in our business.
Our actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to: changes in political, business and economic conditions, any regional or general economic downturn or crisis and any conditions that affect ecommerce growth or cross-border trade; the company's ability to realize expected growth opportunities in payments intermediation and advertising; the outcome of the operating and strategic portfolio reviews; fluctuations in foreign currency exchange rates; our need to successfully react to the increasing importance of mobile commerce and the increasing social aspect of commerce; an increasingly competitive environment for our business; changes to our capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company's share repurchases, or management of operating cash; our ability to manage indebtedness, including managing exposure to interest rates and maintaining credit ratings; our need to manage an increasingly large enterprise with a broad range of businesses of varying degrees of maturity and in many different geographies; our ability to implement our initiative to intermediate payments on our marketplace platform; our need and ability to manage regulatory, tax, data security and litigation risks; whether the operational, marketing and strategic benefits of the separation of the eBay and PayPal businesses can be achieved; our ability to timely upgrade and develop technology systems, infrastructure and customer service capabilities at reasonable cost while maintaining site stability and performance and adding new products and features; and our ability to integrate, manage and grow businesses that have been acquired or may be acquired in the future.
The forward-looking statements in this presentation 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 our operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting our Investor Relations website at https://investors.ebayinc.com or the SEC's website at www.sec.gov. All information in this presentation is as of July 17, 2019. Undue reliance should not be placed on the forward-looking statements in this presentation, which are based on information available to us on the date hereof. We assume no obligation to update such statements.
2
CFO COMMENTS
Q2 HIGHLIGHTS
- Revenue of $2.7B, up 2% Y/Y (up 4%FX-Neutral)
- GAAP EPS of $0.46 andNon-GAAP EPS of $0.68
- GAAP operating margin of 21%, up 6pts Y/Y
- Non-GAAPoperating margin of 27%, up 2pts Y/Y
- Generated $744M of Operating Cash Flow and $607M of Free Cash Flow
- Returned $1.6B to shareholders through share repurchases and cash dividends
- Reaffirming organicFX-neutral revenue growth rates and raising GAAP and Non- GAAP EPS guidance for the full year
4Reconciliation of Non-GAAP figures and calculation of Free Cash Flow (FCF) are included in the Appendix of this presentation
TRAILING 12-MONTH ACTIVE BUYERS
(millions)
180 | 182 | ||
179 | |||
175 | 177 | ||
171
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | |
Y/Y Growth* | 4% | 4% | 4% | 4% | 4% | 4% |
5*Starting in the second quarter of 2018, Y/Y growth rate is on a pro-forma basis, which includes Giosis' Japan business active buyers in both current and prior year periods
GMV
($ millions)
Int'l
US
US Y/Y Growth
Int'l FX-Neutral Y/Y Growth
Total FX-Neutral Y/Y Growth
Sold Items Y/Y Growth
23,591 | 23,629 | 22,719 | 24,641 | 22,589 | 22,601 |
14,115 | 14,357 | 13,708 | 14,883 | 13,701 | 13,768 |
9,476 | 9,272 | 9,011 | 9,758 | 8,888 | 8,833 |
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 |
7% | 5% | 3% | (1)% | (6)% | (5)% |
7% | 7% | 7% | 5% | 3% | 2% |
7% | 7% | 5% | 2% | (1)% | 0% |
1% | 0% | 0% | 0% | 0% | 0% |
6
REVENUE
($ millions)
2,580 | 2,640 | 2,649 | 2,877 | 2,643 | 2,687 | |
MS&O | 563 | 560 | 582 | 535 | 557 | |
557 | ||||||
Transaction | 2,023 | 2,077 | 2,089 | 2,295 | 2,108 | 2,130 |
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | |
Y/Y Growth. | 12% | 9% | 6% | 6% | 2% | 2% |
FX-Neutral Y/Y Growth. | 7% | 6% | 6% | 6% | 4% | 4% |
Organic FX-Neutral Y/Y Growth. | 7% | 6% | 5% | 5% | 3% | 4% |
Trxn Take Rate. | 8.6% | 8.8% | 9.2% | 9.3% | 9.3% | 9.4% |
7 | Calculation of total Revenue and Organic Revenue growth is included in the Appendix of this presentation; MS&O = Marketing Services & Other Revenue |
- Q2FX-Neutral Transaction Revenue up 4% Y/Y … down 1pt Q/Q
- Q2FX-Neutral MS&O Revenue up 4% Y/Y ...
up 3pts Q/Q
MARKETPLACE GMV & REVENUE
($ millions)
GMV | 22,547 | 22,569 | 23,231 | 21,571 | ||
21,482 | 21,484 | |||||
298 | 301 | 316 | 277 | 270 | ||
MS&O | 310 | |||||
Revenue | ||||||
Transaction | 1,792 | 1,837 | 1,803 | 1,984 | 1,885 | 1,887 |
Revenue | ||||||
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | |
FX-Neutral GMV Y/Y Growth. | 7% | 7% | 5% | 3% | (1)% | (1)% |
FX-Neutral Rev Y/Y Growth. | 7% | 6% | 5% | 6% | 4% | 3% |
Trxn Take Rate . | 7.9% | 8.1% | 8.4% | 8.5% | 8.7% | 8.8% |
Segment Margin . | 33% | 30% | 30% | 31% | 36% | 32% |
8B2C = Business to Consumer sellers; C2C = Consumer to Consumer sellers
- Q2FX-Neutral B2C GMV down 1% Y/Y and FX- Neutral C2C GMV flat Y/Y
- Q2FX-Neutral Transaction Revenue up 5% Y/Y, down 1pt Q/Q
- Q2FX-Neutral MS&O Revenue down 6% Y/Y, up 2pts Q/Q
- Japan acquisition impact of <1pt on Q2FX-Neutral GMV and Revenue
- Segment Margin up 2pts Y/Y primarily due to continued cost leverage and currency hedging gains, partially offset by a stronger USD and Payments investments
PAYMENTS PROGRESS
~6,000
~4,300
Q1 19 | Q2 19 |
# Sellers in Program
Grew total sellers in the program by nearly 40% Q/Q
9
700
600
500
400
300
200
100
Product Launch
9/25/18
Cumulative GMV Intermediated
GMV intermediated to date = $636M
Q2 US GMV exit penetration = 3.8%
$636M
6/30/19
STUBHUB GMV & REVENUE
($ millions)
GMV
MS&O
Revenue
Transaction Revenue
1,410 | |||||
1,237 | |||||
1,044 | 1,060 | 1,018 | 1,117 | ||
1 | 1 | 1 | 3 | 3 | 3 |
2 | 2 | 5 | 5 3 | ||
6 | 6 | 21 | |||
1 | 7 | ||||
286 | 311 | ||||
231 | 240 | 223 | 243 | ||
• | Q2 FX-Neutral GMV up |
6% Y/Y, up 8pts Q/Q | |
on a stronger sporting | |
event landscape | |
• | Q2 FX-Neutral |
Transaction Revenue | |
up 1% Y/Y | |
• Q2 FX-Neutral MS&O | |
Revenue up 255% Y/Y | |
due to 1P inventory | |
• | Segment Margin up |
2pts Y/Y driven by | |
operational leverage |
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | |
GMV FX-Neutral Y/Y Growth. | 13% | 5% | 7% | (1)% | (2)% | 6% |
Rev FX-Neutral Y/Y Growth. | 9% | 3% | 7% | 2% | 0% | 7% |
Trxn Take Rate. | 22.1% | 22.7% | 23.1% | 22.1% | 22.0% | 21.7% |
SegmenSegment Margint | 13% | 2% | 10% | 26% | 11% | 4% |
10 |
and a stronger USD, |
partially offset by 1P |
inventory |
CLASSIFIEDS REVENUE
($ millions)
• | Q2 FX-Neutral Revenue | |||||||||
up 12% Y/Y, flat Q/Q, | ||||||||||
driven by ongoing | ||||||||||
strength in Germany | ||||||||||
271 | and UK motors vertical | |||||||||
259 | 263 | • | Segment Margin flat | |||||||
254 | 256 | |||||||||
246 | ||||||||||
Y/Y driven by operating | ||||||||||
leverage offset by | ||||||||||
marketing investments | ||||||||||
and a stronger USD | ||||||||||
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | |||||
Rev Y/Y Growth. | 24% | 18% | 8% | 8% | 4% | 5% | ||||
FX-Neutral Rev Y/Y Growth. | 10% | 10% | 11% | 11% | 12% | 12% | ||||
Segment Margin | 35% | 38% | 39% | 44% | 36% | 38% |
11
NON-GAAP EXPENSES
(% of revenue)
Operating Expense at 50.3%, down 3pts Y/Y
Cost of Revenue
21.8% | 22.8% |
Q2 18 | Q2 19 |
Sales & Marketing
30.6% | 29.5% |
Q2 18 | Q2 19 |
Product Development
11.1% | 10.0% |
Q2 18 | Q2 19 |
General & Admin
8.8% | 8.2% |
Q2 18 | Q2 19 |
Investments in KO, SH 1P and Site Operations
Lower cost base | Productivity in product | |||
partially offset by | Operating leverage | |||
initiative related spend | ||||
Giosis' Japan business | ||||
12Reconciliation of Non-GAAP expenses is included in the Appendix of this presentation
NON-GAAP EPS
$0.71$0.67 $0.68
$0.53 $0.53 $0.56
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | |
Non-GAAP EPS Y/Y Growth | 9% | 17% | 19% | 20% | 26% | 28% |
Non-GAAP Operating Margin | 27.9% | 25.2% | 26.4% | 29.2% | 29.8% | 26.9% |
GAAP EPS | $0.40 | $0.64 | $0.73 | $0.80 | $0.57 | $0.46 |
GAAP EPS Y/Y Growth | (58)% | ** | 52% | ** | 45% | (27)% |
13Reconciliation of Non-GAAP EPS and Non-GAAP Operating Margin is included in the Appendix of this presentation; ** Not meaningful
- Q2Non-GAAP Operating Margin up 170bps Y/Y primarily due to continued cost leverage and a stronger USD, partially offset by Payments investments
- Q2Non-GAAP EPS growth driven by net benefit of share repurchases and margin expansion, partially offset by Payments investments
FREE CASH FLOW
($ millions)
1,104 | |||||||
607 | |||||||
337 | 188 | 381 | 368 | ||||
Q1 18 | Q2 18 | Q3 18 | Q4 18 | Q1 19 | Q2 19 | ||
Y/Y Growth | (25)% | (64)% | (47)% | 39% | 9% | 223% | |
CapEx % of Revenue | 6% | 7% | 7% | 5% | 7% | 5% | |
FCF % of Revenue | 13% | 7% | 14% | 38% | 14% | 23% |
14Calculation of Free Cash Flow (FCF) is included in the Appendix of this presentation
- Q2 FCF up 223% Y/Y due to timing of cash taxes and CapEx, and operational growth
2019 CASH & DEBT
$6.3B
Debt | |
Q2 19 Ending Cash and | |
Investments* | ($3.0B) |
Net Debt |
($9.3B)
Capital Allocation Tenets
- Preserve financial flexibility to execute on strategy and drivelong-term value creation
- Drive organic growth while balancing profitability
- Supplement organic growth with disciplined acquisitions and investments
- Optimize financial flexibility, access to debt and cost of capital
- Meaningful returns to shareholders through share repurchases and dividends
Repurchased $1.5B of shares and paid cash dividend of $120M in Q2
$4.2B Authorization Remaining**
15* Cash balances/flows include cash, cash equivalents and non-equity investments
- Authorization remaining as of June 30, 2019
CAPITAL STRUCTURE PROGRESS
= Complete
Capital Allocation & Return
Dividend
Initiating a quarterly dividend
First payment of $0.14 per share expected on or about March 20, 2019 to shareholders of record as of March 1, 2019
Share Repurchase
Additional share repurchase authorization of $4.0B with no expiration
- Expected 2019 share repurchase of approximately $5.0B
On Track: Repurchased $3.0B YTD
Target Capital Structure
- We plan to maintain our current BBB+ rating … important as we build our payment intermediation capabilitiesOn Track
- Expect to exit 2019 with cash and investments of approximately $3.5BOn Track
- Targetingmid-term leverage of approximately 1.5x net debt and gross debt below 3.0x EBITDA
On Track: Expect to pay down $1.6B of debt in Q3, no plans to refinance
Capital allocation tenets remain the same … disciplined execution
16
GUIDANCE
Revenue.
(in billions) .
Y/Y Growth.
Organic FX-Neutral Y/Y Growth.
Non-GAAP EPS.
Y/Y Growth.
Q3 19
Low High
$2.61 $2.66
(1)%1%
1%3%
$0.62 $0.65
10%15%
Q3 Guidance Context
- Non-GAAPEPS growth driven by:
- Net benefit of share repurchase program ~13pts
- Operational productivity offset by investment in managed payments
- Non-GAAPeffective tax rate of 15.5% - 17.5%
Full Year Guidance
- Lowering Revenue to $10.75 - $10.83 billion, maintaining OrganicFX-Neutral growth of 2-3%
- Non-GAAPOperating Margin of 28%-29% … Non-GAAP effective tax rate of 15% to 17%
- RaisingNon-GAAP EPS to $2.70 - $2.75
- Free Cash Flow of $2.1B to $2.3B … CapEx5-7% of Revenue
17Reconciliations of non-GAAP measures are included in the Appendix of this presentation
Q&A
RECONCILIATIONS
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS OPERATING MARGIN
Three months ended | ||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | |||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2019 | 2019 | |||||||||||||||||
(in millions, except percentages) | ||||||||||||||||||||||
GAAP operating income | $ | 579 | $ | 406 | $ | 556 | $ | 681 | $ | 609 | $ | 561 | ||||||||||
Stock-based compensation expense and related employer payroll taxes | 126 | 158 | 127 | 143 | 126 | 145 | ||||||||||||||||
Amortization of acquired intangible assets within cost of net revenues | 6 | 4 | 3 | 1 | 2 | 2 | ||||||||||||||||
Amortization of acquired intangible assets within operating expenses | 10 | 13 | 13 | 13 | 13 | 12 | ||||||||||||||||
Other significant gains, losses or charges | - | 84 | 2 | 1 | 38 | 3 | ||||||||||||||||
Non-GAAP operating income | $ | 721 | $ | 665 | $ | 701 | $ | 839 | $ | 788 | $ | 723 | ||||||||||
Revenues | $ | 2,580 | $ | 2,640 | $ | 2,649 | $ | 2,877 | $ | 2,643 | $ | 2,687 | ||||||||||
GAAP operating margin | 22.5 % | 15.4 % | 21.0 % | 23.7 % | 23.0 % | 20.9 % | ||||||||||||||||
Non-GAAP operating margin | 27.9 % | 25.2 % | 26.4 % | 29.2 % | 29.8 % | 26.9 % |
20
GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS NET INCOME / EPS
Three months ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||
2018 | 2018 | 2018 | 2018 | 2019 | 2019 | ||||||||||||
(in millions, except per share data) | |||||||||||||||||
GAAP Income from continuing operations | $ | 407 | $ | 638 | $ | 720 | $ | 763 | $ | 521 | $ | 403 | |||||
Stock-based compensation expense and related employer payroll taxes | 126 | 158 | 127 | 143 | 126 | 145 | |||||||||||
Amortization of acquired intangible assets within cost of net revenues | 6 | 4 | 3 | 1 | 2 | 2 | |||||||||||
Amortization of acquired intangible assets within operating expenses | 10 | 13 | 13 | 13 | 13 | 12 | |||||||||||
Other significant gains, losses or charges | - | 84 | 2 | 1 | 38 | 3 | |||||||||||
Gains or losses on investments and sale of business | - | (246) | (313) | - | - | - | |||||||||||
Change in fair market value of warrant | - | (106) | (126) | 128 | (113) | 8 | |||||||||||
Tax Effects of US Tax Reform | - | - | - | (463) | - | - | |||||||||||
Tax effect of step-up of intangible assets basis | - | - | - | (9) | - | 199 | |||||||||||
Tax effect of non-GAAP adjustments | (1) | (12) | 128 | 93 | 21 | (183) | |||||||||||
Non-GAAP net income from continuing operations | $ | 548 | $ | 533 | $ | 554 | $ | 670 | $ | 608 | $ | 589 | |||||
Non-GAAP net income from continuing operations per diluted share | $ | 0.53 | $ | 0.53 | $ | 0.56 | $ | 0.71 | $ | 0.67 | $ | 0.68 | |||||
Shares used in non-GAAP diluted share calculation | 1,029 | 1,004 | 983 | 950 | 908 | 867 |
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GAAP TO NON-GAAP QUARTERLY RECONCILIATIONS
STATEMENT OF INCOME | Three months ended | |||||||||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||||||
Reported | Non-GAAP | Non-GAAP | Reported | Non-GAAP | Non-GAAP | |||||||||||||||
Entries | Entries | |||||||||||||||||||
(in millions, except per share data and percentages) | ||||||||||||||||||||
Net revenues | $ | 2,687 | $ | - | $ | 2,687 | $ | 2,640 | $ | - | $ | 2,640 | ||||||||
Cost of net revenues | 630 | (17) | (a)(b) | 613 | 597 | (20) | (a)(b) | 577 | ||||||||||||
Gross Profit | 2,057 | 17 | 2,074 | 2,043 | 20 | 2,063 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | 817 | (25) | (a) | 792 | 838 | (31) | (a) | 807 | ||||||||||||
Product development | 322 | (54) | (a) | 268 | 352 | (58) | (a) | 294 | ||||||||||||
General and administrative | 274 | (54) | (a)(d) | 220 | 368 | (137) | (a)(d) | 231 | ||||||||||||
Provision for transaction losses | 71 | - | 71 | 66 | - | 66 | ||||||||||||||
Amortization of acquired intangible assets | 12 | (12) | (b) | - | 13 | (13) | (b) | - | ||||||||||||
Total operating expense | 1,496 | (145) | 1,351 | 1,637 | (239) | 1,398 | ||||||||||||||
Income from operations | 561 | 162 | 723 | 406 | 259 | 665 | ||||||||||||||
Interest and other income, net | (51) | 8 | (f) | (43) | 301 | (352) | (e)(f) | (51) | ||||||||||||
Income from continuing operations before income taxes | 510 | 170 | 680 | 707 | (93) | 614 | ||||||||||||||
Provision for income taxes | (107) | 16 | (c)(g) | (91) | (69) | (12) | (c) | (81) | ||||||||||||
Income from continuing operations | $ | 403 | $ | 186 | $ | 589 | $ | 638 | $ | (105) | $ | 533 | ||||||||
Net income (loss) from continuing operations per share: | ||||||||||||||||||||
Basic | $ | 0.47 | $ | 0.68 | $ | 0.64 | $ | 0.54 | ||||||||||||
Diluted | $ | 0.46 | $ | 0.68 | $ | 0.64 | $ | 0.53 | ||||||||||||
Weighted average shares: | ||||||||||||||||||||
Basic | 860 | 860 | 992 | 992 | ||||||||||||||||
Diluted | 867 | 867 | 1,004 | 1,004 | ||||||||||||||||
Operating margin | 20.9 % | 6.0 % | 26.9 % | 15.4 % | 9.8 % | 25.2 % | ||||||||||||||
Effective tax rate | 20.9 % | (7.5)% | 13.4 % | 9.7 % | 3.6 % | 13.3 % |
Notes: | |
(a) Stock-based compensation expense and related employer payroll taxes | |
(b) Amortization of acquired intangible assets | |
(c) Income taxes associated with certain non-GAAP entries | |
(d) Other significant gains, losses or charges | |
(e) Gains or losses on investments | |
22 | (f) Change in fair market value of warrant |
(g) Tax effect of step-up of intangible assests basis |
CALCULATION OF FREE CASH FLOW
Three months ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||
2018 | 2018 | 2018 | 2018 | 2019 | 2019 | ||||||||||||
(in millions) | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 495 | $ | 372 | $ | 560 | $ | 1,234 | $ | 550 | $ | 744 | |||||
Less: Purchases of property and equipment, net | (158) | (184) | (179) | (130) | (182) | (137) | |||||||||||
Free cash flow from continuing operations | $ | 337 | $ | 188 | $ | 381 | $ | 1,104 | $ | 368 | $ | 607 |
23
RECONCILIATION OF TOTAL REVENUE
Three months ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||
2018 | 2018 | 2018 | 2018 | 2019 | 2019 | ||||||||||||
Net Revenues by Type | (in millions) | ||||||||||||||||
Net Transaction Revenues: | |||||||||||||||||
Marketplace (2) | $ | 1,792 | $ | 1,837 | $ | 1,803 | $ | 1,984 | $ | 1,885 | $ | 1,887 | |||||
StubHub | 231 | 240 | 286 | 311 | 223 | 243 | |||||||||||
Total net transaction revenues | $ | 2,023 | $ | 2,077 | $ | 2,089 | $ | 2,295 | $ | 2,108 | $ | 2,130 | |||||
Marketing services and other revenues: | |||||||||||||||||
Marketplace | $ | 310 | $ | 298 | $ | 301 | $ | 316 | $ | 277 | $ | 270 | |||||
Classifieds | 246 | 259 | 254 | 263 | 256 | 271 | |||||||||||
StubHub | 1 | 6 | 5 | 3 | 7 | 21 | |||||||||||
Elimination of intersegment revenue | - | - | - | - | (5) | (5) | |||||||||||
Total marketing and other revenues | $ | 557 | $ | 563 | $ | 560 | $ | 582 | $ | 535 | $ | 557 | |||||
Total net revenues (1) | $ | 2,580 | $ | 2,640 | $ | 2,649 | $ | 2,877 | $ | 2,643 | $ | 2,687 | |||||
(1) Foreign currency impact | $ | 109 | $ | 70 | $ | 4 | $ | (9) | $ | (68) | $ | (86) | |||||
(2) Hedge gain/(loss) | $ | (28) | $ | (21) | $ | 12 | $ | 29 | $ | 20 | $ | 13 |
24
RECONCILIATION OF ORGANIC REVENUE
Three months ended | |||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | ||||||
2018 | 2018 | 2018 | 2018 | 2019 | 2019 | ||||||
As Reported Revenue Growth | 12% | 9% | 6% | 6% | 2% | 2% | |||||
Acquisition/Disposition Impact | -% | (0)% | (1)% | (1)% | (1)% | (0)% | |||||
Foreign Currency Impact | (5)% | (3)% | (0)% | (1)% | 2 % | 2 % | |||||
Organic FX-Neutral Revenue Growth | 7% | 6% | 5% | 5% | 3% | 4% |
OrganicFX-NeutralRevenue Growth. The company defines Organic FX-Neutral Revenue Growth as As Reported Revenue Growth excluding incremental revenue from acquisitions or dispositions for the twelve-month period following such acquisitions or dispositions and foreign exchange rate effects. The company believes this measure provides useful supplemental information regarding the company's underlying revenue trends by presenting revenue growth exclusive of these effects.
25
GAAP TO NON-GAAP RECONCILIATIONS GUIDANCE
Three Months Ending | |||||
September 30, 2019 | |||||
(in billions, except per share amounts) | GAAP | Non-GAAP (a) | |||
Net Revenue | $2.61 - $2.66 | $2.61 - $2.66 | |||
Diluted EPS | $0.40 - $0.44 | $0.62 - $0.65 | |||
Twelve Months Ending | |||||
December 31, 2019 | |||||
(in billions, except per share amounts) | GAAP | Non-GAAP (b) | |||
Net Revenue | $10.75 - $10.83 | $10.75 - $10.83 | |||
Diluted EPS | $1.97 - $2.07 | $2.70 - $2.75 | |||
Twelve Months Ending | |||||
(in billions) | December 31, 2019 | ||||
Net cash provided by continuing operations | $2.6 - $3.0 | ||||
Less: Purchase of property and equipment, net | $(0.5) - $(0.7) | ||||
Free cash flow | $2.1 - $2.3 |
- Estimatednon-GAAP amounts above for the three months ending September 30, 2019 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $10-$15 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $135-$145 million and an adjustment that excludes the net deferred tax impact related to the step-up in the tax basis of intangible assets of approximately $40 - $50 million.
- Estimatednon-GAAP amounts above for the twelve months ending December 31, 2019 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $50-$60 million, estimated stock-based compensation expense and associated employer payroll tax expense of approximately $530-$550 million and an adjustment that excludes the net deferred tax impact related to the step-up in the tax basis of intangible assets of approximately $150 - $170 million.
26