eBay 2002 Annual Report Download - page 2

The eBay Community's Success is eBay's Success
Both individually and in the aggregate, these trends strengthened and expanded the company across
many elements in 2002. And combined with a continued focus on execution and careful investment, these
trends also led to outstanding Ñnancial performance for the company.
In every quarter throughout 2002, eBay's U.S. business, excluding payments, saw accelerating year-
over-year revenue growth. For the full year, eBay's International business grew 165% over 2001, reÖecting
outstanding growth in our largest international markets, such as Germany, the United Kingdom, and
Korea, and accelerating trends in many of our earlier stage European markets.
On a consolidated basis, net revenues in 2002 increased 62% over the prior year, operating margins
expanded more than ten percentage points, and net income increased 176% to a record $250 million. These
proÑts also drove record cash Öows Ì free cash Öows for 2002 increased 75% to $341 million. This left our
balance sheet in its strongest position ever, with more than $1.8 billion in cash and investments and total
assets of more than $4.1 billion.
A Promising Future
The eBay marketplace continues to deliver on its promise with each passing year, and 2002 was no
exception. There are few companies today achieving eBay's rate of growth, while expanding operating
margins and generating increasing amounts of cash, while continuing to make important investments to
strengthen the unique long-term prospects of the business. We are excited about eBay's future and we
believe that 2003 will be another year where we see increasing success for our users, strengthening core
capabilities of the company, and record Ñnancial performance.
In 2003 we will focus heavily on marketing and promotional activities to accelerate trading on the
site. We will make product development advances that will make it easier and faster for our users to trade,
and technology innovations that expand the platform itself. We are going to further integrate payments,
and continue to build customer support and trust & safety so that users can enjoy an even better
experience than they do today. We're going to invest heavily in international expansion, to tap the huge
potential that appears to be the hallmark of Germany, the UK, Korea and so many of the other markets
we've entered. And we're going to do all of this with the same Ñnancial discipline we have always shown
by staying true to our strategy of balancing returns with appropriate investment to capitalize on the
company's long-term opportunities.
We would like to express our gratitude to eBay's stockholders, partners, and employees for their
continued support. In particular, we would like to oÅer special thanks to the eBay community, who
continues to drive the growth and evolution of the business. Working together with our community, we
look forward to even greater success to come.
Pierre Omidyar Meg Whitman
Founder and Chairman of the Board President and CEO