UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2022~~March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 001-37713

eBay Inc.

(Exact name of registrant as specified in its charter)

Delaware

77-0430924

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

2025 Hamilton Avenue

San Jose

California

95125

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(408) 376-7108

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of exchange on which registered
Common stock	EBAY	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 1, 2022,~~April 24, 2023, there were ~~549,367,835~~534,503,131 shares of the registrant’s common stock, $0.001 par value, outstanding, which is the only class of common or voting stock of the registrant issued.

eBay Inc.

TABLE OF CONTENTS

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1: Financial Statements (unaudited)

Index


			Page
Condensed Consolidated Balance Sheet as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022			4
Condensed Consolidated Statement of Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			5
Condensed Consolidated Statement of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			6
Condensed Consolidated Statement of Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			7
Condensed Consolidated Statement of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			8
Notes to Condensed Consolidated Financial Statements			10
Note 1 — The Company and Summary of Significant Accounting Policies			10
Note 2 — Net Income (Loss) Per Share			12
Note 3 — ~~Discontinued Operations~~B usiness Combinations			13

Note 4 — Goodwill and ~~Intangible~~Intangible Assets			1614
Note 5 — Segments			1715
Note 6 — Investments			1816
Note 7 — Derivative Instruments			2321
Note 8 — Fair Value Measurement of Assets and Liabilities			2825
Note 9 — Debt			3229
Note 10 — Supplemental Consolidated Financial Information			3532
Note 11 — Commitments and Contingencies			3734
Note 12 — Stockholders’ Equity			4037
Note 13 — Employee Benefit Plans			4238
Note 14 — Income Taxes			4339
Note 15 — Accumulated Other Comprehensive Income			4440
Note 16 — Restructuring			41

Table of Contents

eBay Inc.

CONDENSED CONSOLIDATED BALANCE SHEET


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions, except par value)					(In millions, except par value)
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,742	$	1,379	Cash and cash equivalents	$	2,082	$	2,154
Short-term investments	Short-term investments	1,483		5,944		Short-term investments	1,922		2,625
Equity investment in Adevinta						Equity investment in Adevinta	2,866		2,692
Customer accounts and funds receivable	Customer accounts and funds receivable	605		681		Customer accounts and funds receivable	779		763
Other current assets	Other current assets	1,237		1,107		Other current assets	949		1,056

Total current assets	Total current assets	5,067		9,111		Total current assets	8,598		9,290
Long-term investments	Long-term investments	2,146		2,575		Long-term investments	1,657		1,797
Property and equipment, net	Property and equipment, net	1,173		1,236		Property and equipment, net	1,235		1,238
Goodwill	Goodwill	4,113		4,178		Goodwill	4,287		4,262
Operating lease right-of-use assets	Operating lease right-of-use assets	541		289		Operating lease right-of-use assets	486		513
Deferred tax assets	Deferred tax assets	3,227		3,255		Deferred tax assets	3,111		3,169
Equity investment in Adevinta		2,919		5,391

Other assets	Other assets	467		591		Other assets	630		581

Total assets	Total assets	$	19,653	$	26,626	Total assets	$	20,004	$	20,850
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Short-term debt	Short-term debt	$	1,149	$	1,355	Short-term debt	$	—	$	1,150
Accounts payable	Accounts payable	249		262		Accounts payable	280		261
Customer accounts and funds payable	Customer accounts and funds payable	604		707		Customer accounts and funds payable	792		768
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	1,735		1,927		Accrued expenses and other current liabilities	1,829		1,866
Income taxes payable	Income taxes payable	235		371		Income taxes payable	305		226

Total current liabilities	Total current liabilities	3,972		4,622		Total current liabilities	3,206		4,271
Operating lease liabilities	Operating lease liabilities	448		200		Operating lease liabilities	395		418
Deferred tax liabilities	Deferred tax liabilities	2,400		3,116		Deferred tax liabilities	2,226		2,245
Long-term debt	Long-term debt	6,579		7,727		Long-term debt	7,721		7,721
Other liabilities	Other liabilities	1,011		1,183		Other liabilities	1,069		1,042

Total liabilities	Total liabilities	14,410		16,848		Total liabilities	14,617		15,697
Commitments and Contingencies (Note 11)	Commitments and Contingencies (Note 11)	0		0		Commitments and Contingencies (Note 11)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, $0.001 par value; 3,580 shares authorized; 549 and 594 shares outstanding		2		2
Common stock, $0.001 par value; 3,580 shares authorized; 536 and 539 shares outstanding						Common stock, $0.001 par value; 3,580 shares authorized; 536 and 539 shares outstanding	2		2
Additional paid-in capital	Additional paid-in capital	17,059		16,659		Additional paid-in capital	17,364		17,279
Treasury stock at cost, 1,171 and 1,121 shares		(46,101)		(43,371)
Treasury stock at cost, 1,191 and 1,186 shares						Treasury stock at cost, 1,191 and 1,186 shares	(46,954)		(46,702)
Retained earnings	Retained earnings	33,960		36,090		Retained earnings	34,744		34,315
Accumulated other comprehensive income	Accumulated other comprehensive income	323		398		Accumulated other comprehensive income	231		259
Total stockholders’ equity	Total stockholders’ equity	5,243		9,778		Total stockholders’ equity	5,387		5,153
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	19,653	$	26,626	Total liabilities and stockholders’ equity	$	20,004	$	20,850

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF INCOME


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In millions, except per share amounts)									(In millions, except per share amounts)
		(Unaudited)									(Unaudited)
Net revenues	Net revenues	$	2,422	$	2,668	$	4,905	$	5,306	Net revenues	$	2,510	$	2,483
Cost of net revenues	Cost of net revenues	663		672		1,352		1,278		Cost of net revenues	700		689
Gross profit	Gross profit	1,759		1,996		3,553		4,028		Gross profit	1,810		1,794
Operating expenses:	Operating expenses:									Operating expenses:
Sales and marketing	Sales and marketing	566		559		1,044		1,105		Sales and marketing	511		478
Product development	Product development	344		350		645		654		Product development	352		301
General and administrative	General and administrative	237		250		463		496		General and administrative	297		226
Provision for transaction losses	Provision for transaction losses	86		103		182		191		Provision for transaction losses	84		96
Amortization of acquired intangible assets	Amortization of acquired intangible assets	1		2		2		9		Amortization of acquired intangible assets	8		1
Total operating expenses	Total operating expenses	1,234		1,264		2,336		2,455		Total operating expenses	1,252		1,102
Income from operations	Income from operations	525		732		1,217		1,573		Income from operations	558		692
Gain (loss) on equity investments and warrant, net	Gain (loss) on equity investments and warrant, net	(1,221)		(273)		(3,512)		(309)		Gain (loss) on equity investments and warrant, net	198		(2,291)
Interest and other, net	Interest and other, net	(31)		(58)		(81)		(139)		Interest and other, net	(26)		(50)
Income (loss) from continuing operations before income taxes	Income (loss) from continuing operations before income taxes	(727)		401		(2,376)		1,125		Income (loss) from continuing operations before income taxes	730		(1,649)
Income tax benefit (provision)	Income tax benefit (provision)	191		(107)		501		(263)		Income tax benefit (provision)	(161)		310
Income (loss) from continuing operations	Income (loss) from continuing operations	(536)		294		(1,875)		862		Income (loss) from continuing operations	569		(1,339)
Income (loss) from discontinued operations, net of income taxes	Income (loss) from discontinued operations, net of income taxes	5		10,440		3		10,513		Income (loss) from discontinued operations, net of income taxes	(2)		(2)
Net income (loss)	Net income (loss)	$	(531)	$	10,734	$	(1,872)	$	11,375	Net income (loss)	$	567	$	(1,341)

Income (loss) per share - basic:	Income (loss) per share - basic:									Income (loss) per share - basic:
Continuing operations	Continuing operations	$	(0.96)	$	0.44	$	(3.28)	$	1.27	Continuing operations	$	1.06	$	(2.28)
Discontinued operations	Discontinued operations	0.01		15.48		0.01		15.52		Discontinued operations	—		—
Net income (loss) per share - basic	Net income (loss) per share - basic	$	(0.95)	$	15.92	$	(3.27)	$	16.79	Net income (loss) per share - basic	$	1.06	$	(2.28)

Income (loss) per share - diluted:	Income (loss) per share - diluted:									Income (loss) per share - diluted:
Continuing operations	Continuing operations	$	(0.96)	$	0.43	$	(3.28)	$	1.25	Continuing operations	$	1.05	$	(2.28)
Discontinued operations	Discontinued operations	0.01		15.25		0.01		15.27		Discontinued operations	—		—
Net income (loss) per share - diluted	Net income (loss) per share - diluted	$	(0.95)	$	15.68	$	(3.27)	$	16.52	Net income (loss) per share - diluted	$	1.05	$	(2.28)

Weighted-average shares:	Weighted-average shares:									Weighted-average shares:
Basic	Basic	556		674		571		678		Basic	537		587
Diluted	Diluted	556		685		571		689		Diluted	541		587

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In millions)									(In millions)
		(Unaudited)									(Unaudited)
Net income (loss)	Net income (loss)	$	(531)	$	10,734	$	(1,872)	$	11,375	Net income (loss)	$	567	$	(1,341)
Other comprehensive income (loss), net of reclassification adjustments:	Other comprehensive income (loss), net of reclassification adjustments:									Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation gains (losses)	Foreign currency translation gains (losses)	(85)		10		(119)		(107)		Foreign currency translation gains (losses)	1		(34)
Unrealized gains (losses) on investments, net	Unrealized gains (losses) on investments, net	(17)		(1)		(68)		(4)		Unrealized gains (losses) on investments, net	19		(51)
Tax benefit (expense) on unrealized gains (losses) on investments, net	Tax benefit (expense) on unrealized gains (losses) on investments, net	2		1		15		1		Tax benefit (expense) on unrealized gains (losses) on investments, net	(6)		13
Unrealized gains (losses) on hedging activities, net	Unrealized gains (losses) on hedging activities, net	105		(4)		125		70		Unrealized gains (losses) on hedging activities, net	(53)		20
Tax benefit (expense) on unrealized gains (losses) on hedging activities, net	Tax benefit (expense) on unrealized gains (losses) on hedging activities, net	(24)		1		(28)		(16)		Tax benefit (expense) on unrealized gains (losses) on hedging activities, net	11		(4)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(19)		7		(75)		(56)		Other comprehensive income (loss), net of tax	(28)		(56)
Comprehensive income (loss)	Comprehensive income (loss)	$	(550)	$	10,741	$	(1,947)	$	11,319	Comprehensive income (loss)	$	539	$	(1,397)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In millions, except per share amounts)									(In millions, except per share amounts)
		(Unaudited)									(Unaudited)
Common stock:	Common stock:									Common stock:
Balance, beginning of period	Balance, beginning of period	$	2	$	2	$	2	$	2	Balance, beginning of period	$	2	$	2
Common stock issued	Common stock issued	—		—		—		—		Common stock issued	—		—
Common stock repurchased	Common stock repurchased	—		—		—		—		Common stock repurchased	—		—
Balance, end of period	Balance, end of period	2		2		2		2		Balance, end of period	2		2
Additional paid-in-capital:	Additional paid-in-capital:									Additional paid-in-capital:
Balance, beginning of period	Balance, beginning of period	16,904		16,546		16,659		16,497		Balance, beginning of period	17,279		16,659
Common stock and stock-based awards issued	Common stock and stock-based awards issued	54		57		55		58		Common stock and stock-based awards issued	—		1
Tax withholdings related to net share settlements of restricted stock units and awards	Tax withholdings related to net share settlements of restricted stock units and awards	(37)		(59)		(98)		(128)		Tax withholdings related to net share settlements of restricted stock units and awards	(48)		(61)
Stock-based compensation	Stock-based compensation	137		140		248		256		Stock-based compensation	128		111

Forward contract for share repurchases	Forward contract for share repurchases	—		—		188		—		Forward contract for share repurchases	—		188
Other	Other	1		(8)		7		(7)		Other	5		6
Balance, end of period	Balance, end of period	17,059		16,676		17,059		16,676		Balance, end of period	17,364		16,904
Treasury stock at cost:	Treasury stock at cost:									Treasury stock at cost:
Balance, beginning of period	Balance, beginning of period	(44,809)		(36,807)		(43,371)		(36,515)		Balance, beginning of period	(46,702)		(43,371)
Common stock repurchased	Common stock repurchased	(1,292)		(1,501)		(2,730)		(1,793)		Common stock repurchased	(252)		(1,438)
Balance, end of period	Balance, end of period	(46,101)		(38,308)		(46,101)		(38,308)		Balance, end of period	(46,954)		(44,809)
Retained earnings:	Retained earnings:									Retained earnings:
Balance, beginning of period	Balance, beginning of period	34,615		23,476		36,090		22,961		Balance, beginning of period	34,315		36,090
Net income (loss)	Net income (loss)	(531)		10,734		(1,872)		11,375		Net income (loss)	567		(1,341)
Dividends and dividend equivalents declared	Dividends and dividend equivalents declared	(124)		(124)		(258)		(250)		Dividends and dividend equivalents declared	(138)		(134)

Balance, end of period	Balance, end of period	33,960		34,086		33,960		34,086		Balance, end of period	34,744		34,615
Accumulated other comprehensive income:	Accumulated other comprehensive income:									Accumulated other comprehensive income:
Balance, beginning of period	Balance, beginning of period	342		553		398		616		Balance, beginning of period	259		398
Foreign currency translation adjustment	Foreign currency translation adjustment	(85)		10		(119)		(107)		Foreign currency translation adjustment	1		(34)
Change in unrealized gains (losses) on investments	Change in unrealized gains (losses) on investments	(17)		(1)		(68)		(4)		Change in unrealized gains (losses) on investments	19		(51)
Change in unrealized gains (losses) on derivative instruments	Change in unrealized gains (losses) on derivative instruments	105		(4)		125		70		Change in unrealized gains (losses) on derivative instruments	(53)		20
Tax benefit (provision) on above items	Tax benefit (provision) on above items	(22)		2		(13)		(15)		Tax benefit (provision) on above items	5		9

Balance, end of period	Balance, end of period	323		560		323		560		Balance, end of period	231		342
Total stockholders’ equity	Total stockholders’ equity	$	5,243	$	13,016	$	5,243	$	13,016	Total stockholders’ equity	$	5,387	$	7,054

Dividends and dividend equivalents declared per share or restricted stock unit	Dividends and dividend equivalents declared per share or restricted stock unit	$	0.22	$	0.18	$	0.44	$	0.36	Dividends and dividend equivalents declared per share or restricted stock unit	$	0.25	$	0.22

The accompanying notes are an integral part of these condensed consolidated financial statements.

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eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(In millions)					(In millions)
		(Unaudited)					(Unaudited)
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	(1,872)	$	11,375	Net income (loss)	$	567	$	(1,341)
Income (loss) from discontinued operations, net of income taxes		(3)		(10,513)
Loss from discontinued operations, net of income taxes						Loss from discontinued operations, net of income taxes	2		2
Adjustments:	Adjustments:					Adjustments:
Provision for transaction losses	Provision for transaction losses	182		191		Provision for transaction losses	84		96
Depreciation and amortization	Depreciation and amortization	231		261		Depreciation and amortization	107		118
Stock-based compensation	Stock-based compensation	248		238		Stock-based compensation	128		111

Loss (gain) on investments and other, net	Loss (gain) on investments and other, net	7		(44)		Loss (gain) on investments and other, net	(4)		6
Deferred income taxes	Deferred income taxes	(695)		106		Deferred income taxes	33		(376)
Change in fair value of warrant	Change in fair value of warrant	219		(72)		Change in fair value of warrant	(38)		115
Change in fair value of equity investment in Adevinta	Change in fair value of equity investment in Adevinta	2,472		422		Change in fair value of equity investment in Adevinta	(174)		1,643
Change in fair value of equity investment in Adyen						Change in fair value of equity investment in Adyen	—		246
Change in fair value of equity investment in Gmarket	Change in fair value of equity investment in Gmarket	259		—		Change in fair value of equity investment in Gmarket	11		182
Unrealized change in fair value of equity investment in KakaoBank		196		—
Unrealized change in fair value of equity investment in Adyen		118		—
Realized change in fair value of shares sold in Adyen		167		—
Realized change in fair value of shares sold in KakaoBank		75		—
Loss (gain) on extinguishment of debt		—		10
Change in fair value of equity investment in KakaoBank						Change in fair value of equity investment in KakaoBank	3		99

Changes in assets and liabilities, net of acquisition effects	Changes in assets and liabilities, net of acquisition effects	(398)		(17)		Changes in assets and liabilities, net of acquisition effects	122		(272)
Net cash provided by continuing operating activities	Net cash provided by continuing operating activities	1,206		1,957		Net cash provided by continuing operating activities	841		629
Net cash provided by (used in) discontinued operating activities		(365)		152
Net cash used in discontinued operating activities						Net cash used in discontinued operating activities	—		(16)
Net cash provided by operating activities	Net cash provided by operating activities	841		2,109		Net cash provided by operating activities	841		613
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment	Purchases of property and equipment	(194)		(182)		Purchases of property and equipment	(132)		(83)
Purchases of investments	Purchases of investments	(10,146)		(9,676)		Purchases of investments	(3,543)		(5,475)
Maturities and sales of investments	Maturities and sales of investments	13,181		6,765		Maturities and sales of investments	4,404		6,827

Proceeds from the sale of shares in Adyen	Proceeds from the sale of shares in Adyen	680		—		Proceeds from the sale of shares in Adyen	—		473
Proceeds from the sale of shares in KakaoBank						Proceeds from the sale of shares in KakaoBank	—		27

Proceeds from the sale of shares in KakaoBank		287		—
Other	Other	(44)		4		Other	(28)		3
Net cash provided by (used in) continuing investing activities		3,764		(3,089)
Net cash provided by (used in) discontinued investing activities		—		2,444
Net cash provided by (used in) investing activities		3,764		(645)
Net cash provided by continuing investing activities						Net cash provided by continuing investing activities	701		1,772
Net cash provided by discontinued investing activities						Net cash provided by discontinued investing activities	—		—
Net cash provided by investing activities						Net cash provided by investing activities	701		1,772
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from issuance of common stock	Proceeds from issuance of common stock	55		57		Proceeds from issuance of common stock	—		1
Repurchases of common stock	Repurchases of common stock	(2,542)		(1,733)		Repurchases of common stock	(242)		(1,069)
Payments for taxes related to net share settlements of restricted stock units and awards	Payments for taxes related to net share settlements of restricted stock units and awards	(98)		(128)		Payments for taxes related to net share settlements of restricted stock units and awards	(92)		(61)
Payments for dividends	Payments for dividends	(250)		(243)		Payments for dividends	(134)		(129)
Proceeds from issuance of long-term debt, net		—		2,482

Repayment of debt	Repayment of debt	(1,355)		(1,156)		Repayment of debt	(1,150)		(750)

Net funds receivable and payable activity	Net funds receivable and payable activity	8		30		Net funds receivable and payable activity	229		56
Other	Other	—		6		Other	1		—
Net cash used in continuing financing activities	Net cash used in continuing financing activities	(4,182)		(685)		Net cash used in continuing financing activities	(1,388)		(1,952)
Net cash provided by (used in) discontinued financing activities		—		(62)
Net cash used in discontinued financing activities						Net cash used in discontinued financing activities	—		—
Net cash used in financing activities	Net cash used in financing activities	(4,182)		(747)		Net cash used in financing activities	(1,388)		(1,952)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(57)		(5)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	5		(18)
Net increase in cash, cash equivalents and restricted cash	Net increase in cash, cash equivalents and restricted cash	366		712		Net increase in cash, cash equivalents and restricted cash	159		415
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	1,406		1,594		Cash, cash equivalents and restricted cash at beginning of period	2,272		1,406
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	1,772	$	2,306	Cash, cash equivalents and restricted cash at end of period	$	2,431	$	1,821

Less: Cash, cash equivalents and restricted cash of discontinued operations	Less: Cash, cash equivalents and restricted cash of discontinued operations	—		162		Less: Cash, cash equivalents and restricted cash of discontinued operations	—		—
Cash, cash equivalents and restricted cash of continuing operations at end of period	Cash, cash equivalents and restricted cash of continuing operations at end of period	$	1,772	$	2,144	Cash, cash equivalents and restricted cash of continuing operations at end of period	$	2,431	$	1,821

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eBay Inc.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS—(Continued)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(In millions)					(In millions)
		(Unaudited)					(Unaudited)
Supplemental cash flow disclosures:	Supplemental cash flow disclosures:					Supplemental cash flow disclosures:
Cash paid for:	Cash paid for:					Cash paid for:
Interest	Interest	$	134	$	121	Interest	$	60	$	80

Income taxes	Income taxes	$	282	$	313	Income taxes	$	29	$	35
Non-cash investing activities:
Equity investment in Adevinta		$	—	$	10,776

The accompanying notes are an integral part of these condensed consolidated financial statements.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — The Company and Summary of Significant Accounting Policies

The Company

eBay Inc. is a global commerce leader ~~which includes our Marketplace platforms.~~that connects people and builds communities to create economic opportunity for all. Our technology empowers millions of buyers and sellers in more than 190 markets around the world, providing everyone the opportunity to grow and thrive. Founded in 1995 in San Jose, California, eBay is one of the ~~world’s~~world's largest and most vibrant marketplaces for discovering great value and unique selection. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity for all. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere.

When we refer to “we,” “our,” “us,” the “Company” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction losses, legal contingencies, income taxes, revenue recognition, stock-based compensation, investments including level 3 investments in Gmarket Global LLC (“Gmarket”), warrants and ~~warrant,~~ the recoverability of goodwill and intangible assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates.

Principles of Consolidation and Basis of Presentation

The accompanying ~~condensed~~ financial statements are consolidated and include the financial statements of eBay Inc., our wholly and majority-owned subsidiaries and variable interest entities (“VIE”) where we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest. A qualitative approach is applied to assess the consolidation requirement for ~~VIE’s. Equity~~VIEs. Generally, investments in entities ~~where we have not elected the fair value option and~~ where we hold at least a 20% ownership interest orand have the ability to exercise significant influence, but not control, over the investee are accounted for using the equity method of ~~accounting.~~ accounting, including those in which the fair value option has been elected.

For ~~such~~equity method investments, our share of the investees’ results of operations is included in gain (loss) on equity investments and warrant, net and ~~our equity~~ investment ~~balance is~~balances are included in long-term investments. ~~Equity~~For equity investments under the fair value option, the change in fair value of the investment is included in gain (loss) on equity investments and warrant, net and investment balances are included in long-term investments, other than our equity interest in Adevinta ASA (“Adevinta”) which is included in the short-term assets section on the condensed consolidated balance sheet. Investments in entities where we hold less than a 20% ownership interest are generally accounted for as equity investments to be measured at fair value or, under an election, at cost if it does not have readily determinable fair value, in which case the carrying value would be adjusted upon the occurrence of an observable price change in an orderly transaction for identical or similar instruments or impairment.

Upon the transfer of our Classifieds business to Adevinta ~~ASA (“Adevinta”) on June 24,~~in 2021, shares in Adevinta were included as part of total consideration received under the definitive agreement. The equity interest in Adevinta is accounted for under the fair value option. ~~As of June 30, 2022, our ownership in Adevinta was 33%. Subsequent changes in fair value are included in gain (loss) on equity investments and warrant, net.~~

Additionally, upon completion of the sale of 80.01% of the outstanding equity interests of eBay Korea LLC ~~a limited liability company incorporated under the laws of Korea and a wholly owned subsidiary of eBay KTA~~ (“eBay Korea”) to ~~E-mart~~Emart Inc. ~~and one of its wholly owned subsidiaries (together, “Emart”~~(“Emart”) ~~on November 14,~~in 2021, we retained 19.99% of the outstanding equity interests of the new entity, Gmarket, ~~Global LLC (“Gmarket”) formerly known as Apollo Korea,~~ which is accounted for under the fair value option. Subsequent changes in fair value for these equity investments are included in gain (loss) on equity investments and warrant, net ~~and~~on our ~~equity investment balance is included in long-term investments.~~consolidated statement of income.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. We have evaluated all subsequent events through the date these condensed consolidated financial statements were issued. In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the condensed consolidated financial position, results of operations and cash flows for these interim periods.

Significant Accounting Policies

There were no significant changes to our significant accounting policies disclosed in “Note 1 — The Company and Summary of Significant Accounting Policies” ofin our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022.

Recent Accounting Pronouncements Not Yet Adopted

In March 2022, the FASB issued new guidance to expand the scope of financial assets that can be included in a closed portfolio hedged using the portfolio layer method to allow consistent accounting for similar hedges. The expanded scope permits the application of the same portfolio hedging method to both prepayable and nonprepayable financial assets. The standard will be effective for annual reporting periods beginning after December 15, 2022, including interim reporting periods within those fiscal years. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In June 2022, the Financial Accounting Standards Board (“FASB”) issued new guidance to clarify the fair value measurement guidance for equity securities subject to contractual restrictions that prohibit the sale of an equity security. Further, the guidance introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The standard will be effective for annual reporting periods beginning after December 15, 2023, including interim reporting periods within those fiscal years. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 2 — Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common ~~shares~~stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income (loss) per share by application of the treasury stock method. The calculation of diluted net income (loss) per share excludes all anti-dilutive shares of common ~~shares.~~stock.

The following table presents the computation of basic and diluted net income (loss) per share for the periods indicated (in millions, except per share amounts):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Numerator:	Numerator:									Numerator:
Income (loss) from continuing operations	Income (loss) from continuing operations	$	(536)	$	294	$	(1,875)	$	862	Income (loss) from continuing operations	$	569	$	(1,339)
Income (loss) from discontinued operations, net of income taxes		5		10,440		3		10,513
(Loss) from discontinued operations, net of income taxes										(Loss) from discontinued operations, net of income taxes	(2)		(2)
Net income (loss)	Net income (loss)	$	(531)	$	10,734	$	(1,872)	$	11,375	Net income (loss)	$	567	$	(1,341)
Denominator:	Denominator:									Denominator:
Weighted average shares of common stock - basic	Weighted average shares of common stock - basic	556		674		571		678		Weighted average shares of common stock - basic	537		587
Dilutive effect of equity incentive awards	Dilutive effect of equity incentive awards	—		11		—		11		Dilutive effect of equity incentive awards	4		—
Weighted average shares of common stock - diluted	Weighted average shares of common stock - diluted	556		685		571		689		Weighted average shares of common stock - diluted	541		587

Income (loss) per share - basic:	Income (loss) per share - basic:									Income (loss) per share - basic:
Continuing operations	Continuing operations	$	(0.96)	$	0.44	$	(3.28)	$	1.27	Continuing operations	$	1.06	$	(2.28)
Discontinued operations	Discontinued operations	0.01		15.48		0.01		15.52		Discontinued operations	—		—
Net income (loss) per share - basic	Net income (loss) per share - basic	$	(0.95)	$	15.92	$	(3.27)	$	16.79	Net income (loss) per share - basic	$	1.06	$	(2.28)
Income (loss) per share - diluted:	Income (loss) per share - diluted:									Income (loss) per share - diluted:
Continuing operations	Continuing operations	$	(0.96)	$	0.43	$	(3.28)	$	1.25	Continuing operations	$	1.05	$	(2.28)
Discontinued operations	Discontinued operations	0.01		15.25		0.01		15.27		Discontinued operations	—		—
Net income (loss) per share - diluted	Net income (loss) per share - diluted	$	(0.95)	$	15.68	$	(3.27)	$	16.52	Net income (loss) per share - diluted	$	1.05	$	(2.28)
Common stock equivalents excluded from income (loss) per diluted share because their effect would have been anti-dilutive	Common stock equivalents excluded from income (loss) per diluted share because their effect would have been anti-dilutive	16		8		16		9		Common stock equivalents excluded from income (loss) per diluted share because their effect would have been anti-dilutive	12		7

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 3 — ~~Discontinued Operations~~Business Combinations

~~Classifieds~~

~~On June 24, 2021, we completed the previously announced transfer~~Acquisition of our Classifieds business to Adevinta for $2.5 billion in cash, subject to certain adjustments, and approximately 540 million shares in Adevinta which represented an equity interest of 44%. Together, the total consideration received under the definitive agreement was valued at approximately $13.3 billion, based on the closing trading price of Adevinta’s outstanding shares at the Oslo Stock Exchange on June 24, 2021. The transfer resulted in a pre-tax gain of $12.5 billion and related income tax expense of $2.1 billion, both within income from discontinued operations. The results of our Classifieds business have been presented as discontinued operations in our consolidated statement of income for all periods presented through June 24, 2021 as the transfer represented a strategic shift in our business that had a major effect on our operations and financial results.TCGplayer

In addition, upon closing we entered into a transition service agreement (“TSA”) with Adevinta to support the operations of Classifieds after the divestiture for fees of $29 million. This agreement terminated during the second quarter of 2022.

~~eBay Korea~~

~~On November 14, 2021,~~2022, we completed the ~~previously announced sale~~acquisition of ~~80.01%~~TCGplayer, a trusted marketplace for collectible card game enthusiasts. In 2023, we recorded measurement period adjustments related to the revised valuation of the ~~outstanding equity interests of eBay Korea to Emart, pursuant to~~intangible assets acquired. The following table presents the ~~terms and conditions~~revised allocation of the ~~securities~~aggregate purchase agreement, in exchange for approximately $3.0 billion of gross cash proceeds as of the transaction close date, subject to certain adjustments. The sale resulted in a pre-tax gain of $3.2 billion inclusive of a $81 million currency translation adjustment and a $44 million gain on the net investment hedge settled in the fourth quarter of 2021, as well as income tax expense of $369 million. The results of our eBay Korea business have been presented as discontinued operations in our condensed consolidated statement of income for all periods presented through November 14, 2021 as the transfer represented a strategic shift in our business that had a major effect on our operations and financial results.consideration (in millions):

In addition, upon closing we entered into a transition service agreement with eBay Korea to support the operations of eBay Korea after the divestiture for immaterial fees. This agreement commenced with the close of the transaction and is currently expected to terminate during the fourth quarter of 2022.

~~Discontinued operations~~


	TCGplayer
Goodwill	$	148
Purchased intangible assets	109
Deferred taxes	(18)
Total	$	239

The ~~following table presents financial results from discontinued operations, net~~goodwill recognized is primarily attributable to expected synergies and the assembled workforce of TCGplayer. We generally do not expect goodwill to be deductible for income ~~taxes in our condensed consolidated statement of income for the periods indicated (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022
2021 (1)
2022
2021 (1)
Classifieds income from discontinued operations, net of income taxes $ 5 $ 10,428 $ 5 $ 10,500
eBay Korea income (loss) from discontinued operations, net of income taxes — 3 (2) 4
StubHub income from discontinued operations, net of income taxes — 9 — 9
Income (loss) from discontinued operations, net of income taxes $ 5 $ 10,440 $ 3 $ 10,513

~~(1)~~ ~~Includes Classifieds financial results through the transaction close on June 24, 2021 and includes the gain on sale recorded for the Classifieds transaction.~~tax purposes.

Our consolidated financial statements include the operating results of the acquired business from the date of acquisition. Separate operating results and pro forma results of operations for the acquisition above have not been presented as the effect of this acquisition is not material to our financial results.

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~~eBay Inc.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~The following table presents cash flows for discontinued operations for the periods indicated (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022
2021 (1)
2022
2021 (1)
Classifieds net cash provided by (used in) discontinued operating activities $ — $ 41 $ (1) $ 145
eBay Korea net cash provided by (used in) discontinued operating activities (349) 17 (364) 7
Net cash provided by (used in) discontinued operating activities $ (349) $ 58 $ (365) $ 152
Classifieds net cash provided by discontinued investing activities $ — $ 2,454 $ — $ 2,453
eBay Korea net cash used in discontinued investing activities — (8) — (9)
Net cash provided by (used in) discontinued investing activities $ — $ 2,446 $ — $ 2,444
eBay Korea net cash provided by (used in) discontinued financing activities $ — $ 6 $ — $ (62)
Net cash provided by (used in) discontinued financing activities $ — $ 6 $ — $ (62)

~~(1)~~ ~~Includes Classifieds financial results through the transaction close on June 24, 2021 and includes the gain on sale recorded for the Classifieds transaction.~~

~~During the three and six months ended June 30, 2022, we paid income taxes of $348 million related to discontinued operating activities of eBay Korea.~~

~~Classifieds~~

The financial results of Classifieds were presented as income (loss) from discontinued operations, net of income taxes on our condensed consolidated statement of income through June 24, 2021, when the transfer of Classifieds was completed. The periods presented below include the impact of intercompany revenue agreements through June 24, 2021. The impact of these intercompany revenue agreements to net revenues and cost of net revenues was $3 million and $5 million for the three and six months ended June 30, 2021, respectively. The continuing revenue and cash flows are not considered to be material.

~~The following table presents the financial results of Classifieds for the periods indicated (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022
2021 (1)
2022
2021 (1)
Net revenues $ — $ 289 $ — $ 565
Cost of net revenues — 33 — 63
Gross profit — 256 — 502
Operating expenses:
Sales and marketing — 96 — 183
Product development — 62 — 105
General and administrative (7) 40 (7) 67
Provision for transaction losses — — — 2
Total operating expenses (7) 198 (7) 357
Income (loss) from operations of discontinued operations 7 58 7 145
Interest and other, net — (1) — —
Pre-tax gain on sale — 12,524 — 12,524
Income (loss) from discontinued operations before income taxes 7 12,581 7 12,669
Income tax provision (2) (2,153) (2) (2,169)
Income (loss) from discontinued operations, net of income taxes $ 5 $ 10,428 $ 5 $ 10,500

~~(1)~~ ~~Includes Classifieds financial results through the transaction close on June 24, 2021 and includes the gain on sale recorded for the Classifieds transaction.~~

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~~eBay Inc.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~eBay Korea~~

The financial results of eBay Korea were presented as income (loss) from discontinued operations, net of income taxes on our condensed consolidated statement of income through November 14, 2021, when the sale of eBay Korea was completed. The following table presents the financial results of eBay Korea for the periods indicated (in millions):

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net revenues $ — $ 398 $ — $ 783
Cost of net revenues — 229 — 446
Gross profit — 169 — 337
Operating expenses:
Sales and marketing — 141 — 282
Product development — 15 — 29
General and administrative — 9 2 21
Total operating expenses — 165 2 332
Income (loss) from operations of discontinued operations — 4 (2) 5
Interest and other, net — 1 — 1
Income (loss) from discontinued operations before income taxes — 5 (2) 6
Income tax benefit (provision) — (2) — (2)
Income (loss) from discontinued operations, net of income taxes $ — $ 3 $ (2) $ 4

~~StubHub, PayPal and Enterprise~~

~~For the three and six months ended June 30, 2022 and 2021, the discontinued operations activity related to our former StubHub, PayPal and Enterprise businesses was immaterial.~~

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 4 — Goodwill and Intangible Assets

Goodwill

The following table presents goodwill activity for the period indicated (in millions):

December 31,
2021 Goodwill
Acquired Adjustments June 30,
2022
Goodwill $ 4,178 $ 45 $ (110) $ 4,113


	December 31, 2022		Goodwill Acquired		Adjustments		March 31, 2023
Goodwill	$	4,262	$	20	$	5	$	4,287

Goodwill acquired during the three months ended March 31, 2023 relates to the acquisition of 3PM Shield, a provider of AI-based marketplace compliance solutions, on February 13, 2023 and the revised valuation of the intangible assets acquired from the 2022 acquisition of TCGplayer. The adjustments to goodwill during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 were primarily due to foreign currency translation. ~~Goodwill acquired during the six months ended June 30, 2022 relates to the acquisition of KnownOrigin, a non-fungible token (NFT) marketplace, on June 22, 2022.~~

Intangible Assets

Intangible assets are reported within other assets in our condensed consolidated balance sheet. The following table presents components of identifiable intangible assets as of the dates indicated (in millions, except years):


		June 30, 2022							December 31, 2021								March 31, 2023							December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life (Years)
Intangible assets:	Intangible assets:															Intangible assets:
Customer lists and user base	Customer lists and user base	$	189	$	(189)	$	—	0	$	203	$	(203)	$	—	0	Customer lists and user base	$	246	$	(196)	$	50	8	$	190	$	(190)	$	—	0
Marketing related	Marketing related	55		(52)		3		2	57		(52)		5		2	Marketing related	81		(55)		26		6	68		(53)		15		7
Developed technologies	Developed technologies	173		(173)		—		0	174		(174)		—		0	Developed technologies	235		(179)		56		4	275		(177)		98		5
All other	All other	159		(156)		3		3	159		(156)		3		3	All other	159		(157)		2		3	159		(157)		2		3
Total	Total	$	576	$	(570)	$	6		$	593	$	(585)	$	8		Total	$	721	$	(587)	$	134		$	692	$	(577)	$	115

Amortization expense for intangible assets was $1$10 million and $2$1 million for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $2 million and $9 million for the six months ended June 30, 2022 and 2021,~~ respectively.

The following table presents expected future intangible asset amortization as of the date indicated (in millions):

June 30, 2022
Remaining 2022 $ 2
2023 2
2024 1
2025 1
Total $ 6


	March 31, 2023
Remaining 2023	$	25
2024	33
2025	30
2026	21
Thereafter	25
Total	$	134

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 5 — Segments

We have 1one operating and reportable segment. Our reportable segment is Marketplace, which includes our online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. Our management and our chief operating decision maker review financial information presented on a consolidated basis for purposes of allocating resources and evaluating performance and do not evaluate using asset information.

During the second quarter of 2021, we classified the results of our eBay Korea business which was part of our Marketplace segment as discontinued operations in our consolidated statement of income for the periods presented. See “Note 3 — Discontinued Operations” for additional information.

The accounting policies of our segment are the same as those described in “Note 1 — The Company and Summary of Significant Accounting Policies.”

The following table summarizes ~~net revenues by type for the periods indicated (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net revenues by type:
Net transaction revenues $ 2,297 $ 2,496 $ 4,652 $ 4,972
Marketing services and other revenues 125 172 253 334
Total net revenues $ 2,422 $ 2,668 $ 4,905 $ 5,306

~~The following table summarizes~~ the allocation of net revenues based on geography for the periods indicated (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
U.S.	U.S.	$	1,199	$	1,304	$	2,425	$	2,600	U.S.	$	1,261	$	1,226

United Kingdom	United Kingdom	410		498		828		1,001		United Kingdom	381		418

Germany	Germany	259		337		532		681		Germany	252		273
Rest of world	Rest of world	554		529		1,120		1,024		Rest of world	616		566
Total net revenues	Total net revenues	$	2,422	$	2,668	$	4,905	$	5,306	Total net revenues	$	2,510	$	2,483

Net revenues, inclusive of the effects of foreign exchange during each period, are attributed to U.S. and international geographies primarily based upon the country in which the seller, platform that displays advertising, other service provider or customer, as the case may be, is located.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 6 — Investments

The following tables summarize the unrealized gains and losses and estimated fair value of our investments classified as available-for-sale debt securities and restricted cash as of the dates indicated (in millions):


		June 30, 2022									March 31, 2023
		Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value			Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Short-term investments:	Short-term investments:									Short-term investments:
Restricted cash	Restricted cash	$	26	$	—	$	—	$	26	Restricted cash	$	41	$	—	$	—	$	41
Corporate debt securities	Corporate debt securities	1,196		—		(1)		1,195		Corporate debt securities	1,649		—		(6)		1,643
Government and agency securities	Government and agency securities	40		—		—		40		Government and agency securities	141		—		(4)		137

		$	1,262	$	—	$	(1)	$	1,261		$	1,831	$	—	$	(10)	$	1,821
Long-term investments:	Long-term investments:									Long-term investments:
Restricted cash	Restricted cash	$	4	$	—	$	—	$	4	Restricted cash	$	5	$	—	$	—	$	5
Corporate debt securities	Corporate debt securities	807		—		(40)		767		Corporate debt securities	515		—		(30)		485
Government and agency securities	Government and agency securities	798		—		(36)		762		Government and agency securities	625		—		(39)		586
		$	1,609	$	—	$	(76)	$	1,533		$	1,145	$	—	$	(69)	$	1,076


		December 31, 2021									December 31, 2022
		Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value			Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Short-term investments:	Short-term investments:									Short-term investments:
Restricted cash	Restricted cash	$	22	$	—	$	—	$	22	Restricted cash	$	36	$	—	$	—	$	36
Corporate debt securities	Corporate debt securities	4,151		1		—		4,152		Corporate debt securities	2,355		—		(5)		2,350
Government and agency securities	Government and agency securities	25		—		—		25		Government and agency securities	141		—		(6)		135

		$	4,198	$	1	$	—	$	4,199		$	2,532	$	—	$	(11)	$	2,521
Long-term investments:	Long-term investments:									Long-term investments:
Restricted cash										Restricted cash	$	13	$	—	$	—	$	13
Corporate debt securities	Corporate debt securities	$	954	$	1	$	(5)	$	950	Corporate debt securities	686		—		(40)		646
Government and agency securities	Government and agency securities	779		—		(2)		777		Government and agency securities	604		—		(47)		557
		$	1,733	$	1	$	(7)	$	1,727		$	1,303	$	—	$	(87)	$	1,216

We consider cash to be restricted when withdrawal or general use is legally restricted. Restricted cash is held ~~primarily~~ in interest bearing accounts ~~primarily~~for letters of credit related to our global sabbatical ~~program.~~program and for certain amounts related to other compensation arrangements held in escrow. Our fixed-income investments consist of predominantly investment grade corporate debt securities and government and agency securities. The corporate debt and government and agency securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies.

The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We regularly review investment securities for other-than-temporary impairment using both qualitative and quantitative ~~criteria~~.criteria. Investments classified as available-for-sale debt securities are carried at fair value with changes reflected in other comprehensive income. Where there is an intention or a requirement to sell an impaired available-for-sale debt security, the entire impairment is recognized in earnings with a corresponding adjustment to the amortized cost basis of the security. From time to time, we sell available-for-sale debt securities in an unrealized loss position and recognize an immaterial loss.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We regularly review investment securities for credit impairment using both qualitative and quantitative criteria. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through interest and other, net for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. We did not recognize any credit-related impairment through an allowance for credit losses as of ~~June 30, 2022.~~March 31, 2023.

Investment securities in a continuous loss position for less than 12 months had an estimated fair value of ~~$3.1~~$1.5 billion and unrealized losses of ~~$73~~$2 million as of ~~June 30, 2022,~~March 31, 2023, and an estimated fair value of ~~$3.1~~$2.8 billion and ~~an immaterial amount~~unrealized losses of ~~unrealized losses~~$32 million as of December 31, ~~2021.~~2022. Investment securities in a continuous loss position for greater than 12 months had an estimated fair value of ~~$69~~$1.4 billion and unrealized losses of $77 million as of March 31, 2023, and an estimated fair value of $952 million and ~~an immaterial amount of~~ unrealized losses as of ~~June 30, 2022, and there were no investment securities in a continuous loss position for greater than 12 months~~$66 million as of December 31, ~~2021.~~2022. Refer to “Note 15 — Accumulated Other Comprehensive Income” for amounts reclassified to earnings from unrealized gains and losses.

The following table presents estimated fair values of our short-term and long-term investments classified as available-for-sale debt securities and restricted cash by date of contractual maturity as of the date indicated (in millions):


	~~June 30, 2022~~March 31, 2023
One year or less (including restricted cash of ~~$26)~~$41)	$	~~1,261~~1,821
One year through two years (including restricted cash of ~~$4)~~$5)	~~560~~639
Two years through three years	~~657~~307
Three years through four years	~~242~~
~~Four years through five years~~	74130


Total	$	~~2,794~~2,897

Equity Investments

The following table summarizes our equity investments as of the dates indicated (in millions):


		Balance Sheet Location	June 30, 2022		December 31, 2021			Balance Sheet Location	March 31, 2023		December 31, 2022
Equity investments with readily determinable fair values	Equity investments with readily determinable fair values	Short-term investments	$	222	$	1,745	Equity investments with readily determinable fair values	Short-term investments	$	101	$	104
Equity investment in Adevinta	Equity investment in Adevinta	Equity investment in Adevinta	2,919		5,391		Equity investment in Adevinta	Equity investment in Adevinta	2,866		2,692
Equity investments under the fair value option	Equity investments under the fair value option	Long-term investments	504		725		Equity investments under the fair value option	Long-term investments	460		461
Equity investments under the equity method of accounting							Equity investments under the equity method of accounting	Long-term investments	35		34
Equity investments without readily determinable fair values	Equity investments without readily determinable fair values	Long-term investments	76		85		Equity investments without readily determinable fair values	Long-term investments	86		86
Equity investments under the equity method of accounting		Long-term investments	33		38
Total equity investments	Total equity investments		$	3,754	$	7,984	Total equity investments		$	3,548	$	3,377

Equity investment in Adevinta

1917

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Upon completion of the transfer of our Classifieds business to Adevinta ~~on June 24,~~in 2021, we received an equity investment of 44% in Adevinta valued at ~~$10.8~~$10.8 billion at the close of the transfer. ~~On November 18,~~In the fourth quarter of 2021, we completed the sale of approximately 135 million of our voting shares in Adevinta to Permira, inclusive of the option exercised by Permira to purchase additional voting shares, for total cash consideration of approximately $2.3 billion which reduced our ownership in Adevinta to 33%. Following the close of the share sale, ~~in November 2021,~~ our equity investment in Adevinta iswas reported in the long-term assets section on the condensed consolidated balance sheet to reflect our contractual requirement to retain at least 25% of the total number of issued and outstanding equity securities of Adevinta until October 14, 2023, subject to certain exceptions specified in the agreement. As of December 31, 2022 and March 31, 2023, our equity investment in Adevinta is reported in the short-term assets section on the condensed consolidated balance sheet since our contractual requirement ends within twelve months of the balance sheet date.

At the initial recognition of the equity investment, we elected the fair value option where subsequent changes in fair value are recognized in earnings. The investment is classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets. The fair value of the equity investment is measured based on Adevinta’s closing stock price and prevailing foreign exchange rate at each balance sheet date and the changes in fair value are reflected in gain (loss) on equity investments and warrant, net in the condensed consolidated statement of income. We believe the fair value option election creates more transparency of the current value in the equity investment in Adevinta. ~~Our non-voting shares are convertible to voting shares on a 1-to-one basis, subject to a limitation of 33% voting interest.~~

For the three months ended ~~June 30, 2022 and 2021,~~March 31, 2023, unrealized ~~losses~~gains of ~~$829~~$174 million ~~and $422 million, respectively,~~ were recorded related to the change in fair value of the investment, and for the six months ended June 30, 2022 and 2021, unrealized losses of $2,472 million and $422 million, respectively, were recorded related to the change in fair value of the investment in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of ~~income.~~income related to the change in fair value of the investment compared to $1,643 million of unrealized losses recorded during the same period in 2022. The fair value of the investment was ~~$2,919~~$2,866 million and ~~$5,391~~$2,692 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, respectively~~.2022, respectively.

Equity investments with readily determinable fair values

Equity investments with readily determinable fair values are classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets. Subsequent changes in fair value are reflected in gain (loss) on equity investments and warrant, net in the condensed consolidated statement of income.

In August 2021, one of our equity investments, KakaoBank Corp. (“KakaoBank”), which previously did not have a readily determinable fair value, completed its initial public offering which resulted in this investment having a readily determinable fair value. The fair value of the equity investment in KakaoBank Corp. (“KakaoBank”) is measured based on ~~KakaoBank’s~~ closing stock price and prevailing foreign exchange rate at each balance sheet date. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, unrealized losses of ~~$105~~$3 million and ~~$196~~$91 million, respectively, were recorded in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income related to the change in fair value of the investment. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022, we sold a portion of our shares in KakaoBank for ~~$242~~$45 million and ~~$287 million, respectively, and~~ recorded a realized ~~losses~~gain on the change in fair value of shares sold of ~~$67~~$8 million ~~and $75 million, respectively,~~ in gain (loss) on equity investments and warrant, ~~net on our condensed consolidated statement of income.~~net. The fair value of the investment was ~~$126~~$101 million and ~~$684~~$104 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and is reported within short-term investments in our condensed consolidated balance sheet.

We entered into a warrant agreement in conjunction with a commercial agreement with Adyen that vests in a series of 4four tranches, at a specified price per share upon meeting processing volume milestone targets on a calendar year basis. When a relevant milestone is reached, the warrant becomes exercisable with respect to the corresponding tranche of warrant shares up until the warrant expiration date of January 31, 2025. ~~In the fourth quarter of 2021, we~~We met the processing volume milestone target to vest the first tranche of the ~~warrant. Upon vesting~~warrant and in the third quarter of 2022, we sold the ~~first tranche, we exercised~~remainder of our shares in Adyen. Refer to “Note 7 —Derivative Instruments” for more information about the option to purchase shares of Adyen valued at $1.1 billion in exchange for approximately $110 million in cash. The fair value of the equity investment is measured based on Adyen’s closing stock price and prevailing foreign exchange rate at each balance sheet date.

warrant.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the three and six months ended June 30, 2022, unrealized losses of $38 million and $118 million, respectively, were recorded in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income related to the change in fair value of the investment. During the three and six months ended June 30, 2022, we sold a portion of our shares in Adyen for $129 million and $680 million, respectively, and recorded realized losses on the change in fair value of shares sold of $1 million and $167 million, respectively, in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income. As of June 30, 2022 and December 31, 2021, the fair value of the investment was $96 million and $1,061 million, respectively ~~and~~ ~~is reported within short-term investments in our condensed consolidated balance sheet. Refer to “Note 7 —Derivative Instruments” for more information about the warrant.~~

Subsequent to June 30, 2022, we sold additional shares in Adyen for $84 million and recorded a realized gain on the change in fair value of shares sold of $17 million in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income.

Equity investments under the fair value option

~~On November 14,~~In the fourth quarter of 2021, we completed the ~~previously announced~~ sale of 80.01% of the outstanding equity interests of eBay Korea to Emart. Upon completion of the sale, we retained 19.99% of the outstanding equity interest of the new entity, Gmarket, over whom we are able to exercise significant influence based on the terms of the securities purchase agreement, including through our board representation. Our equity investment in Gmarket was valued at ~~$728~~$728 million as of the transaction close date. At the initial recognition of this equity investment, we elected the fair value option where subsequent changes in fair value are recognized in gain (loss) on equity investments and warrant, net in the condensed consolidated statement of income. We believe the fair value option election creates more transparency of the current value in the equity investment in Gmarket. Our retained investment in Gmarket is subject to a two year right held by Emart to purchase the remaining interest at or near the ~~close~~closing price of the sale.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, unrealized losses of ~~$77~~$11 million and ~~$259~~$182 million, respectively, were recorded in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income related to the change in fair value of the investment. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~,2022, the fair value of the investment was ~~$466~~$420 million and ~~$725~~$431 million, respectively and is reported within long-term investments in our condensed consolidated balance sheet.

The investment is classified as Level 3 in the fair value hierarchy as the valuation reflects management’s estimate of assumptions that market participants would use in pricing the equity investment. Certain other immaterial equity investments aggregating to ~~$38~~$40 million as of ~~June 30, 2022~~March 31, 2023 are measured at fair value using the net asset value per share (or its equivalent) practical expedient, and have not been classified in the fair value hierarchy. Refer to “Note 8 — Fair Value Measurement of Assets and Liabilities” for more information.

Other equity method investments

We account for equity investments through which we exercise significant influence but do not have control over the investee under the fair value option or under the equity method. For equity investments accounted for under the equity method, our consolidated results of operations include, as a component of ~~gain (loss) on equity investments~~interest and ~~warrant~~,other, net, our share of the net income or loss of the equity investments. For equity investments accounted for under the fair value option, the change in fair value is included in our consolidated results of operations as a component of gain (loss) on equity ~~method of accounting.~~investments and warrant, net.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Equity investments without readily determinable fair values

The following table summarizes the change in total carrying value related to equity investments without readily determinable fair values ~~still~~ held for the periods indicated (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Carrying value, beginning of period	Carrying value, beginning of period	$	78	$	528	$	85	$	539	Carrying value, beginning of period	$	86	$	85
Additions		—		1		—		1

Upward adjustments for observable price changes		—		41		—		41

Downward adjustments for observable price changes and impairment	Downward adjustments for observable price changes and impairment	—		—		(7)		—		Downward adjustments for observable price changes and impairment	—		(7)

Foreign currency translation and other		(2)		1		(2)		(10)

Carrying value, end of period	Carrying value, end of period	$	76	$	571	$	76	$	571	Carrying value, end of period	$	86	$	78

For the ~~six~~three months ended ~~June 30, 2022, we recorded~~March 31, 2023, no downward adjustments ~~$7 million~~ to the carrying value of a strategic investment in gain (loss) on equity investments and warrant, net were recorded on our condensed consolidated statement of income.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For such equity investments without readily determinable fair values ~~still~~ held ~~at June 30, 2022,~~as of March 31, 2023, the cumulative upward adjustment for observable price changes was $41 million and cumulative downward adjustment for observable price changes and impairments was $298 million.

The following table summarizes unrealized gains and losses related to equity investments held ~~at June 30, 2022~~as of March 31, 2023 and presented within gain (loss) on equity investments and warrant, net for the periods indicated (in millions):

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net gains/(losses) recognized during the period on equity investments $ (1,116) $ (380) $ (3,293) $ (380)
Less: Net gains/(losses) recognized during the period on equity investments sold during the period (68) — (242) —
Total unrealized gains/(losses) on equity investments held at June 30, 2022 $ (1,048) $ (380) $ (3,051) $ (380)


	Three Months Ended March 31,
	2023		2022
Net gains (losses) recognized during the period on equity investments	$	160	$	(2,177)
Less: Net gains (losses) recognized during the period on equity investments sold during the period	—		(174)
Total unrealized gains (losses) on equity investments held, end of period	$	160	$	(2,003)

2220

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 7 — Derivative Instruments

Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse foreign exchange rate and interest rate movements. We do not use any of our derivative instruments for trading purposes.

We use foreign currency exchange contracts to reduce the volatility of cash flows related to forecasted revenues, expenses, assets and liabilities, including intercompany balances denominated in foreign currencies. These contracts are generally one month to one year in duration but with maturities up to 24 months. The objective of the foreign exchange contracts is to ensure that ultimately the U.S. dollar-equivalent cash flows are not adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. We evaluate the effectiveness of our foreign exchange contracts designated as cash flow or net investment hedges on a quarterly basis.

In ~~the second quarter of~~ 2022, we ~~began~~entered into derivative instruments to hedge the variability of forecasted interest payments on anticipated debt issuance using forward-starting interest rate swaps. The total notional amount of these forward-starting interest rate swaps was $150 million as of June 30, 2022 with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate. These interest rate swaps effectively ~~fix~~fixed the benchmark interest rate and ~~have~~had the economic effect of hedging the variability of forecasted interest payments for up to 10ten years on an anticipated debt ~~issuance by the second quarter of 2023, and they will be terminated upon issuance of the debt.~~

~~Additionally in 2020,~~issuance. Similar to other cash flow hedges, we ~~began to hedge the variability of forecasted interest payments on anticipated debt issuance using forward-starting interest rate swaps and~~ recorded changes in the fair value of these interest rate swaps in ~~AOCI~~accumulated other comprehensive income (“AOCI”) until the anticipated debt issuance. ~~In May 2021,~~As described in “Note 9 — Debt”, in 2022, we issued ~~$2.5~~$1.2 billion of senior unsecured notes, which consisted of notes maturing in ~~2026, 2031~~2025, 2027 and ~~2051.~~2032. As a result, we terminated the interest rate swaps and the gain associated with the termination of approximately ~~$45~~$25 million is amortized to interest expense over the ~~terms~~term of our notes due in ~~May 2026 and May 2031.~~

Similar to other cash flow hedges, we record changes in the fair value of these interest rate swaps in accumulated other comprehensive income (loss) (“AOCI”) until the anticipated debt issuance. Upon debt issuance and termination of the derivative instruments, their fair value will be amortized over the term of the new debt to interest expense. We evaluate the effectiveness of interest rate swaps designated as cash flow hedges on a quarterly basis.

During 2020, we began to hedge the variability of the cash flows in interest payments associated with our floating-rate debt using interest rate swaps. These interest rate swap agreements effectively convert our floating-rate debt that is based on London Interbank Offered Rate (“LIBOR”) to a fixed-rate basis, reducing the impact of interest-rate changes on future interest expense. The total notional amount of these interest rate swaps was $400 million as of June 30, 2022 with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate. Our interest rate swap contracts have maturity dates in 2023. Similar to other cash flow hedges, we record changes in the fair value of these interest rate swaps in AOCI and their fair value is amortized over the term of the debt to interest expense.November 2032.

Cash Flow Hedges

For derivative instruments that are designated as cash flow hedges, the derivative’s gain or loss is initially reported as a component of AOCI and subsequently reclassified into earnings in the same period the forecasted hedged transaction affects earnings. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Unrealized gains and losses in AOCI associated with such derivative instruments are immediately reclassified into earnings. As of ~~June 30, 2022,~~March 31, 2023, we have estimated that approximately ~~$122~~$18 million of net derivative gains related to our foreign exchange cash flow hedges and ~~$11~~$8 million of net derivative gains related to our interest rate cash flow hedges included in AOCI will be reclassified into earnings within the next 12 months. We classify cash flows related to our cash flow hedges as operating activities in our condensed consolidated statement of cash flows.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Non-Designated Hedges

Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets or liabilities, including intercompany balances and equity investments denominated in non-functional currencies. The gains and losses on our derivatives not designated as hedging instruments are recorded in interest and other, net, which are offset by the foreign currency gains and losses on the related assets and liabilities that are also recorded in interest and other, net. We classify cash flows related to our non-designated hedging instruments in the same line item as the cash flows of the related assets or liabilities, which is generally within operating activities in our condensed consolidated statement of cash flows. Cash flows related to the settlement of non-designated hedging instruments related to equity investments are classified within investing activities in our condensed consolidated statement of cash flows.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Warrant

We entered into a warrant agreement in conjunction with a commercial agreement with Adyen that, subject to meeting certain conditions, entitles us to acquire a fixed number of shares up to 5% of Adyen’s fully diluted issued and outstanding share capital at a specific date. The warrant has a term of seven years and vests in a series of 4four tranches, at a specified price per share (fixed for the first two tranches) upon meeting processing volume milestone targets on a calendar year basis. When or if a relevant milestone is reached, the warrant becomes exercisable with respect to the corresponding tranche of warrant shares up until the warrant expiration date of January 31, 2025. The maximum number of tranches that can vest in one calendar year is 2.

In 2021, we met the processing volume milestone target to vest the first tranche of the warrant. Upon vesting of the first tranche, we exercised the option to purchase shares of Adyen valued at approximately $1.1 billion in exchange for approximately $110 million in cash. Our equity investment in Adyen is accounted for as an equity investment with a readily determinable fair value. Refer to “Note 6 —~~Investments” for more information about our equity investments.~~two.

The warrant is accounted for as a derivative under ASC Topic 815, Derivatives and Hedging. We report the warrant at fair value within ~~warrant asset~~other assets in our condensed consolidated balance ~~sheets~~sheet and changes in the fair value of the warrant are recognized in gain (loss) on equity investments and warrant, net in our condensed consolidated statement of income. The day-one value attributable to the other side of the warrant, which was recorded as a deferred credit, is reported within other liabilities in our condensed consolidated balance ~~sheets~~sheet and is amortized over the life of the commercial arrangement. See “Note 8 — Fair Value Measurements” for information about the fair value measurement of the warrant.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Fair Value of Derivative Contracts

The following table presents fair values of our outstanding derivative instruments as of the dates indicated (in millions):


		Balance Sheet Location	June 30, 2022		December 31, 2021			Balance Sheet Location	March 31, 2023		December 31, 2022
Derivative Assets:	Derivative Assets:						Derivative Assets:
Foreign exchange contracts designated as cash flow hedges	Foreign exchange contracts designated as cash flow hedges	Other current assets	$	142	$	63	Foreign exchange contracts designated as cash flow hedges	Other current assets	$	49	$	89

Foreign exchange contracts not designated as hedging instruments	Foreign exchange contracts not designated as hedging instruments	Other current assets	55		22		Foreign exchange contracts not designated as hedging instruments	Other current assets	8		18
Interest rate contracts designated as cash flow hedges	Interest rate contracts designated as cash flow hedges	Other current assets	7		—		Interest rate contracts designated as cash flow hedges	Other current assets	—		2
Warrant	Warrant	Other assets	225		444		Warrant	Other assets	252		214
Foreign exchange contracts designated as cash flow hedges	Foreign exchange contracts designated as cash flow hedges	Other assets	25		24		Foreign exchange contracts designated as cash flow hedges	Other assets	5		13

Total derivative assets	Total derivative assets		$	454	$	553	Total derivative assets		$	314	$	336

Derivative Liabilities:	Derivative Liabilities:						Derivative Liabilities:
Foreign exchange contracts designated as cash flow hedges	Foreign exchange contracts designated as cash flow hedges	Other current liabilities	$	36	$	—	Foreign exchange contracts designated as cash flow hedges	Other current liabilities	$	10	$	12

Foreign exchange contracts not designated as hedging instruments	Foreign exchange contracts not designated as hedging instruments	Other current liabilities	—		17		Foreign exchange contracts not designated as hedging instruments	Other current liabilities	22		34

Foreign exchange contracts designated as cash flow hedges							Foreign exchange contracts designated as cash flow hedges	Other liabilities	—		1

Total derivative liabilities	Total derivative liabilities		$	36	$	17	Total derivative liabilities		$	32	$	47

Total fair value of derivative instruments	Total fair value of derivative instruments		$	418	$	536	Total fair value of derivative instruments		$	282	$	289

Under the master netting agreements with the respective counterparties to our derivative contracts, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis on our condensed consolidated balance sheet. As of ~~June 30, 2022,~~March 31, 2023, the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities by ~~$33~~$22 million, resulting in net derivative assets of ~~$188~~$40 million and net derivative liabilities of $2$10 million. As of ~~June 30, 2022,~~March 31, 2023, there was no potential effect of rights of set-off associated with the interest rate contracts as there were ~~only~~no asset ~~positions of $7 million.~~positions.

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Effect of Derivative Contracts on Accumulated Other Comprehensive Income

The following tables present the activity of derivative instruments designated as cash flow hedges gross of tax as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, and the impact of these derivative contracts on AOCI for the periods indicated (in millions):


		December 31, 2021		Amount of Gain (Loss) Recognized in Other Comprehensive Income		Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings		June 30, 2022			December 31, 2022		Amount of Gain (Loss) Recognized in Other Comprehensive Income		Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings		March 31, 2023
Foreign exchange contracts designated as cash flow hedges	Foreign exchange contracts designated as cash flow hedges	$	25	$	140	$	16	$	149	Foreign exchange contracts designated as cash flow hedges	$	52	$	(21)	$	28	$	3
Interest rate contracts designated as cash flow hedges	Interest rate contracts designated as cash flow hedges	30		—		(2)		32		Interest rate contracts designated as cash flow hedges	62		—		4		58
Total	Total	$	55	$	140	$	14	$	181	Total	$	114	$	(21)	$	32	$	61

December 31, 2020 Amount of Gain (Loss) Recognized in Other Comprehensive Income Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings June 30, 2021
Foreign exchange contracts designated as cash flow hedges $ (95) $ (6) $ (44) $ (57)
Interest rate contracts designated as cash flow hedges 10 22 — 32
Total $ (85) $ 16 $ (44) $ (25)

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~


	December 31, 2021		Amount of Gain (Loss) Recognized in Other Comprehensive Income		Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings		March 31, 2022
Foreign exchange contracts designated as cash flow hedges	$	25	$	25	$	6	$	44
Interest rate contracts designated as cash flow hedges	40		2		1		41
Total	$	65	$	27	$	7	$	85

Effect of Derivative Contracts on Condensed Consolidated Statement of Income

The following table summarizes the total gain (loss) recognized in the condensed consolidated statement of income from our foreign exchange derivative contracts by location for the periods indicated (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Foreign exchange contracts designated as cash flow hedges recognized in net revenues	Foreign exchange contracts designated as cash flow hedges recognized in net revenues	$	9	$	(18)	$	15	$	(46)	Foreign exchange contracts designated as cash flow hedges recognized in net revenues	$	29	$	6
Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues	Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues	—		1		—		2		Foreign exchange contracts designated as cash flow hedges recognized in cost of net revenues	(1)		—

Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net	Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net	25		—		40		(6)		Foreign exchange contracts not designated as hedging instruments recognized in interest and other, net	(4)		15
Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income	Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income	$	34	$	(17)	$	55	$	(50)	Total gain (loss) recognized from foreign exchange derivative contracts in the condensed consolidated statement of income	$	24	$	21

The following table summarizes the total gain (loss) recognized in the condensed consolidated statement of income from our interest rate derivative contracts by location for the periods indicated (in millions):

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Gain (loss) from interest rate contracts designated as cash flow hedges recognized in interest and other, net $ (2) $ 1 $ (1) $ —


	Three Months Ended March 31,
	2023		2022


Gain (loss) from interest rate contracts designated as cash flow hedges recognized in interest and other, net	$	4	$	1

The following table summarizes the total gain (loss) recognized in the condensed consolidated statement of income due to changes in the fair value of the warrant for the periods indicated (in millions):

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Gain (loss) attributable to changes in the fair value of warrant recognized in gain (loss) on equity investments and warrant, net $ (104) $ 108 $ (219) $ 72


	Three Months Ended March 31,
	2023		2022
Gain (loss) attributable to changes in the fair value of warrant recognized in gain (loss) on equity investments and warrant, net	$	38	$	(115)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Notional Amounts of Derivative Contracts

Derivative transactions are measured in terms of the notional amount, but this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. The notional amount is generally not exchanged, but is used only as the basis on which the value of foreign exchange payments under these contracts are determined. The following table presents the notional amounts of our outstanding derivatives as of the dates indicated (in millions):


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Foreign exchange contracts designated as cash flow hedges	Foreign exchange contracts designated as cash flow hedges	$	1,688	$	2,066	Foreign exchange contracts designated as cash flow hedges	$	1,430	$	1,741

Foreign exchange contracts not designated as hedging instruments	Foreign exchange contracts not designated as hedging instruments	2,436		3,159		Foreign exchange contracts not designated as hedging instruments	2,169		2,181
Interest rate contracts designated as cash flow hedges	Interest rate contracts designated as cash flow hedges	550		400		Interest rate contracts designated as cash flow hedges	—		400

Total	Total	$	4,674	$	5,625	Total	$	3,599	$	4,322

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Credit Risk

Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. To further limit credit risk, we also enter into collateral security arrangements related to certain interest rate derivative instruments whereby collateral is posted between counterparties if the fair value of the derivative instrument exceeds certain thresholds. Additional collateral would be required in the event of a significant credit downgrade by either party. We are not required to pledge, nor are we entitled to receive, collateral related to our foreign exchange derivative transactions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 8 — Fair Value Measurement of Assets and Liabilities

The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated (in millions):

June 30, 2022
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Assets:
Cash and cash equivalents $ 1,742 $ 1,742 $ — $ —
Short-term investments:
Restricted cash 26 26 — —
Corporate debt securities 1,195 — 1,195 —
Government and agency securities 40 — 40 —
Equity investments with readily determinable fair values 222 222 — —
Total short-term investments 1,483 248 1,235 —
Equity investment in Adevinta 2,919 2,919 — —
Derivatives 454 — 229 225
Long-term investments:
Restricted cash 4 4 — —
Corporate debt securities 767 — 767 —
Government and agency securities 762 — 762 —
Equity investment under the fair value option 466 — — 466
Total long-term investments 1,999 4 1,529 466
Total financial assets $ 8,597 $ 4,913 $ 2,993 $ 691
Liabilities:
Derivatives $ 36 $ — $ 36 $ —


	March 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	2,082	$	2,082	$	—	$	—
Short-term investments:
Restricted cash	41		41		—		—
Corporate debt securities	1,643		—		1,643		—
Government and agency securities	137		—		137		—

Equity investments with readily determinable fair values	101		101		—		—
Total short-term investments	1,922		142		1,780		—
Equity investment in Adevinta	2,866		2,866		—		—

Derivatives	314		—		62		252
Long-term investments:
Restricted cash	5		5		—		—
Corporate debt securities	485		—		485		—
Government and agency securities	586		—		586		—
Equity investment under the fair value option	420		—		—		420
Total long-term investments	1,496		5		1,071		420
Total financial assets	$	8,680	$	5,095	$	2,913	$	672

Liabilities:
Other liabilities	$	24	$	—	$	—	$	24
Derivatives	$	32	$	—	$	32	$	—

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		December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,379	$	1,379	$	—	$	—	Cash and cash equivalents	$	2,154	$	2,154	$	—	$	—
Short-term investments:	Short-term investments:									Short-term investments:
Restricted cash	Restricted cash	22		22		—		—		Restricted cash	36		36		—		—
Corporate debt securities	Corporate debt securities	4,152		—		4,152		—		Corporate debt securities	2,350		—		2,350		—
Government and agency securities	Government and agency securities	25		—		25		—		Government and agency securities	135		—		135		—

Equity investments with readily determinable fair values	Equity investments with readily determinable fair values	1,745		1,745		—		—		Equity investments with readily determinable fair values	104		104		—		—
Total short-term investments	Total short-term investments	5,944		1,767		4,177		—		Total short-term investments	2,625		140		2,485		—
Equity investment in Adevinta	Equity investment in Adevinta	5,391		5,391		—		—		Equity investment in Adevinta	2,692		2,692		—		—
Derivatives	Derivatives	553		—		109		444		Derivatives	336		—		122		214
Long-term investments:	Long-term investments:									Long-term investments:
Restricted cash										Restricted cash	13		13		—		—
Corporate debt securities	Corporate debt securities	950		—		950		—		Corporate debt securities	646		—		646		—
Government and agency securities	Government and agency securities	777		—		777		—		Government and agency securities	557		—		557		—
Equity investment under the fair value option	Equity investment under the fair value option	725		—		—		725		Equity investment under the fair value option	431		—		—		431
Total long-term investments	Total long-term investments	2,452		—		1,727		725		Total long-term investments	1,647		13		1,203		431
Total financial assets	Total financial assets	$	15,719	$	8,537	$	6,013	$	1,169	Total financial assets	$	9,454	$	4,999	$	3,810	$	645

Liabilities:	Liabilities:									Liabilities:
Other liabilities										Other liabilities	$	14	$	—	$	—	$	14
Derivatives	Derivatives	$	17	$	—	$	17	$	—	Derivatives	$	47	$	—	$	47	$	—

Our financial assets and liabilities are valued using market prices on both active markets (Level 1), less active markets (Level 2) and little or no market activity (Level 3). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. We did not have any transfers of financial instruments between valuation levels during the three months ended ~~June 30, 2022.~~March 31, 2023.

Other financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value because of the short-term nature of these instruments.

Fair value measurement of derivative instruments

The majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as equity prices, interest rate yield curves, option volatility and currency rates. Our warrant, which is accounted for as a derivative instrument, is valued using a Black-Scholes model. Key assumptions used in the valuation include risk-free interest ~~rates;~~rates, Adyen’s common stock price, equity volatility and common stock ~~outstanding;~~outstanding, exercise ~~price;~~price, and details specific to the warrant. The value is also probability adjusted for management’s assumptions with respect to vesting of the remaining three tranches which are each subject to meeting processing volume milestone targets. These assumptions and the probability of meeting processing volume milestone targets may have a significant impact on the value of the warrant. Refer to “Note 7 — Derivative Instruments” for further details on our derivative instruments.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents a reconciliation of the opening to closing balance of assets measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Opening balance at beginning of period	Opening balance at beginning of period	$	444	$	1,051	Opening balance at beginning of period	$	214	$	444
Exercise of options under warrant		—		(961)

Change in fair value	Change in fair value	(219)		354		Change in fair value	38		(230)
Closing balance at end of period	Closing balance at end of period	$	225	$	444	Closing balance at end of period	$	252	$	214

The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the warrant as of ~~June 30, 2022~~March 31, 2023 (in ~~millions)~~millions, except percentages):

Fair value

Valuation technique

Unobservable Input(1)

Range (weighted average)

Warrant

~~225~~252

Black-Scholes and Monte Carlo

Probability of vesting

0.0% - 55.0% ~~(49%~~(48.2%)

Equity volatility

~~(46%~~(51%)

(1)Probability of vesting was weighted by the unadjusted value of the tranches. For volatility, the average represents the arithmetic average of the points within the range and is not weighted by the relative fair value or notional amount.

Fair value measurement of equity investments

Certain ~~of our~~ equity investments are measured at fair value on a recurring basis, including our equity investment in Adevinta, equity investments with readily determinable fair values and equity investments under the fair value option.

Our equity investment in Adevinta is accounted for under the fair value option and classified within Level 1 in the fair value hierarchy as the fair value is measured based on Adevinta’s closing stock price and prevailing foreign exchange rate at each balance sheet date. Our equity investments with readily determinable fair values are also classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets.

Our equity investment in Gmarket ~~was initially recognized on November 14, 2021 in connection with the sale of 80.01% of the outstanding equity interests of eBay Korea to Emart. This equity investment~~ is accounted for under the fair value option and ~~its initial valuation of $728 million was based on the sale price of eBay Korea.~~ ~~Our investment in Gmarket~~ is subject to a two year right held by Emart from the date of disposal to purchase the remaining interest at or near the ~~close~~closing price of the sale.

The following table presents a reconciliation of the opening to closing balance of the equity investment in Gmarket measured using significant unobservable inputs (Level 3) as of the dates indicated (in millions):

June 30,
2022
December 31,
2021 (1)
Opening balance at beginning of period $ 725 $ —
Recognition of equity investment — 728
Change in fair value (259) (3)
Closing balance at end of period $ 466 $ 725

~~(1)~~There were no indicators of a potential material change in fair value of the investment between the date of recognition and December 31, 2021. The fair value of the investment was $725 million as of December 31, 2021 due to foreign currency adjustments.


	March 31, 2023		December 31, 2022
Opening balance at beginning of period	$	431	$	725

Change in fair value	(11)		(294)
Closing balance at end of period	$	420	$	431

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

This investment is classified within Level 3 in the fair value hierarchy as valuation of the investment reflects management’s estimate of assumptions that market participants would use in pricing the asset. The following table presents quantitative information about Level 3 significant unobservable inputs used in the fair value measurement of the equity investment in Gmarket as of ~~June 30, 2022~~March 31, 2023 that may have a significant impact on the overall valuation (in ~~millions)~~millions, except multiples):

Fair value

Valuation technique

Unobservable Input(1)

Range

Equity investment in Gmarket

~~466~~420

Market multiples

Revenue multiple — GPC method~~(1)~~

~~1.1x~~1.0x — ~~2.0x~~1.6x

Revenue multiple — GMAC method~~(1)~~

~~1.4x~~1.0x — 4.1x

(1)The primary unobservable inputs used in the fair value measurement of our equity investment in Gmarket under the fair value option, when using the Guideline Public Company (GPC) method and the Guideline Merged and Acquired Company (GMAC) method under the market multiple approach, are the respective revenue multiples. Significant increases (decreases) in the revenue multiples in isolation would result in significantly higher (lower) fair value measurement. The market multiples are derived from respective groups of guideline public companies and guideline merged and acquired companies.

Certain other immaterial equity investments under the fair value option aggregating to ~~$38~~$40 million as of ~~June 30, 2022~~March 31, 2023 are measured at fair value using the net asset value per share (or its equivalent) practical expedient, and have not been classified in the fair value hierarchy.

Refer to “Note 6 — Investments” for further details about our equity investments.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 9 — Debt

The following table summarizes the carrying value of our outstanding debt as of the dates indicated (in millions, except percentages):


		Coupon		As of		Effective		As of		Effective			Coupon		As of		Effective		As of		Effective
		Rate		June 30, 2022		Interest Rate		December 31, 2021		Interest Rate			Rate		March 31, 2023		Interest Rate		December 31, 2022		Interest Rate
Long-Term Debt	Long-Term Debt											Long-Term Debt
Floating Rate Notes:	Floating Rate Notes:											Floating Rate Notes:
Senior notes due 2023	Senior notes due 2023	LIBOR plus 0.87%		$	400	1.100	%	$	400	1.100	%	Senior notes due 2023	LIBOR plus 0.87%		$	—	—	%	$	400	3.786	%

Fixed Rate Notes:	Fixed Rate Notes:											Fixed Rate Notes:

Senior notes due 2022		—	%	—		—	%	750		3.989	%
Senior notes due 2022		—	%	—		—	%	605		2.678	%
Senior notes due 2023	Senior notes due 2023	2.750	%	750		2.866	%	750		2.866	%	Senior notes due 2023	2.750	%	—		—	%	750		2.866	%
Senior notes due 2024	Senior notes due 2024	3.450	%	750		3.531	%	750		3.531	%	Senior notes due 2024	3.450	%	750		3.531	%	750		3.531	%
Senior notes due 2025	Senior notes due 2025	1.900	%	800		1.803	%	800		1.803	%	Senior notes due 2025	1.900	%	800		1.803	%	800		1.803	%
Senior notes due 2025												Senior notes due 2025	5.900	%	425		6.036	%	425		6.036	%
Senior notes due 2026	Senior notes due 2026	1.400	%	750		1.252	%	750		1.252	%	Senior notes due 2026	1.400	%	750		1.252	%	750		1.252	%
Senior notes due 2027												Senior notes due 2027	3.600	%	850		3.689	%	850		3.689	%
Senior notes due 2027	Senior notes due 2027	3.600	%	850		3.689	%	850		3.689	%	Senior notes due 2027	5.950	%	300		6.064	%	300		6.064	%
Senior notes due 2030	Senior notes due 2030	2.700	%	950		2.623	%	950		2.623	%	Senior notes due 2030	2.700	%	950		2.623	%	950		2.623	%
Senior notes due 2031	Senior notes due 2031	2.600	%	750		2.186	%	750		2.186	%	Senior notes due 2031	2.600	%	750		2.186	%	750		2.186	%
Senior notes due 2032												Senior notes due 2032	6.300	%	425		6.371	%	425		6.371	%
Senior notes due 2042	Senior notes due 2042	4.000	%	750		4.114	%	750		4.114	%	Senior notes due 2042	4.000	%	750		4.114	%	750		4.114	%
Senior notes due 2051	Senior notes due 2051	3.650	%	1,000		2.517	%	1,000		2.517	%	Senior notes due 2051	3.650	%	1,000		2.517	%	1,000		2.517	%

Total senior notes	Total senior notes			7,750				9,105				Total senior notes			7,750				8,900
Hedge accounting fair value adjustments (1)	Hedge accounting fair value adjustments (1)			6				7				Hedge accounting fair value adjustments (1)			4				5
Unamortized premium/(discount) and debt issuance costs	Unamortized premium/(discount) and debt issuance costs			(28)				(30)				Unamortized premium/(discount) and debt issuance costs			(33)				(34)

Less: Current portion of long-term debt	Less: Current portion of long-term debt			(1,149)				(1,355)				Less: Current portion of long-term debt			—				(1,150)
Total long-term debt	Total long-term debt			6,579				7,727				Total long-term debt			7,721				7,721

Short-Term Debt	Short-Term Debt											Short-Term Debt
Current portion of long-term debt	Current portion of long-term debt			1,149				1,355				Current portion of long-term debt			—				1,150

Total short-term debt	Total short-term debt			1,149				1,355				Total short-term debt			—				1,150
Total Debt	Total Debt			$	7,728			$	9,082			Total Debt			$	7,721			$	8,871

(1) Includes the fair value adjustments to debt associated with terminated interest rate swaps which are being recorded as a reduction to interest expense over the remaining term of the related notes.

Senior Notes

~~During the second quarter of 2022, the company~~In January 2023, we redeemed the ~~$605 million~~$1.2 billion aggregate principal amount of the floating rate and 2.750% senior notes due 2023. Total cash consideration paid was $1.2 billion, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

In 2022, we redeemed the $1.4 billion aggregate principal amount of the 2.600% and 3.800% senior notes due 2022. Total cash consideration paid was ~~$605 million,~~$1.4 billion, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

~~During the first quarter~~In 2022, we issued senior notes of ~~2022, the company redeemed the $750 million~~$1.2 billion aggregate principal amount, which consisted of ~~the 3.800% senior~~$425 million of 5.900% fixed rate notes due ~~March 2022. Total cash consideration paid was $750~~2025, $300 million ~~as the redemption price was equal~~of 5.950% fixed rate notes due to ~~100%~~2027 and $425 million of ~~the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.~~6.300% fixed rate notes due 2032.

~~None of the floating rate notes are redeemable prior to maturity.~~ We may redeem some or all of the ~~other~~ fixed rate notes of each series at any time and from time to time prior to their maturity, generally at a make-whole redemption price, plus accrued and unpaid interest.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

If a change of control triggering event (as defined in the applicable senior notes) occurs with respect to the ~~floating rate notes due 2023, the 2.750%~~3.450% fixed rate notes due ~~2023,~~2024, the 1.900% fixed rate notes due 2025, the 5.900% fixed rate notes due 2025, the 1.400% fixed rate notes due 2026, the 3.600% fixed rate notes due 2027, the 5.950% fixed rate notes due 2027, the 2.700% fixed rate notes due 2030, the 2.600% fixed rate notes due 2031, the 6.300% fixed rate notes due 2032, the 4.000% fixed rate notes due 2042, or the 3.650% fixed rate notes due 2051, we must, subject to certain exceptions, offer to repurchase all of the notes of the applicable series at a price equal to 101% of the principal amount, plus accrued and unpaid interest.

The indenture pursuant to which the senior notes were issued includes customary covenants that, among other things and subject to exceptions, limit our ability to incur, assume or guarantee debt secured by liens on specified assets or enter into sale and lease-back transactions with respect to specified properties, and also includes customary events of default with customary grace periods in certain circumstances, including payment defaults and bankruptcy-related defaults.

To help achieve our interest rate risk management objectives, during the second quarter of 2020, we entered into interest rate swap agreements that effectively converted $400 million of our LIBOR-based floating-rate debt to a fixed-rate basis. ~~These swaps were designated as cash flow hedges and have maturity dates in 2023.~~ During the ~~second~~first quarter of 2023 we terminated the interest rate swap agreements upon redemption of the floating rate senior notes due 2023. During 2022, we ~~began~~entered into derivative instruments to hedge the variability of forecasted interest payments on anticipated debt issuance using forward-starting interest rate swaps. ~~The total notional amount~~As described above, in 2022 we issued $1.2 billion of ~~these forward-starting~~senior unsecured notes, which consisted of notes maturing in 2025, 2027 and 2032. As a result, we terminated the interest rate swaps ~~was $150~~and the gain associated with the termination of approximately $25 million asis amortized to interest expense over the term of ~~June 30, 2022 and will be terminated upon issuance of the debt.~~our notes due in November 2032.

The effective interest rates for our senior notes include the interest payable, the amortization of debt issuance costs and the amortization of any original issue discount and premium on these senior notes. Interest on these senior notes is payable either quarterly or semiannually. Interest expense associated with these senior notes, including amortization of debt issuance costs, was approximately ~~$55~~$67 million and ~~$59~~$60 million during the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $115 million and $125 million during the six months ended June 30, 2022 and 2021,~~ respectively. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the estimated fair value of these senior notes, using Level 2 inputs, was approximately ~~$7.0~~$7.1 billion and ~~$9.5~~$8.0 billion, respectively.

Commercial Paper

We have a commercial paper program pursuant to which we may issue commercial paper notes in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time with maturities of up to 397 days from the date of issue. As of ~~June 30,~~March 31, 2023 and December 31, 2022, there were no commercial paper notes outstanding.

Credit Agreement

In March 2020, we entered into a credit agreement that provides for an unsecured $2 billion five-year credit facility. We may also, subject to the agreement of the applicable lenders, increase commitments under the revolving credit facility by up to $1 billion. Funds borrowed under the credit agreement may be used for working capital, capital expenditures, acquisitions and other general corporate purposes.

As of ~~June 30, 2022,~~March 31, 2023, no borrowings were outstanding under our $2 billion credit agreement. However, as described above, we have an up to $1.5 billion commercial paper program and are required to maintain available borrowing capacity under our credit agreement in order to repay commercial paper borrowings in the event we are unable to repay those borrowings from other sources when they become due, in an aggregate amount of $1.5 billion. As of ~~June 30, 2022,~~March 31, 2023, no borrowings were outstanding under our commercial paper program; therefore, $2 billion of borrowing capacity was available for other purposes permitted by the credit agreement, subject to customary conditions to borrowing. The credit agreement includes a covenant limiting our consolidated leverage ratio to no more than 4.0:1.0, subject to, upon the occurrence of a qualified material acquisition, if so elected by us, a step-up to 4.5:1.0 for the four fiscal quarters completed following such qualified material acquisition. The credit

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

agreement includes customary events of default, with corresponding grace periods in certain circumstances, including payment defaults, cross-defaults and bankruptcy-related defaults. In addition, the credit agreement contains customary affirmative and negative covenants, including restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case, subject to customary exceptions. The credit agreement also contains customary representations and warranties.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

We were in compliance with all financial covenants in our outstanding debt instruments during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 10 — Supplemental Consolidated Financial Information

Contract Balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when we have satisfied our performance obligation and have the unconditional right to payment. The allowance for doubtful accounts and authorized credits is estimated based upon our assessment of various factors including historical experience, the age of the accounts receivable balances, current economic conditions reasonable and supportable forecasts, and other factors that may affect our customers’ ability to pay. The allowance for doubtful accounts and authorized credits was ~~$51~~$45 million and ~~$74~~$42 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. As of ~~June 30,~~March 31, 2023, we reported an allowance for doubtful accounts of $17 million reflecting an increase of $1 million, net of write-offs of $3 million for the three months ended March 31, 2023. As of December 31, 2022, we reported an allowance for doubtful accounts of $27 million reflecting a decrease of $15 million, net of write-offs of $35 million for the six months ended June 30, 2022. As of December 31, 2021, we reported an allowance for doubtful accounts of $42$16 million.

Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period. Due to the generally short-term duration of contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized for the ~~six~~three month period ended ~~June 30,~~March 31, 2023 that was included in the deferred revenue balance at the beginning of the period was $31 million. The amount of revenue recognized for the three month period ended March 31, 2022 that was included in the deferred revenue balance at the beginning of the period was $37 million. ~~The amount of revenue recognized for the six month period ended June 30, 2021 that was included in the deferred revenue balance at the beginning of the period was $46 million.~~

Cash, cash equivalents and restricted cash


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Cash and cash equivalents	Cash and cash equivalents	$	1,742	$	1,379	Cash and cash equivalents	$	2,082	$	2,154
Customer accounts	Customer accounts	—		5		Customer accounts	303		69
Restricted cash included in short-term investments	Restricted cash included in short-term investments	26		22		Restricted cash included in short-term investments	41		36
Restricted cash included in long-term investments	Restricted cash included in long-term investments	4		—		Restricted cash included in long-term investments	5		13
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash	$	1,772	$	1,406	Cash, cash equivalents and restricted cash	$	2,431	$	2,272

Customer accounts and funds receivable


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Cash and cash equivalents		$	—	$	5
Customer accounts						Customer accounts	$	303	$	69
Funds receivable	Funds receivable	605		676		Funds receivable	476		694
Customer accounts and funds receivable	Customer accounts and funds receivable	$	605	$	681	Customer accounts and funds receivable	$	779	$	763

Other current assets


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Payment processor advances	Payment processor advances	$	405	$	453	Payment processor advances	$	353	$	336
Prepaid expenses						Prepaid expenses	115		120
Accounts receivable, net						Accounts receivable, net	80		90
Short-term derivative assets	Short-term derivative assets	204		86		Short-term derivative assets	57		112
Prepaid expenses		117		114
Income and other tax receivable	Income and other tax receivable	140		108		Income and other tax receivable	44		122
Accounts receivable, net		82		98
Other	Other	289		248		Other	300		276
Other current assets	Other current assets	$	1,237	$	1,107	Other current assets	$	949	$	1,056

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Accrued expenses and other current liabilities


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Compensation and related benefits	Compensation and related benefits	$	363	$	517	Compensation and related benefits	$	393	$	426
Sales and use tax and VAT accruals	Sales and use tax and VAT accruals	316		396		Sales and use tax and VAT accruals	386		346
Advertising accruals	Advertising accruals	236		172		Advertising accruals	214		229
Operating lease liabilities	Operating lease liabilities	144		150		Operating lease liabilities	125		131
Transaction loss reserve	Transaction loss reserve	117		116		Transaction loss reserve	101		101
Uninvoiced general and administrative expenses	Uninvoiced general and administrative expenses	104		95		Uninvoiced general and administrative expenses	95		111
Accrued interest expense	Accrued interest expense	59		74		Accrued interest expense	74		67
Deferred revenue	Deferred revenue	33		79		Deferred revenue	45		34
Other	Other	363		328		Other	396		421
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	$	1,735	$	1,927	Accrued expenses and other current liabilities	$	1,829	$	1,866

Gain (loss) on equity investments and warrant, net


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In millions)									(In millions)
Change in fair value of equity investment in Adevinta		$	(829)	$	(422)	$	(2,472)	$	(422)
Change in fair value of equity investment in Gmarket		(77)		—		(259)		—
Unrealized change in fair value of equity investment in Adevinta										Unrealized change in fair value of equity investment in Adevinta	$	174	$	(1,643)
Unrealized change in fair value of equity investment in Adyen										Unrealized change in fair value of equity investment in Adyen	—		(80)
Unrealized change in fair value of equity investment in Gmarket										Unrealized change in fair value of equity investment in Gmarket	(11)		(182)
Unrealized change in fair value of equity investment in KakaoBank	Unrealized change in fair value of equity investment in KakaoBank	(105)		—		(196)		—		Unrealized change in fair value of equity investment in KakaoBank	(3)		(91)
Unrealized change in fair value of equity investment in Adyen		(38)		—		(118)		—
Change in fair value of warrant										Change in fair value of warrant	38		(115)
Realized change in fair value of shares sold in Adyen	Realized change in fair value of shares sold in Adyen	(1)		—		(167)		—		Realized change in fair value of shares sold in Adyen	—		(166)
Realized change in fair value of shares sold in KakaoBank	Realized change in fair value of shares sold in KakaoBank	(67)		—		(75)		—		Realized change in fair value of shares sold in KakaoBank	—		(8)
Change in fair value of warrant		(104)		108		(219)		72
Gain (loss) on other investments	Gain (loss) on other investments	—		41		(6)		41		Gain (loss) on other investments	—		(6)
Total gain (loss) on equity investments and warrant, net	Total gain (loss) on equity investments and warrant, net	$	(1,221)	$	(273)	$	(3,512)	$	(309)	Total gain (loss) on equity investments and warrant, net	$	198	$	(2,291)

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Note 11 — Commitments and Contingencies

Off-Balance Sheet Arrangements

As of ~~June 30, 2022,~~March 31, 2023, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

We have a cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows for cash withdrawals from the financial institution based upon our aggregate operating cash balances held within the same financial institution (“Aggregate Cash Deposits”). This arrangement also allows us to withdraw amounts exceeding the Aggregate Cash Deposits up to an agreed-upon limit. The net balance of the withdrawals and the Aggregate Cash Deposits are used by the financial institution as a basis for calculating our net interest expense or income under the arrangement. As of ~~June 30, 2022,~~March 31, 2023, we had a total of ~~$1.3 billion~~$168 million in aggregate cash deposits ~~partially offset by $1.2 billion in~~and no cash withdrawals held within the financial institution under the cash pooling arrangement.

Litigation and Other Legal Matters

Overview

We are involved in legal and regulatory proceedings on an ongoing basis. Many of these proceedings are in early stages and may seek an indeterminate amount of damages. If we believe that a loss arising from such matters is probable and can be reasonably estimated, we accrue the estimated liability in our financial statements. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) is not material. If we cannot estimate the probable or reasonably possible loss or range of losses arising from a proceeding, we have disclosed that fact. In assessing the materiality of a proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require us to change our business practices in a manner that could have a material adverse impact on our business. With respect to the matters disclosed in this Overview, we are unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies.

Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable were not material for the three ~~and six~~ months ended ~~June 30, 2022.~~March 31, 2023. We have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material. However, legal and regulatory proceedings are inherently unpredictable and subject to significant uncertainties. If one or more matters were resolved against us in a reporting period for amounts in excess of management’s expectations, the impact on our operating results or financial condition for that reporting period could be material. Legal fees are expensed as incurred.

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General Matters

Third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to patent disputes, and expect that we could be subject to additional patent infringement claims involving various aspects of our business as our products and services continue to expand in scope and complexity. Such claims may be brought directly or indirectly against us and/or against our customers (who may be entitled to contractual indemnification under their contracts with us), and we are subject to increased exposure to such claims as a result of our acquisitions and divestitures and in cases where we are entering new lines of business. We have in the past been forced to litigate such claims. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act, the Lanham Act and the Communications Decency Act are interpreted by the courts, and as we expand the scope of our business (both in terms of the range of products and services that we offer and our geographical operations) and become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries like ourselves are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws will be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and costly to defend and resolve, could require expensive changes in our methods of doing business or could require us to enter into costly royalty or licensing agreements on unfavorable terms.

From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of business, including suits by our users (individually or as class actions) alleging, among other things, improper disclosure of our prices, rules or policies, that our practices, prices, rules, policies or customer/user agreements violate applicable law or that we have acted unfairly and/or not acted in conformity with such practices, prices, rules, policies or agreements. Further, the number and significance of these disputes and inquiries are increasing as the political and regulatory landscape changes and, as we have grown larger, our businesses have expanded in scope (both in terms of the range of products and services that we offer and our geographical operations) and our products and services have increased in complexity. Any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, damage awards (including statutory damages for certain causes of action in certain jurisdictions), injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business.

From time to time, the Company receives subpoenas or requests for information from various government agencies, typically for potential misconduct by sellers on the Company’s Marketplace platforms. More recently, the Company has received subpoenas or requests for information from government agencies related to potential liability of the Company for products sold by sellers on the Marketplace platforms. The Company generally responds to government subpoenas and requests in the ordinary course of business and in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company.

In this regard, the Company has responded to inquiries from the U.S. Department of Justice (“DOJ”) regarding products sold on the Marketplace platforms alleged to violate certain laws and regulations, including regulations of the Environmental Protection Agency (“EPA”) and, separately, regulations of the Drug Enforcement Agency. The inquiries relate to whether and to what extent the Company should be liable for the sale of regulated or illicit products manufactured and sold by others who listed such products on Marketplace platforms in a manner that evaded and/or was designed to evade detection by the Company. With respect to the inquiries regarding EPA regulations, the EPA, DOJ and the Company have begun discussions relating to allegations of noncompliance arising under the Clean Air Act, among other alleged violations, which discussions include a potential settlement. If the Company is found to be liable for such activities on the Marketplace, it ~~could~~likely will be subject to monetary damages, changes in our business practices, or other remedies that could have a material adverse impact on our business. ~~At this time,~~

The Company is also responding to inquiries from the U.S. Attorney for the District of Massachusetts regarding potential criminal liability of the Company arising from the stalking and harassment in 2019 of the editor and publisher of Ecommercebytes, a website that publishes ecommerce news and information. Six former Company employees and one former contractor have pleaded guilty to crimes arising from the conduct. The Company has

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

begun discussions with the U.S. Attorney’s Office, which discussions include a potential settlement. We expect any such settlement may include fines, other payments, and non-monetary remedies, such as additional remediation, compliance and reporting requirements. Although the Company has concluded that losses in the U.S. Attorney matter are probable, we are unable at this time to estimate the ~~possible loss~~losses that may be incurred because the ~~matters are~~matter is still under investigation and ~~involve novel legal~~involves open questions relevant to the Company’s potential ~~liability.~~liability for conduct of its former employees. The editor and publisher also have a pending civil action against the Company, which seeks unspecified damages arising from the above-described conduct.

In connection with the government matters and civil action described above, the Company to date has accrued for probable losses of approximately $64 million in the aggregate. Given the uncertainties involved, the ultimate resolution of these matters could result in additional losses that may be material to our ~~operating~~financial results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of our net income or loss for that period.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Indemnification Provisions

We entered into a separation and distribution agreement and various other agreements with PayPal to govern the separation and relationship of the two companies. These agreements provide for specific indemnity and liability obligations and could lead to disputes between us and PayPal, which may be significant. In addition, the indemnity rights we have against PayPal under the agreements may not be sufficient to protect us and our indemnity obligations to PayPal may be significant.

In addition, we have entered into indemnification agreements with each of our directors, executive officers and certain other officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us.

In the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations, including our standard marketing, promotions and application programming interface license agreements. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by a third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain cases, we have agreed to provide indemnification for intellectual property infringement. It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our ~~condensed~~ consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively.

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Note 12 — Stockholders’ Equity

Stock Repurchase Program

Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. Our stock repurchase programs may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash.

In ~~August 2021 our Board authorized an additional~~ ~~$3.0 billion~~ ~~stock repurchase program and in February 2022 our Board authorized an additional $4.0 billion stock repurchase program. These stock repurchase programs have no expiration from the date of authorization.~~

On October 29, 2021, we entered into accelerated share repurchase agreements (the “2021 ASR Agreements”) with 2 financial institutions (each a “2021 ASR Counterparty”), as part of our share repurchase program. Under the 2021 ASR Agreements, we paid an aggregate amount of $2.5 billion to the 2021 ASR Counterparties and received an initial delivery of approximately 29.3 million shares of our common stock, which were recorded as a $2,125 million increase to treasury stock. In December 2021, the 2021 ASR Agreement with one of the 2021 ASR Counterparties settled and resulted in a delivery of approximately 3.4 million additional shares of our common stock, which were recorded as a $188 million increase to treasury stock. The remaining $188 million was evaluated as an unsettled forward contract indexed to our own stock, classified within stockholders’ equity as of December 31, 2021.

In January 2022, the 2021 ASR Agreement with the remaining 2021 ASR Counterparty settled and resulted in a delivery of approximately 3.3 million additional shares of our common stock. The related forward contract was settled and recorded as a $188 million increase to treasury stock during the six months ended June 30, 2022. In total under the 2021 ASR Agreements, approximately 36.0 million shares were repurchased at an average price per share of $69.43.

The following table summarizes stock repurchase activity under our stock repurchase programs for the period indicated (in millions, except per share amounts):

Shares
Repurchased (1)
Average Price
per Share (2)
Value of Shares
Repurchased (2)
Remaining Amount Authorized
Balance as of January 1, 2022 $ 1,991
Authorization of additional plan in February 2022 4,000
Repurchase of shares of common stock 47 $ 54.01 $ 2,542 (2,542)
Accelerated share repurchases (3)
3 0 $ — —
Balance as of June 30, 2022 $ 3,449


	Shares Repurchased (1)	Average Price per Share (2)		Value of Shares Repurchased (2)		Remaining Amount Authorized
Balance as of January 1, 2023						$	2,848


Repurchase of shares of common stock	5	$	45.53	$	250	(250)


Balance as of March 31, 2023						$	2,598

(1) These repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. None of the repurchased shares of common stock have been retired.

(2) Excludes broker ~~commissions.~~

~~(3)~~ ~~As indicated above, in January 2022, the 2021 ASR Agreement with the remaining ASR Counterparty settled~~commissions and ~~resulted in delivery of approximately 3.3 million additional shares.~~

excise tax accruals.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

Dividends

The Company paid a total of ~~$121~~$134 million and ~~$121~~$129 million in cash dividends during the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $250 million and $243 million in cash dividends during the six months ended June 30, 2022 and 2021,~~ respectively. In ~~August 2022,~~April 2023, our Board of Directors declared a cash dividend of ~~$0.22~~$0.25 per share of common stock to be paid on ~~September~~June 16, ~~2022~~2023 to stockholders of record as of ~~September~~June 1, ~~2022.~~2023.

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Note 13 — Employee Benefit Plans

Restricted Stock Unit Activity

The following table presents restricted stock unit (“RSU”) activity under our equity incentive plans for the period indicated (in millions):


			Units
Outstanding as of January 1, ~~2022~~2023			2021
Awarded			121
Vested			~~(6)~~(3)
Forfeited			~~(2)~~(1)
Outstanding as of ~~June 30, 2022~~March 31, 2023			2418

The weighted average grant date fair value for RSUs awarded during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$56.47~~$42.98 per share.

Stock-Based Compensation Expense

The following table presents the impact on our results of continuing operations of recording stock-based compensation expense for the periods indicated (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Cost of net revenues	Cost of net revenues	$	13	$	13	$	25	$	23	Cost of net revenues	$	13	$	12
Sales and marketing	Sales and marketing	20		25		40		45		Sales and marketing	20		20
Product development	Product development	62		55		107		97		Product development	59		45
General and administrative	General and administrative	42		42		76		73		General and administrative	36		34
Total stock-based compensation expense	Total stock-based compensation expense	$	137	$	135	$	248	$	238	Total stock-based compensation expense	$	128	$	111
Capitalized in product development	Capitalized in product development	$	3	$	3	$	7	$	6	Capitalized in product development	$	4	$	4

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Note 14 — Income Taxes

We are subject to both direct and indirect taxation in the U.S. and various states and foreign jurisdictions. We are under examination by certain tax authorities for the 2010 to ~~2020~~2021 tax years. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these or other examinations. The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2009 include, among others, the U.S. (Federal and California), Germany, India, Israel, ~~Singapore,~~ Switzerland and the United Kingdom.

Although the timing of the resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.

We have recognized the tax consequences of all foreign unremitted earnings and management has no specific plans to indefinitely reinvest the unremitted earnings of our foreign subsidiaries as of the balance sheet date. We have not provided for deferred taxes on outside basis differences in our investments in our foreign subsidiaries that are unrelated to unremitted earnings. These basis differences will be indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of our outside basis difference is not practicable.

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Note 15 — Accumulated Other Comprehensive Income

The following tables summarize the changes in AOCI for the periods indicated (in millions):


		Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Investments		Foreign Currency Translation		Estimated Tax (Expense) Benefit		Total			Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Investments		Foreign Currency Translation		Estimated Tax (Expense) Benefit		Total
Balance as of March 31, 2022		$	85	$	(58)	$	294	$	21	$	342
Balance as of December 31, 2022												Balance as of December 31, 2022	$	114	$	(98)	$	222	$	21	$	259
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	114		(19)		(85)		(24)		(14)		Other comprehensive income (loss) before reclassifications	(21)		19		1		(2)		(3)
Less: Amount of gain (loss) reclassified from AOCI	Less: Amount of gain (loss) reclassified from AOCI	9		(2)		—		(2)		5		Less: Amount of gain (loss) reclassified from AOCI	32		—		—		(7)		25
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	105		(17)		(85)		(22)		(19)		Net current period other comprehensive income (loss)	(53)		19		1		5		(28)
Balance as of June 30, 2022		$	190	$	(75)	$	209	$	(1)	$	323
Balance as of March 31, 2023												Balance as of March 31, 2023	$	61	$	(79)	$	223	$	26	$	231


		Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Investments		Foreign Currency Translation		Estimated Tax (Expense) Benefit		Total			Unrealized Gains (Losses) on Derivative Instruments		Unrealized Gains (Losses) on Investments		Foreign Currency Translation		Estimated Tax (Expense) Benefit		Total
Balance as of March 31, 2021		$	(11)	$	2	$	537	$	25	$	553
Balance as of December 31, 2021												Balance as of December 31, 2021	$	65	$	(7)	$	328	$	12	$	398
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(20)		(1)		10		6		(5)		Other comprehensive income (loss) before reclassifications	27		(51)		(34)		8		(50)
Less: Amount of gain (loss) reclassified from AOCI	Less: Amount of gain (loss) reclassified from AOCI	(16)		—		—		4		(12)		Less: Amount of gain (loss) reclassified from AOCI	7		—		—		(1)		6
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	(4)		(1)		10		2		7		Net current period other comprehensive income (loss)	20		(51)		(34)		9		(56)
Balance as of June 30, 2021		$	(15)	$	1	$	547	$	27	$	560
Balance as of March 31, 2022												Balance as of March 31, 2022	$	85	$	(58)	$	294	$	21	$	342

Unrealized Gains (Losses) on Derivative Instruments Unrealized
Gains (Losses) on
Investments Foreign
Currency
Translation Estimated Tax (Expense) Benefit Total
Balance as of December 31, 2021 $ 65 $ (7) $ 328 $ 12 $ 398
Other comprehensive income (loss) before reclassifications 141 (70) (119) (16) (64)
Less: Amount of gain (loss) reclassified from AOCI 16 (2) — (3) 11
Net current period other comprehensive income (loss) 125 (68) (119) (13) (75)
Balance as of June 30, 2022 $ 190 $ (75) $ 209 $ (1) $ 323
The following table summarizes the reclassifications out of AOCI for the periods indicated (in millions):


Details about AOCI Components	Affected Line Item in the Statement of Income	Amount of Gain (Loss) Reclassified From AOCI
		Three Months Ended March 31,
		2023		2022
Gains (losses) on cash flow hedges:
Foreign exchange contracts	Net revenues	$	29	$	6
Foreign exchange contracts	Cost of net revenues	(1)		—



Interest rate contracts	Interest and other, net	4		1
	Total, from continuing operations before income taxes	32		7
	Provision for income taxes	(7)		(1)
	Total, from continuing operations net of income taxes	25		6








Total reclassifications for the period	Total, net of income taxes	$	25	$	6

Unrealized Gains (Losses) on Derivative Instruments Unrealized
Gains (Losses) on
Investments Foreign
Currency
Translation Estimated Tax (Expense) Benefit Total
Balance as of December 31, 2020 $ (85) $ 5 $ 654 $ 42 $ 616
Other comprehensive income (loss) before reclassifications 26 (4) (107) (5) (90)
Less: Amount of gain (loss) reclassified from AOCI (44) — — 10 (34)
Net current period other comprehensive income (loss) 70 (4) (107) (15) (56)
Balance as of June 30, 2021 $ (15) $ 1 $ 547 $ 27 $ 560

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eBay Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 16 — Restructuring

The following table summarizes ~~the reclassifications out of AOCI~~restructuring reserve activity for the ~~periods~~period indicated (in millions):

Details about AOCI Components Affected Line Item in the Statement of Income Amount of Gain (Loss) Reclassified From AOCI
Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Gains (losses) on cash flow hedges:
Foreign exchange contracts Net revenues $ 9 $ (18) $ 15 $ (46)
Foreign exchange contracts Cost of net revenues — 1 — 2
Interest rate contracts Interest and other, net (2) 1 (1) —
Total, from continuing operations before income taxes 7 (16) 14 (44)
Provision for income taxes (2) 4 (3) 10
Total, from continuing operations net of income taxes 5 (12) 11 (34)
Total reclassifications for the period Total, net of income taxes $ 5 $ (12) $ 11 $ (34)


	Three Months Ended March 31, 2023
Accrued liability, beginning of period	$	—
Charges	42
Payments	(14)

Accrued liability, end of period	$	28

During the first quarter of 2023, management announced plans that included the reduction in workforce and other exit costs. The reduction was substantially completed in the first quarter of 2023 and resulted in a pre-tax charge of $42 million. There was no restructuring activity during the first quarter of 2022. Restructuring charges are included in general and administrative expenses in the condensed consolidated statement of income.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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, including statements that involve expectations, plans or intentions (such as those relating to future business, future results of operations or financial condition, ~~including with respect to the effects of COVID-19, impacts from~~inflationary pressure, foreign exchange rate volatility and geopolitical events, such as the ongoing war in Ukraine, new or planned features or services, or management ~~strategies, including our portfolio review)~~strategies). You can generally identify these forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in “Part I – Item 1A: Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Form 10-K”), as well as in our unaudited condensed consolidated financial statements, related notes, and the other information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission (“SEC”). We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the unaudited condensed consolidated financial statements and the related notes included in this report.

When we refer to “we,” “our,” “us” or “eBay” in this Quarterly Report on Form 10-Q, we mean the current Delaware corporation (eBay Inc.) and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

OVERVIEW

Business

eBay Inc. is a global commerce leader, which includes our Marketplace platforms. Founded in 1995 in San Jose, California, eBay is one of the world’s largest and most vibrant marketplaces for discovering great value and unique selection. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to provide buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere. In ~~2022,~~2023, we are focused on our strategic playbook — to understand the customer and their needs; build experiences they will love, at scale; and tell our story in new and different ways.

In ~~2020~~2022, and extending into 2021, there were changes in consumer behavior that resulted in more online shopping driven by the outbreak of a coronavirus and its variants (“COVID-19”). Our Marketplace platforms experienced elevated traffic, acquisition of small sellers and buyer acquisition due to the impacts of measures taken globally to contain the spread of COVID-19, which were unprecedented and are not expected to recur. In addition to the impact of COVID-19, we also experienced softness in most markets during the first ~~half~~quarter of ~~2022 resulting from geopolitical and macroeconomic events which are uncertain in duration. Through the remainder of 2022,~~2023, we ~~expect lower~~experienced reduced traffic in most markets resulting from geopolitical events, inflationary pressure, foreign exchange rate volatility and lower consumer confidence. These factors negatively impacted discretionary consumer spending, are uncertain in duration and we expect them to continue ~~as a result of geopolitical and macroeconomic events in addition to the year-over-year impacts of COVID-19.~~

On June 24, 2021 we completed the transfer of our Classifieds business to Adevinta ASA (“Adevinta”), and on November 14, 2021 we completed the sale of 80.01% of the outstanding equity interests of eBay Korea LLC, a limited liability company incorporated under the laws of Korea and a wholly owned subsidiary of eBay KTA (“eBay Korea”) to E-mart Inc. and one of its wholly owned subsidiaries (together, “Emart”). The results of our eBay Korea and Classifieds businesses have been presented as discontinued operations in our condensed consolidated statement of income for all periods presented through the respective transaction close dates as the transactions represented a strategic shift in our business that had a major effect on our operations and financial results.during 2023.

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~~See “Note 3 — Discontinued Operations” in our condensed consolidated financial statements included elsewhere in this report for additional information.~~

Presentation

In addition to the corresponding measures under generally accepted accounting principles (“GAAP”), management uses non-GAAP measures in reviewing our financial results. The foreign exchange neutral (“FX-Neutral”), or constant currency, net revenue amounts discussed below are non-GAAP financial measures and are not in accordance with, or an alternative to, measures prepared in accordance with GAAP. Accordingly, the FX-Neutral information appearing in the following discussion of our results of operations should be read in conjunction with the information provided below in “Non-GAAP Measures of Financial Performance,” which includes reconciliations of FX-Neutral financial measures to the most directly comparable GAAP measures. We calculate the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts.

Quarter Highlights

Net revenues ~~decreased 9%~~increased 1% to ~~$2,422~~$2,510 million ~~primarily due to a decline in traffic resulting from the normalization of consumer behavior~~ during the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~the elevated traffic from the impact of COVID-19 during~~ the same period in ~~2021. Net~~2022 primarily due to the investment in focus categories and higher take rate as a result of the expansion of payment services and promoted listing products. The increase in net revenues ~~were also impacted~~was partially offset by ~~softness~~a reduction in traffic in most markets resulting from geopolitical events, inflationary pressure, foreign exchange rate volatility and ~~macroeconomic events~~lower consumer confidence during the three months ended ~~June 30, 2022~~March 31, 2023. FX-Neutral net revenues (as defined above) increased 3% during the three months ended March 31, 2023 compared to the same period in 2021, which are uncertain in duration. These decreases were partially offset by an increase in net revenues due to the completion of the managed payments migration on a global basis by the end of 2021 and the associated higher take rate. FX-Neutral net revenues (as defined above) decreased 6% during the three months ended June 30, 2022 compared to the same period in 2021.2022. Operating margin decreased to ~~21.7%~~22.2% for the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~27.4%~~27.9% for the same period in ~~2021.~~2022.

We generated cash flow from continuing operating activities of ~~$577~~$841 million during the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~$1.0 billion~~$629 million in the same period in ~~2021.~~2022.

~~During the three months ended June 30, 2022 we received cash proceeds of $467 million in the aggregate from the sales of shares in Adyen and KakaoBank.~~ We recorded ~~realized losses on the change in fair value~~unrealized gains of ~~shares sold of $68~~$198 million in ~~the~~ aggregate in gain (loss) on equity investments and warrant, net on our condensed consolidated statement of income ~~for~~during the three months ended ~~June 30,~~March 31, 2023 compared to $2,291 million of unrealized losses recorded during the same period in 2022.

In January 2023, we repaid debt of $1.2 billion consisting of the floating rate and 2.750% senior notes.

During the three months ended ~~June 30, 2022,~~March 31, 2023, we ~~repaid debt of $605~~paid $242 million ~~consisting of~~cash for the ~~2.600% senior notes due 2022. We also repurchased $1.5 billion~~purchase of common stock and paid ~~$121~~$134 million in cash dividends.

In April 2023, we declared a quarterly cash dividend of $0.25 per share of common stock to be paid on June 16, 2023 to stockholders of record as of June 1, 2023.

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RESULTS OF OPERATIONS

We have one reportable segment to reflect the way management and our chief operating decision maker (“CODM”) review and assess performance of the business. Our reportable segment is Marketplace, which includes our online marketplace located at www.ebay.com, its localized counterparts and the eBay suite of mobile apps. The accounting policies of our segment are the same as those described in “Note 1 — The Company and Summary of Significant Accounting Policies” in our condensed consolidated financial statements included elsewhere in this report.

Net Revenues

Beginning in the fourth quarter of 2022, we present revenues generated from our Marketplace GMV and from non-GMV based businesses as “Net revenues” in order to more closely align our presentation of net revenues with how our business is operated. We formerly presented such amounts as “Net transaction revenues” and “Marketing services and other (MS&O) revenues,” and those line items for such prior periods have been conformed to current period presentation. Consolidated net revenues are unchanged.

Net revenues primarily include final value fees, feature fees, fees to promote listings, payment service fees, listing fees, and store subscription fees from sellers on our platforms. Our net revenues also include revenues from the sale of advertisements, revenue sharing arrangements and shipping fees. Our net revenues are reduced by incentives, including discounts, coupons and rewards, provided to our customers.

The following table presents net revenues for the periods indicated (in millions, except percentages):


	Three Months Ended March 31,
	2023		2022		% Change
Net revenues	$	2,510	$	2,483	1	%

Seasonality

We expect transaction activity patterns on our platforms to ~~mirror~~trend with general consumer buying patterns and expect that these trends will continue. As we introduce and scale new products ~~and platforms, such as managed payments which was completed by~~throughout the ~~end of 2021,~~year, we expect net revenues to fluctuate. In addition, macroeconomic conditions, including the impact of COVID-19, disrupted seasonal patterns in net revenues, particularly in the ~~war in Ukraine and global economic uncertainty also contributed to fluctuations in revenues and margins.~~first quarter of 2021. The following table presents our total net revenues and the sequential quarterly movements of these net revenues for the periods indicated (in millions, except percentages):


		Quarter Ended													Quarter Ended
		March 31			June 30			September 30			December 31				March 31			June 30			September 30			December 31

2020
Net revenues		$	1,821		$	2,337		$	2,258		$	2,478
% change from prior quarter		(4)		%	28		%	(3)		%	10		%

2021	2021													2021
Net revenues	Net revenues	$	2,638		$	2,668		$	2,501		$	2,613		Net revenues	$	2,638		$	2,668		$	2,501		$	2,613
% change from prior quarter	% change from prior quarter	6		%	1		%	(6)		%	4		%	% change from prior quarter	6		%	1		%	(6)		%	4		%
2022	2022													2022
Net revenues	Net revenues	$	2,483		$	2,422		$	—		$	—		Net revenues	$	2,483		$	2,422		$	2,380		$	2,510
% change from prior quarter	% change from prior quarter	(5)		%	(2)		%							% change from prior quarter	(5)		%	(2)		%	(2)		%	5		%
2023														2023
Net revenues														Net revenues	$	2,510		$	—		$	—		$	—
% change from prior quarter														% change from prior quarter	—		%

Net Revenues by Geography

Revenues are attributed to U.S. and international geographies primarily based upon the country in which the seller, platform that displays advertising, other service provider or customer, as the case may be, is located. The following table presents net revenues by geography for the periods indicated (in millions, except percentages):

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 % Change 2022 2021 % Change
U.S. $ 1,199 $ 1,304 (8) % $ 2,425 $ 2,600 (7) %
Percentage of net revenues 49 % 49 % 49 % 49 %
International 1,223 1,364 (10) % 2,480 2,706 (8) %
Percentage of net revenues 51 % 51 % 51 % 51 %
Total net revenues $ 2,422 $ 2,668 (9) % $ 4,905 $ 5,306 (8) %

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	Three Months Ended March 31,
	2023			2022			% Change
U.S.	$	1,261		$	1,226		3	%
Percentage of net revenues	50		%	49		%

International	1,249			1,257			(1)	%
Percentage of net revenues	50		%	51		%

Total net revenues	$	2,510		$	2,483		1	%

Our commerce platforms operate globally, resulting in certain revenues that are denominated in foreign currencies, primarily the British pound and euro. ~~In addition, as~~Year-over-year appreciation or depreciation of the U.S. dollar may have a material impact to our financial results, and we have seen and could continue to see elevated foreign currency volatility in the future. Through our hedging programs, we actively monitor foreign currency volatility and attempt to mitigate the risk. As shown in the table above, we generate approximately half of our net revenues internationally. Because of these factors, we are subject to the risks related to doing business in foreign countries as discussed in “Part I - Item 1A: Risk Factors” of the ~~2021~~2022 Form 10-K.

~~Table of Contents~~

Net revenues included ~~$9 million and $15~~$29 million of hedging gains during the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023 as compared to ~~$18 million and $46~~$6 million of hedging ~~losses~~gains during the same ~~periods~~period in ~~2021. The hedging activity in net revenues specifically relates to hedges of net transaction revenues.~~2022. Foreign currency movements relative to the U.S. dollar had an unfavorable impact of ~~$95 million and $153~~$45 million on net revenues during the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023 compared to ~~a favorable~~an unfavorable impact of ~~$95 million and $149~~$58 million on net revenues during the same ~~periods~~period in ~~2021.~~

2022. The effect of foreign currency exchange rate movements during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 compared to the same ~~periods~~period in ~~2021~~2022 was primarily attributable to the strengthening of the U.S. dollar against the British pound and euro.

~~Net Revenues by Type~~

~~We generate two types of net revenues:~~

~~Net transaction revenues~~ primarily include final value fees, feature fees, including fees to promote listings and listing fees from sellers on our platforms. Our net transaction revenues also include store subscription and other fees, often from large enterprise sellers. Our net transaction revenues are reduced by incentives, including discounts, coupons and rewards, provided to our customers.

~~Marketing services and other (“MS&O”)revenues~~ ~~consist of revenues principally from the sale of revenue sharing arrangements and advertisements.~~

~~The following table presents net revenues by type for the periods indicated (in millions, except percentages):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 % Change 2022 2021 % Change
Net transaction revenues $ 2,297 $ 2,496 (8) % $ 4,652 $ 4,972 (6) %
MS&O revenues 125 172 (27) % 253 334 (24) %
Total net revenues $ 2,422 $ 2,668 (9) % $ 4,905 $ 5,306 (8) %

~~Net Transaction Revenues~~

Key Operating Metrics

Gross Merchandise Volume (“GMV”) and take rate are significant factors that we believe affect our net ~~transaction~~ revenues.

GMV consists of the total value of all paid transactions between users on our platforms during the applicable period inclusive of shipping fees and taxes. Despite GMV’s divergence from revenue, we still believe that GMV provides a useful measure of the overall volume of paid transactions that flow through our platforms in a given period.

Take rate is defined as net ~~transaction~~ revenues divided by GMV and represents net ~~transaction revenue~~revenues as a percentage of overall volume on our platforms. We believe that take rate provides a useful measure of our ability to monetize volume through marketplace services on our platforms in a given period. We use take rate to identify key revenue drivers on our marketplace.

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~~Net Transaction Revenues~~The following table presents net revenues, GMV and take rate for the periods indicated (in millions, except percentages):


		Three Months Ended June 30,						% Change				Six Months Ended June 30,						Change					Three Months Ended March 31,						% Change
		2022			2021			As Reported		FX-Neutral		2022			2021			As Reported		FX-Neutral			2023			2022			As Reported		FX-Neutral
		(In millions, except percentages)																					(In millions, except percentages)
Net transaction revenues (1)		$	2,297		$	2,496		(8)	%	(5)	%	$	4,652		$	4,972		(6)	%	(4)	%
Net revenues (1)																						Net revenues (1)	$	2,510		$	2,483		1	%	3	%

Supplemental data:	Supplemental data:																					Supplemental data:
GMV ~~(2)~~	GMV ~~(2)~~	$	18,549		$	22,587		(18)	%	(14)	%	$	37,958		$	46,714		(19)	%	(16)	%	GMV ~~(2)~~	$	18,410		$	19,409		(5)	%	(2)	%
Take rate(2)	Take rate(2)	12.38		%	11.05		%	1.33	%			12.25		%	10.64		%	1.61	%			Take rate(2)	13.63		%	12.79		%	0.84	%

(1) Net ~~transaction~~ revenues were net of $9$29 million and ~~$15~~$6 million of hedging gains during the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~respectively,~~respectively.

(2) Take rate is defined as ~~compared to $18 million and $46 million of hedging losses during the same periods in 2021.~~

~~(2)~~ net revenues divided by GMV, ~~for the three and six months ended June 30, 2021 has been retrospectively recast to reflect the new definition of GMV announced in December 2021.~~as discussed above.

Net ~~transaction~~ revenues ~~decreased $199 million and GMV decreased across major categories~~increased primarily due to the investment in focus categories and higher take rate as a ~~decline~~result of the expansion of payment services and promoted listing products. The increase in net revenues was partially offset by a reduction in traffic resulting from the normalization of consumer behavior during the three months ended June 30, 2022 compared to the elevated traffic experienced on our Marketplace platforms from the impact of COVID-19 during the same period in 2021. Net transaction revenues were also impacted by softness in most markets resulting from geopolitical events, inflationary pressure, foreign exchange rate volatility and ~~macroeconomic events~~lower consumer confidence, which negatively impacted discretionary consumer spending during the three months ended ~~June 30, 2022 compared to the same period in 2021, which are uncertain in duration. The decrease in net transaction~~March 31, 2023.

Net revenues ~~was partially offset by the migration to managed payments on a global basis and the associated higher take rate~~increased despite GMV decreasing during the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~the same period in 2021. The migration to managed payments was completed in all markets by the end of 2021, delivering buyers and sellers a simplified end-to-end payments experience.~~

Net transaction revenues decreased $320 million and GMV decreased across major categories primarily due to a decline in traffic resulting from the normalization of consumer behavior during the six months ended June 30, 2022 compared to the elevated traffic experienced on our Marketplace platforms from the impact of COVID-19 during the same period in 2021. Net transaction revenues were also impacted by softness in most markets resulting from geopolitical and macroeconomic events during the six months ended June 30, 2022 compared to the same period in 2021, which are uncertain in duration. The decrease in net transaction revenues was partially offset by the migration to managed payments on a global basis and the associated higher take rate during the six months ended June 30, 2022 compared to the same period in 2021.

Transaction take rate was higher during the three and six months ended June 30, 2022 compared to the same periods in 2021 as a result of revenue initiatives such as global payments. In the second half of 2022, we currently expect the transaction take rate increase to taper compared to the same period in 2021 as the managed payments migration was completed by the end of 2021.

~~Net transaction revenues decreased at a lower rate than GMV during the three and six months ended June 30, 2022 compared to the same periods in 2021~~ primarily due to the benefit of a higher take rate during the same ~~periods,~~period, as discussed above. We expect ~~that~~ the divergence between net ~~transaction~~ revenues and GMV to continue through the ~~remainder of 2022 and beyond, to a lesser extent.~~year. Despite GMV’s divergence from net ~~transaction~~ revenues, we still believe the metric provides a useful measure of overall volume of paid transactions that flow through the platform in a given period.

~~Table of Contents~~

~~Marketing Services and Other Revenues~~

~~The following table presents MS&O revenues for the periods indicated (in millions, except percentages):~~

Three Months Ended
June 30, % Change Six Months Ended
June 30, % Change
2022 2021 As Reported FX-Neutral 2022 2021 As Reported FX-Neutral
(In millions, except percentages)
MS&O revenues $ 125 $ 172 (27) % (25) % $ 253 $ 334 (24) % (22) %

MS&O revenues decreased during the three and six months ended June 30, 2022 compared to the same periods in 2021 primarily due to a decrease in revenues from revenue sharing arrangements for shipping agreements and advertising revenues.

Cost of Net Revenues

Cost of net revenues represents costs associated with customer support, site operations and payment processing. Significant components of these costs primarily consist of employee compensation including stock-based compensation, contractor costs, facilities costs, depreciation of equipment and amortization expense, bank transaction fees, credit card interchange and assessment fees, authentication costs, shipping costs and digital services tax. The following table presents cost of net revenues for the periods indicated (in millions, except percentages):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,
		2022			2021			% Change		2022			2021			% Change			2023			2022			% Change
Cost of net revenues	Cost of net revenues	$	663		$	672		(1)	%	$	1,352		$	1,278		6	%	Cost of net revenues	$	700		$	689		2	%
Percentage of net revenues	Percentage of net revenues	27.4		%	25.2		%			27.6		%	24.1		%			Percentage of net revenues	28		%	28		%

Cost of net revenues, net of immaterial hedging activities, ~~was favorably impacted~~increased during the three months ended March 31, 2023 compared to 2022 primarily driven by ~~$20~~a $14 million increase related to the expansion of authentication services, a $13 million increase related to the launch of eBay International Shipping, and ~~$35~~an $11 million ~~attributable to~~increase in customer support costs, partially offset by a $12 million decrease in payment processing costs incurred and the $12 million favorable impact of foreign currency movements relative to the U.S. ~~dollar during the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.~~

The decrease in cost of net revenues during the three months ended June 30, 2022 compared to the same period in 2021 was primarily due to the favorable foreign currency movements described above, partially offset by higher payment processing costs incurred for managed payments. The migration to managed payments was completed in all markets by the end of 2021.

The increase in cost of net revenues during the six months ended June 30, 2022 compared to the same period in 2021 was primarily due to higher payment processing costs incurred for managed payments, partially offset by the favorable impact of foreign currency movements described above.dollar.

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Operating Expenses

The following table presents operating expenses for the periods indicated (in millions, except percentages):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,
		2022			2021			% Change		2022			2021			% Change			2023			2022			% Change
Sales and marketing	Sales and marketing	$	566		$	559		1	%	$	1,044		$	1,105		(6)	%	Sales and marketing	$	511		$	478		7	%
Percentage of net revenues	Percentage of net revenues	23		%	21		%			21		%	21		%			Percentage of net revenues	20		%	19		%
Product development	Product development	344			350			(2)	%	645			654			(1)	%	Product development	352			301			17	%
Percentage of net revenues	Percentage of net revenues	14		%	13		%			13		%	12		%			Percentage of net revenues	14		%	12		%
General and administrative	General and administrative	237			250			(5)	%	463			496			(7)	%	General and administrative	297			226			31	%
Percentage of net revenues	Percentage of net revenues	10		%	9		%			9		%	9		%			Percentage of net revenues	12		%	9		%
Provision for transaction losses	Provision for transaction losses	86			103			(17)	%	182			191			(5)	%	Provision for transaction losses	84			96			(13)	%
Percentage of net revenues	Percentage of net revenues	4		%	4		%			4		%	4		%			Percentage of net revenues	3		%	4		%
Amortization of acquired intangible assets	Amortization of acquired intangible assets	1			2			(50)	%	2			9			(78)	%	Amortization of acquired intangible assets	8			1			**
Total operating expenses	Total operating expenses	$	1,234		$	1,264		(2)	%	$	2,336		$	2,455		(5)	%	Total operating expenses	$	1,252		$	1,102		14	%

** Not meaningful

Foreign currency movements relative to the U.S. dollar had a favorable impact of ~~$53 million and $81~~$30 million on operating expenses during the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023 compared to ~~the same periods in 2021.~~2022. There was no hedging activity within operating expenses.

Sales and Marketing

Sales and marketing expenses primarily consist of advertising and marketing program costs (both online and offline), employee compensation including stock-based compensation, certain user coupons and rewards, contractor costs, facilities costs and depreciation on equipment. Online marketing expenses represent traffic acquisition costs in various channels such as paid search, affiliates marketing and display advertising. Offline advertising primarily includes brand campaigns and buyer/seller communications.

The increase in sales and marketing expenses during the three months ended ~~June 30, 2022~~March 31, 2023 compared to the same period in ~~2021~~2022 was primarily due to ana $25 million increase in online and offline advertising expenses ~~of $46~~and an $18 million increase in employee related spend, partially offset by ~~the favorable impact~~lower professional service spend of ~~foreign currency movements of $29 million and a decrease in certain user coupons and rewards of $14 million.~~

The decrease in sales and marketing expenses during the six months ended June 30, 2022 compared to the same period in 2021 was primarily due to the favorable impact of foreign currency movements of $50 million and a decrease in certain user coupons and rewards of $33 million. These decreases were partially offset by an increase in online and offline advertising expenses of $25$8 million.

Product Development

Product development expenses primarily consist of employee compensation including stock-based compensation, contractor costs, facilities costs and depreciation on equipment. Product development expenses are net of required capitalization of major platform and other product development efforts, including the development and maintenance of our technology platform. Our top technology priorities include the implementation of our strategic plan including payment intermediation capabilities, improved seller tools and buyer experiences.

The ~~decrease~~increase in product development expenses during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 compared to the same ~~periods~~period in ~~2021~~2022 was primarily due to ~~a decrease~~an increase in employee related costs.

Capitalized internal use and platform development costs were ~~$30~~$31 million and ~~$62~~$32 million in the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~respectively, compared to $32 million and $63 million in the same periods in 2021.~~respectively. These costs are primarily reflected as a cost of net revenues when amortized in future periods.

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General and Administrative

General and administrative expenses primarily consist of employee compensation including stock-based compensation, contractor costs, facilities costs, depreciation of equipment, employer payroll taxes on stock-based compensation, legal expenses, restructuring, insurance premiums and professional fees. Our legal expenses, including those related to various ongoing legal proceedings, may fluctuate substantially from period to period.

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The ~~decrease~~increase in general and administrative expenses during the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~the same period in 2021~~2022 was primarily due to $42 million of restructuring costs that did not occur in 2022, a ~~decrease~~$14 million increase in employee related costs, ~~of $16~~and a $10 million ~~and the favorable impact of foreign currency movements, partially offset by exit costs of $13 million related to the announcement to close our marketplace~~increase in ~~Turkey.~~

The decrease in general and administrative expenses during the six months ended June 30, 2022 compared to the same period in 2021 was primarily due to a decrease in restructuring and exit costs of approximately $20 million and the favorable impact of foreign currency movements.professional service costs.

Provision for Transaction Losses

Provision for transaction losses primarily consists of transaction loss expense associated with our buyer protection programs, losses from our managed payments services, fraud and bad debt expense associated with our accounts receivable balance. We expect our provision for transaction losses to fluctuate depending on many factors, including changes to our protection programs and the impact of regulatory changes.

The decrease in provision for transaction losses during the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~the same period in 2021~~2022 was primarily due to $14 million lower bad debt ~~expense as a result of fees collected through the managed payments platform of $20 million.~~expense.

The decrease in provision for transaction losses during the six months ended June 30, 2022 compared to the same period in 2021 was primarily due to lower bad debt expense as a result of fees collected through the managed payments platform of $30 million, partially offset by higher chargeback losses of $22 million incurred for managed payments.

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Gain (Loss) on Equity Investments and Warrant, Net

Gain (loss) on equity investments and warrant, net primarily consists of ~~realized and unrealized~~ gains and losses related to our various types of equity investments, including our equity investments in Adevinta, ~~Adyen,~~ KakaoBank and Gmarket, and gains and losses due to changes in fair value of the warrant received from Adyen. The following table presents gain (loss) on equity investments and warrant, net for the periods indicated (in millions, except percentages):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,
		2022			2021			% Change		2022			2021			% Change			2023			2022			% Change
Change in fair value of equity investment in Adevinta		$	(829)		$	(422)		96	%	$	(2,472)		$	(422)		**
Change in fair value of equity investment in Gmarket		(77)			—			**		(259)			—			**
Unrealized change in fair value of equity investment in Adevinta																		Unrealized change in fair value of equity investment in Adevinta	$	174		$	(1,643)		111	%
Unrealized change in fair value of equity investment in Adyen																		Unrealized change in fair value of equity investment in Adyen	—			(80)			**
Unrealized change in fair value of equity investment in Gmarket																		Unrealized change in fair value of equity investment in Gmarket	(11)			(182)			(94)	%
Unrealized change in fair value of equity investment in KakaoBank	Unrealized change in fair value of equity investment in KakaoBank	(105)			—			**		(196)			—			**		Unrealized change in fair value of equity investment in KakaoBank	(3)			(91)			(97)	%
Unrealized change in fair value of equity investment in Adyen		(38)			—			**		(118)			—			**
Change in fair value of warrant																		Change in fair value of warrant	38			(115)			(133)	%
Realized change in fair value of shares sold in Adyen	Realized change in fair value of shares sold in Adyen	(1)			—			**		(167)			—			**		Realized change in fair value of shares sold in Adyen	—			(166)			**
Realized change in fair value of shares sold in KakaoBank	Realized change in fair value of shares sold in KakaoBank	(67)			—			**		(75)			—			**		Realized change in fair value of shares sold in KakaoBank	—			(8)			**
Change in fair value of warrant		(104)			108			(196)	%	(219)			72			**
Gain (loss) on other investments	Gain (loss) on other investments	—			41			(100)	%	(6)			41			(115)	%	Gain (loss) on other investments	—			(6)			**
Total gain (loss) on equity investments and warrant, net	Total gain (loss) on equity investments and warrant, net	$	(1,221)		$	(273)		**		$	(3,512)		$	(309)		**		Total gain (loss) on equity investments and warrant, net	$	198		$	(2,291)		**
Percentage of net revenues	Percentage of net revenues	(50)		%	(10)		%			(72)		%	(6)		%			Percentage of net revenues	8		%	(92)		%

** Not meaningful

The ~~increase~~change in gain (loss) on equity ~~method~~ investments and warrant, net during the three months ended ~~June 30, 2022~~March 31, 2023 compared to the same period in ~~2021~~2022 was primarily driven by ~~a $407 million~~the change in the ~~loss recorded from the change in~~ fair value of our equity ~~investment~~investments in Adevinta, Gmarket, KakaoBank and ~~a $212 million change in the loss recorded from the change in fair value of the~~ warrant.

The increase in gain (loss) on equity method investments and warrant, net during the six months ended June 30, 2022 compared to the same period in 2021 was primarily driven by a $2.1 billion change in the loss recorded from the change in fair value of our equity investment in Adevinta.

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Interest and Other, Net

Interest and other, net primarily consists of interest earned on cash, cash equivalents and investments, as well as foreign exchange transaction gains and losses, gain/loss on acquisitions or disposals and interest expense, consisting of interest charges on any amounts borrowed and commitment fees on unborrowed amounts under our credit agreement and interest expense on our outstanding debt securities and commercial paper, if any. The following table presents interest and other, net for the periods indicated (in millions, except percentages):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,
		2022			2021			% Change		2022			2021			% Change			2023			2022			% Change

Total interest and other, net	Total interest and other, net	$	(31)		$	(58)		(47)	%	$	(81)		$	(139)		(42)	%	Total interest and other, net	$	(26)		$	(50)		(48)	%
Percentage of net revenues	Percentage of net revenues	(1)		%	(2)		%			(2)		%	(3)		%			Percentage of net revenues	(1)		%	(2)		%

~~The decrease in interest and other, net expense~~Interest income increased $34 million during the three months ended ~~June 30, 2022~~March 31, 2023 compared to 2022 due to higher yields on corporate debt and government and agency securities in a higher interest rate environment. We expect this trend to continue throughout 2023.

Interest expense increased $6 million during the ~~same period in 2021 was~~three months ended March 31, 2023 compared to 2022 primarily due to ~~foreign exchange transaction gains and an increase in~~higher rates offset by lower average notional on outstanding debt during 2023. In 2023, we repaid two tranches of senior notes at substantially lower interest ~~income.~~

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~~The decrease in interest and other, net expense~~rates than the senior notes that were issued during the ~~six months ended June 30, 2022 compared to the same period in 2021 was primarily due to foreign exchange transaction gains and lower~~fourth quarter of 2022. As a result, we expect continued upward pressure on interest ~~expense.~~

expense throughout 2023.

Income Tax Provision

The following table presents provision for income taxes for the periods indicated (in millions, except percentages):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2022			2021			2022			2021				2023			2022

Income tax provision (benefit)	Income tax provision (benefit)	$	(191)		$	107		$	(501)		$	263		Income tax provision (benefit)	$	161		$	(310)
Effective tax rate	Effective tax rate	26.3		%	26.6		%	21.1		%	23.4		%	Effective tax rate	22.1		%	18.8		%

The ~~decrease~~increase in our effective tax rate for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 compared to the same ~~periods~~period in ~~2021~~2022 was primarily due to ~~unrealized~~the decrease in proportion of non-deductible losses on ~~our~~ investments ~~and a deduction related~~ to ~~the announcement to close our marketplace in Turkey, partially reduced by a lower benefit~~total income (loss) from ~~stock based compensation.~~continuing operations before taxes.

We are regularly under examination by tax authorities both domestically and internationally. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations, although we cannot assure you that this will be the case given the inherent uncertainties in these examinations. Due to the ongoing tax examinations, ~~we believe~~ it is generally impractical to determine the amount and timing of these adjustments.

~~Discontinued Operations~~

~~On November 14, 2021,~~ However, we ~~completed~~expect several tax examinations to close within the previously announced sale of 80.01% of the outstanding equity interests of eBay Korea to Emart. We classified the results of our eBay Korea business as discontinued operations in our condensed consolidated statement of income for the periods presented through November 14, 2021.

On June 24, 2021, we completed the previously announced transfer of our Classifieds business to Adevinta. We classified the results of our Classifieds business as discontinued operations in our condensed consolidated statement of income for the periods presented through June 24, 2021.

next twelve months. See “Note 314 — ~~Discontinued Operations” in our~~Income Taxes” to the condensed consolidated financial statements included ~~elsewhere~~ in this report for ~~additional information.~~more information on estimated settlements within the next twelve months.

Non-GAAP Measures of Financial Performance

To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles, we use FX-Neutral net revenues, which are non-GAAP financial measures. Management uses the foregoing non-GAAP measures in reviewing our financial results. We define FX-Neutral net revenues as net revenues minus the exchange rate effect. We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts, excluding hedging activity.

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

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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 our results of operations as determined in accordance with GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

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These non-GAAP measures are provided to enhance investors’ overall understanding of our current financial performance and its prospects for the future. Specifically, we believe these non-GAAP measures provide useful information to both management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook. In addition, because we have historically reported certain non-GAAP results to investors, we believe that the inclusion of these non-GAAP measures provide consistency in our financial reporting.

The following tables present a reconciliation of FX-Neutral GMV and FX-Neutral net revenues (each as defined below) to our reported GMV and net revenues for the periods indicated (in millions, except percentages):

Three Months Ended
June 30, 2022 Three Months Ended
June 30, 2021 % Change
As Reported
Exchange Rate
Effect (1)(3)
FX-Neutral (2)
As Reported (4)
As Reported FX-Neutral
GMV $ 18,549 $ (865) $ 19,414 $ 22,587 (18) % (14) %
Net Revenues:
Net transaction revenues $ 2,297 $ (91) $ 2,388 $ 2,496 (8) % (5) %
MS&O revenues 125 (4) 129 172 (27) % (25) %
Total net revenues $ 2,422 $ (95) $ 2,517 $ 2,668 (9) % (6) %

Six Months Ended
June 30, 2022 Six Months Ended
June 30, 2021 % Change
As Reported
Exchange Rate
Effect (1)(3)
FX-Neutral (2)
As Reported (4)
As Reported FX-Neutral
GMV $ 37,958 $ (1,431) $ 39,389 $ 46,714 (19) % (16) %
Net Revenues:
Net transaction revenues $ 4,652 $ (147) $ 4,799 $ 4,972 (6) % (4) %
MS&O revenues 253 (6) 259 334 (24) % (22) %
Total net revenues $ 4,905 $ (153) $ 5,058 $ 5,306 (8) % (6) %


	Three Months Ended March 31,
	2023						2022		% Change
	As Reported		Exchange Rate Effect (1)(3)		FX-Neutral (2)		As Reported		As Reported		FX-Neutral
GMV	$	18,410	$	(604)	$	19,014	$	19,409	(5)	%	(2)	%







Net Revenues	$	2,510	$	(45)	$	2,555	$	2,483	1	%	3	%

(1) We define exchange rate effect as the year-over-year impact of foreign currency movements using prior period foreign currency rates applied to current year transactional currency amounts excluding hedging activity.

(2) We define FX-Neutral GMV as GMV minus the exchange rate effect. We define the non-GAAP financial measures of FX-Neutral net revenues as net revenues minus the exchange rate effect.

(3) Net ~~transaction~~ revenues were net of $9$29 million and ~~$15~~$6 million of hedging gains during the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~respectively, as compared to $18 million and $46 million of hedging losses during the same periods in 2021.~~

~~(4)~~ ~~GMV for the three and six months ended June 30, 2021 has been retrospectively recast to reflect the new definition of GMV announced in December 2021.~~

respectively.

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Liquidity and Capital Resources

Cash Flows


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(In millions)					(In millions)
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Continuing operating activities	Continuing operating activities	$	1,206	$	1,957	Continuing operating activities	$	841	$	629
Continuing investing activities	Continuing investing activities	3,764		(3,089)		Continuing investing activities	701		1,772
Continuing financing activities	Continuing financing activities	(4,182)		(685)		Continuing financing activities	(1,388)		(1,952)
Effect of exchange rates on cash, cash equivalents and restricted cash	Effect of exchange rates on cash, cash equivalents and restricted cash	(57)		(5)		Effect of exchange rates on cash, cash equivalents and restricted cash	5		(18)
Net increase in cash, cash equivalents and restricted cash - discontinued operations	Net increase in cash, cash equivalents and restricted cash - discontinued operations	(365)		2,534		Net increase in cash, cash equivalents and restricted cash - discontinued operations	—		(16)
Net increase (decrease) in cash, cash equivalents and restricted cash	Net increase (decrease) in cash, cash equivalents and restricted cash	$	366	$	712	Net increase (decrease) in cash, cash equivalents and restricted cash	$	159	$	415

Continuing Operating Activities

Our operating cash flows arise primarily from cash received from our customers on our platforms offset by cash payments for sales and marketing, employee compensation and payment processing expenses.

Cash provided by continuing operating activities of ~~$1.2 billion~~$841 million in the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 compared to cash provided by continuing operating activities of ~~$2.0 billion~~$629 million in the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was primarily attributable to a decrease in operating income from continuing operations of $356 million. The decrease in operating income was driven by a decrease in net revenues during the six months ended June 30, 2022 compared to the elevated traffic from the impact of COVID-19 during the same period in 2021, as noted in our comments on “Net Transaction Revenues.” The remaining changes in continuing operating cash flows are attributable to working capital movements and changes in non-cash ~~items.~~items during the three months ended March 31, 2023 compared to the same period in 2022.

Continuing Investing Activities

Cash provided by continuing investing activities of ~~$3.8 billion~~$701 million in the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was primarily attributable to proceeds of ~~$13.2 billion~~$4,404 million from the maturities and sales of investments, ~~and proceeds of $967 million in the aggregate from the sales of shares in Adyen and KakaoBank,~~ partially offset by cash paid for investments of ~~$10.1 billion~~$3,543 million and property and equipment of ~~$194~~$132 million.

The largely offsetting effects of purchases of investments and maturities and sale of investments results from the management of our investments. As our immediate cash needs change, purchase and sale activity will fluctuate.

Continuing Financing Activities

Cash used in continuing financing activities of ~~$4.2 billion~~$1,388 million in the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was primarily attributable to ~~cash paid to repurchase $2.5 billion of common stock,~~ debt repayments of ~~$1,355~~$1,150 million related to the redemption of our ~~3.800% senior fixed~~floating rate ~~notes due 2022~~ and ~~our 2.600%~~2.750% senior notes due ~~2022~~2023, cash paid to repurchase $242 million of common stock, and ~~$250~~$134 million paid in cash ~~dividends.~~dividends, partially offset by net funds receivable and payable activity of $229 million.

The ~~negative~~positive effect of exchange rate movements on cash, cash equivalents and restricted cash was due to the ~~strengthening~~weakening of the U.S. dollar against other currencies during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 compared to the ~~2021 year-end rate.~~same period in 2022.

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Liquidity and Capital Resource Requirements

As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, we had assets classified as cash and cash equivalents, as well as short-term and long-term non-equity investments from continuing operations, in an aggregate amount of ~~$4.5~~$5.0 billion and ~~$7.3~~$5.9 billion, respectively. We believe that our cash, cash equivalents and short-term and long-term investments, together with cash expected to be generated from operations, borrowings available under our credit agreement and commercial paper program, and our access to capital markets, will be sufficient to satisfy our material cash requirements over the next 12 months and for the foreseeable future.

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However, geopolitical and macroeconomic events including the ~~impact of COVID-19, the~~ war in Ukraine, inflationary pressure, foreign exchange volatility and global economic uncertainty have caused material disruptions in both U.S. and international financial markets and economies and are uncertain in duration. The future impact of these events cannot be predicted with certainty and have increased, and may continue to increase, our borrowing costs and other costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity, and we cannot assure that we will have access to external financing at times and on terms we consider acceptable, or at all, or that we will not experience other liquidity issues going forward.

Senior Notes

In January 2023, we redeemed the $1.2 billion aggregate principal amount of the floating rate and 2.750% senior notes due 2023. Total cash consideration paid was $1.2 billion, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

As of ~~June 30, 2022,~~March 31, 2023, we had ~~floating- and~~ fixed-rate senior notes outstanding for an aggregate principal amount of $7.8 billion, with ~~$1.1 billion~~none payable within 12 months. The net proceeds from the issuances of these senior notes are used for general corporate purposes, including, among other things, capital expenditures, share repurchases, repayment of indebtedness and possible acquisitions.

On April 15, 2022, the company redeemed the $605 million aggregate principal amount of the 2.600% senior notes due 2022. Total cash consideration paid was $605 million, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

On February 9, 2022, the company redeemed the $750 million aggregate principal amount of the 3.800% senior notes due March 2022. Total cash consideration paid was $750 million, as the redemption price was equal to 100% of the principal amount. In addition, we paid accrued and unpaid interest on the principal amount.

Commercial Paper

We have a commercial paper program pursuant to which we may issue commercial paper notes in an aggregate principal amount at maturity of up to $1.5 billion outstanding at any time with maturities of up to 397 days from the date of issue. As of ~~June 30, 2022,~~March 31, 2023, there were no commercial paper notes outstanding.

Credit Agreement

Credit Ratings

As of ~~June 30, 2022,~~March 31, 2023, we were rated investment grade by Standard and Poor’s Financial Services, LLC (long-term rated BBB+, short-term rated A-2, with a stable outlook) and Moody’s Investor Service (long-term rated Baa1, short-term rated P-2, with a stable outlook). We disclose these ratings to enhance the understanding of our sources of liquidity and the effects of our ratings on our costs of funds. Our borrowing costs depend, in part, on our credit ratings and any actions taken by these credit rating agencies to lower our credit ratings, as described above, will likely increase our borrowing costs.

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We were in compliance with all financial covenants in our outstanding debt instruments for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. For additional details related to our debt, please see “Note 9 — Debt” to the condensed consolidated financial statements included in this report.

Income Taxes

As of ~~June 30, 2022,~~March 31, 2023, our assets classified as cash and cash equivalents, and short-term and long-term non-equity investments ~~from continuing operations~~ included assets held in certain of our foreign operations totaling approximately ~~$2.6~~$2.5 billion. As we repatriate these funds to the U.S., we will be required to pay income taxes in certain U.S. states and applicable foreign withholding taxes on those amounts during the period when such repatriation occurs. We have accrued deferred taxes for the tax effect of repatriating the funds to the U.S.

For additional details related to our income taxes, please see “Income Tax Provision” in our Results of Operations above and “Note 14 — Income Taxes” to the condensed consolidated financial statements included in this report.

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Stock Repurchases

We expect, subject to market conditions and other uncertainties, to continue making opportunistic and programmatic repurchases of our common stock. However, our stock repurchase programs may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, ~~the impacts of the COVID-19 pandemic,~~ price and other market conditions and management’s determination as to the appropriate use of our cash.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, we repurchased approximately ~~$2.5 billion~~$250 million of our common stock under our stock repurchase programs. ~~In February 2022 our Board authorized an additional $4.0 billion stock repurchase program, with no expiration from the date of authorization.~~ As of ~~June 30, 2022,~~March 31, 2023, a total of approximately ~~$3.4~~$2.6 billion remained available for future repurchases of our common stock under our stock repurchase programs. See “Note 12 — Stockholders’ Equity” to the condensed consolidated financial statements included in this report for more information about our stock repurchase programs.

Dividends

Other Capital Resource Requirements

We actively monitor all counterparties that hold our cash and cash equivalents and non-equity investments, focusing primarily on the safety of principal and secondarily on improving yield on these assets. We diversify our cash and cash equivalents and investments among various counterparties in order to reduce our exposure should any one of these counterparties fail or encounter difficulties. To date, we have not experienced any material loss or lack of access to our invested cash, cash equivalents or short-term investments; however, we can provide no assurances that access to our invested cash, cash equivalents or short-term investments will not be impacted by adverse conditions in the financial markets, including, without limitation, as a result of the impact of ~~the COVID-19~~

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~~pandemic.~~geopolitical events, inflationary pressure, lower consumer spending and foreign exchange rate volatility. At any point in time we have funds in our operating accounts and customer accounts that are deposited and invested with third party financial institutions.

We have a cash pooling arrangement with a financial institution for cash management purposes. As of ~~June 30, 2022,~~March 31, 2023, we had a total of ~~$1.3 billion~~$168 million in aggregate cash deposits ~~partially offset by $1.2 billion in~~and no cash withdrawals held within the financial institution under the cash pooling arrangement. See “Note 11 — Commitments and Contingencies” to the condensed consolidated financial statements included in this report for more information about our cash pooling arrangement.

We have entered into various indemnification agreements and, in the ordinary course of business, we have included limited indemnification provisions in certain of our agreements with parties with which we have commercial relations. It is not possible to determine the maximum potential loss under these various indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in our ~~condensed~~ consolidated statement of income in connection with our indemnification provisions have not been significant, either individually or collectively. See “Note 11 — Commitments and Contingencies” to the condensed consolidated financial statements included in this report for more information about our indemnification provisions.

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Item 3: Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to interest rate risk relating to our investments and outstanding debt. In addition, adverse economic conditions and events (including volatility or distress in the equity and/or debt or credit markets) may impact regional and global financial markets. These events and conditions could cause us to write down our assets or investments. We seek to reduce earnings volatility that may result from adverse economic conditions and events or changes in interest rates.

The primary objective of our investment activities is to preserve principal while at the same time improving yields without significantly increasing risk. To achieve this objective, we maintain our cash equivalents and short-term and long-term investments in a variety of asset types, including bank deposits, government bonds and corporate debt securities. As of ~~June 30, 2022,~~March 31, 2023, approximately ~~21%~~25% of our total cash and investments was held in cash and cash equivalents. As such, changes in interest rates will impact interest income. As discussed below, the fair market values of our fixed rate securities may be adversely affected due to a rise in interest rates, and we may suffer losses in principal if we are forced to sell securities that have declined in market value due to changes in interest rates.

As of ~~June 30, 2022,~~March 31, 2023, the balance of our corporate debt and government bond securities was ~~$2.8~~$2.9 billion, which represented approximately 34% of our total cash and investments. Investments in both fixed-rate and floating-rate interest-earning instruments carry varying degrees of interest rate risk. The fair market value of our fixed-rate investment securities may be adversely impacted due to a rise in interest rates. In general, fixed-rate securities with longer maturities are subject to greater interest rate risk than those with shorter maturities. While floating rate securities generally are subject to less interest rate risk than fixed-rate securities, floating-rate securities may produce less income than expected if interest rates decrease and may also suffer a decline in market value if interest rates increase. Due in part to these factors, our investment income may fall short of expectations or we may suffer losses in principal if we sell securities that have declined in market value due to changes in interest rates. A hypothetical ~~100~~1% (100 basis point) point increase in interest rates would have resulted in a decrease in the fair value of our investments of ~~$34~~$19 million and $4$22 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

As of June 30, 2022, we had an aggregate principal amount of $7.8 billion of outstanding senior notes, of which 95% bore interest at fixed rates. During 2020, we began to hedge the variability of the cash flows in interest payments associated with our floating-rate debt using interest rate swaps. These interest rate swap agreements effectively convert our LIBOR-based floating-rate debt to a fixed-rate basis, reducing the impact of interest-rate changes on future interest expense. The total notional amount of these interest swaps was $400 million as of June 30, 2022 with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate. Our interest rate swap contracts have maturity dates in 2023. At June 30, 2022, we did not have an unhedged balance on our floating-rate debt. Additionally during the second quarter of 2022, we began to hedge the variability of forecasted interest payments using forward-starting interest rate swaps. The notional amount of these swaps was $150 million as of June 30, 2022, with terms calling for us to receive interest at a variable rate and to pay interest at a fixed rate. These interest rate swaps effectively fix the benchmark interest rate on anticipated debt issuances that occur by the second quarter of 2023, and they will be terminated upon issuance of the debt. When entering into forward-starting interest rate swaps, we are subject to market risk with respect to changes in the underlying benchmark interest rate that impacts the fair value of the forward-starting interest rate swaps. We manage market risk by matching the terms of the swaps with the terms of the expected debt issuance. We considered the historical volatility of short-term interest rates and determined that it was reasonably possible that an adverse change of 100 basis points could be experienced in the near term. A hypothetical 1% (100 basis points) decrease in interest rates would have resulted in a decrease in the fair values of our floating to fixed rate interest swaps and forward-starting interest rate swaps of approximately $15 million at June 30, 2022.

Further changes in interest rates will impact interest expense on any borrowings under our revolving credit facility, which bear interest at floating rates, and the interest rate on any commercial paper borrowings we make and any debt securities we may issue in the future and, accordingly, will impact interest expense. For additional details related to our debt, see “Note 9 — Debt” to the condensed consolidated financial statements included in this report.

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Equity Price Risk

Equity investments

~~On June 24,~~In 2021, we completed the transfer of our Classifieds business to Adevinta. Upon completion of the transfer we received an equity interest in Adevinta. The equity investment is accounted for under the fair value option and changes in Adevinta’s stock price and equity volatility may have a significant impact on the value of our equity investment in Adevinta. As of ~~June 30, 2022,~~March 31, 2023, a one dollar change in Adevinta’s common stock, holding other factors constant, would increase or decrease the fair value of the investment by approximately ~~$405~~$404 million.

~~In August 2021, KakaoBank completed its initial public offering which resulted in this investment having a readily determinable~~The fair ~~value. Previously this investment was accounted for as an~~value of our equity investment ~~without a readily determinable fair value.~~in KakaoBank is measured based on closing stock price and prevailing foreign exchange rate at each balance sheet date. Valuation of equity investments with readily determinable fair values can be obtained from real time quotes in active markets. Changes in KakaoBank’s stock price and equity volatility may have a significant impact on the value of our equity investment in KakaoBank. As of ~~June 30, 2022,~~March 31, 2023, a one dollar change in KakaoBank’s common stock, holding other factors constant, would increase or decrease the fair value of the investment by approximately $5 million.

As further described in the “Warrant” section below, we entered into a warrant agreement in conjunction with a commercial agreement with Adyen that, subject to meeting certain conditions, entitles us to acquire a fixed number of shares up to 5% of Adyen’s fully diluted issued and outstanding share capital at a specific date. In 2021, we met the processing volume milestone target to vest the first tranche of the warrant. Upon vesting of the first tranche, we exercised the option to purchase shares of Adyen. Our equity investment in Adyen is accounted for as an equity investment with a readily determinable fair value. Changes in Adyen’s common stock price and equity volatility may have a significant impact on the value of the investment. As of June 30, 2022, a one dollar change in Adyen’s common stock, holding other factors constant, would increase or decrease the fair value of the investment by less than $0.1 million.

Our remaining equity investments are primarily investments in privately-held ~~companies, including equity method investments, equity investments under the fair value option and equity investments without readily determinable fair values.~~companies. Our consolidated results of operations include, as a component of gain (loss) on equity investments and warrant, net, our share of the net income or loss of the equity investments accounted for under the equity method of accounting, ~~and~~or the change in fair value of the equity method investments accounted for under the fair value option. Equity investments without readily determinable fair values are accounted for at cost, less impairment and adjusted for subsequent observable

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price changes obtained from orderly transactions for identical or similar investments issued by the same investee. Such changes in the basis of the equity investment are recognized in gain (loss) on equity investments and warrant, net.Equity investments under the fair value option are measured at fair value based on a quarterly valuation analysis and are classified within Level 3 in the fair value hierarchy as the valuation reflects management’s estimate of assumptions that market participants would use in pricing the equity investment. Subsequent changes in fair value are recognized in gain (loss) on equity investments and warrant, net.

As of ~~June 30, 2022,~~March 31, 2023, our equity investments totaled ~~$3.8~~$3.5 billion, which represented approximately ~~45%~~42% of our total cash and investments, and primarily related to our equity investment in Adevinta.

For additional details related to these investments, please see “Note 6 — Investments” to our condensed consolidated financial statements included in this report.

Warrant

We entered into a warrant agreement in conjunction with a commercial agreement with Adyen that, subject to meeting certain conditions, entitles us to acquire a fixed number of shares up to 5% of Adyen’s fully diluted issued and outstanding share capital at a specific date. As discussed above, in 2021 we met the processing volume milestone target to vest the first tranche of the warrant, and we exercised the option to purchase shares of Adyen. The remaining tranches of the warrant are accounted for as a derivative instrument under ASC Topic 815, Derivatives and Hedging. Changes in Adyen’s common stock price and equity volatility may have a significant impact on the value of the warrant. As of ~~June 30, 2022,~~March 31, 2023, a one dollar change in Adyen’s common stock, holding other factors constant, would increase or decrease the fair value of the warrant by approximately $0.2 million. For additional details related to the warrant, please see “Note 7 — Derivative Instruments” to our condensed consolidated financial statements included in this report.

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Foreign Currency Risk

Our commerce platforms operate globally, resulting in certain revenues and costs that are denominated in foreign currencies, primarily the British pound and euro, subjecting us to foreign currency risk, which may adversely impact our financial results. We transact business in various foreign currencies and have significant international revenues as well as costs. In addition, we charge our international subsidiaries for their use of intellectual property and technology and for certain corporate services we provide. Our cash flow and results of operations that are exposed to foreign exchange rate fluctuations may differ materially from expectations and we may record significant gains or losses due to foreign currency fluctuations and related hedging activities.

We have a foreign exchange exposure management program designed to identify material foreign currency exposures, manage these exposures and reduce the potential effects of currency fluctuations on our reported ~~condensed~~ consolidated cash flows and results of operations through the purchase of foreign currency exchange contracts. The effectiveness of the program and resulting usage of foreign exchange derivative contracts is at times limited by our ability to achieve cash flow hedge ~~accounting or net investment hedge accounting, as applicable.~~accounting. For additional details related to our derivative instruments, please see “Note 7 — Derivative Instruments” to our condensed consolidated financial statements included in this report.

We use foreign exchange derivative contracts to help protect our forecasted U.S. dollar-equivalent earnings from adverse changes in foreign currency exchange rates. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse currency exchange rate movements. Most of these contracts are designated as cash flow hedges for accounting purposes. For qualifying cash flow hedges, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (“AOCI”) and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. For contracts not designated as cash flow hedges for ~~hedge~~ accounting purposes, the derivative’s gain or loss is recognized immediately in earnings in our ~~condensed~~ consolidated statement of income. However, only certain revenue and costs are eligible for cash flow hedge accounting.

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The following table illustrates the fair values of outstanding foreign exchange contracts designated as cash flow hedges and foreign exchange contracts not designated for hedge accounting and the before-tax effect on fair values of a hypothetical adverse change in the foreign exchange rates that existed as of ~~June 30, 2022.~~March 31, 2023. The sensitivity for foreign currency contracts is based on a 20% adverse change in foreign exchange rates, against relevant functional currencies.


		Fair Value Asset/(Liability)		Fair Value Sensitivity			Fair Value Asset/(Liability)		Fair Value Sensitivity
		(In millions)					(In millions)
Foreign exchange contracts - Cash flow hedges	Foreign exchange contracts - Cash flow hedges	$	131	$	(197)	Foreign exchange contracts - Cash flow hedges	$	44	$	(90)
Foreign exchange contracts - Not designated for hedge accounting	Foreign exchange contracts - Not designated for hedge accounting	$	55	$	(119)	Foreign exchange contracts - Not designated for hedge accounting	$	(14)	$	(111)

Since our risk management programs are highly effective, the potential loss in value described above would be largely offset by changes in the value of the underlying exposure.

We also use foreign exchange contracts to offset the foreign exchange risk on our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. These contracts reduce, but do not entirely eliminate, the impact of currency exchange rate movements on our assets and liabilities. The foreign currency gains and losses on the assets and liabilities are recorded in interest and other, net, which are offset by the gains and losses on the foreign exchange contracts.

We considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 20% for all currencies could be experienced in the near term. These changes would have resulted in an adverse impact on income before income taxes of approximately $1$3 million as of ~~June 30, 2022~~March 31, 2023 taking into consideration the offsetting effect of foreign exchange forwards in place as of ~~June 30, 2022.~~March 31, 2023.

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Item 4: Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) required by Exchange Act Rules 13a-15(b) or 15d-15(b), our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~June 30, 2022.~~March 31, 2023.

(b) Changes in internal controls. There were no changes in our internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1: Legal Proceedings

The information set forth under “Note 11 — Commitments and Contingencies — Litigation and Other Legal Matters” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.

Item 1A: Risk Factors

Risk Factors:

We are subject to various risks and uncertainties that may affect our business, results of operations and financial condition including not limited to, those described in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (“~~2021~~2022 Form 10-K”). Current global economic and geopolitical events and conditions may amplify many of these risks. These risks are not the only risks that may affect us. Additional risks that we are not aware of or do not believe are material at the time of this filing may also become important factors that adversely affect our business. There have been no material changes to the Company’s risk factors since the ~~2021~~2022 Form 10-K.

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Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Stock repurchase activity during the three months ended ~~June 30, 2022~~March 31, 2023 was as follows:

Period Ended Total Number of Shares Purchased
Average Price Paid per Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Programs
Maximum Dollar Value that May Yet be Purchased Under the Programs (1)
April 30, 2022 12,217,374 $ 54.33 12,217,374 $ 4,077,490,420
May 31, 2022 10,450,397 $ 48.57 10,450,397 $ 3,569,907,111
June 30, 2022 2,592,147 $ 46.40 2,592,147 $ 3,449,639,372
25,259,918 25,259,918


Period Ended	Total Number of Shares Purchased	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Dollar Value that May Yet be Purchased Under the Programs (1)
January 31, 2023	1,686,769	$	46.07	1,686,769	$	2,770,352,492
February 28, 2023	1,553,849	$	48.26	1,553,849	$	2,695,360,493
March 31, 2023	2,250,193	$	43.23	2,250,193	$	2,598,079,088
	5,490,811			5,490,811

(1)In August 2021 our Board authorized an additional $3.0 billion stock repurchase program and in February 2022 our Board authorized an additional $4.0 billion stock repurchase program. These stock repurchase programs have no expiration from the date of authorization.

Our stock repurchase programs are intended to programmatically offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, to make opportunistic and programmatic repurchases of our common stock to reduce our outstanding share count. Any share repurchases under our stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. These stock repurchase programs have no expiration from the date of authorization.

During the three months ended ~~June 30, 2022,~~March 31, 2023, we repurchased approximately ~~$2.5 billion~~$250 million of our common stock under our stock repurchase programs. As of ~~June 30, 2022,~~March 31, 2023, a total of approximately ~~$3.4~~$2.6 billion remained available for future repurchases of our common stock under our stock repurchase programs.

We expect, subject to market conditions and other uncertainties, to continue making opportunistic and programmatic repurchases of our common stock. However, our stock repurchase programs may be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash.

(2)Excludes broker ~~commissions.~~commissions and excise tax accruals.

Item 3: Defaults Upon Senior Securities

Not applicable.

Item 4: Mine Safety Disclosures

Not applicable.

Item 5: Other Information

Not applicable.

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Item 6: Exhibits

The information required by this Item is set forth in the Index to Exhibits of this Quarterly Report.

INDEX TO EXHIBITS

Exhibit Number

Filed or furnished with this 10-Q

Description

10.01+

Offer letter dated April 6, 2022 between Registrant and Eddie Garcia.

31.01

Certification of Registrant’s Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

31.02

Certification of Registrant’s Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.

32.01

Certification of Registrant’s Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

32.02

Certification of Registrant’s Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002.

101

The following materials from the Company’s Quarterly Report on Form 10-Q for the ~~periods~~period ended ~~June 30, 2022~~March 31, 2023 were formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheet, (ii) Condensed Consolidated Statement of Income, (iii) Condensed Consolidated Statement of Comprehensive Income ~~(Loss)~~ (iv) Condensed Consolidated Statement of Stockholders’ Equity and (v) Condensed Consolidated Statement of Cash Flows. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104

Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

+ Indicates a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		eBay Inc.
		Principal Executive Officer:

		By:	/s/ Jamie Iannone
			Jamie Iannone
			Chief Executive Officer
Date:	~~August 4, 2022~~April 27, 2023
		Principal Financial Officer:

		By:	/s/ Steve Priest
			Steve Priest
			Chief Financial Officer
Date:	~~August 4, 2022~~April 27, 2023
		Principal Accounting Officer:

		By:	/s/ ~~Brian J. Doerger~~Rebecca Spencer
			~~Brian J. Doerger~~Rebecca Spencer
			Vice President, Chief Accounting Officer
Date:	~~August 4, 2022~~April 27, 2023

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		Page
	PART I: FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	3
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4642
Item 3	Quantitative and Qualitative Disclosures About Market Risk	6154
Item 4	Controls and Procedures	6457
	PART II: OTHER INFORMATION
Item 1	Legal Proceedings	6558
Item 1A	Risk Factors	6558
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	6659
Item 3	Defaults Upon Senior Securities	6659
Item 4	Mine Safety Disclosures	6659
Item 5	Other Information	6659
Item 6	Exhibits	6760
Signatures		6861


	December 31, 2020		Amount of Gain (Loss) Recognized in Other Comprehensive Income		Less: Amount of Gain (Loss) Reclassified From AOCI to Earnings		June 30, 2021
Foreign exchange contracts designated as cash flow hedges	$	(95)	$	(6)	$	(44)	$	(57)
Interest rate contracts designated as cash flow hedges	10		22		—		32
Total	$	(85)	$	16	$	(44)	$	(25)


	June 30, 2022		December 31, 2021 (1)
Opening balance at beginning of period	$	725	$	—
Recognition of equity investment	—		728
Change in fair value	(259)		(3)
Closing balance at end of period	$	466	$	725


	Three Months Ended June 30, 2022						Three Months Ended June 30, 2021		% Change
	As Reported		Exchange Rate Effect (1)(3)		FX-Neutral (2)		As Reported (4)		As Reported		FX-Neutral
GMV	$	18,549	$	(865)	$	19,414	$	22,587	(18)	%	(14)	%



Net Revenues:
Net transaction revenues	$	2,297	$	(91)	$	2,388	$	2,496	(8)	%	(5)	%



MS&O revenues	125		(4)		129		172		(27)	%	(25)	%




Total net revenues	$	2,422	$	(95)	$	2,517	$	2,668	(9)	%	(6)	%


	Six Months Ended June 30, 2022						Six Months Ended June 30, 2021		% Change
	As Reported		Exchange Rate Effect (1)(3)		FX-Neutral (2)		As Reported (4)		As Reported		FX-Neutral
GMV	$	37,958	$	(1,431)	$	39,389	$	46,714	(19)	%	(16)	%



Net Revenues:
Net transaction revenues	$	4,652	$	(147)	$	4,799	$	4,972	(6)	%	(4)	%



MS&O revenues	253		(6)		259		334		(24)	%	(22)	%




Total net revenues	$	4,905	$	(153)	$	5,058	$	5,306	(8)	%	(6)	%