eBay Inc. EBAY reported first-quarter 2016 earnings of 41 cents per share, which beat the Zacks Consensus Estimate of 39 cents. Adjusted earnings per share exclude one-time items but include stock-based compensation expense.Management sounded upbeat and mentioned several initiatives including the collection of data from sellers, application of artificial intelligence for a better user experience, increased use of social media to drive traffic, and focus on discovery-based user experience to name a few.eBay seeks to attract more customers to its online properties, engage them and thus generate revenues. Therefore, the best way to understand the business is through its revenue/volume growth, customer growth, revenue per customer and cash flows.RevenuesGross revenue of $2.137 billion was up 3.7% on a year-over-year basis (up 6% on an Fx-neutral basis) and beat the Zacks Consensus Estimate of $2.081 billion.The Gross Merchandise Volume grew 5% year over year on an Fx-neutral basis. Active buyers/customers of 162 million were flat sequentially but up 4% from the year-ago quarter.MarginsPro-forma gross margin for the quarter was 77.9%, down 248 basis points (bps) year over year and 112 bps sequentially.Adjusted operating expenses of $1.04 billion increased 1.7% from the prior–year quarter but decreased 6.6% sequentially. Operating margin shrank 1.4% year over year and 13.3% sequentially to 29.2%.Excluding the impact of intangibles amortization and other items on a tax-adjusted basis, pro-forma net income came in at $481.0 million compared with $508.0 million in the year-ago period.Including the special items, GAAP net income was $482 million (41 cents per share) compared with $626 million (51 cents) in the March quarter of last year.Balance Sheet and Cash FloweBay’s balance sheet is highly leveraged, with total debt of $9.04 billion eclipsing the cash and short-term investments’ balance of $8.01 billion. The company generated $641 million in cash from continuing operations and spent $158 million on capex. Share repurchases totaled $1.0 billion.OutlookFor the second quarter of 2016, eBay expects revenues to grow 4–6% on an Fx-neutral basis to $2.14 billion to $2.19 billion. The Zacks Consensus Estimate is pegged at $2.136 billion. Non-GAAP earnings are expected within 40–42 cents. The Zacks Consensus Estimate is pegged at 37 cents. GAAP earnings per share from continuing operations are expected in the range of 32–34 cents.In 2016, eBay expects revenues to grow 3–5% on an Fx-neutral basis to $8.6 billion to $8.8 billion.Zacks RecommendationeBay has a Zacks Rank #3 (Hold). Investors may consider stocks such as Travelport Worldwide Limited TVPT, Mercadolibre, Inc. MELI and Stamps.com Inc. STMP. While Travelport Worldwide sports a Zacks Rank #1 (Strong Buy), Mercadolibre and Stamps.com carry a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EBAY INC (EBAY): Free Stock Analysis Report STAMPS.COM INC (STMP): Free Stock Analysis Report MERCADOLIBRE IN (MELI): Free Stock Analysis Report TRAVELPORT WWD (TVPT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research