Uber Technologies, Inc. (UBER) on Q2 2021 Results - Earnings Call Transcript

Operator: Good day, and thank you for standing by, and welcome to the Uber Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised, that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Balaji Krishnamurthy, Head of Investor Relations. Please, go ahead. Balaji Krishnamurthy: Thank you, Operator. Thank you for joining us today, and welcome to Uber Technologies second quarter 2021 earnings presentation. On the call today, we have Uber's CEO, Dara Khosrowshahi; and CFO, Nelson Chai. During today's call, we use both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures are included in the press release, supplemental slides and in our filings with the SEC, each of which is posted to investor.uber.com. As a reminder, these numbers are unaudited and may be subject to change. Certain statements in this presentation and on this call are forward-looking statements. Such statements can be identified by terms such as believe, expect, intend and may. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainties described in our most recent annual report on Form 10-K for the year ended December 31, 2020 and in other filings made with the SEC when available. Following prepared remarks today, we will publish the prepared remarks in our investor relations website, and we will open the call to questions. For the remainder of this discussion, all second quarter growth rates reflect year-over-year growth and are on a constant currency basis, unless otherwise noted. For July trends, we will be providing comparisons with July 2019 in addition to year-over-year trends. Lastly, we ask you to review our earnings press release for detailed Q2 financial review and our Q2 supplemental slides decks for a number of additional disclosure that provide context on recent business performance. With that, let me hand it over to Dara. Dara Khosrowshahi: Thanks, Balaji. On our last call with you, we said that we would lean in to re-ignite driver and courier growth. We've done so aggressively, and we've made real progress. Matching and balancing supply and demand, market by market, at the right times, at the right places, and at the right price is the key to our marketplace and what we do better than anyone else in the world. As a result of our driver-focused investments, everything from refreshed digital marketing to more attractive incentives, to good old-fashioned phone calls to folks we haven't seen in a while, monthly active drivers and couriers in the US organically increased by 420,000 from February to July, and we gained an additional 110,000 active couriers from our Postmates migration. In particular, the number of Mobility drivers in the US ended the quarter up 75% year-on-year in June. We also made several operational and product improvements to the onboarding process that led to nearly a quarter of new drivers signing up to both drive and deliver, and we cut courier onboarding time by over 90%. We continue to see strong earner momentum early in the second half of the year and have been able to taper our short-term incentives as we hit our stride. The good news is that drivers increasingly want to get back on the road. In June, 60% of inactive drivers told us they intend to start driving again within a month; that's up from 40% in April. And 90% of drivers told us they expect to come back by September. We are also beginning to see marketplace metrics revert to normalcy in several markets, with surge levels and wait times nearly back to normal in Miami, Atlanta, Dallas, Houston and Phoenix. But in major cities like New York, San Francisco and Los Angeles, demand continues to outpace supply and prices and wait times remain above our comfort levels. Our investment in the earner experience is a fundamental, cross disciplinary, and long term initiative for our company. From doubling down on our app quality, to targeted and personalized re-engagement campaigns, to completely redesigning our onboarding flow to make it easier and faster than ever to earn safely, to rolling out unique programs like free language learning from Rosetta Stone or free tuition with ASU, our Earner Super App is unique in the depth and breadth of earnings opportunities we can offer drivers and couriers globally. We have a lot of work to do and it's on us to ensure Uber remains the most attractive and rewarding platform for on-demand work in the world. I do also want to acknowledge the Delta variant. Thanks to the incredible effectiveness of the vaccines, we continued to see GB growth in our business from June to July, despite the impact of the new variants. Where markets are recovering, our Mobility and Delivery businesses are emerging stronger together. As of last week, our total Gross Bookings in New York City, London and Paris are over 30% higher than July 2019, as Mobility has made a nearly full recovery. Nelson will have more specifics, but we have confidence in our ability to manage through any scenario, just as we have done over the last 500 plus days. Our ambition is to help people go anywhere and get anything. Whether they first came to Uber via Rides, Eats or Freight, consumers, merchants and companies alike are increasingly getting used to doing more with Uber. During the pandemic, we've shown how each of our multiple business lines can provide a hedge against the others. But more exciting is how innovation in our product and brand is driving cross-pollination between our customer bases - in other words, our businesses do provide a hedge, but, more importantly, strength in one business can strengthen the others. You are well aware by now that the Rides app is acting like a free marketing engine for our Delivery business. What may be less obvious is that Delivery is now increasingly driving consumer acquisition for Mobility. That's because in many markets, especially suburbs and smaller towns, Eats is sometimes the first way consumers engage with Uber. We've launched proactive efforts to convert these Eats-first consumers into Uber riders. In Q2, over 20% of Mobility's first-time riders in the US and more than 40% of first-time riders in the UK were existing Delivery consumers, with this contribution rapidly growing over the last year. Over time, we expect our growing New Verticals business to increasingly benefit from, and contribute to, our platform. Already, over 3 million consumers are ordering groceries, convenience items, alcohol and more on Uber's apps each month -- and this is before we have even fully addressed the US opportunity. Notably, consumers acquired through one of our New Verticals offerings spend more than twice as much as consumers acquired through our restaurant delivery offering. We are beginning to broadly roll out grocery powered by Cornershop in the US, having doubled our footprint to more than 400 cities in the last few weeks, and expect this to be the next pillar of growth for Uber. Underpinning all of this is our membership program. Just a year ago we began to roll out Uber Pass in earnest. It now drives 30% of Delivery GBs in the US, and roughly 25% globally. Consumers who regularly engage with both Mobility and Delivery now account for nearly half of our total company Gross Bookings. For these consumers in particular, Pass is a no-brainer, and we see a long runway for increased adoption. We're also seeing the benefits of cross-platform synergies for merchants and other businesses. Uber remains the largest global on-demand delivery platform outside of China, with more than 750,000 monthly active merchants on our platform. And our leadership position continues to grow. We are now the category leader in 8 of our top 10 Delivery markets, with clear number two positions in the US and UK. We're proud that Uber Eats, Postmates, and Cornershop helped many small businesses offset the loss of in-store traffic during lockdowns. But as cities reopen, these merchants are discovering that delivery demand is additive, even as in-store traffic comes back. Merchants have increasingly embraced our Ads offering to drive significant demand amplification at a reasonable cost. Our original goal was to exit this year with $100 million of Ads run-rate revenue, but we now expect to surpass that goal and end 2022 with at least $300 million in run-rate revenues. Beyond last-mile delivery, Uber is increasingly powering first- and middle-mile logistics with Uber Freight. Notably, roughly 50% of our freight volumes come from grocery and consumer staples shippers. Freight has successfully disrupted the freight brokerage market with our innovative technology, and is now one of the largest digital freight brokers globally excluding China. We believe there is a large opportunity to be the preferred end-to-end logistics partner for shippers. 80% of shipper decision-makers manage both full truck loads as well as last-mile shipping, and almost 60% of surveyed customers have last-mile needs. With the pending acquisition of Transplace, we have the potential to create the first end-to-end digital logistics platform that could one day power the movement of goods all the way from the point of production to the consumer. While none of us can predict the macro future or the effects of the Delta variant going forward, we continue to see Uber gaining momentum, as we expand our services and footprint and become a bigger part of the daily local habits of millions of consumers, earners, merchants, and shippers all over the world. We see the path to sustainable and improving EBITDA profitability in the next six months, but it's our growth potential over the next 5 to 10 years that has me and this team excited and hungry to Uber On. Now, over to Nelson. Nelson Chai: Thanks, Dara. As Dara mentioned, we are of course still seeing impacts from the virus. However, on balance, we continued to make good progress, with total Gross Bookings growing from June to July. Mobility Gross Bookings were at a $39 billion run-rate in July, with Gross Bookings up 6% month-over-month and 83% recovered vs. July 2019. US and Canada Mobility Gross Bookings were up 7% month-over-month and 76% recovered vs. July 2019, while trips were up 9% month-over-month. EMEA and LatAm were nearly fully recovered on a GB basis vs. July 2019, while APAC was a mixed bag with New Zealand, Hong Kong and Japan growing vs. July 2019, but India, Australia and Taiwan impacted by ongoing or new lockdowns. Delivery Gross Bookings were at a $51 billion run-rate in July, with Gross Bookings up 4% month-over-month, up 56% year-over-year and up over 260% vs. July 2019. Delivery has remained relatively steady since March, even as cities reopened. We are witnessing very healthy trendlines in major markets like Sydney, New York, and London, with Paris as an outlier where we have seen some modest pullback. Next, a word on M&A. Our business has a huge amount of organic momentum, and we will always aim to have the vast majority of our growth be organic. Indeed, our Delivery business has organically grown at a greater than 100% compound growth rate over the past four years. At the same time, we do not hesitate to leverage M&A where appropriate, including both acquisitions and divestitures. Just as we divested several assets last year that along with cost rationalization helped improve our cost base by over $1 billion, we have also made several attractive acquisitions. For instance, our acquisition of Careem has led to markets in the Middle East turning into some of our most profitable markets, operating well above our Mobility long-term margin targets. More recently, our acquisition of Postmates has helped us establish a number one position in LA, the second largest Delivery market in the US, while allowing us to execute organically to establish category leadership in NYC at the same time. We have now largely completed the integration process, and expect to deliver on our synergies targets laid out at the time of the acquisition. Turning to our balance sheet, the past few months have been eventful for Uber's equity investment portfolio, as several of our portfolio companies took steps to become publicly traded companies, including Didi, Zomato, Grab, Aurora, and Joby. At the end of Q2, our equity stakes portfolio was carried at nearly $15 billion, or over $7 per Uber share. As we have previously noted, some of these stakes are more strategic and others are more financial, with Didi being the clearest example of the latter for us. As we emerge from our post-IPO lockup restrictions, we will evaluate some of these positions, as long as the market is reflecting a reasonable value for them. As we have said previously, we don't intend to run an investment firm, but we have sufficient liquidity to ensure that we have the flexibility to maintain those positions with the aim of maximizing value for Uber and our shareholders. Finally, turning to outlook. We were very clear in the spring that our Mobility marketplace in the US was not delivering the magical experience we have all taken for granted, as consumer demand returned faster than drivers as markets opened up. We emphasized that it was not okay and we would proactively invest to reenergize supply. As expected, these efforts impacted our margins and adjusted EBITDA in Q2. At the same time, we also told investors that we have the levers available to achieve total company quarterly Adjusted EBITDA profitability this year. We remain committed to it. The good news is driver supply has been growing and our marketplace dynamics are improving, drivers on our platform are earning more than other alternatives. Our gross bookings continue to grow and in July our margins are already improving, benefiting from our investment in Q2 to accelerate the flywheel. In July, new driver additions on Uber in the US grew 30% month over month, that's right, over 30% month over month, even as we pulled back on incentives and improved our margins. As our investments taper, we expect Mobility to show strong leverage in the back half. For context, in major markets like Australia, Canada, France, and UAE where supply was organically recovering without significant investments from Uber, our Mobility EBITDA margin in Q2 exceeded long-term targets, ranging from 46% to 67% of revenue. In the US, our take rate in Miami, Atlanta, Dallas, Houston, and Phoenix has nearly reverted to pre-COVID levels in July. We expect our delivery business to continue to improve its bottom line while growing at scale. Our Delivery business outside the US and Canada was just shy of breaking even in Q2, while we consciously leaned into the US to improve our category position. We expect to start delivering on our Postmates synergy targets in Q3, and deliver additional leverage through improving network efficiencies and lower incentive spend across our global footprint. We expect Freight to continue to grow and manage its investment levels for the balance of the year and we will continue to manage our corporate overheads. Pre-COVID, we used to provide guidance around our expected annual Gross Bookings and adjusted EBITDA, which we believe provides investors with some transparency on our near-term goals, without being overly focused on quarterly fluctuations. With our business emerging from the pandemic, we believe this quarter is the right time to return to providing guidance around near-term trends. However, there is still a reasonable amount of uncertainty in the world, and as a result, we will provide guidance for Q3 this call. With that context, for Q3, we expect total company Gross Bookings to be between $22 billion and $24 billion and total company adjusted EBITDA to be better than the loss of $100 million. And for Q4 we expect to achieve total company EBITDA profitability. So with that, let's open it up for question. Operator: Thank you. Your first question is from Ross Sandler from Barclays. Your line is open. Ross Sandler: Hey, guys. Thanks for the color on the guidance. Just a question on 3Q for the Rides business. It looks like your EBITDA is doing swing thoughts about $300 million to $350 million to above $500 million or so. So how should we think about the take rates in Rides in 3Q system-wide? You mentioned a few cities there back into the pre-COVID levels. But how do we think about overall take rate? And then what level of driver incentives are baked into that EBITDA run rate? Thanks a lot. Dara Khosrowshahi: So, Ross, as you heard in my prepared comments, we did give some update about what we're seeing in July. And you heard us talk mentioned not only a growth, but the margins are improving. So, if margins and take rate stay where they were just in July. So, we just hold on, and then we continue to grow our volume as we expect. We will be comfortably within the ranges that we're talking about there. So, we're already seeing that pullback and I think you heard my stat that we increased new drivers on the Uber platform in the US by 30% between July versus June. And that's as we pulled back on incentives, because again when we did this, we knew what we wanted to build long-term sustainable profitability and growth. As you saw coming out of the pandemic, our marketplace wasn't operating efficiently or functionally correctly and you heard in my comments. So, we invested on the supply side to get our marketplace healthy again and we're seeing the benefits of that today. So, we are able to pull back on incentives. If you just look at where we are in July and you run that forward we should be able to achieve that kind of range that you're talking about, which is why you saw, I mean put out the guidance on Q3 on the bottom line and also in the investor deck, there's a chart on that which hopefully provide some simple ranges to help guide in terms of where we're getting to. Our next question? Operator: Your next question is from Justin Post from Bank of America. Your line is open. Justin Post: Great. Thanks. I think there might be a little confusion on the investment levels at Uber versus basically Lyft in the US. Could you explain why it might be a little bit different dynamics in the second quarter? And why you may have a bigger profitability pivot? And then maybe if you could -- if you can give us an organic update on Delivery maybe ex-Postmates or some of the acquisitions. Just how you did organically in the quarter? Thank you. Dara Khosrowshahi: Yes. Sure. Listen, we can't speak for Lyft, but I think on balance we were super aggressive as it relates to drive our acquisition levels and when we compare the number of new drivers coming onto the platform quarter-on-quarter, month-on-month, the monthly active drivers directly against at least the numbers that we heard from Lyft, our numbers are higher on a direct comparable basis. So, I think that if you compare our numbers to Lyft again, we're not privy to their numbers. We invested early and aggressively and we're seeing very positive momentum as a result of that early investment and we've been able to pull back as it relates to incentives and revenue margins in July have come up significantly over Q2 and the momentum that we see in driver and courier growth is continuing if not strengthening. So that gives us a lot of confidence, as it relates to Q4 -- Q3 in terms of revenue margins, take rate, and in terms of EBITDA. And we think the Q2 investment that we made was the right investment. And it puts us in very, very good stead as it relates to Q3 and Q4. As far as Eats goes, the vast majority of Eats' growth is organic. So, broadly, we are seeing monthly active eaters on a global basis up about 40% on a year-on-year basis. We are seeing basket sizes of about 10% on a yearly basis. We're seeing frequency of orders up as well. So, the organic growth rates for Uber Eats as well over 50% and most of that is really about continuing to build up audience on a year-on-year basis. We're obviously happy with the Postmates acquisition in terms of being able to drive synergy value and getting to a number one position in LA. We're number one in New York as well, but it's really about the organic growth. And it's about active eaters, it's about basket size and it's about orders per eater and all of those are running positive for Q2. And we think they'll continue to run positive for Q3 and Q4. Justin Post: Great. Thanks, Dara. Dara Khosrowshahi: You're welcome. Next question? Operator: Your next question is from Brian Nowak from Morgan Stanley. Your line is open. Brian Nowak: Great. Thanks for taking my questions. I have two. The first one is on sort of the point around the investment in the drivers. I feel like we pay so much attention to these access incentives. But when you're talking about marketing and on board costs and background checks and vaccination promotion education. Can you just help us better understand a little bit, how big was the investment to bring on more drivers in the quarter? And how do we think about that throughout the course of the year? Just so you can sort of think about 2022 and hopefully, those costs are not as big of a burden? And then secondly on Uber Pass, I appreciate the color on the volumes. So, it was a bit more than areas you think you've had some success in driving adoption Uber Pass, and in your mind still low hanging fruit areas to drive more adoption of that for riders as the rise recovery continues. Thanks. Dara Khosrowshahi: Yes. So, in terms of driver acquisition spend the heaviest driver acquisition spend and incentive spend that we think we will see and we saw was in Q2. We really have to take action very quickly because the marketplace was not at a place that we considered healthy. And we wanted to lean into get wait times down to get service levels down. And all of those metrics in general as far as surge and wait times are moving in the right direction. And in a bunch of cities, southern cities et cetera there actually back to normal. And the vast majority of the spend as it relates to driver acquisition is really incentives. It's about putting dollars in front of drivers, and our top 20 cities drivers for Mobility are making over $40 an active our including just earnings and tips as well. So, the good news is, we're now in a place where we're able to put those -- pull those investments back. If you look at July volume growth will add about $200 million in EBITDA, take rate improvements will add about $150 million in EBITDA, which gives us a lot of confidence as it relates to our Q3 numbers. And we're running positive in these numbers on theoretical there based on actual July numbers. So, I think from that standpoint, the investments were big, I thought investments were well worth it and we're on the positive side of the ledger so to speak. As far as Uber Pass goes, the most important factor for what you asked for us is, what is the retention rate. And what we're seeing is, after some optimization building up the product et cetera, the retention rate for our cohorts that are with us more than six months is now 98% retention rate on a month-on-month basis. So now that we have really perfected the products driven the savings et cetera, we can now lean into member growth, the vast majority of member growth is going to be organic. It's putting the product in front of both our riders and drivers we see the Mobility business coming back is going to be a big benefit and you've heard us talk about how users who use both Mobility and Delivery account for more than 50% of our gross bookings on a global basis. So, now that we have the retention. We can step on the gas in terms of acquisition, but we're really going to take advantage of that 100 million monthly active platform customers and put what's a great product in front of them and we think that we'll get a significant amount of organic traction there. Brian Nowak: Great. Thanks, Dara. Dara Khosrowshahi: Sure. Next question, please. Operator: Your next question is from Mark Mahaney from ISI. Your line is open. Mark Mahaney: Thanks. Question on the drivers, you mentioned those two numbers about that drivers up 75% year-over-year in June and a couple of 100,000 from February to July. Those drivers, do you -- can you tell us how many of those are absolutely new drivers to the platform versus lapsed drivers or people who didn't drive during the COVID crisis and have come back? Dara Khosrowshahi: Yes, Mark. We can. And the majority of drivers who are coming back to the platform or what we call resurrecting drivers they've driven, whether it's in the past number one reason why they had not driven as because of safety concerns vaccines COVID et cetera as vaccination rates go up, we are seeing the resurrecting drivers come back. So, because of the size and scale the business we can reach into our database and we are getting real momentum in terms of those resurrections coming back. So, I think all of the signs are quite positive. Mark Mahaney: And one quick follow-up question, please. Any comments -- updated comments on the regulatory outlook? And particularly on the state of Massachusetts? Dara Khosrowshahi: Yes. When we think of the state of Massachusetts, listen, we think the right answer is our IC+ model, right, which is independent contractor with benefits, our drivers love it, Prop 22 has proven to be incredibly popular with California drivers. The vast majority of drivers prefer IC+ over employment, full-time employment. And with Massachusetts, we're -- I think that voters in California voted for because they had driver support. I see no reason why voters in Massachusetts are going to be any different. We absolutely prefer a legislative outcome in Massachusetts. But if we can get there we'll take you to vote and based on what happened in California, we're quite confident. Mark Mahaney: Okay. Thank you. Dara Khosrowshahi: Sure. Next question? Operator: Your next question is from Doug Anmuth from J. P. Morgan. Your line is open. Doug Anmuth: Thanks for taking my questions. I just wanted to clarify on driver supply, I think in a few months ago, kind of your expectation was that things would kind of return to normal in the third quarter -- by the end of the third quarter, is that kind of still what you're expecting here given your trajectory and the tapering that you've mentioned? And then second on profitability, is that overall in Delivery profit in the fourth quarter? I just wanted to clarify there. Thanks. Nelson Chai: Yes. On the fourth quarter, it's total company EBITDA profitability and then even in the third quarter guidance was total company as well as that includes all aspects of the business, but if you -- on my prepared comments I just fact that we'll continue to make progress and improvement on Delivery and we'll -- and again, we expect our EBITDA profitability of our Mobility business continues to improve. And again we're pretty confident in terms of how we're doing it, which is why we put out the guidance for Q3. Dara Khosrowshahi: But I think if you look in the supplemental slides you also see that our Delivery business outside of the US is an inch away from EBITDA profitability. So, again this is in a theory we're executing on it quite effectively and we're confident in our stance overall profitability. And then lastly, you did mentioned something about driver supply returning. And so, what I would say is that you heard us both made comments in the prepared remarks that again we invested heavily in Q2. We're seeing the benefit even in July, which we talked about the margins are improving. We're adding more drivers and we've pulled back on incentives and what I would suggest is that our ability to achieve those numbers is really just based on take rates where they are in July point forward for the rest of the quarter. And I do think on drivers of audit, yeah, I think that I would add is. It's not just a question on money and less in short-term we have to lean in as it relates to incentives and driver earnings are definitely high and obviously driving is a very flexible way to earn. But I would also underlie the operational and the tech improvements that we have made. So, for example, now we're testing the capability to bring on driver is usually when someone want to drive a person. We have to do background checks, et cetera, and not just in the state that you live and other states as well. We can onboard drivers very quickly to deliver food and as we process all of the regulatory checks that we have to be very careful that we do on the ground in each state. We can then move them over to driving for the Mobility business as well. And that has allowed the on-boarding flows a CRM campaigns that we are driving the incentive technology has allowed us to move from a period of heavy spend and adding drivers to much less heavy spend so to speak and adding both couriers and drivers at the fastest pace that we have for the year. I mean, July looks really good and if August and September or anything like July, we will be in very, very good shape. Doug Anmuth: Great. That's helpful. Thank you. Dara Khosrowshahi: Sure. Operator: Your next question is from Brent Thill from Jefferies. Your line is open. Brent Thill: Thank you. Any color just as it relates to pricing trends for the second half? And how we should think about that? And Dara on the Eats business, if you could just comment on the frequency, I know you had mentioned on the last call that there is perhaps a slowdown in terms of frequency. How are you thinking about now as you look forward? Dara Khosrowshahi: Yes. I'll start with the second first, which is we actually have not seen a material decrease in frequency as it relates to our Delivery business. And we think it's just because of higher portion of our delivery customers are using the Pass. So, we always thought that could be an offset but we weren't sure of the relative offset between task because as non-members become Pass members and they have free trials and especially if they when they graduate into paid membership and then that six-month cohort that has a 98% retention. The number of orders per eater and riders and rides per rider goes up materially. So, the question for us as well, is that positive momentum of membership going to outdo? Let's say, the negative of cities open up. And so far that as the case so that orders per eater has stayed very consistent and people were going out, which is great. But we do think that order per eater there'll be a tailwind in terms of orders per eater as we continue to drive membership. As far as pricing trends in the second half, we are seeing in July and early August. We are seeing pricing ease. It's still up year-on-year, but the pace of the price increases looks like it's easing as we get into a more normalized supply situation, which we think is a great as a real positive for the marketplace. Brent Thill: Great. Thank you. Dara Khosrowshahi: You're welcome. Operator: Your next question is from Deepak Mathivanan from Wolfe Research. Your line is open. Deepak Mathivanan: Hey, guys. Thanks for taking the questions. Just a couple of ones. So, first on Eats EBITDA given the high incremental margins on this business below the revenue margins, how much are you reinvesting into the business right now on non-food and some of these other categories? And what are the trends -- underlying trends in terms of profitability of the core of our food business? And then second question, just a follow-up on the rights take rate. In addition to US grow, you also saw European markets recover during our second quarter with the impact of driver incentives is somewhat low. So, is the 280 basis point sequential decline and take rate predominantly from US, can you give some color on kind of quantifying it by geographical regions? Dara Khosrowshahi: Yes. As far as the Delivery goes, we are spending a fair amount as it relates to Grocery and New Verticals, et cetera. Grocery and New Verticals accounts for about 5% to 6% of our overall GB's and it's growing at pretty healthy rates, but we think that we can get to delivery EBITDA profitability by the end of the year, including Grocery as well. So, yes, we're leading into those parts of the business, but really the Delivery story for us is as a larger percentage of our delivery customers are repeat customers. Our the incentives that we have to put into the marketplace, the marketing spend that we have to spend to the marketplace comes down. Generally, in the U.S., and other markets as the marketplace becomes more efficient and we get kind of more frequency in the marketplace, we're able to drive the cost per trip down because couriers can batch -- we can batch two or three deliveries per courier at the time that they have to be on the trip reduces as we add more restaurants into the marketplace, et cetera. So, the combination of marketing efficiencies that we get and cost per trip efficiencies that we get allow us to continue to invest aggressively in growing our Delivery business. But at the same time improving our margins as well and investing into the grocery business. Nelson Chai: Regarding your question on the take rates, you're right. In APAC and Latin America, we are not expecting any take rate changes, if you will. So, much of the investment was in the US and Canada and there was actually some in Europe as well in order to get drivers back and help build supply. Deepak Mathivanan: Got it. Okay. Thank you so much. Dara Khosrowshahi: Sure. Operator: Your next question is from John Blackledge from Cowen. Your line is open. John Blackledge: Great. Thanks. Two questions. First on the Delta-variant. Could you talk about Mobility trends in the recent weeks and in areas where Delta-variant has spiked in? And also delivery trends along the same lines. And then on Delivery, second question how is Uber differentiating versus other competitors in Grocery and other across different geos? And then what's kind of the goal on the US, given the US at several scale players in that market? Thank you. Dara Khosrowshahi: Yes. I think as it relates to Delta-variant trends, where we have seen shutdowns, we see significant changes as it relates to the power end of the business. So, for example, if you look at our supplemental deck, Australia and Sydney for example where City shut down, we see Mobility obviously take a hit. But we see essentially the opposite happen in the delivery side of the business that's a hedge that we talked about. And even net of the hedge Mobility and Delivery tend to be up pretty significantly on a year-on-year basis. Certainly, if we compare to 2019 volumes as well where we don't see where there aren't shutdowns, it's really hard to tell me you know it's people still want to go out and there may be slight changes in behavior But the non-material changes in behavior and some of the underlying growth that we see in the business takes over. So, certainly the July trends that we saw relative to June were pretty encouraging, but no one can predict what's going to happen with Delta going forward. But so far we're hedged, and the trends that we're seeing are pretty good. As it relates to differentiating and delivery, listen I think that the differentiator that we have is the audience and the Uber platform, right? So, we actually were late in the Delivery game, we were one of the latest players to build up Delivery business. We built it based on the Uber brand, the marketplace matching technology that we have the pricing technology routing et cetera. Three-quarters of essentially elements of what is a ride, and what to delivering ultimately what's going to be a grocery three quarters of the elements that we're building in our stack. Our common elements that our engineers are coding. So, we essentially get to have engineers working on common elements. We got bigger datasets than anyone else. We're able to train our algorithms over much larger data points global data points versus our competitors, which allow us to build a matching, routing, incentives and marketing engine that is more personalized and just have greater capabilities than anyone else. At the same time, we have ops teams on the ground in every single market. We understand the regulatory marketplace the overheads that we have or much lighter than our competitors. It all translates into cost of customer acquisition is lower, lifetime value is higher because of the higher frequency counts that we have with our customers and overheads are low. So, lower cost of customer acquisition, higher lifetime value, lower overheads and greater tech capabilities, that's the differentiator. We built Eats has now number one in eight out of top 10 markets. And we think grocery. We're off to a great start internationally in the US Instacart at the really strong competitor. I think in the US, we're going to be practical. We're going to build out our merchant base and we're going to lean in on the Rides and Eats audience to build up grocer in the US. But it's a bigger audience than anyone else has. So, we think that's a great asset to have. John Blackledge: Thank you. Dara Khosrowshahi: You're welcome. Operator: Your next question is from James Lee of Mizuho. Your line is open. James Lee: Great. Thanks for taking my question. Can you give us an update on competition with Didi given their issues with the regulatory bodies in China? Are you seeing them any pullback from their perspective on the international operations? I know you guys competing within South America and EMEA. Any update would be helpful? Thanks. Dara Khosrowshahi: So, as you know, it's happened very recently and quickly. So, we actually really haven't seen anything material, if you will. Obviously, we compete with them particularly in some parts of Latin America. We had a strong second quarter and continue to have to do well as we're into July and we actually haven't seen anything what I'd call material changes. Those kinds of fluctuations market-by-market, city-by-city but nothing and nothing that I could attach to the broader question surrounding duty. Nelson Chai: Next question, please. Operator: Next question is from Brad Erickson from RBC Capital Markets. Your line is open. Brad Erickson: Hi, there. Thanks for taking the questions. Just one more on the driver incentives. Can you just talk about the confidence level that you can continue to taper here? I think your main competitor here in the U.S., they're going to keep those investment levels fairly high for the foreseeable future. And so I guess I'm just wondering how conservative are your expectations there as we look at what's contemplated into the Q4 guide and the profit target? And then the second one is, just can you remind us just what's built-in also for that profit target regarding advertising? Thanks. Nelson Chai: So, there isn't much more from a run rate standpoint on advertising. It's really coming from Mobility recovery. And so, if you listen to my commentary, I really did center it and the variability is really around the Mobility recovery or the continue to recovery. We did notice that lifted increase some of their incentive spend both in June but particularly in July and as you heard from our commentary based on the results in July, our business is quite strong and our margins have come back. And again as I reiterated a few times on this call already. And as we think about getting to the guidance that we gave you, it's really around not increasing our take rates if you will, between now and the end of the quarter. It's just maintaining where they were today if in this at this point of time in Q3 and then some expected increase on the volume side. So, again, obviously, we can't predict the future, but we feel pretty good about what's going on now and it's happening today in the marketplace where they are investing. As Dara mentioned, we invested early and often to build back our marketplace. And you do get the benefits of the flywheel. You did hear my comments about in July, how we had a 30% new drivers without really incremental or spent incrementalized we're spending a lot more in incentive. And so we just got about the flywheel going and we're getting the benefits from it. I'm not going to comment on what listed and we're not going to do. But again, we feel pretty comfortable for our marketplaces today. Dara Khosrowshahi: And I think the other factor that I would also point out, Brad, is the incentives was the fastest lever that we could pull, but the improvements that we have made in terms of onboarding flow, the CRM campaigns that we're sending to resurrected drivers. We've done a bunch of testing and learning in terms of one incentives work in which ones don't, all of that is resulting in greater efficiency in terms of our being able to add incremental drivers at a lower cost in our being able to hold onto drivers because earnings are really high. The other factor that I would add is that again based on what we can see our spend versus Lyft spend, our base we went to more aggressively. So, I think that when we say we can taper it's off of a more aggressive base. And if they're putting in incentives, it's probably off of a lower base. So, there may not be that much of a difference, but the biggest factor is, we now have the machine working, and listen in July, we pull back incentives and drive our acquisition and courier acquisition look really, really strong. So, all we're giving you is the facts and our capabilities are getting better. And we're getting smarter about how we're spending and that's what gives us a lot of confidence going into Q3 and Q4. Brad Erickson: Great. Thanks. Dara Khosrowshahi: Sure. Operator: Here your next question is from Edward Yruma from KeyBanc Capital Markets. Your line is open. Edward Yruma: Hey, guys. Thanks for taking the question. I wanted to ask a question about reward. I know you guys continue to innovate the program. I guess how successful have you been in terms of driving incremental usage either on the East side or on the Ride side, more importantly getting a consumer to use both sides to be app. Dara Khosrowshahi: Yes. So, on average the past customer is the number of trips Rides and food orders per customer on a monthly basis increases more than 50% on pre-past, post half. So, that included incrementality is pretty significant. We see a lot more crossover and if you look at our supplemental slides the percentage of our total gross bookings now coming from Mobility and Delivery cross-platform users is close to 50% in the US and the UK as well. So, the path is really working and the most important factor on the path is that 98% retention rate. It's a really strong product that's sticky and that gives us the confidence to be able to lean in and grow the number of Pass members that we got. Edward Yruma: Got it. And do you think that that helps keep the customer loyal to your platform versus shopping our other platforms from a price perspective? Dara Khosrowshahi: It's certainly shows up in the orders per month. It's our belief that it's not purely priced. We really invest in the customer service there certainly savings but listen, this is a well-worn path Amazon Prime. I think touched talked a bunch of players after the value of high-frequency type of interactions. And we're not inventing anything here. The good news for us is our Pass structurally because of the Delivery benefits, because of the Ride benefits, now because of the grocery benefits just structurally our Pass can offer more than any other Pass out there and the upside that we can see from frequency is just structurally higher than any other player out there. So, we think our Pass is the upside from it in terms of our business and the retention just a structurally different place versus any of our competitors. Edward Yruma: Great. Thank you. Dara Khosrowshahi: You're welcome. Operator: Your next question is from Tom White of DA Davidson. Your line is open. Tom White: Great. Thanks guys for taking my question. Just hoping you could comment maybe on your expectation we're staying EBITDA profitable after the fourth quarter and maybe whether you really think you should, and I guess specifically, I'm talking about growing businesses and grocery and other Delivery categories. How you're thinking about when you're investing in those long-term very large opportunities versus kind of catered to public equity investors? I would like to see some near-term profitable. Nelson Chai: So, Tom when we talk about getting the EBITDA profitability in Q4, our expectation is that will continue and they'll be sustainable and growing, as we continue to move forward into 2022. So, we believe we'll have enough to invest along some of those other new verticals in other areas and reinvest back in. But we recognize the fact that one of the things we did, if you think about the approach like this quarter we invested ahead up our healthy marketplace. So, we can go given coverage to get our margins back. Have our business is healthy and growing and profitable as we move towards EBITDA profitability. That's pretty important for the company and for Dara from myself that we just sustainably build our business and continue to grow our bottom line as well. Dara Khosrowshahi: Hey, Tom, just mathematically. The other factor that I would point to is our Mobility business is a $50 plus billion run rate via COVID and we're seeing a number of markets back above a 100% of 2019 levels. At $50 billion the Mobility margins as a percentage of gross bookings can be 10% and already is 10% at a bunch of market. So, the earning power today with our kind of growth on our Mobility business is really, it's a $5 billion earnings power today. Delivery business, we have markets that are 5% of gross bookings today. So, the earnings power of that business is another $2.5 billion. Our earning overheads, it's, call it $2 billion on a run-rate basis. So, the earnings power of this Company is very, very significant that allows us to invest in new businesses. It allows us to invest in new verticals, high capacity vehicles, tool, rental, reserve, it allows us to invest in grocery, et cetera. And because of the scale of our business and because of the membership program et cetera, that they talked about, we can invest aggressively and we can be EBITDA profitable and we expect to increased margins for the foreseeable future. And in a tough way COVID kind of prepared us for this, we have to sharpen our kind of operating muscles. But this is not raise the profitability. And then I'm going to go, where we're going to do. This is a race, the profitability and just keep growing and growing and growing. That is absolutely our goal. And I think we got the earnings power to do it. Tom White: Thank you. Dara Khosrowshahi: You're welcome. Operator: Your next question is from Steven Fox from Fox Advisors. Your line is open Steven Fox: Hi, thanks, good afternoon. I was just wondering if you could follow up on a couple of comments that one in particular, as well as the comment about being practical when considering category expansion in the US, it seems like category expansion has a better return on your investment and you could be aggressive while still protecting profit. So any longer term thoughts on how to think of not just groceries, but also the Drizly acquisition coming in other categories as you invest in the next year. Thank you. Dara Khosrowshahi: Yeah, I think on the long term I just point to Uber right look, this is not made up theories right we built, we were late in the Delivery game, we built up Uber Eats using the engineering platform that we built on Mobility putting a bunch of our great product people engineers against that we've built up Freight organically, we're making a big acquisition, but that's another business that we built Grocery and Drizly are very, very close to our Delivery business in terms of use cases. They cover the fast and frequent, people want there liquor fast, they want grocery fast and they're also frequent use cases as well. So we are going to use the family of apps that we have to essentially cross promote one service to the other at the right time targeted to the right person using ML algorithms, so I'll have the same identity. They have the same payment characteristics will have fraud engines routing engines pricing inches all of them running against the bigger dataset than anyone else can. So just if this is a play that we've run a bunch of times and we're very, very confident that we can do the same for grocery and other categories as well. Steven Fox: Great. And just to clarify, you said. These new categories of 5% to 6% of Delivery booking bookings, or total company bookings, I want to clear on that. Thanks. Dara Khosrowshahi: Delivery booking. Steven Fox: Thanks very much. Operator: Next question is from Jason Helfstein from Oppenheimer. Your line is open. Jason Helfstein: Thanks. Just two quick ones, one just, how are you thinking if unemployment benefits are extended, would that change your 3rd quarter outlook, and the number two, I think kind of SoftBank's position in your stock has been closing headache for many? Any thoughts about how that could get resolved. Thanks. Nelson Chai: Well, so first of all, in terms of our guidance is really just based on what we think is going to happen to the extent benefits are, we will manage it. But as you know we've made really good strides right now in the current environment and with the current plans in place. So no, we don't see any changes irrespective of benefits get extended or not. We do see benefit in terms of folks coming back to drive when the benefits do expire. But that's more of an upside, if you will, in terms of SoftBank it's hard for me to comment on SoftBank there. We have good relationship with them, they an investor, there's lots of stuff you read About what they're doing regarding some of their holdings, particularly given what's going on in China. I think much of it is done already. But again they don't really call us for advice on how they're going to trade, and what they're going to go do, but again I think we're fine with whatever they and doing so. Jason Helfstein: Thanks. Operator: Your next question is from Nikhil Devnani from Bernstein. Your line is open. Nikhil Devnani: Hi, thanks for taking my question. A couple if I may. First in the markets where you've invested aggressively and you've seen driver supply improve. Could you see market share gains. Follow again either competitors or alternatives in those regions. And then secondly, in terms of the users that you're adding any way to dimension how many of these are new to Uber altogether or just older users reactivating. Thank you. Nelson Chai: Just so in terms of the supply question again. Yes, there is nothing in terms of are we gaining our -- what I would say is our category -- we call our category position you got, call it, market share, it's very healthy and actually ever the region of our Mobility businesses and it's either been stable to where it was in Q1 or has improved a slightly in every major market and again it, whether it's, it has to do with investment on bringing drivers back or just the competitive nature of the marketplaces or other factors that it's, it is what it is. I can't draw a conclusion between them between different marketplaces. The team is actually doing quite well, executing given the pandemic and people coming back. Dara Khosrowshahi: So what was your second question, I'm sorry, I missed it. Nikhil Devnani: No worries. Second question is just on the users in app fee growth, any way to dimension, how many of these are new users to Uber altogether, how many are just reactivating old users? Dara Khosrowshahi: Yes, I think the majority of both our driver growth and new user growth tends to come from resurrection, again, we got the deepest database that any company has, so we can reach into that database and when we reach into that database with essentially CRM campaigns. So it's a very, very cheap to bring back those resurrecting drivers. The second most significant area of growth is essentially the rides business there on Eats and then now the Eats business actually throwing to rides and mixing new customers, essentially that don't use the other product. And then the third channel is essentially new customers to the platform itself, so it's in that order and listen, we have active we have active initiatives in all three and we can always do better, but certainly the momentum that we're seeing is as positive in all three Balaji Krishnamurthy: Operator, we have time for one more question. Nikhil Devnani: Got it. Thank you. Dara Khosrowshahi: Sure. Balaji Krishnamurthy: Let's take the last. Operator: Your last thank you. Your last question is from Youssef Squali from Truist Securities. Your line is open. Youssef Squali: Great, thank you very much. I have one question for Dara and one question for Nelson. Dara, can you maybe speak to the driver supply driver supply and incentives in states that have ended federal unemployment benefits recently versus those that did not. How much of maybe the pullback that you're seeing and maybe at least partially driven by that. And then, Nelson with profitability, couple of quarters away now literally around the corner. Can you maybe revisit long-term margins of the business across both Rides and Eats that you've shared with us pre-COVID arguably obviously you're in a much, much better financial situation with all the cost savings et cetera. So obviously ex grocery ex-free to the areas still investment, if you could maybe just provide some color on that, that'd be great. Nelson Chai: So I'll go first. We are updating any of our long-term margins today. We want to get through the pandemic and come out and then we understand that it is something that investors want. And so we will address that in that shortly after. And I think Dara gave you had a very high level. The math as you went through it and he used as a percent of GB's and 10% of Gross Bookings for Mobility and 5% for Delivery; and so I can't suggest not a good guide guidepost. But again, we will formally, take a look at it as we get through the pandemic, we wanted to do is just make sure we navigated the recovery is going on, particularly in terms of creating equilibrium on our marketplace, which is what we've been able to do and here through Q2 and starting to see the benefits in Q3. Dara Khosrowshahi: Yes, I think Youssef, to your question on driver incentives. We have been leaning into driver incentives broadly in Q2, we have been able to pull back from driver incentives broadly in Q3. And we have been able to continue to acquire and/or resurrect new drivers broadly in July, even as we pull back incentives just because the machinery and the targeting is working so much better. In states that have ended UI, our marketplace balance in general is in a much healthier condition than states that have not ended the UI. There is additional factor that's coming in the Delta-variant now which may throw things off but it does seem to be a positive to us, we don't know if it's because the UI or other factors. But it seems positive and our driving -- kind of driver incentive efficiency improvements has happened in states where UI has ended as well as states where UI continues. Youssef Squali: Okay, thank you both. Dara Khosrowshahi: You bet. Balaji Krishnamurthy: We can wrap it up guys. Dara Khosrowshahi: All right, thank you everyone for joining us. And lot of hard work from the team in Q2, and we see some pretty positive signals as it relates to Q3 and Q4. So, thanks very much for joining us. Operator: This concludes today's conference call. Thank you for participating. You may disconnect.
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Uber Shares Drop 9% Despite Strong Q3 Earnings

Uber Technologies (NYSE:UBER) reported third-quarter earnings that beat analyst expectations, but its shares fell over 9% intra-day today as investors showed a muted response to the results.

For Q3, Uber posted adjusted earnings per share of $1.20, far exceeding the $0.37 forecast, with revenue rising to $11.19 billion, a 20% year-over-year increase and above the expected $10.99 billion. The company's gross bookings reached $41 billion, up 16% year-over-year, driven by 17% growth in Mobility to $21 billion and a 16% increase in Delivery to $18.7 billion.

Uber achieved a milestone with $1.1 billion in operating income, its first time surpassing the $1 billion mark in a single quarter. Adjusted EBITDA also saw a strong 55% year-over-year rise, hitting $1.7 billion.

Looking ahead, Uber projected Q4 gross bookings between $42.75 billion and $44.25 billion, translating to 16% to 20% growth on a constant currency basis, and expects adjusted EBITDA in the range of $1.78 billion to $1.88 billion.

Uber Shares Jump 10% as Tesla Robotaxi Event Fails to Impress

Uber Technologies (NYSE:UBER) saw its shares rise by 10% on Friday after Tesla's Robotaxi event fell short of investor expectations. Jefferies analysts described the event as a “best-case outcome” for Uber, as Tesla unveiled limited new advancements for its autonomous vehicle plans, specifically around the Cybercab. Tesla announced intentions to introduce full self-driving capabilities in California and Texas by 2025 for the Model 3 and Model Y, with Cybercab production slated for 2027.

Jefferies pointed out that Tesla provided no concrete data or specifics on the scale of its planned robotaxi fleet, leaving the door open for Uber to capture market attention based on its core ridesharing strengths. Uber's role in the autonomous vehicle space could position it as a key partner for AV developers, providing critical market support as they navigate technological and regulatory hurdles.

The analysts forecast that robotaxi technology will help Uber drive down mobility costs, spurring rideshare demand. They believe Uber’s established platform offers AV developers unique advantages, including optimized fleet management, competitive pricing strategies, and support for local compliance and consumer adoption, making it a valuable partner in the evolving autonomous rideshare industry.

Uber Technologies Inc. (NYSE:UBER) Maintains "Buy" Rating Amid Tesla's Robotaxi Challenge

  • Citigroup maintains a "Buy" rating for Uber Technologies Inc. (NYSE:UBER), with a stock price of $77.87.
  • Tesla's announcement of a $25,000 robotaxi could disrupt the rideshare market, posing a challenge to Uber and Lyft.
  • Despite competition, Uber's stock shows resilience with a 2.23% increase, reflecting confidence in its position within the autonomous vehicle ecosystem.

On October 9, 2024, Citigroup maintained its "Buy" rating for Uber Technologies Inc. (NYSE:UBER), with a recommendation to "hold" the stock. At that time, UBER's stock price was $77.87. Uber, a leading player in the rideshare market, faces competition from companies like Lyft and potential new entrants like Tesla.

Tesla's upcoming Robotaxi event on October 10 has the rideshare market on edge. Tesla plans to unveil a low-cost, fully autonomous vehicle, which could disrupt the business models of Uber and Lyft. Despite these concerns, JPMorgan analyst Doug Anmuth remains confident in Uber's future, highlighting its strong position in the autonomous vehicle (AV) ecosystem.

The announcement of Tesla's $25,000 robotaxi poses a direct challenge to Uber and Lyft. Tesla's potential launch of a robotaxi ride-hailing app could make it a formidable competitor. Since Tesla's initial robotaxi announcement in April, Uber's valuation multiples have compressed, indicating pressure on the rideshare giant. However, Anmuth is cautious about how quickly Tesla's vision will materialize.

Despite these challenges, UBER's stock price has shown resilience. The current price of $77.87 reflects a 2.23% increase, or $1.70, from previous levels. Today, the stock has traded between $75.96 and $77.96. Over the past year, UBER has seen a high of $82.14 and a low of $40.09, with a market capitalization of approximately $163.6 billion.

Uber's trading volume on the NYSE is 15,982,716 shares, indicating active investor interest. As highlighted by Citigroup's "Buy" rating, there is confidence in Uber's ability to navigate the challenges posed by Tesla's robotaxi and maintain its position in the rideshare market.

Citigroup's "Buy" Rating on Uber Technologies Inc. Highlights Confidence in Strategic Direction

  • Citigroup reaffirms a "Buy" rating on Uber Technologies Inc. (NYSE:UBER), signaling strong confidence in the company's future, especially following its partnership with Waymo.
  • The partnership with Waymo is expected to position Uber as a leader in autonomous transportation, with the introduction of driverless rides in select cities marking a significant step forward.
  • Uber's stock saw a notable increase, reflecting investor optimism about the company's strategic initiatives and its potential to revolutionize the ride-hailing service with autonomous vehicles.

Citigroup's reaffirmation of a "Buy" rating on Uber Technologies Inc. (NYSE:UBER) underscores the financial institution's confidence in the company's strategic direction, particularly following its expanded partnership with Waymo. This collaboration is seen as a significant positive development, potentially positioning Uber as a leader in the future of autonomous transportation. The partnership, which involves the introduction of driverless rides in select cities, marks a pivotal moment for Uber, aligning with its commitment to innovation and leadership in the evolving transportation sector.

Uber's stock experienced a notable surge, increasing by over 5% to $72.48, following the announcement of the Waymo partnership. This price movement reflects investor optimism about the company's strategic initiatives and its potential to revolutionize the ride-hailing service with autonomous vehicles. The introduction of driverless rides in Austin and Atlanta, utilizing Waymo's fully autonomous, all-electric Jaguar I-Pace vehicles, represents a significant expansion of Uber's robotaxi service. This initiative is expected to make self-driving rides more accessible to the public, enhancing the convenience and safety of urban transportation.

The collaboration between Uber and Waymo leverages each company's strengths, with Uber managing vehicle-related operations and Waymo overseeing the autonomous technology aspects. This strategic alliance is anticipated to accelerate the adoption of autonomous driving technology, offering a glimpse into the future of urban mobility. Waymo's co-CEO, Tekedra Mawakana, expressed enthusiasm about the partnership, emphasizing Waymo's mission to become the world's most trusted driver. This sentiment is echoed by Uber's CEO, Dara Khosrowshahi, who highlighted the opportunity for more customers to experience what he referred to as "that mobility magic."

The financial implications of this partnership are significant, with Uber's stock price reflecting positive investor sentiment. The stock's performance, with a notable increase of 6.45% on the day of the announcement, indicates strong market confidence in Uber's strategic direction and its potential for growth in the autonomous vehicle sector. The company's market capitalization of approximately $152.28 billion, coupled with a trading volume of about 28.7 million shares, underscores its substantial presence in the market and the high level of investor interest in its future prospects.

In summary, Citigroup's "Buy" rating on Uber, following its partnership with Waymo, highlights the potential for transformative growth in the autonomous transportation sector. This strategic collaboration not only positions Uber as a leader in innovation but also signals a significant shift towards safer, more convenient urban mobility solutions. As Uber continues to expand its driverless ride offerings, it remains a compelling investment opportunity for those interested in the future of transportation.

Cantor Fitzgerald Initiates Uber Coverage with Overweight Rating, Citing Strong Growth Potential

Cantor Fitzgerald analysts initiated coverage on Uber (NYSE:UBER) with an Overweight rating and a price target of $90 on the stock.

The analysts’ bullish outlook is driven by Uber's potential for solid growth, with expectations of a mid-teens compound annual growth rate (CAGR) and margin expansion over the next 2-3 years. The analysts highlight Uber’s strong competitive positioning in the rideshare and delivery markets, which are expected to unlock new opportunities for growth and margins through market expansion, partnerships, and mergers and acquisitions in adjacent categories.

While acknowledging the challenges posed by autonomous technology, the analysts believe Uber’s long-term prospects remain positive due to the slow pace of transportation technology advancements and capital demands.

Uber Shares Surge 8% After Better-Than-Expected Q2 Results

Uber Technologies (NYSE:UBER) saw its shares jump more than 8% intra-day today following the release of its second-quarter financial results, which exceeded expectations in revenue and gross bookings.

For Q2, Uber reported earnings per share of $0.18, falling short of the Street estimate of $0.31. However, the company's quarterly revenue hit $10.7 billion, slightly above the projected $10.57 billion.

Gross bookings surged to $39.95 billion, a significant increase from $33.60 billion year-over-year, and surpassed the estimate of $39.71 billion. Adjusted EBITDA rose 71% year-over-year to $1.57 billion, outpacing the forecast of $1.5 billion.

Looking ahead to Q3, Uber anticipates gross bookings to be between $40.25 billion and $41.75 billion, compared to the expected $41.27 billion.

Adjusted EBITDA for the third quarter is expected to range from $1.58 billion to $1.68 billion, aligning with the Street estimate of $1.63 billion. The outlook includes an approximate 4 percentage point currency headwind to the total year-over-year reported growth, with Mobility's year-over-year reported growth facing an estimated 7 percentage point currency headwind.

Uber Technologies Inc. (NYSE:UBER) Reports Strong Second-Quarter Earnings

  • 19% year-over-year growth in gross bookings, highlighting Uber's expanding market presence.
  • Generated $1.47 billion in net cash from operating activities, indicating strong operational efficiency.
  • Achieved a remarkable free cash flow of $1.415 billion, showcasing financial health and liquidity.

Uber Technologies Inc. (NYSE:UBER), a leading player in the ridesharing and mobility services market, recently made headlines with its second-quarter earnings announcement. The company, known for disrupting traditional taxi services and expanding into food delivery and freight logistics, reported a significant 19% year-over-year growth in gross bookings. This growth is a testament to Uber's expanding market presence and its ability to adapt and innovate in a competitive landscape. The news, as highlighted by Investopedia on August 6, 2024, underscores the company's successful quarter, reflecting its strong financial health and operational efficiency.

In the detailed financial breakdown, Uber showcased a robust performance in its quarterly cash flow statement. The company generated $1.47 billion in net cash provided by operating activities. This figure is crucial as it indicates the cash that the company is able to generate from its core business operations, which in Uber's case, includes its ridesharing, food delivery, and freight logistics services. The ability to generate such a significant amount of cash from operating activities speaks volumes about Uber's operational efficiency and the strong demand for its services.

Furthermore, Uber's commitment to growth and expansion is evident through its investments and financial activities. The company invested $242 million in various investing activities and allocated $156 million towards financing activities, with a capital expenditure of $57 million during the period. These investments are strategic moves to bolster Uber's market position, enhance its technology and service offerings, and expand its global footprint. Despite these expenditures, Uber achieved a remarkable free cash flow of $1.415 billion, showcasing its financial health and liquidity. Free cash flow is a critical indicator of a company's ability to generate cash after accounting for capital expenditures, and Uber's strong free cash flow suggests it has ample resources to fund its operations, invest in growth opportunities, and return value to shareholders.

Moreover, Uber's financial prudence is further highlighted by its significant debt repayments amounting to $104 million, which strengthens its balance sheet. Starting the period with $5.485 billion in cash and ending with $5.827 billion reflects a positive cash flow, enhancing the company's liquidity and its ability to meet short-term obligations. The notable increase in working capital by $631 million also contributes to Uber's operational capabilities, ensuring it has the necessary resources to manage day-to-day operations effectively.

Overall, Uber's financials paint a picture of a company that is not only growing but also managing its finances wisely. With effective management of operating activities, investments, and financing decisions, Uber is well-positioned for future growth and stability. This financial performance, coupled with the company's innovative business model and market expansion strategies, makes Uber a noteworthy player in the global mobility and transportation sector.