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Uber Takes $509M Loss - Tops Forecasts

August 5, 2021

Uber reported a Q2 net income of $1.1 billion, but their operating loss was still $1.19 billion. The firm had unrealized gains of $1.4 billion in Didi and $471 million in Aurora. Consequently, the ride hailer reported earnings per share of 58 cents against an anticipated loss of 51 cents per share. As to revenue, Uber took in $3.93 billion with only $3.75 billion expected.

“In Q2 we invested in recovery by investing in drivers and we made strong progress, with monthly active drivers and couriers in the US increasing by nearly 420,000 from February to July,” said Dara Khosrowshahi, CEO. “Our platform is getting stronger each quarter, with consumers who engage with both Mobility and Delivery now generating nearly half of our total company Gross Bookings.”

“We successfully made large investments in Q2 to improve marketplace balance, and we are now well positioned to reach Adjusted EBITDA profitability by Q4,” said Nelson Chai, CFO. “As we make progress towards that important milestone, we expect our Adjusted EBITDA loss in Q3 to improve to less than $100 million in addition to record Gross Bookings between $22 and $24 billion.”

Financial Highlights for Second Quarter 2021

  • Gross Bookings grew 114% year-over-year (“YoY”) to $21.9 billion, or 104% on a constant currency basis, with Mobility Gross Bookings of $8.6 billion (+184% YoY) and Delivery Gross Bookings of $12.9 billion (+85% YoY).
  • Revenue grew 35% QoQ and 105% YoY, or 95% on a constant currency basis. Mobility Revenue grew 90% QoQ (and 11% QoQ excluding the UK accrual in Q1) and 106% YoY. Delivery Revenue grew 13% QoQ and 122% YoY.
  • Net income attributable to Uber Technologies, Inc. was $1.1 billion, including $272 million in stock-based compensation expense. Net income benefited from unrealized gains of $1.4 billion and $471 million due to the revaluation of Uber’s equity investments in Didi and Aurora, respectively.
  • Adjusted EBITDA of $(509) million, down $150 million QoQ but up $328 million YoY, representing a (2.3)% margin as a percentage of Gross Bookings and a (13.0)% margin as a percentage of revenue.
  • Mobility Adjusted EBITDA of $179 million, down $119 million QoQ but up $129 million YoY, representing a 2.1% margin as a percentage of Mobility Gross Bookings and a 11.1% margin as a percentage of Mobility Revenue. Mobility Take Rate and Adjusted EBITDA were impacted by elevated investments in reviving driver availability, particularly in the US.
  • Delivery Adjusted EBITDA of $(161) million improved by $39 million QoQ and by $71 million YoY, representing a (1.2)% margin as a percentage of Delivery Gross Bookings and a (8.2)% margin as a percentage of Delivery Revenue.
  • Unrestricted cash, cash equivalents and short-term investments were $5.0 billion at the end of the second quarter.
 

Financial Highlights for the Second Quarter 2021 (continued)

Delivery

  • Gross Bookings of $12.9 billion: Gross Bookings grew 4% QoQ and 75% YoY on a constant currency basis, with triple digit YoY growth in EMEA and strong double digit YoY growth in U.S. & Canada, LatAm and APAC.
  • Revenue of $1.96 billion: Revenue grew 13% QoQ and 122% YoY. Take Rate of 15.2% grew 120 bps QoQ and 250 bps YoY. The YoY expansion was driven by higher volumes, higher basket sizes, and improved network efficiencies. Additionally, we realized a 250 bps YoY benefit from business-model changes in some countries that reclassify certain payments and incentives as Cost of Revenue.
  • Adjusted EBITDA of $(161) million: Adjusted EBITDA improved $39 million QoQ and $71 million YoY, driven by improved network efficiencies, reduced incentive spend per trip, and cost leverage. Delivery Adjusted EBITDA margin was (1.2)% as a percentage of Gross Bookings, compared to (1.6)% in Q1 2021 and (3.3)% in Q2 2020.

Mobility

  • Gross Bookings of $8.6 billion: Mobility Gross Bookings grew 28% QoQ and 174% YoY on a constant currency basis. On a QoQ basis, Mobility Gross Bookings grew 54% in EMEA, 37% in the U.S. & Canada, and 10% in LatAm, while declining 9% QoQ in APAC due to the severe COVID-19 outbreak in India.
  • Revenue of $1.62 billion: Mobility Revenue grew 11% QoQ, excluding the UK accrual in Q1, and grew 98% YoY on a constant currency basis.
  • Take Rate of 18.7%: Take rate declined 280 bps QoQ, excluding the UK accrual, and declined 710 bps YoY. Take Rate was impacted by elevated investments in reviving driver availability, particularly in the US.
  • Adjusted EBITDA of $179 million: Adjusted EBITDA decreased $119 million QoQ and Adjusted EBITDA margin reached 2.1% of Gross Bookings, compared to 4.4% in Q1 2021 and 1.6% in Q2 2020. EBITDA was impacted by elevated investments in reviving driver availability.

Freight, All Other, and Corporate

  • Freight delivered accelerating growth and improving EBITDA margins: Freight revenue accelerated to 65% YoY, reaching a $1.4 billion annualized run-rate, with strong customer adoption of our technology-first offering driven by Freight’s leading service standards and real-time demand channels. Freight improved Adjusted EBITDA margins 1,130 bps YoY to (11.8)%.
  • Corporate G&A and Platform R&D expenses of $(486) million: This compared to $(417) million in Q1 2021, and $(492) million in Q2 2020. On a QoQ basis, expenses increased due to higher headcount and external legal spend.

GAAP and Non-GAAP Costs and Operating Expenses

  • Cost of revenue excluding D&A: GAAP cost of revenue increased $389 million QoQ and $1.18 billion YoY. Non-GAAP cost of revenue grew $394 million QoQ and $1.21 billion YoY on an absolute dollar basis, driven by an increase in Courier payments and incentives in certain markets; an increase in Mobility driven by volume increases primarily resulting in higher insurance costs; and an increase in Freight carrier payments.
  • GAAP and Non-GAAP operating expenses (The non-GAAP operating expenses measure excludes pro forma adjustments, such as stock-based compensation and restructuring charges):
    • Operations and support: GAAP operations and support increased $9 million QoQ and declined $150 million YoY. Non-GAAP operations and support declined by $2 million QoQ but grew $29 million YoY, with the YoY increase attributable to higher driver background check costs and higher headcount costs from the Postmates and Cornershop acquisitions, offset by lower Mobility employee headcount costs from cost reduction actions in 2020.
    • Sales and marketing: GAAP sales and marketing grew $153 million QoQ and $520 million YoY. Non-GAAP sales and marketing grew $161 million QoQ and $543 million YoY as a result of higher marketing and promotion spend in our Mobility and Delivery businesses.
    • Research and development: GAAP research and development declined $27 million QoQ and $96 million YoY. Non-GAAP research and development grew $7 million QoQ but declined $87 million YoY, with the YoY decline driven by lower employee headcount costs, which was primarily driven by the sales of JUMP and our ATG business in the second quarter of 2020 and the first quarter of 2021, respectively.
    • General and administrative: GAAP general and administrative grew $152 million QoQ and $51 million YoY. GAAP general and administrative grew YoY primarily attributed to a net increase in legal, tax, and regulatory reserve changes and settlements. Non-GAAP general and administrative grew $87 million QoQ and grew $40 million YoY, primarily attributable to an increase in indirect taxes.

Operating Highlights for the Second Quarter 2021

Platform

  • Trips of 1.51 billion: Trips on our platform grew 4% QoQ and were 105% above Q2 2020 levels, with QoQ growth in both Mobility and Delivery trips.
  • Monthly Active Platform Consumers (“MAPC”) reached 101 million: MAPCs grew 3% QoQ and grew 84% YoY to 101 million, with Delivery MAPCs growing roughly 48% YoY. On average, each MAPC spent approximately $72 per month, up $10 YoY and $6 QoQ, and used our platform approximately five times per month during the quarter ended June 30, 2021.
  • Active drivers and couriers: Uber continues to be a platform of choice for people to earn flexibly. Drivers and couriers earned an aggregate $7.9 billion during the quarter, with earnings up 144% YoY, outpacing Uber’s Gross Bookings growth of 114% YoY.
  • Membership: Launched Uber Pass in Australia, New Zealand, and France during the quarter. Pass members now contribute roughly 25% of global Delivery Gross Bookings and 30% of US Delivery Gross Bookings.

Delivery

  • Reopening impact: Delivery continued to demonstrate strong consumer metrics even as COVID-19 restrictions eased around the world. Delivery MAPCs, basket size and order frequency were stable QoQ, and grew nearly 50% YoY, 14% YoY and 10% YoY, respectively.
  • Merchants: Active merchants grew over 60% YoY to exceed 750K in Q2, with several large partnerships announced across Eats and New Verticals. We witnessed strong adoption of our pickup option for merchants, with over 60% of active US restaurants on our platform now offering pickup to consumers. We expect this to be an increasingly valuable offering as the world reopens and consumers engage with restaurants across delivery, pickup and dine-in.
  • Ads rollout continues: Ads are now available in most major Uber Delivery markets globally, and we migrated to a proprietary Ads platform that further improves the margin profile of the offering. Active advertising merchants grew to 84K.
  • Postmates integration: Postmates apps are now largely integrated, with nearly 5 million consumers, 160K couriers and over 25K merchants migrating from the respective Postmates to Uber Eats apps.
  • New Verticals: New Verticals, which includes Uber’s non-restaurant delivery offerings (grocery, convenience, alcohol and others), gained further traction in expansion markets like the US and UK, with US Gross Bookings in June nearly tripling from December 2020 levels, while the UK and France more than doubled over the same period. New Verticals MAPCs reached 3 million during the second quarter driven by strength in our international business. Significant progress in rolling out New Verticals offerings in the US, including partnerships signed with Albertsons, BevMo, and Walgreens, as well as the Gopuff partnership now rolling out across the country.
    • Albertsons partnership: Uber and Albertsons announced a strategic partnership to offer on-demand and scheduled grocery delivery to customers in major US markets where Albertsons operates by the end of 2021. This marks Uber’s first national grocery partnership in the US, more than doubling the availability of our grocery offering to 400+ cities and towns, including San Francisco and Phoenix, with a full national presence with the anticipated addition of 1,200 stores expected by year’s end.
    • Walgreens partnership: Further expanding on our partnership with Walgreens, consumers can now order retail products on Uber Eats from more than 7,800 Walgreens stores for same-day delivery across the United States.
    • Cornershop acquisition: Uber announced an agreement with the minority shareholders of Cornershop to acquire their interests in Cornershop in an all-stock transaction after which Cornershop will become a wholly-owned subsidiary of the Company.
    • FTD partnership: Launched the first-ever delivery app partnership for nationwide flower delivery, making same-day delivery from FTD’s network of florists across the US available in the Uber Eats app.
  • Supporting local restaurants: Uber was proud to continue supporting small restaurants through a partnership with the Local Initiative Support Corporation (LISC), in which we distributed $4.5 million to 900 local restaurants across the country. Only small- and medium-sized restaurants with fewer than five locations were eligible for the microgrants. More than 87% of the recipients of the microgrants were businesses owned by women or people of color, who have been among those hardest hit by the pandemic.

Mobility

  • Airport recovery: Trips to and from airports represented 10% of Mobility Gross Bookings in Q2 2021, growing 67% QoQ and 617% YoY, outpacing the overall segment’s recovery as consumer travel trends improved.
  • Uber Reserve expansion: Expanded reservation functionality to UberX and other economy tiers in April, after proving product market fit and reliability on the Uber Black category over the past few quarters.
  • Uber Rent national expansion: Uber Rent is now available across the US, allowing consumers to easily book a rental car from Avis, Budget, Hertz and dozens of other providers, directly from the Uber app.
  • Pool relaunch: The first relaunch of a reimagined Pool started in Australia in Perth and Sydney. The product is designed to be structurally margin positive, and we are seeing encouraging adoption. In addition, we also launched Pool Chance, a new product where the rider only receives a discount if they are pooled with another rider on the trip, in Adelaide, Brisbane, Gold Coast and Auckland.
  • White House partnership: In May, we announced alongside the White House that we would offer free rides to vaccination sites across the US. As part of this we provided over 200K free rides (up to $25) to and from vaccination providers between May 24-July 4.
  • Walgreens vaccine integration: Uber and Walgreens teamed up to develop a simple in-app vaccine and ride-booking feature where an Uber user could book a vaccine appointment in the Uber app and their ride to get to the appointment all in a few taps.
  • India driver vaccination effort: Driven by our vaccination initiative, more than 100,000 drivers on the Uber platform have now received at least one COVID vaccine shot to help India get moving again.
  • GMB agreement: Uber formally recognized the GMB trade union, which will now be able to represent up to 70,000 Uber drivers across the UK. Uber and GMB will join forces to raise the standard of flexible work across the industry, as Uber continues to be the only major operator offering protections to drivers.
  • Continued Electric Vehicle (EV) progress in London: We announced a partnership with UK tech firm Arrival to design a purpose-built, fully-electric vehicle for the ride-hailing industry and the next phase of our Clean Air Plan, which has already raised more than £135m to support drivers with the cost of switching to EVs.
  • New partnerships to support drivers’ fair transition to EVs: We entered several EV partnerships, including with Kia to give drivers discounts on up to 30,000 EVs across key European markets; with Crédit Agricole to provide drivers with financing solutions to buy EVs; with Total Energies to accelerate the transition of Uber’s drivers towards electric mobility, by providing support for vehicle conversion and easier access to charge points; and with the City of Hamburg to help taxi partners access financial incentives for switching to electric vehicles.
  • Lime on Uber: Uber’s micromobility partnership with Lime is witnessing strong traction, with 2021 year to date trips as of June 30, 2021 surpassing 2020 full year trips. The partnership is currently live in 100 major cities globally with plans to launch nearly all remaining cities of Lime’s existing footprint in Q3, including scooters in NYC, London, and SF.

Freight and Corporate

  • Expansion into Less than Truckload (LtL): Uber Freight expanded into the $65 billion LtL market, providing shippers with a single platform to manage their full truckload and LtL needs, and furthers our journey to supporting shippers from first to final mile.
  • Automating the Load Lifecycle: Uber Freight improved cost per load by 7% QoQ in Q2, with technology driven improvements across load tracking automation, digital billing capture, and streamlined load scheduling.
  • ESG report: On July 22, 2021, Uber released its 2021 ESG Report and 2021 People & Culture (P&C) Report, which highlight our perspectives and performance on the environmental, social, and governance (ESG) issues that matter most to our business and our stakeholders, including progress on our diversity, equity, inclusion and anti-racism efforts in this year’s P&C Report.
  • Didi IPO: On June 30, 2021, Didi priced its initial public offering of American Depositary Shares (“ADSs”) on NYSE at a price per ADS of $14, with four ADSs representing one ordinary share of Didi. Upon the close of the IPO in early July, Uber owns approximately 144 million ordinary shares of Didi, with a carrying value of $7.3 billion for these holdings as of June 30, 2021 (increased from $5.9 billion as of March 31, 2021).

Recent Developments

  • Uber Freight to acquire Transplace: On July 22, 2021, Uber announced that Uber Freight will acquire Transplace for approximately $2.25 billion, consisting of up to $750 million in Uber common stock (to be issued at pre-close VWAP price) and the remainder in cash. Uber Freight’s acquisition of Transplace will create one of the leading logistics technology platforms, with one of the largest and most comprehensive managed transportation and logistics networks in the world. The transaction is subject to regulatory approval and other customary closing conditions. The transaction is expected to close in late 2021 or the first half of 2022.
  • Aurora: On July 15, 2021, Aurora announced that it has agreed to combine with Reinvent Technology Partners Y (NASDAQ: RTPY), a special purpose acquisition company (SPAC). Investors and Aurora partners have committed $1 billion in a PIPE. Uber increased the carrying value of its Aurora investment to $2.1 billion as of June 30, 2021 (from $1.7 billion as of March 31, 2021).
  • Zomato: On July 23, 2021, Zomato completed its initial public offering, listing its shares on Indian stock exchanges. Uber owns 612 million shares of Zomato.
  • Grab: On August 2, 2021, Grab filed a registration statement on Form F-4 with the Securities and Exchange Commission in connection with the previously announced proposed transaction through which it would, if consummated, go public through a merger with Altimeter Growth Corp (NASDAQ: AGC), a special purpose acquisition company. The carrying value of our Grab investment was approximately $3.6 billion as of June 30, 2021 (from $2.3 billion as of December 31, 2020).

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