Uber(US:UBER)2023-02-08 15:49Financial Data and Key Metrics - Gross bookings increased by 26% year-on-year on a constant currency basis [8] - Adjusted EBITDA reached $665 million, exceeding the high-end of guidance for the sixth consecutive quarter [8] - Incremental adjusted EBITDA margin was 12% [8] - The company achieved 2 billion quarterly trips, a new milestone [9] - Mobility consumer base exceeded 100 million for the first time [9] - Over 5.4 million people earned on Uber globally, an all-time high [9] Business Line Data and Key Metrics - Uber One membership program grew to over 12 million members, nearly doubling in 2022 [15] - Members spend 4.1 times more monthly than non-members [16] - Member retention is 15% higher than non-member retention [16] - Globally, 25% of gross bookings come from members, with 40% of Delivery gross bookings in the U.S. coming from members [17] - Delivery incremental margins exceeded 20% in 2022, driven by marketplace efficiency, technology gains, and advertising [28][29] Market Data and Key Metrics - Mobility trip growth is accelerating, and Delivery remains resilient despite macroeconomic uncertainty [10] - The company is expanding upfront fare and destination technology globally, with a 4% increase in conversion rates [37][38] - Reserve, a new Mobility product, accounted for $2 billion in gross bookings and is growing at 100% year-on-year [43] - The Ads business reached a $500 million annual run rate, with 80% year-on-year growth in active advertisers [59] Company Strategy and Industry Competition - The company is focused on leveraging its platform advantage through advertising and membership programs [9] - Uber One is seen as a key moat, with active efforts to push adoption and innovate benefits [15][16] - The company is committed to achieving GAAP operating profit in 2023, having already achieved EBITDA profitability in 2021 and free cash flow positivity in 2022 [23][24] - Competitors are pulling back from unsustainable spending, giving Uber an advantage in the Delivery market [86] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's prospects despite macroeconomic uncertainty, citing strong momentum entering 2023 [10] - The reopening of economies and the shift from product to service spending are seen as tailwinds for the business [34] - The company expects to continue outgrowing the Delivery category, driven by platform advantages, membership, and advertising [88] Other Important Information - The company reduced costs by over $1 billion in 2020, including shutting down businesses and reducing headcount by 20% [18] - Headcount is expected to remain relatively flat in 2023, with selective hiring in tax and Delivery sales [19] - Insurance costs remain a challenge, with no significant progress in reducing costs per trip [49][54] Summary of Q&A Session Question: Uber One's growth strategy and cost efficiency [14] - Uber One is actively promoted across Delivery and Mobility services, with significant growth in membership and retention [15][16] - The company has been focused on cost efficiency since 2020, achieving EBITDA profitability and free cash flow positivity [22][23] Question: Frequency of trips and Delivery incremental margins [26][27] - Frequency of trips is driven by membership growth, platform cross-promotion, new products, and the macro environment [31][32][33][34] - Delivery incremental margins are supported by marketplace efficiency, technology gains, and advertising [28][29] Question: Impact of upfront fare and destination technology [37] - The technology has been a significant release, improving marketplace throughput and reducing cancellations [38][39] Question: New Mobility products and global rollout of upfront fares [42] - Reserve is the most impactful new Mobility product, with significant growth potential [43] - Upfront fares and destinations are expected to be rolled out globally by the end of 2023 [55] Question: FX impact and cost issues [47] - FX has improved, but the company remains focused on achieving GAAP operating profit in 2023 [48] - Insurance costs remain a challenge, with no significant progress in reducing costs per trip [49][54] Question: Delivery margins and advertising growth [56] - Delivery margins are driven by marketplace efficiency, technology, and advertising [57] - The Ads business is growing rapidly, with significant upside potential [59][60] Question: User penetration and stock-based compensation [65][66] - User penetration in the U.S. is lagging on the West Coast but recovering elsewhere [67][68] - Stock-based compensation will be managed judiciously, with a focus on GAAP operating profit [69][70] Question: Uber One profitability and driver supply [74][75] - Uber One members become profitable in their second year, with significant benefits to merchants and advertisers [80][81] - Driver supply is healthy, with inflation driving more people to earn on the platform [77][78] Question: Delivery growth and competitive dynamics [85] - Delivery growth is driven by category adoption, platform advantages, and advertising [86][87] Question: Mobility growth and Freight performance [91] - Mobility growth is supported by shared gains, driver supply, and technology investments [92][93] - Freight performance lagged in Q4 due to industry cyclicality, but the business remains resilient [97][98] Question: Promotional spending efficiency and growth ambitions [101] - The company has been efficient with promotional spending but may strategically invest in growth areas [102][103] - Marketing investments will be targeted to drive growth in strategic products and geographies [105][106]