Uber(US:UBER)2022-09-12 22:27Summary of Uber Technologies, Inc. Conference Call Company Overview - Company: Uber Technologies, Inc. (NYSE: UBER) [1] - Event: Goldman Sachs Communacopia + Technology Conference 2022 [1] Key Industry Insights Pandemic Recovery and Business Position - Uber emerged from the pandemic in a stronger position, pivoting from mobility to delivery, with both segments now at scale and driving profitability [5][6] - The company has exited non-core businesses, focusing on core operations and achieving higher cost discipline, resulting in 12% incremental EBITDA margins, exceeding the target of 7% [5] Demand Trends in Mobility - Demand for mobility is returning to pre-pandemic levels, with trip volumes in August consistent with July and a Labor Day bump aligning with 2019 trends [10][11] - The company expects strong volume growth in Q4, driven by increased consumer outings and back-to-office trends [11] Growth Drivers - Future growth is expected to come from: - Core UberX Business: 50% of growth driven by increased services spending [13] - New Product Innovations: 35% of growth from new offerings like hailable vehicles, enterprise services, and segmented products [14][15] - Geographic Expansion: 15% of growth from markets with lower penetration, such as Germany, Spain, and Japan [16] Driver Supply and Competitive Environment - The driver supply environment is constructive, with active drivers nearing pre-pandemic highs, although still undersupplied by 5% to 10% [18] - Innovations like modular onboarding and upfront pricing have improved driver activation and satisfaction, enhancing competitive positioning [19][20][23] - The competitive landscape is favorable, with competitors facing capital constraints and Uber maintaining a strong market position [25][26] Delivery Business Insights Performance and Growth - Delivery gross bookings grew by 12% on a constant currency basis, with sticky consumer habits observed post-pandemic [30] - Delivery margins are benefiting from marketplace densification and cost per transaction improvements [31][32] New Vertical Opportunities - The grocery category is identified as a significant growth opportunity, with integration of Cornershop functionality into the Uber Eats app [38][39] - New verticals, including grocery, pharmacy, and alcohol delivery, are showing strong growth and profitability [33][34] Advertising Revenue - The advertising business is on track to reach a $1 billion run rate by 2024, currently at a $350 million run rate [32] Strategic Initiatives Super App Strategy - Uber is early in its super app strategy, aiming to increase consumer utility by encouraging multi-product usage and membership [44][46] - Membership programs are showing strong retention and spending advantages, with members spending 2.5 times more than non-members [46] Capital Allocation and Profitability Goals - Uber aims for a top-line growth rate of 22% to 25% and a 7% incremental EBITDA margin, with a focus on disciplined capital allocation [57][58] - The company plans to utilize free cash flow for stock buybacks and investments, targeting investment-grade status for its debt [62] Future Outlook - Uber aims to be an everyday utility for consumers, expanding its capabilities in on-demand delivery and fulfillment services [65][66] - The company is focused on optimizing its technology and marketplace to enhance operational efficiency and customer experience [66]