Uber Technologies, Inc Q1 FY2025 earnings call

• Audience and Engagement: Monthly active consumers grew 14% to 170 million, trips up 18%, and retention rates hit all-time highs globally.
• Financial Performance: Generated record adjusted EBITDA of $1.9 billion, up 35% year-on-year, and free cash flow of $2.3 billion.
• Strategic Initiatives: Launched with Waymo in Austin with ~100 cars, announced 5 AD partnerships in U.S., Europe, and Middle East, partnered with Open Table to integrate dining/delivery/transportation, went live with Delta SkyMiles partnership, and acquired Trendyol Go to supercharge growth in Turkey.
• Market Competitiveness: In mobility, competitive with Lyft in U.S., Bolt in Europe, and DiDi in Latin America; remains market leading in most markets. In delivery, U.S. market is competitive with consolidation in the sector, but Uber has strong organic growth internationally.

Mobility: Monthly active consumers grew 14% to 170 million, trips increased by 18%, and gross bookings grew in line with trips. Delivery: Grocer and retail business accelerated this quarter. Restaurant delivery profit margins are modestly lower than Uber X, but grocery and retail hit breakeven for variable contribution in Q4 and started accreting in Q1. Revenue contribution details weren't explicitly broken down by percentage in the transcript, but key financials for each segment were highlighted.

• Q2 outlook expects strong top line growth combined with stronger profitability growth. - U.S. mobility insurance costs are expected to be a modest headwind of high single digits through 2025, meaningfully lower than in the last two years, with opportunities to pass savings to consumers.

• Insurance and Legal: Insurance costs and legal system abuse in the U.S. pose risks to mobility margins. - Macro-economic uncertainties could potentially impact consumer behavior, though not seen as significant yet.

Q: Just on mobility, as you work to keep prices low, curious what kind of elasticity you think you’re seeing in terms of the response and how that’s showing up in rides?

A: On mobility, the elasticity that we’re seeing is similar to the past - usually a dollar increase in price negatively affects transactions. There's short term and long term elasticity. Sessioning elasticity and longer term habit change elasticity are factors. So far, results with pricing are good as insurance headwinds eased.

Q: On AV, you talked about almost 100 cars in Austin, on the way to hundreds. What are you seeing there in terms of utilization of those Waymos relative to some of their other markets?

A: Very encouraged with Austin AV. Waymo has strong safety track record, consumers love the product, opt-in rates and ratings are healthy. Vehicles in Austin are very busy, with average Waymo in Austin busier than 99% of Austin drivers in terms of trips per day. Going to continue increasing vehicle count in Austin and expand to other areas like Atlanta.

Q: Could you go a bit deeper on the broader competitive landscape, especially around pricing dynamics or incenting supply and demand across both mobility and delivery, and specific geos?

A: Markets are very competitive globally. In mobility, Lyft is a strong domestic competitor; internationally, Bolt in Europe and DiDi in Latin America. Uber is market leading in most markets. In delivery, U.S. market is highly competitive with consolidation, but Uber has strong organic growth internationally, especially in grocery/retail which accelerated this quarter.

Q: On Austin and U.S. mobility, can you walk through how you’re thinking about the size of the fleet or internal timeline for Austin AV and human drivers to match supply-demand? Also, update on U.S. mobility growth by suburbs vs urban?

A: In Austin, focus is on excellent experience and growing fleet. Goal isn't just incremental trips but perfect rides. Over long term, reliable service leads to growth. In U.S. mobility, trip growth has been ~19% YOY for last few quarters. GB growth gap with trips narrowing due to lower insurance costs. Sparser markets (growing faster than core) represent ~20% of mobility trips, showing strong growth in these areas.

Q: On delivery margin and grocery/retail maturity, what does that say about margin expansion cadence?

A: Delivery margins up 3.7 percentage EBs, up 70 BPs YOY. Driven by advertising and scale opex leverage. Grocery/retail hit breakeven for variable contribution in Q4 and started accreting in Q1. Incremental margins for delivery in Q1 were 9%, but balance between growing profitability and top line is key, with steady margin expansion expected.