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Uber Reports Second Quarter 2019 Results

August 8, 2019 4:05 PM

SAN FRANCISCO--(BUSINESS WIRE)-- Uber Technologies, Inc. (NYSE: UBER) today announced financial results for the quarter ended June 30, 2019.

“Our platform strategy continues to deliver strong results, with Trips up 35% and Gross Bookings up 37% in constant currency, compared to the second quarter of last year,” said Dara Khosrowshahi, CEO. “In July, the Uber platform reached over 100 million Monthly Active Platform Consumers for the first time, as we become a more and more integral part of everyday life in cities around the world.”

Financial and Operational Highlights

Three Months Ended June 30,

(in millions, except per share amounts, and percentages)

2018

2019

% Change

Gross Bookings

$

12,012

$

15,756

31

%

Monthly Active Platform Consumers (“MAPCs”)

76

99

30

%

Trips

1,242

1,677

35

%

Revenue

$

2,768

$

3,166

14

%

Loss from operations (1), (2)

$

(739

)

$

(5,485

)

**

Net loss attributable to Uber Technologies, Inc. (1), (2)

$

(878

)

$

(5,236

)

**

Diluted net loss per common share

$

(2.01

)

$

(4.72

)

(135

)%

Adjusted Net Revenue (“ANR”) (1), (3)

$

2,574

$

2,873

12

%

YoY % Growth at constant currency & ex-Driver appreciation award (3)

26

%

Core Platform Contribution Margin (as a % of ANR)

14.7

%

8.2

%

**

Adjusted EBITDA (3)

$

(292

)

$

(656

)

(125

)%

(1) Q2 2019 includes a $298 million driver appreciation award made in connection with our initial public offering.

(2) Q2 2019 includes $3.9 billion of stock-based compensation expenses, primarily due to RSU expense recognition in connection with our initial public offering.

(3) “Adjusted Net Revenue,” “YoY % Growth at constant currency & ex-Driver appreciation award” and “Adjusted EBITDA” are non-GAAP measures as defined by the Securities and Exchange Commission (the “SEC”). See “Definitions of Non-GAAP Measures” and “Reconciliations of Non-GAAP Measures” sections herein for an explanation and reconciliations of non-GAAP measures used throughout this release.

** Percentage not meaningful.

“While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction,” said Nelson Chai, CFO. “In Q2, Adjusted Net Revenue grew 26% year-over-year in constant currency and excluding our Driver Appreciation Award, which is an acceleration from Q1. Adjusted EBITDA also improved meaningfully from Q1, driven by a $337 million sequential improvement in Core Platform Contribution.”

Other Highlights

Webcast and conference call information

A live audio webcast of our second quarter 2019 earnings release call will be available at https://investor.uber.com/, along with the earnings press release and slide presentation. The call begins on August 8, 2019 at 2:00 PM (PT) / 5:00 PM (ET). This press release, including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, is also available on that site.

We also provide announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs, on our investor relations website (https://investor.uber.com/).

Forward-Looking Statements

This press release contains forward-looking statements regarding our future business expectations which involve risks and uncertainties. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: competition, managing our growth and corporate culture, financial performance, investments in new products or offerings, our ability to attract drivers, consumers and other partners to our platform, our brand and reputation and other legal and regulatory developments. In addition, other potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on May 13, 2019 and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, that will be filed following this earnings release. All information provided in this release and in the attachments is as of the date of this press release and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

Non-GAAP Financial Measures

To supplement our financial information, which is prepared and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, we use the following non-GAAP financial measures: Adjusted Net Revenue; Core Platform Adjusted Net Revenue; Ridesharing Adjusted Net Revenue; Uber Eats Adjusted Net Revenue; YoY % Growth at constant currency & ex-Driver appreciation award; and Adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.

We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

There are a number of limitations related to the use of non-GAAP financial measures. In light of these limitations, we provide specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.

For more information on these non-GAAP financial measures, please see the sections titled “Key Terms for Our Key Metrics and Non-GAAP Financial Measures,” “Definitions of Non-GAAP Measures” and “Reconciliations of Non-GAAP Measures” included at the end of this release.

We calculate constant currency by translating our current period financial results using the corresponding prior period’s monthly exchange rates for our transacted currencies other than the U.S. dollar.

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts which are reflected in thousands, and per share amounts)

(Unaudited)

As of December 31, 2018

As of June 30, 2019

Assets

Cash and cash equivalents

$

6,406

$

11,744

Restricted cash and cash equivalents

67

137

Accounts receivable, net of allowance of $34 and $39, respectively

919

1,290

Prepaid expenses and other current assets

860

1,129

Assets held for sale

406

—

Total current assets

8,658

14,300

Restricted cash and cash equivalents

1,736

1,809

Investments

10,355

10,415

Equity method investments

1,312

1,370

Property and equipment, net

1,641

1,447

Operating lease right-of-use assets

—

1,337

Intangible assets, net

82

78

Goodwill

153

167

Other assets

51

57

Total assets

$

23,988

$

30,980

Liabilities, mezzanine equity and stockholders’ equity (deficit)

Accounts payable

$

150

$

167

Short-term insurance reserves

941

977

Operating lease liabilities, current

—

180

Accrued and other current liabilities

3,157

4,246

Liabilities held for sale

11

—

Total current liabilities

4,259

5,570

Long-term insurance reserves

1,996

2,217

Long-term debt, net of current portion

6,869

4,526

Operating lease liabilities, non-current

—

1,274

Other long-term liabilities

4,072

1,485

Total liabilities

17,196

15,072

Commitments and contingencies

Mezzanine equity

Redeemable non-controlling interest

—

(14

)

Redeemable convertible preferred stock, $0.00001 par value, 946,246 and zero shares authorized, 903,607 and zero shares issued and outstanding, respectively; aggregate liquidation preference of $14 and $0, respectively

14,177

—

Stockholders’ equity (deficit)

Common stock, $0.00001 par value, 2,696,114 and 5,000,000 shares authorized, 457,189 and 1,697,614 shares issued and outstanding, respectively

—

—

Additional paid-in capital

668

30,193

Accumulated other comprehensive loss

(188

)

(167

)

Accumulated deficit

(7,865

)

(14,104

)

Total stockholders’ equity (deficit)

(7,385

)

15,922

Total liabilities, mezzanine equity, and stockholders’ equity (deficit)

$

23,988

$

30,980

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share amounts which are reflected in thousands, and per share amounts)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2018

2019

2018

2019

Revenue

$

2,768

$

3,166

$

5,352

$

6,265

Costs and expenses

Cost of revenue, exclusive of depreciation and amortization shown separately below

1,342

1,740

2,498

3,421

Operations and support

349

864

721

1,298

Sales and marketing

715

1,222

1,392

2,262

Research and development

365

3,064

705

3,473

General and administrative

638

1,638

1,067

2,061

Depreciation and amortization

98

123

186

269

Total costs and expenses

3,507

8,651

6,569

12,784

Loss from operations

(739

)

(5,485

)

(1,217

)

(6,519

)

Interest expense

(160

)

(151

)

(292

)

(368

)

Other income (expense), net

63

398

5,000

658

Income (loss) before income taxes and loss from equity method investment

(836

)

(5,238

)

3,491

(6,229

)

Provision for (benefit from) income taxes

28

(2

)

604

17

Loss from equity method investment, net of tax

(14

)

(10

)

(17

)

(16

)

Net income (loss) including redeemable non-controlling interest

(878

)

(5,246

)

2,870

(6,262

)

Less: net loss attributable to redeemable non-controlling interest, net of tax

—

(10

)

—

(14

)

Net income (loss) attributable to Uber Technologies, Inc.

$

(878

)

$

(5,236

)

$

2,870

$

(6,248

)

Net income (loss) per share attributable to Uber Technologies, Inc. common stockholders:

Basic

$

(1.99

)

$

(4.72

)

$

1.33

$

(7.97

)

Diluted

$

(2.01

)

$

(4.72

)

$

1.20

$

(7.98

)

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:

Basic

440,958

1,110,704

439,022

783,900

Diluted

441,408

1,110,704

476,394

783,982

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Six Months Ended June 30,

2018

2019

Cash flows from operating activities

Net income (loss) including redeemable non-controlling interest

$

2,870

$

(6,262

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

186

269

Bad debt expense

22

67

Stock-based compensation

81

3,952

Gain on extinguishment of convertible notes and settlement of derivative

—

(444

)

Gain on business divestitures

(3,201

)

—

Deferred income tax

470

(31

)

Revaluation of derivative liabilities

402

(58

)

Accretion of discount on long-term debt

149

78

Payment-in-kind interest

35

10

Loss on disposal of property and equipment

37

13

Impairment on long-lived assets held for sale

79

—

Loss from equity method investment

17

16

Gain on debt and equity securities, net

(1,984

)

(14

)

Non-cash deferred revenue

—

(26

)

Gain on forfeiture of unvested warrants and related share repurchases

(152

)

—

Unrealized foreign currency transactions

48

(5

)

Other

6

(1

)

Change in operating assets and liabilities, net of impact of business acquisitions and disposals:

Accounts receivable

(21

)

(436

)

Prepaid expenses and other assets

(312

)

(178

)

Accounts payable

(52

)

9

Accrued insurance reserve

516

257

Accrued expenses and other liabilities

354

1,140

Net cash used in operating activities

(450

)

(1,644

)

Cash flows from investing activities

Proceeds from insurance reimbursement, sale and disposal of property and equipment

230

41

Purchase of property and equipment

(209

)

(277

)

Purchase of equity method investments

(423

)

—

Proceeds from business disposal, net of cash divested

—

293

Acquisition of businesses, net of cash acquired

(64

)

(7

)

Net cash provided by (used in) investing activities

(466

)

50

Cash flows from financing activities

Proceeds from issuance of common stock upon initial public offering, net of offering costs

—

7,977

Taxes paid related to net share settlement of equity awards

—

(1,368

)

Proceeds from issuance of common stock related to private placement

—

500

Proceeds from exercise of stock options, net of repurchases

15

5

Repurchase of outstanding shares

(9

)

—

Issuance of term loan and senior notes, net of issuance costs

1,478

—

Principal repayment on term loan

(6

)

(13

)

Principal repayment on revolving lines of credit

(197

)

—

Principal payments on capital and finance leases

(34

)

(72

)

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs

1,250

—

Dissolution of joint venture and subsequent proceeds

38

—

Other

(59

)

—

Net cash provided by financing activities

2,476

7,029

Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents

(102

)

12

Net increase in cash and cash equivalents, and restricted cash and cash equivalents

1,458

5,447

Cash and cash equivalents, and restricted cash and cash equivalents

Beginning of period

5,828

8,209

Reclassification from (to) assets held for sale during the period

(6

)

34

End of period, excluding cash classified within assets held for sale

$

7,280

$

13,690

Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents to the condensed consolidated balance sheets

Cash and cash equivalents

$

5,647

$

11,744

Restricted cash and cash equivalents-current

118

137

Restricted cash and cash equivalents-non-current

1,515

1,809

Total cash and cash equivalents, and restricted cash and cash equivalents

$

7,280

$

13,690

Supplemental disclosures of cash flow information

Cash paid for:

Interest, net of amount capitalized

$

43

$

166

Income taxes, net of refunds

161

80

Non-cash investing and financing activities:

Conversion of redeemable convertible preferred stock to common stock upon initial public offering

—

14,224

Conversion of convertible notes to common stock upon initial public offering

—

4,229

Changes in purchases of property, equipment and software recorded in accounts payable and accrued liabilities

(12

)

5

Financed construction projects

86

—

Capital and finance lease obligations

60

150

Settlement of litigation through issuance of redeemable convertible preferred stock

250

—

Common stock issued in connection with acquisitions

93

—

Ownership interest in MLU B.V. received in connection with the disposition of Uber Russia/CIS operations

1,410

—

Grab debt security received in exchange for the sale of Southeast Asia operations

2,275

—

Other Income (Expense), Net

The following table presents other income (expense), net (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

2018

2019

2018

2019

(Unaudited)

Interest income

$

24

$

64

$

42

$

108

Foreign currency exchange gains (losses), net

(37

)

(7

)

(24

)

(8

)

Gain on business divestitures (1)

40

—

3,201

—

Gain (loss) on debt and equity securities, net (2)

—

(2

)

1,984

14

Change in fair value of embedded derivatives

(35

)

(117

)

(402

)

58

Gain on extinguishment of convertible notes and settlement of derivative

—

444

—

444

Other

71

16

199

42

Other income (expense), net

$

63

$

398

$

5,000

$

658

(1)

During the six months ended June 30, 2018, gain on business divestitures primarily includes a $2.2 billion gain on the sale of our Southeast Asia operations to Grab Holding Inc. (“Grab”) and a $954 million gain on the disposal of our Uber Russia/CIS operations recognized in the first quarter of 2018.

(2)

During the six months ended June 30, 2018, gain on debt and equity securities, net represents a $2.0 billion unrealized gain on our non-marketable equity securities related to Didi recognized in the first quarter of 2018.

Stock-Based Compensation Expense

The following table summarizes total stock-based compensation expense by function for the three and six months ended June 30, 2018 and 2019 (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

2018

2019

2018

2019

(Unaudited)

Operations and support

$

2

$

404

$

7

$

405

Sales and marketing

1

212

4

213

Research and development

5

2,557

11

2,560

General and administrative

12

768

61

774

Total

$

20

$

3,941

$

83

$

3,952

Results by Offering and Segment

Three Months Ended June 30,

Six Months Ended June 30,

(in millions, except percentages)

2018

2019

% Change

2018

2019

% Change

Revenue

Ridesharing revenue

$

2,291

$

2,348

2

%

$

4,471

$

4,724

6

%

Uber Eats revenue

346

595

72

%

629

1,131

80

%

Vehicle Solutions revenue

34

3

(91

)%

89

13

(85

)%

Other revenue

26

25

(4

)%

52

57

10

%

Total Core Platform revenue

2,697

2,971

10

%

5,241

5,925

13

%

Total Other Bets revenue

71

195

175

%

111

340

206

%

Total revenue

$

2,768

$

3,166

14

%

$

5,352

$

6,265

17

%

United States and Canada

$

1,493

$

1,776

19

%

$

2,880

$

3,526

22

%

Latin America ("LATAM")

547

417

(24

)%

1,065

867

(19

)%

Europe, Middle East and Africa ("EMEA")

413

502

22

%

801

989

23

%

Asia Pacific ("APAC")

244

276

13

%

495

543

10

%

Total Core Platform revenue

$

2,697

$

2,971

10

%

$

5,241

$

5,925

13

%

Gross Bookings (1)

Ridesharing

$

10,166

$

12,188

20

%

$

19,546

$

23,634

21

%

Uber Eats

1,774

3,386

91

%

3,247

6,457

99

%

Total Core Platform

11,940

15,574

30

%

22,793

30,091

32

%

Other Bets

72

182

153

%

112

314

180

%

Total

$

12,012

$

15,756

31

%

$

22,905

$

30,405

33

%

Adjusted Net Revenue

Ridesharing (2)

$

2,223

$

2,314

4

%

$

4,342

$

4,649

7

%

Uber Eats (3)

220

337

53

%

403

576

43

%

Other

60

27

(55

)%

141

69

(51

)%

Total Core Platform

2,503

2,678

7

%

4,886

5,294

8

%

Other Bets

71

195

175

%

111

340

206

%

Total

$

2,574

$

2,873

12

%

$

4,997

$

5,634

13

%

Contribution Profit (Loss) by Segment(1)

Core Platform

$

369

$

220

(40

)%

$

796

$

103

(87

)%

Other Bets

(28

)

(122

)

**

(48

)

(193

)

**

Total

$

341

$

98

(71

)%

$

748

$

(90

)

(112

)%

(1)

Excluding impact of our 2018 Divested Operations.

(2)

Q2 2019 includes a $287 million driver appreciation award in connection with our initial public offering.

(3)

Q2 2019 includes an $11 million driver appreciation award in connection with our initial public offering.

**

Percentage not meaningful.

Key Terms for Our Key Metrics and Non-GAAP Financial Measures

2018 Divested Operations. We define 2018 Divested Operations as our operations in (i) Southeast Asia prior to the sale of those operations to Grab and (ii) Russia/CIS prior to the formation of our Yandex Taxi joint venture.

Adjusted EBITDA. We define Adjusted EBITDA as net income (loss), excluding (i) income (loss) from discontinued operations, net of income taxes, (ii) net income (loss) attributable to redeemable non-controlling interest, net of tax, (iii) provision for (benefit from) income taxes, (iv) income (loss) from equity method investment, net of tax, (v) interest expense, (vi) other income (expense), net, (vii) depreciation and amortization, (viii) stock-based compensation expense, (ix) certain legal, tax, and regulatory reserves and settlements, (x) asset impairment/loss on sale of assets, (xi) acquisition and financing related expenses, and (xii) restructuring charges.

Adjusted Net Revenue (“ANR”). We define Adjusted Net Revenue as revenue less (i) excess Driver incentives and (ii) Driver referrals. We believe that Adjusted Net Revenue is informative of our top line performance because it measures the total net financial activity reflected in the amount earned by us after taking into account all Driver and restaurant earnings, Driver incentives, and Driver referrals. Adjusted Net Revenue is lower than revenue in all reported periods.

Core Platform. Core Platform refers to one of the two operating segments that we use to manage our business. Core Platform consists primarily of Ridesharing and Uber Eats.

Core Platform Adjusted Net Revenue. We define Core Platform Adjusted Net Revenue as Core Platform revenue less (i) excess Driver incentives and (ii) Driver referrals.

Core Platform Contribution Margin. We define Core Platform Contribution Margin as Core Platform Contribution Profit (Loss) as a percentage of Core Platform Adjusted Net Revenue. Core Platform Contribution Margin demonstrates the margin that we generate after direct expenses. We believe that Core Platform Contribution Margin is a useful indicator of the economics of our Core Platform, as it does not include indirect unallocated research and development and general and administrative expenses (including expenses for our Advanced Technologies Group and Other Technology Programs).

Core Platform Contribution Profit (Loss). We define Core Platform Contribution Profit (Loss) as Core Platform revenue less the following direct costs and expenses of our Core Platform: (i) cost of revenue, exclusive of depreciation and amortization; (ii) operations and support; (iii) sales and marketing; (iv) research and development; and (v) general and administrative. Core Platform Contribution Profit (Loss) also reflects any applicable exclusions from Adjusted EBITDA and excludes the impact of our 2018 Divested Operations.

Driver or restaurant earnings. Driver or restaurant earnings refer to the net portion of the fare or the net portion of the order value that a Driver or a restaurant retains, respectively.

Driver incentives. Driver incentives refer to payments that we make to Drivers, which are separate from and in addition to the Driver’s portion of the fare paid by the consumer. For example, Driver incentives could include payments we make to Drivers should they choose to take advantage of an incentive offer and complete a consecutive number of trips or a cumulative number of trips on the platform over a defined period of time. Driver incentives are recorded as a reduction of revenue to the extent they are not excess Driver incentives (as defined below).

Driver referrals. Driver referrals refer to payments that we make to existing Drivers to refer new Drivers onto our platform. Driver referrals are recorded in sales and marketing expenses, as they represent the receipt of a distinct service of customer acquisition for which there is evidence of fair value.

Excess Driver incentives. Excess Driver incentives refer to cumulative payments, including incentives but excluding Driver referrals, to a Driver that exceed the cumulative revenue that we recognize from a Driver with no future guarantee of additional revenue. Cumulative payments to a Driver could exceed cumulative revenue from a Driver as a result of Driver incentives or when the amount paid to a Driver for a Trip exceeds the fare charged to the consumer. Excess Driver incentives are recorded in cost of revenue, exclusive of depreciation and amortization.

Gross Bookings. We define Gross Bookings as the total dollar value, including any applicable taxes, tolls, and fees, of Ridesharing and New Mobility rides, Uber Eats meal deliveries, and amounts paid by shippers for Uber Freight shipments, in each case without any adjustment for consumer discounts and refunds, Driver and restaurant earnings, and Driver incentives. Gross Bookings do not include tips earned by Drivers. Gross Bookings exclude the impact of our 2018 Divested Operations.

Monthly Active Platform Consumers (“MAPCs”). We define MAPCs as the number of unique consumers who completed a Ridesharing or New Mobility ride or received an Uber Eats meal on our platform at least once in a given month, averaged over each month in the quarter. MAPCs presented for an annual period are MAPCs for the fourth quarter of the year. MAPCs exclude the impact of our 2018 Divested Operations.

Other Bets. Other Bets refers to one of the two operating segments that we use to manage our business. Other Bets in 2017 and 2018 consisted primarily of Uber Freight and in 2018 also included New Mobility.

Take Rate. We define Take Rate as Adjusted Net Revenue as a percentage of Gross Bookings. For purposes of Take Rate, Gross Bookings include the impact of our 2018 Divested Operations.

Trips. We define Trips as the number of completed consumer Ridesharing or New Mobility rides and Uber Eats meal deliveries in a given period. For example, an UberPOOL ride with three paying consumers represents three unique Trips, whereas an UberX ride with three passengers represents one Trip. Trips exclude the impact of our 2018 Divested Operations.

Definitions of Non-GAAP Measures

We collect and analyze operating and financial data to evaluate the health of our business and assess our performance. In addition to revenue, net income (loss), loss from operations, and other results under GAAP, we use Adjusted Net Revenue and Adjusted EBITDA, which are described below, to evaluate our business. We have included these non-GAAP financial measures because they are key measures used by our management to evaluate our operating performance. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Our calculation of these non-GAAP financial measures may differ from similarly-titled non-GAAP measures, if any, reported by our peer companies. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP.

Adjusted Net Revenue

We define Adjusted Net Revenue as revenue less (i) excess Driver incentives and (ii) Driver referrals. We define Core Platform Adjusted Net Revenue as Core Platform revenue less (i) excess Driver incentives and (ii) Driver referrals. We define Ridesharing Adjusted Net Revenue as Ridesharing revenue less (i) excess Driver incentives and (ii) Driver referrals. We define Uber Eats Adjusted Net Revenue as Uber Eats revenue less (i) excess Driver incentives and (ii) Driver referrals. We believe that these measures are informative of our top line performance because they measure the total net financial activity reflected in the amount earned by us after taking into account all Driver and restaurant earnings, Driver incentives, and Driver referrals. Adjusted Net Revenue is lower than revenue in all reported periods.

Excess Driver incentives refer to cumulative payments, including incentives but excluding Driver referrals, to a Driver that exceed the cumulative revenue that we recognize from a Driver with no future guarantee of additional revenue. Cumulative payments to a Driver could exceed cumulative revenue from a Driver as a result of Driver incentives or when the amount paid to a Driver for a Trip exceeds the fare charged to the consumer. Further, cumulative payments to Drivers for Uber Eats deliveries historically have exceeded the cumulative delivery fees paid by consumers. Excess Driver incentives are recorded in cost of revenue, exclusive of depreciation and amortization. Driver referrals are recorded in sales and marketing expenses. Management views Driver incentives and Driver referrals as Driver payments in the aggregate, whether they are classified as Driver incentives, excess Driver incentives, or Driver referrals.

These amounts largely depend on our business decisions based on market conditions. We include the impact of these amounts in Adjusted Net Revenue as it is useful to evaluate how increasing or decreasing incentives would impact our top line performance, and the overall net financial activity between us and our customers, which ultimately impacts our Take Rate.

Adjusted Net Revenue has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for revenue prepared in accordance with GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss), excluding (i) income (loss) from discontinued operations, net of income taxes, (ii) net income (loss) attributable to redeemable non-controlling interest, net of tax (iii) provision for (benefit from) income taxes, (iv) income (loss) from equity method investment, net of tax, (v) interest expense, (vi) other income (expense), net, (vii) depreciation and amortization, (viii) stock-based compensation expense, (ix) certain legal, tax, and regulatory reserves and settlements, (x) asset impairment/loss on sale of assets, (xi) acquisition and financing related expenses, and (xii) restructuring charges.

We have included Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and certain variable charges.

Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:

Reconciliations of Non-GAAP Measures

Adjusted Net Revenue

The following tables present reconciliations of Adjusted Net Revenue, Core Platform Adjusted Net Revenue, Ridesharing Adjusted Net Revenue, Uber Eats Adjusted Net Revenue and Adjusted EBITDA to the most directly comparable GAAP financial measures for each of the periods indicated (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

2018

2019

2018

2019

Adjusted Net Revenue reconciliation:

Revenue

$

2,768

$

3,166

$

5,352

$

6,265

Deduct:

Excess Driver incentives

(163

)

(263

)

(292

)

(566

)

Driver referrals

(31

)

(30

)

(63

)

(65

)

Adjusted Net Revenue

$

2,574

$

2,873

$

4,997

$

5,634

Core Platform Adjusted Net Revenue reconciliation(1):

Core Platform revenue

$

2,697

$

2,971

$

5,241

$

5,925

Deduct:

Excess Driver incentives

(163

)

(263

)

(292

)

(566

)

Driver referrals

(31

)

(30

)

(63

)

(65

)

Core Platform Adjusted Net Revenue

$

2,503

$

2,678

$

4,886

$

5,294

Ridesharing Adjusted Net Revenue reconciliation:

Ridesharing revenue

$

2,291

$

2,348

$

4,471

$

4,724

Deduct:

Excess Driver incentives

(39

)

(9

)

(71

)

(21

)

Driver referrals

(29

)

(25

)

(58

)

(54

)

Ridesharing Adjusted Net Revenue

$

2,223

$

2,314

$

4,342

$

4,649

Uber Eats Adjusted Net Revenue reconciliation:

Uber Eats revenue

$

346

$

595

$

629

$

1,131

Deduct:

Excess Driver incentives

(124

)

(253

)

(221

)

(544

)

Driver referrals

(2

)

(5

)

(5

)

(11

)

Uber Eats Adjusted Net Revenue

$

220

$

337

$

403

$

576

(1) Core Platform Adjusted Net Revenue includes Ridesharing Adjusted Net Revenue, Uber Eats Adjusted Net Revenue, and Other Core Platform Adjusted Net Revenue. Other Core Platform Adjusted Net Revenue, which primarily consists of revenue associated with our Vehicle Solutions activities, does not include excess Driver incentives or Driver referrals and is equal to GAAP Other Core Platform revenue in all periods.

The comparability of the results for the periods presented above was impacted by our 2018 Divested Operations. The 2018 Divested Operations decreased Adjusted Net Revenue by $4 million during the six months ended June 30, 2018 due to excess Driver incentives and Driver referrals for the 2018 Divested Operations being greater than revenue for the 2018 Divested Operations in the period.

YoY % Growth at constant currency & ex-Driver appreciation award

The following table presents the reconciliation of YoY % Growth at constant currency & ex-Driver appreciation award to the most directly comparable GAAP financial measures for the second quarter of 2019 compared to the same period in 2018:

YoY % Growth

YoY % Growth at constant currency & ex-Driver appreciation award

Revenue

14

%

Excess Driver incentives

(2

)%

Driver referrals

—

%

Adjusted Net Revenue

12

%

Add back:

Driver appreciation award

11

%

23

%

Add:

Constant currency impact

3

%

YoY % Growth at constant currency & ex-Driver appreciation award

26

%

Adjusted EBITDA

Three Months Ended June 30,

Six Months Ended June 30,

2018

2019

2018

2019

Adjusted EBITDA reconciliation:

Net income (loss) attributable to Uber Technologies, Inc.

$

(878

)

$

(5,236

)

$

2,870

$

(6,248

)

Add (deduct):

Net income (loss) attributable to non-controlling interest, net of tax

—

(10

)

—

(14

)

Provision for (benefit from) income taxes

28

(2

)

604

17

(Income) loss from equity method investment, net of tax

14

10

17

16

Interest expense

160

151

292

368

Other (income) expense, net

(63

)

(398

)

(5,000

)

(658

)

Depreciation and amortization

98

123

186

269

Stock-based compensation expense

20

3,941

83

3,952

Legal, tax, and regulatory reserves and settlements

252

380

252

380

Driver appreciation award

—

299

—

299

Payroll tax on IPO stock-based compensation

—

86

—

86

Asset impairment/loss on sale of assets

81

—

113

8

Acquisition and financing related expenses

—

—

15

—

Gain on restructuring of lease arrangement

(4

)

—

(4

)

—

Adjusted EBITDA

$

(292

)

$

(656

)

$

(572

)

$

(1,525

)

The comparability of the results for the periods presented above was impacted by our 2018 Divested Operations. During the three and six months ended June 30, 2018, 2018 Divested Operations decreased net income (loss) attributable to Uber Technologies, Inc. by $16 million and $118 million, respectively.

Investors and analysts: [email protected]

Media: [email protected]

Source: Uber Technologies, Inc.

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