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Uber Announces Results for First Quarter 2020

May 7, 2020 4:06 PM

Revenue of $3.5 billion, growing 14% year-over-year or 16% on a constant currency basis

Rides Adjusted EBITDA of $581 million

SAN FRANCISCO--(BUSINESS WIRE)-- Uber Technologies, Inc. (NYSE: UBER) today announced financial results for the quarter ended March 31, 2020.

Financial Highlights for First Quarter 2020

“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” said Dara Khosrowshahi, CEO. “Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.”

“Our ample liquidity provides us with substantial flexibility to navigate the current crisis, but we are being proactive and taking actions to emerge stronger and more focused as a company,” said Nelson Chai, CFO. “We have recently exited eight unprofitable Eats markets, significantly reduced the size of our customer support and recruiting teams, and merged our JUMP unit into Lime. Building on the steps we have already taken, we are continuing to look at all levers to ensure our core Rides and Eats businesses emerge from this crisis stronger than ever.”

First Quarter 2020 Financial and Operational Highlights

Three Months Ended March 31,

(In millions, except percentages)

2019

2020

% Change

% Change
(Constant
Currency (1))

Monthly Active Platform Consumers (“MAPCs”)

93

103

11

%

Trips

1,550

1,658

7

%

Gross Bookings

$

14,649

$

15,776

8

%

10

%

GAAP Revenue

$

3,099

$

3,543

14

%

16

%

Adjusted Net Revenue (1)

$

2,761

$

3,256

18

%

19

%

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

$

(1,012

)

$

(2,936

)

(190

)%

Rides Adjusted EBITDA

$

192

$

581

203

%

Adjusted EBITDA (1)

$

(869

)

$

(612

)

30

%

(1)

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.

(2)

Net loss attributable to Uber Technologies, Inc. includes stock-based compensation expense of $11 million in Q1 2019 and $277 million in Q1 2020 as well as pre-tax impairment write-downs of $2.1 billion, partially offset by a pre-tax gain on business divestiture of our Uber Eats India operations of $154 million.

Results by Offering and Segment

Gross Bookings

Three Months Ended March 31,

(In millions, except percentages)

2019

2020

% Change

% Change
(Constant
Currency)

Gross Bookings:

Rides

$

11,446

$

10,874

(5

)%

(3

)%

Eats

3,071

4,683

52

%

54

%

Freight

128

198

55

%

55

%

Other Bets

4

21

*

*

*

*

ATG and Other Technology Programs

—

—

*

*

*

*

Total

$

14,649

$

15,776

8

%

10

%

**

Percentage not meaningful.

GAAP Revenue

Three Months Ended March 31,

(In millions, except percentages)

2019

2020

% Change

% Change
(Constant
Currency)

Revenue:

Rides

$

2,418

$

2,470

2

%

4

%

Eats

536

819

53

%

56

%

Freight

127

199

57

%

57

%

Other Bets

18

30

66

%

67

%

ATG and Other Technology Programs (1)

—

25

*

*

*

*

Total

$

3,099

$

3,543

14

%

16

%

(1)

Including $25 million collaboration revenue from Toyota recognized in Q1 2020.

**

Percentage not meaningful.

Adjusted Net Revenue (1)

Three Months Ended March 31,

(In millions, except percentages)

2019

2020

% Change

% Change
(Constant
Currency (1))

Adjusted Net Revenue:

Rides

$

2,377

$

2,475

4

%

6

%

Eats

239

527

121

%

124

%

Freight

127

199

57

%

57

%

Other Bets

18

30

66

%

67

%

ATG and Other Technology Programs (2)

—

25

*

*

*

*

Total

$

2,761

$

3,256

18

%

19

%

(1)

“Adjusted Net Revenue,” “Rides Adjusted Net Revenue,” “Eats Adjusted Net Revenue” and constant currency are non-GAAP measures as defined by the SEC. “Freight Adjusted Net Revenue,” “Other Bets Adjusted Net Revenue” and “ATG and Other Technology Programs Adjusted Net Revenue” are equal to GAAP net revenue in all periods presented. 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.

(2)

Including $25 million collaboration revenue from Toyota recognized in Q1 2020.

**

Percentage not meaningful.

Net Loss, Adjusted EBITDA and Segment Adjusted EBITDA

Net loss attributable to Uber Technologies, Inc. was $1.0 billion in Q1 2019, which includes $11 million in stock-based compensation expense. Net loss attributable to Uber Technologies, Inc. was $2.9 billion in Q1 2020, which includes pre-tax impairment write-downs of $2.1 billion and $277 million in stock-based compensation expense, partially offset by a pre-tax gain on business divestiture of our Uber Eats India operations of $154 million.

Three Months Ended March 31,

(In millions, except percentages)

2019

2020

% Change

Segment Adjusted EBITDA:

Rides

$

192

$

581

203

%

Eats

(309

)

(313

)

(1

)%

Freight

(29

)

(64

)

(121

)%

Other Bets

(42

)

(63

)

(50

)%

ATG and Other Technology Programs

(113

)

(108

)

4

%

Corporate G&A and Platform R&D (1), (2)

(568

)

(645

)

(14

)%

Adjusted EBITDA (3)

$

(869

)

$

(612

)

30

%

(1)

Excluding stock-based compensation expense.

(2)

Includes costs that are not directly attributable to our reportable segments. Corporate G&A also includes certain shared costs such as finance, accounting, tax, human resources, information technology and legal costs. Platform R&D also includes mapping and payment technologies and support and development of the internal technology infrastructure. Our allocation methodology is periodically evaluated and may change.

(3)

“Adjusted EBITDA” is a non-GAAP measure as defined by 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.

GAAP Revenue by Geographical Region

Three Months Ended March 31,

(In millions, except percentages)

2019

2020

% Change

United States and Canada

$

1,895

$

2,142

13

%

Latin America ("LATAM")

450

497

10

%

Europe, Middle East and Africa ("EMEA")

487

552

13

%

Asia Pacific ("APAC") (1)

267

352

32

%

Total

$

3,099

$

3,543

14

%

(1)

Primarily includes Australia.

Operating Highlights for the First Quarter 2020

COVID-19 Initiatives

Platform

Rides

Other Segments

Recent Developments

Webcast and conference call information

A live audio webcast of our first quarter 2020 earnings release call will be available at https://investor.uber.com/, along with the earnings press release and slide presentation. The call begins on May 7, 2020 at 1:30 PM (PT) / 4:30 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/).

About Uber

Our mission is to ignite opportunity by setting the world in motion.

We revolutionized personal mobility with ridesharing, and we are leveraging our platform to redefine the massive meal delivery and logistics industries.

We are a technology platform that uses a massive network, leading technology, operational excellence and product expertise to power movement from point A to point B. We develop and operate proprietary technology applications supporting a variety of offerings on our platform. We connect consumers with independent providers of ride services, restaurants and food delivery services, public transportation networks, e-bikes, e-scooters and other personal mobility options. We use this same network, technology, operational excellence and product expertise to connect shippers with carriers in the freight industry. We are also developing technologies that will provide autonomous driving vehicle solutions to consumers, networks of vertical take-off and landing vehicles and new solutions to solve everyday problems.

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: developments in the COVID-19 pandemic and the resulting impact on our business and operations, 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. For additional information on other potential risks and uncertainties that could cause actual results to differ from the results predicted, please see our Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent Form 10-Qs or Form 8-Ks filed with the Securities and Exchange Commission. 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 (“GAAP”), we use the following non-GAAP financial measures: Adjusted Net Revenue; Rides Adjusted Net Revenue; Eats Adjusted Net Revenue; Adjusted EBITDA; Adjusted EBITDA margin as a percentage of ANR; and net loss attributable to Uber Technologies, Inc. excluding the impairment write-downs, net of the tax benefit, as well as, revenue and Adjusted Net Revenue growth in constant currency. 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.

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

As of December 31, 2019

As of March 31, 2020

Assets

Cash and cash equivalents

$

10,873

$

8,165

Short-term investments

440

831

Restricted cash and cash equivalents

99

193

Accounts receivable, net

1,214

683

Prepaid expenses and other current assets

1,299

1,242

Total current assets

13,925

11,114

Restricted cash and cash equivalents

1,095

1,171

Collateral held by insurer

1,199

1,107

Investments

10,527

8,687

Equity method investments

1,364

1,299

Property and equipment, net

1,731

1,851

Operating lease right-of-use assets

1,594

1,589

Intangible assets, net

71

560

Goodwill

167

2,566

Other assets

88

146

Total assets

$

31,761

$

30,090

Liabilities, mezzanine equity and equity

Accounts payable

$

272

$

215

Short-term insurance reserves

1,121

1,073

Operating lease liabilities, current

196

205

Accrued and other current liabilities

4,050

5,138

Total current liabilities

5,639

6,631

Long-term insurance reserves

2,297

2,421

Long-term debt, net of current portion

5,707

5,703

Operating lease liabilities, non-current

1,523

1,519

Other long-term liabilities

1,412

1,498

Total liabilities

16,578

17,772

Mezzanine equity

Redeemable non-controlling interests

311

290

Equity

Common stock

—

—

Additional paid-in capital

30,739

31,035

Accumulated other comprehensive loss

(187

)

(395

)

Accumulated deficit

(16,362

)

(19,298

)

Total Uber Technologies, Inc. stockholders' equity

14,190

11,342

Non-redeemable non-controlling interests

682

686

Total equity

14,872

12,028

Total liabilities, mezzanine equity and equity

$

31,761

$

30,090

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 March 31,

2019

2020

Revenue

$

3,099

$

3,543

Costs and expenses

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

1,681

1,786

Operations and support

434

503

Sales and marketing

1,040

885

Research and development

409

645

General and administrative

423

859

Depreciation and amortization

146

128

Total costs and expenses

4,133

4,806

Loss from operations

(1,034

)

(1,263

)

Interest expense

(217

)

(118

)

Other income (expense), net

260

(1,795

)

Loss before income taxes and loss from equity method investment

(991

)

(3,176

)

Provision for (benefit from) income taxes

19

(242

)

Loss from equity method investments, net of tax

(6

)

(12

)

Net loss including non-controlling interests

(1,016

)

(2,946

)

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

(4

)

(10

)

Net loss attributable to Uber Technologies, Inc.

$

(1,012

)

$

(2,936

)

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

Basic

$

(2.23

)

$

(1.70

)

Diluted

$

(2.26

)

$

(1.70

)

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

Basic

453,543

1,724,367

Diluted

453,619

1,724,367

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Three Months Ended March 31,

2019

2020

Cash flows from operating activities

Net loss including non-controlling interests

$

(1,016

)

$

(2,946

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

146

128

Bad debt expense

47

22

Stock-based compensation

11

277

Gain on business divestiture

—

(154

)

Deferred income tax

4

(273

)

Revaluation of derivative liabilities

(175

)

—

Accretion of discount on long-term debt

53

20

Loss from equity method investment

6

12

Unrealized (gain) loss on debt and equity securities, net

(16

)

114

Impairment of debt and equity securities

—

1,863

Impairments of goodwill, long-lived assets and other assets

—

193

Unrealized foreign currency transactions

(4

)

7

Other

2

(10

)

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

Accounts receivable

(210

)

444

Prepaid expenses and other assets

(116

)

29

Collateral held by insurer

—

92

Operating lease right-of-use assets

41

57

Accounts payable

—

(46

)

Accrued insurance reserves

161

77

Accrued expenses and other liabilities

370

(320

)

Operating lease liabilities

(26

)

(49

)

Net cash used in operating activities

(722

)

(463

)

Cash flows from investing activities

Proceeds from sale and disposal of property and equipment

40

1

Purchases of property and equipment

(129

)

(198

)

Purchases of marketable securities

—

(493

)

Proceeds from maturities and sales of marketable securities

—

100

Proceeds from business disposals, net of cash divested

293

—

Acquisition of business, net of cash acquired

—

(1,346

)

Return of capital from equity method investee

—

91

Purchase of non-marketable equity securities

—

(10

)

Other investing activities

—

(1

)

Net cash provided by (used in) investing activities

204

(1,856

)

Cash flows from financing activities

Principal payments on finance leases

(41

)

(60

)

Other financing activities

(5

)

(3

)

Net cash used in financing activities

(46

)

(63

)

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

3

(156

)

Net decrease in cash and cash equivalents, and restricted cash and cash equivalents

(561

)

(2,538

)

Cash and cash equivalents, and restricted cash and cash equivalents

Beginning of period

8,209

12,067

Reclassification from assets held for sale during the period

34

—

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

$

7,682

$

9,529

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

Cash and cash equivalents

$

5,745

$

8,165

Restricted cash and cash equivalents-current

136

193

Restricted cash and cash equivalents-non-current

1,801

1,171

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

$

7,682

$

9,529

Other Income (Expense), Net

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

Three Months Ended March 31,

2019

2020

(Unaudited)

Interest income

$

44

$

38

Foreign currency exchange gains (losses), net

(1

)

(28

)

Gain on business divestiture (1)

—

154

Unrealized gain (loss) on debt and equity securities, net (2)

16

(114

)

Impairment of debt and equity securities (3)

—

(1,863

)

Change in fair value of embedded derivatives

175

—

Other

26

18

Other income (expense), net

$

260

$

(1,795

)

(1)

During the three months ended March 31, 2020, gain on business divestiture represents a $154 million gain on the sale of our Uber Eats India operations to Zomato Media Private Limited (“Zomato”).

(2)

During the three months ended March 31, 2019 and 2020, we recorded changes to the fair value of investments in securities accounted for under the fair value option.

(3)

During the three months ended March 31, 2020, we recorded an impairment write-down of $1.9 billion, primarily related to our investment in Didi and the credit loss allowance recorded on our investment in Grab.

Stock-Based Compensation Expense

The following table summarizes total stock-based compensation expense by function (in millions):

Three Months Ended March 31,

2019

2020

(Unaudited)

Operations and support

$

1

$

25

Sales and marketing

1

14

Research and development

3

167

General and administrative

6

71

Total

$

11

$

277

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

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 non-controlling interests, 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 reserve changes and settlements, (x) goodwill and asset impairments/loss on sale of assets, (xi) acquisition and financing related expenses, (xii) restructuring charges and (xiii) other items not indicative of our ongoing operating performance, including COVID-19 response initiatives related to payments for financial assistance to Drivers personally impacted by COVID-19 and the cost of personal protective equipment distributed to Drivers. Our board and management find the exclusion of the impact of the COVID-19 response initiatives from Adjusted EBITDA to be useful because it allows us and our investors to assess the impact of these response initiatives on our results of operations.

Adjusted Net Revenue (“ANR”). We define Adjusted Net Revenue as revenue (i) less excess Driver incentives, (ii) less Driver referrals and (iii) the addition of our COVID-19 response initiative related to payments for financial assistance to Drivers personally impacted by COVID-19. 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 in transactions in which the Driver is our customer. The impact of the COVID-19 response initiative related to payments for financial assistance is recorded as a reduction to revenue. To help our board, management and investors assess the impact of this COVID-19 response initiative on our results of operations, we are excluding the impact of this COVID-19 response initiative from ANR. Our board and management find the exclusion of the impact of the COVID-19 response initiative from Adjusted Net Revenue to be useful because it allows us and our investors to assess the impact of these response initiatives on our results of operations.

COVID-19 response initiatives. To support those whose earning opportunities have been depressed as a result of COVID-19, as well as communities hit hard by the pandemic, we have announced and implemented several initiatives, including, in particular, payments for financial assistance to Drivers personally impacted by COVID-19 and the cost of personal protective equipment distributed to Drivers. The payments for financial assistance to Drivers personally impacted by COVID-19 are recorded as a reduction to revenue and the cost of personal protective equipment distributed to Drivers is recorded as an expense in our costs and expenses.

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 after we retain our service fee to Drivers. 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 Drivers that exceed the cumulative revenue that we recognize from Drivers with no future guarantee of additional revenue. Cumulative payments to Drivers could exceed cumulative revenue from Drivers in transactions where the Drivers are our customers, as a result of Driver incentives or when the amount paid to Drivers 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 Rides and New Mobility rides, Eats meal deliveries, and amounts paid by Freight shippers, 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.

Monthly Active Platform Consumers (“MAPCs”). We define MAPCs as the number of unique consumers who completed a Rides or New Mobility ride or received an Eats meal on our platform at least once in a given month, averaged over each month in the quarter. While a unique consumer can use multiple product offerings on our platform in a given month, that unique consumer is counted as only one MAPC.

Other Bets. The Other Bets segment consists of multiple investment stage offerings. The largest investment within the segment is our New Mobility offering that refers to products that provide consumers with access to rides through a variety of modes, including dockless e-bikes and e-scooters. It also includes Transit, UberWorks and our Incubator group.

Segment Adjusted EBITDA. We define each segment’s Adjusted EBITDA as segment revenue less the following direct costs and expenses of that segment: (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. Segment Adjusted EBITDA also reflects any applicable exclusions from Adjusted EBITDA.

Segment Adjusted EBITDA margin. We define each segment’s Adjusted EBITDA margin as the segment Adjusted EBITDA as a percentage of segment Adjusted Net Revenue. Segment Adjusted EBITDA margin demonstrates the margin that we generate after direct expenses. We believe that each segment’s Adjusted EBITDA margin is a useful indicator of the economics of our segments, as it does not include indirect Corporate G&A and Platform R&D.

Take Rate. We define Take Rate as Adjusted Net Revenue as a percentage of Gross Bookings.

Trips. We define Trips as the number of completed consumer Rides or New Mobility rides and 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.

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, Adjusted EBITDA; Adjusted EBITDA margin as a percentage of ANR; and net loss attributable to Uber Technologies, Inc. excluding the impairment write-downs, net of the tax benefit as well as revenue and ANR growth rates in constant currency, 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 (i) less excess Driver incentives, (ii) less Driver referrals and (iii) the addition of COVID-19 response initiative related to payments for financial assistance to Drivers personally impacted by COVID-19. We define Rides Adjusted Net Revenue as Rides revenue (i) less excess Driver incentives, (ii) less Driver referrals and (iii) the addition of COVID-19 response initiative related to payments for financial assistance to Drivers personally impacted by COVID-19. We define Eats Adjusted Net Revenue as Eats revenue (i) less excess Driver incentives, (ii) less Driver referrals and (iii) the addition of COVID-19 response initiative related to payments for financial assistance to Drivers personally impacted by COVID-19. Freight Adjusted Net Revenue, Other Bets Adjusted Net Revenue and ATG and Other Technology Programs Adjusted Net Revenue are equal to GAAP net revenue in all periods presented. 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 in transactions in which the Driver is our customer. The impact of the COVID-19 response initiative related to payments for financial assistance to Drivers personally impacted by COVID-19 is recorded as a reduction to revenue. To help our board, management and investors assess the impact of this COVID-19 response initiative on our results of operations, we are excluding the impact of this COVID-19 response initiative from ANR. Our board and management find the exclusion of the impact of the COVID-19 response initiative from Adjusted Net Revenue to be useful because it allows us and our investors to assess the impact of these response initiatives on our results of operations. 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.

Excess Driver incentives

Excess Driver incentives refer to cumulative payments, including incentives but excluding Driver referrals, to Drivers that exceed the cumulative revenue that we recognize from Drivers with no future guarantee of additional revenue. Cumulative payments to Drivers could exceed cumulative revenue from Drivers in transactions in which the Driver is our customer, as a result of Driver incentives or when the amount paid to Drivers for a Trip exceeds the fare charged to the consumer. Further, cumulative payments to Drivers for 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

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.

COVID-19 response initiatives

To support those whose earning opportunities have been depressed as a result of COVID-19, as well as communities hit hard by the pandemic, we have announced and implemented several initiatives, including, in particular, payments for financial assistance to Drivers personally impacted by COVID-19 which are recorded as a reduction to revenue.

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 non-controlling interests, 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 reserve changes and settlements, (x) goodwill and asset impairments/loss on sale of assets, (xi) acquisition and financing related expenses, (xii) restructuring charges and (xiii) other items not indicative of our ongoing operating performance, including COVID-19 response initiatives related to payments for financial assistance to Drivers personally impacted by COVID-19 and the cost of personal protective equipment distributed to Drivers.

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. To help our board, management and investors assess the impact of COVID-19 on our results of operations, we are excluding the impacts of COVID-19 response initiatives related to payments for financial assistance to Drivers personally impacted by COVID-19 and the cost of personal protective equipment distributed to Drivers from Adjusted EBITDA. Our board and management find the exclusion of the impact of the COVID-19 response initiatives from Adjusted EBITDA to be useful because it allows us and our investors to assess the impact of these response initiatives on our results of operations.

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:

Adjusted EBITDA Margin as a Percentage of ANR

We define Adjusted EBITDA margin as a percentage of ANR as Adjusted EBITDA divided by Adjusted Net Revenue.

Constant Currency

We compare the percent change in our current period results from the corresponding prior period using constant currency disclosure. We present constant currency growth rate information to provide a framework for assessing how our underlying revenue and ANR performed excluding the effect of foreign currency rate fluctuations. 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.

Reconciliations of Non-GAAP Measures

Adjusted Net Revenue

The following tables present reconciliations of Adjusted Net Revenue, Rides Adjusted Net Revenue, Eats Adjusted Net Revenue and Adjusted EBITDA to the most directly comparable GAAP financial measures for each of the periods indicated. Freight Adjusted Net Revenue, Other Bets Adjusted Net Revenue and ATG and Other Technology Programs Adjusted Net Revenue are equal to GAAP net revenue in all periods presented.

Three Months Ended March 31,

(In millions)

2019

2020

Adjusted Net Revenue reconciliation:

Revenue

$

3,099

$

3,543

Deduct:

Excess Driver incentives

(303

)

(295

)

Driver referrals

(35

)

(11

)

Add:

COVID-19 response initiative

—

19

Adjusted Net Revenue

$

2,761

$

3,256

Three Months Ended March 31,

(In millions)

2019

2020

Rides Adjusted Net Revenue reconciliation:

Rides revenue

$

2,418

$

2,470

Deduct:

Excess Driver incentives

(12

)

(3

)

Driver referrals

(29

)

(9

)

Add:

COVID-19 response initiative

—

17

Rides Adjusted Net Revenue

$

2,377

$

2,475

Three Months Ended March 31,

(In millions)

2019

2020

Eats Adjusted Net Revenue reconciliation:

Eats revenue

$

536

$

819

Deduct:

Excess Driver incentives

(291

)

(292

)

Driver referrals

(6

)

(2

)

Add:

COVID-19 response initiative

—

2

Eats Adjusted Net Revenue

$

239

$

527

Adjusted EBITDA

Three Months Ended March 31,

(In millions)

2019

2020

Adjusted EBITDA reconciliation:

Net loss attributable to Uber Technologies, Inc.

$

(1,012

)

$

(2,936

)

Add (deduct):

Net loss attributable to non-controlling interests, net of tax

(4

)

(10

)

Provision for (benefit from) income taxes

19

(242

)

Loss from equity method investment, net of tax

6

12

Interest expense

217

118

Other (income) expense, net

(260

)

1,795

Depreciation and amortization

146

128

Stock-based compensation expense

11

277

Legal, tax, and regulatory reserve changes and settlements

—

19

Goodwill and asset impairments/loss on sale of assets

8

193

Uber Eats India transaction and related costs

—

10

COVID-19 response initiatives

—

24

Adjusted EBITDA

$

(869

)

$

(612

)

Investors and analysts: [email protected]

Media: [email protected]

Source: Uber Technologies, Inc.

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