Uber Reports First Quarter 2019 Results

Uber Technologies, Inc. (NYSE: UBER) announced financial results today
for the quarter ended March 31, 2019.

“Earlier this month we took the important step of becoming a public
company, and we are now focused on executing our strategy to become a
one-stop shop for local transportation and commerce. In the first
quarter, engagement across our platform was higher than ever, with an
average of 17 million trips per day and an annualized gross bookings
run-rate of $59 billion,” said Dara Khosrowshahi, CEO. “Our global reach
continues to be an important differentiator, and we maintained
leadership of the ridesharing category in every region we serve.”

Financial and Operational Highlights

“Our Q1 2019 results were at or near the high end of the ranges we
shared last month in our IPO prospectus,” said Nelson Chai, CFO. “Our
investments remain focused on global platform expansion and long-term
product and technology differentiation, but we will not hesitate to
invest to defend our market position globally. We maintained stable
regional ridesharing category position in the quarter and started to see
signs of less aggressive pricing by some ridesharing competitors, which
has continued into Q2 2019.”

Other Highlights

• 41% YoY growth of Gross Bookings in Q1 2019 (at constant
  currency and excluding the impact of our 2018 Divested Operations):
  Demonstrating the power of our Platform, total company gross
  bookings grew 41% YoY (at constant currency and excluding the impact
  of divestitures that closed in Q1 2018) similar to Q4 2018’s 43% YoY.
  Foreign currency negatively impacted reported gross bookings growth by
  7% in Q1 2019 and 6% in Q4 2018.
• Core Platform loyalty program launched nationally in the US: Uber
  Rewards, our consumer loyalty program, was expanded throughout the
  United States in March 2019. Under this program, consumers can earn
  points through spending on Uber’s Core Platform. As users accumulate
  points they earn increasing rewards by achieving Gold, Platinum, and
  Diamond status. Benefits can include flexible cancellations and price
  protection for specific routes.
• Driver rewards program expands across the US: We
  launched Uber Pro, our driver rewards program in 10 cities during Q1
  2019, and have now expanded it across the US. By achieving Gold,
  Platinum, or Diamond status, drivers get gas and car maintenance
  discounts and access to a tuition-free college education at Arizona
  State University Online through enrollment reimbursement.
• Improved restaurant selection helps to drive Uber Eats growth:
  After successfully growing restaurant partners to 220,000 in 2018,
  the launch of restaurant self-sign up to become an Uber Eats partner
  has continued to grow independent and small chain restaurant
  selection. We also continue to expand large chain partnerships,
  including with Starbucks in seven large US cities and international
  pilot cities. Our “aggregator” delivery model (restaurants using their
  own couriers) has been launched in select markets and well-received by
  restaurant partners of all sizes.
• Uber Freight tackles opportunity with disruptive technology: In
  a little over a year and a half since launch, our logistics on-demand
  team has contracted with over 36,000 carriers with more than 400,000
  drivers and have served over 1,000 shippers, including global
  enterprises such as Anheuser-Busch InBev, Niagara, Land O’Lakes, and
  Colgate-Palmolive.
• New Mobility (NeMo) launches new JUMP bike hardware and Transit,
  in app public transportation options: We launched a new JUMP
  eBike in January 2019, featuring next generation hardware that
  improved connectivity, is more durable, and has a swappable battery.
  We also launched our first public transit product in partnership with
  the City of Denver in the United States.
• Advanced Technologies Group (ATG) receives investment: Toyota,
  DENSO, and SoftBank Vision Fund agreed to invest an aggregate of $1
  billion in our ATG business. This investment and expanded commercial
  partnership will further deepen the ATG-Toyota collaboration on
  next-generation autonomous vehicles. We currently expect the
  investment to close in July 2019.
• Announced the acquisition of Careem: We reached
  an agreement to acquire Careem, a ridesharing, meal delivery, and
  payments company operating in the Middle East, North Africa and
  Pakistan, for $3.1 billion, consisting of $1.4 billion in cash and
  $1.7 billion in unsecured convertible notes. The acquisition of Careem
  is subject to applicable regulatory approvals and expected to close in
  January 2020. Following closing, Careem will become a wholly-owned
  subsidiary of Uber, operating as an independent company under the
  Careem brand and led by Careem’s current CEO and co-founder.
• Balance sheet strengthened: In May 2019, we raised net
  proceeds, after deducting underwriting discounts and commissions and
  offering expenses, of approximately $8.0 billion in our initial public
  offering. Separately, we received a $500 million private placement
  investment from PayPal and continue to work with the company to drive
  digital payment efficiencies.

Webcast and conference call information

A live audio webcast of our first 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 today 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/).

Forward-Looking Statements

This press release contains forward-looking statements regarding our
future business expectations that 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 include, but are not limited to,
risks and uncertainties related to: 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 March 31, 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; 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 and liquidity 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 and liquidity. 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. We compensate for these limitations by providing
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 section titled “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.

Other Income (Expense), Net

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

Results by Offering and Segment

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 Ridersharing 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:

• Adjusted EBITDA excludes certain recurring, non-cash charges, such as
  depreciation of property and equipment and amortization of intangible
  assets, and although these are non-cash charges, the assets being
  depreciated and amortized may have to be replaced in the future, and
  Adjusted EBITDA does not reflect all cash capital expenditure
  requirements for such replacements or for new capital expenditure
  requirements;
• Adjusted EBITDA excludes stock-based compensation expense, which has
  been, and will continue to be for the foreseeable future, a
  significant recurring expense in our business and an important part of
  our compensation strategy;
• Adjusted EBITDA does not reflect period to period changes in taxes,
  income tax expense or the cash necessary to pay income taxes;
• Adjusted EBITDA does not reflect the components of other income
  (expense), net, which includes interest income, foreign currency
  exchange gains (losses), net, gain on divestitures, gain on debt and
  equity securities, net, and change in fair value of embedded
  derivatives; and
• Adjusted EBITDA excludes certain legal, tax, and regulatory reserves
  and settlements that may reduce cash available to us.

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):

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 $5 million during the first quarter of
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.

Adjusted EBITDA

The comparability of the results for the periods presented above was
impacted by our 2018 Divested Operations. The 2018 Divested Operations
decreased net income (loss) attributable to Uber Technologies, Inc. by
$102 million during the first quarter of 2018.

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