Uber Technologies, Inc Q4 FY2025 Earnings Call

Thank you for your patience. My name is Greg, and I will be your conference operator today. I would like to welcome everyone to today's Uber Q4 and Full Year 2025 Earnings Conference Call. I will now hand the call over to Alax Wang, Senior Director of Investor Relations. Alax?

Thank you, Greg. Thank you all for joining us today, and welcome to Uber's Fourth Quarter and Full Year 2025 Earnings Presentation. On the call today, we have Uber's CEO, Dara Khosrowshahi; CFO, Prashanth Mahendra-Rajah; and incoming CFO, Balaji Krishnamurthy. During today's call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the press release, supplemental slides, and our filings with the SEC, each of which is posted to investor.uber.com. Certain statements in this presentation and on this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our most recent Form 10-K and in other filings made with the SEC. We published our quarterly earnings press release, prepared remarks, and supplemental slides to our Investor Relations website earlier today, and we ask you to review those documents if you haven't already. We will open the call to questions following brief opening remarks from Dara, Prashanth, and Balaji. With that, let me hand it over to Dara.

Thanks, Alax. Q4 was another great quarter for Uber. Trips on our platform accelerated again to a 15 billion annual run rate, and our audience grew to more than 200 million monthly active users. These healthy inputs drove exceptional outputs with gross bookings up 22% year-on-year. Looking at 2025 in full, we had our fifth consecutive year of annual gross bookings over 20%. We generated $8.7 billion in adjusted EBITDA, up 35% and a phenomenal $9.8 billion in free cash flow, up 42%. We started 2026 with a ton of momentum, a scaled and profitable platform, and a clear operating framework to generate durable growth. This gives us the confidence to make targeted growth-oriented investments aligned with the six strategic areas of focus that we outlined last quarter. Of course, one of these areas is autonomous. At this time last year, we laid out our views on AVs in more depth, and we've done that again this quarter. With the benefit of learning from multiple AV deployments around the world, we're more convinced than ever that AVs will unlock a multitrillion-dollar opportunity for Uber. AVs amplify the fundamental strengths of our platform, global scale, deep demand density, sophisticated marketplace technology, and decades of on-the-ground experience matching riders, drivers, and vehicles, all in real time. We also understand that there are reasonable questions being asked and a debate being had about what autonomy means for Uber, both in the short term and the long term. I'd encourage everyone to read our prepared remarks and take a look at our supplemental slides where we lay out our latest views and why we believe our approach is proving to be the right one. Finally, I want to take a moment to say thank you to Prashanth, who we announced this morning will be stepping down as CFO on February 16. Whether it was getting us the investment-grade status, spearheading our first share repurchase program, or steering us through several acquisitions, Prashanth has been a great partner to me and the management team. I wish him all the best in a very exciting new opportunity that he will share more about very soon. I'm also thrilled that Balaji will be stepping up as CFO. Balaji won't be a stranger to many of you on the call. I've worked closely with him for a long time, and I'm confident that he is the right person for this job. He knows our business inside and out. He's a bold thinker and brilliant strategist, and I'm super excited to have him join the management team at this important time for Uber. Now I'll hand it over to Prashanth and Balaji to say a few words, and then we'll take your questions.

Thank you, Boss. First, I want to say thank you to Dara and the entire Uber management team. And of course, my heartfelt congratulations to Balaji, who I know will do a terrific job. Uber is a once in a generation company. It's a dynamic, fast-moving, and innovative place, and I have loved every moment of my time here, and I am extremely bullish about its future. Over the holidays, I had a chance to take stock of where we were and all that we had achieved from delivering phenomenal growth at scale, achieving investment-grade status, and returning significant cash to shareholders. At the same time, a new opportunity presented itself where I could serve America and get back to the country that has given me and my family so much. I look forward to sharing more on that soon. And in the meantime, I'll be working with Dara and Balaji to ensure both a successful and seamless transition. Now let me hand it over to Balaji.

Thank you, Prashanth, for everything you've done for Uber, and thank you, Dara, for the trust you're putting in me. It's an honor to step into this role at this moment. I'm lucky to be building from such a strong base and accelerating core business supported by a huge and increasingly active consumer, owner, and merchant base, large and growing cash flows, which we can use strategically to invest into our future, and world-class talent that is innovating and executing at scale with a get-it-done culture that is always pushing ahead. I look forward to working with Dara, the management team, our board, and with all of you to solidify Uber's position as a once-in-a-generation company that stands the test of time. With that, we'll take your questions.

It looks like our first question today comes from Justin Post with Bank of America. Justin?

Great. I guess I'll ask about the competitive environment on AVs and really appreciate all the slides and prepared remarks. Just wanted to think in the context of 30% of your bookings coming from major cities, which you outlined, how do you think about the impact of AV ramps from, say, Tesla or Waymo in those cities on market share and your profitability? Just high level on those things.

Yes, definitely, Justin. So I think the good news on AV for us is that we view the introduction of AVs as actually an overall growth driver for the markets in which we operate, right? So San Francisco gross bookings for us have accelerated, where we are in Austin and Atlanta as well, our bookings have accelerated. New riders to the platform have been growing faster than the rest of the country. Frequency is super strong as well. So AVs in the marketplace, whether they're competitive in SF or whether they're on our platforms like Austin and Atlanta are turning out to be net positives in growing the overall economic pie. From that standpoint, when we look at AVs, it's fundamentally a positive opportunity as reflected in Waymo's latest valuation of $110 billion, which is pretty incredible on a pre-money basis. But this is not a technology that is going to replace; it's going to augment. And then when we see our own performance as it relates to AVs, we're seeing AVs on our platform at significantly higher utilization than kind of 1P standalone platforms based on the publicly available data. Trips per vehicle per day are 30% higher, ETAs are better as well. So we know that the best product today out there in the market is an AV on the Uber platform as well. Then if you look at the partnerships that we are setting up, whether it's a partnership with Waymo, NVIDIA, or the newest partner Waabi, or Nuro and Lucid which have a production-ready car out there, we expect to be in 15 cities by the end of this year and then expanding beyond that as well, which should actually increase the wave of the AV business that we're seeing behind us. From a top-line basis, we see AV as a net positive for the ecosystem. In terms of margins, I think AV is going to be very similar to other products out there, which is any time we introduce a newer product, we introduce it at a lower margin than, let's say, UberX or Uber Black or Uber Reserve as we're building our liquidity. And then over a period of time, margins improve. For example, in the deals that we're striking today with various partners at scale, we expect to have healthy economics based on current consumer fares and healthy economics mean positive economics. These are deals that we're striking right now. So from a margin standpoint, structurally, we think the AV ecosystem will be a net positive to mobility generally. The margins that we're getting now are good positive margins, and they are fair for our partners, and they're fair for us as well. From a competitive standpoint, at this point, AVs really haven't scaled, right? We added 50 times the trips on the Uber platform this last year than kind of the entire AV industry added. As it scales up, we expect it to be competitive. We think a lot of these players will be on our platform as they realize that utilization is structurally higher in a 3P platform. And listen, competition is nothing new for us. We're the multiproduct player. We are everywhere. We are global as well. With the membership program that really gets people highly engaged with our platform, we're very confident in terms of what we will do in a competitive market, and we're very confident that we're going to be the first choice for AV manufacturers and technology companies to put their assets on our platform.

And Justin, this is Balaji. One additional thing I'd add there is, while you asked about the top market, it's important to remember that 70% of the U.S. is outside of the stock markets and nearly 75% of our U.S. profits come from those markets. Those numbers have been growing because those markets are growing faster than the top 20 cities. I think this is a very common misconception. We've heard many times that Uber's profit pools are concentrated in the top cities, and it could not be further from the truth. As you think about where AVs go in the near term, those non-top 20 markets are going to be unlikely to be addressed by AVs for a long time to come as well. From our perspective, not only are we going to be well positioned in those markets to be the platform of choice for our AV partners, but for the remainder of the U.S., it is going to be played by traditional ridesharing operators such as Uber.

And also, just remind investors that 60% of our mobility gross bookings are international outside of the U.S. as well. So we have a big business in the U.S. outside of the big cities and we have an even bigger business outside of the U.S. as it relates to mobility.

Our next question comes from the line of Eric Sheridan with Goldman Sachs.

First, wishing you the best going forward, Prashanth and congrats Balaji on the new role. I wanted to drill down a little bit in the shareholder letter. You talked about customer growth and the momentum you have coming out of 2025. Can you lay out some of the strategic priorities and growth investments that are top of mind for you guys in terms of maintaining that momentum in terms of new users across your products? And then also reflect on how Uber One can continue to evolve the customer lifetime relationship you have looking out over the next 12, 18 months?

Yes, absolutely. So we have been very, very happy in terms of our user growth. And in terms of the strategy behind the user growth, I'd laid out in terms of there's products, there's use cases, there's demographics, and then there's geographies. We are introducing products along each of those different segments. If you look at the products, for example, our Moto product, it's a two-wheeler product. It is much more affordable and is bringing on significant new segments to our audience. And then we're seeing on occasions, those Moto users, if it's raining or if they're on a date at night, they will upgrade to an UberX or other use cases. So just introducing newer products is one area where we get new consumers. New use cases, a new use case might be Reserve where we thought that Reserve was going to serve people who wanted higher reliability. But it's also a customer base, particularly in the suburbs outside the big cities, that didn't find previously Uber reliability high enough for a time-sensitive trip. Now they do because we offer the Reserve product. That product has higher margins and higher earnings for our drivers as well. At the same time, we're introducing new products for women, for teens, and for older demographics – simpler products that we have to attract those users. Last but not least, I'd say international growth outside of the mainline cities. Generally, growth in less dense markets is about 1.5 to 2 times more than growth in the middle of the big cities. This is a result of new supply coming on first and then new audience coming on after that supply. We're very, very happy with the customer growth, and at this point, we don't see any signal of it slowing down. Of course, AVs are an entirely new use case. There are people who are curious about the product and people who absolutely love the product, and we think AVs can be another opportunity for customer acquisition. Anything to add, Balaji, to that?

I'd just say just adding a quantitative lens on everything Dara said. If you think about where the crux of our growth is coming from, it's still audience growth, which is very encouraging for where this business will go over the next few years. Looking at 2025, we started the year with MAPC growth at about 14% year-on-year. We ended the year with MAPC growth at 18% year-on-year, which is a very strong step up. And there's a lot of runway in front of us still as you look at that MAPC number at over 202 million monthly actives, our annual active base is over 450 million, and we are continuing to improve our penetration of that base. As we're doing that, frequency, while it is growing at a slower rate, that is more of a function of our cohorts coming on and maturing from there. What we are seeing is our new rider cohorts, new eater cohorts are exhibiting much stronger retention than prior U.S. cohorts. This is driven by our focus on early life cycle investments, ensuring that consumers we acquire retain better through the early part of their engagement with Uber's platform. As we introduce them to multiple products that we serve our consumers with, currently, 40% of consumers in Q4 were using more than one Uber product. Our membership program, which has been a key investment area, continues to grow 55% year-on-year, supercharging that cohort that we are acquiring.

Our next question is from the line of Brian Nowak with Morgan Stanley.

I have two questions. One on autonomous, one on capital returns. Dara, I appreciate all the color on autonomous in the letter. I wanted to give you one more shot to refute one of the other concerns. The history of technology with capital-intensive, heavy investment technologies often kind of shows the technology will migrate toward winner-take-most at scale. Can you walk us through why you don't think AV will go that way when safety is so important to scaling AV over the next 3, 5, 10 years? That's the first one. And then the second one, maybe for Balaji or Prashanth. I think throughout 2025, you talked about sort of a 50% free cash flow commitment to shareholders. Are you still maintaining that philosophy? Or what is the reinvestment versus capital return philosophy as we look at 2026?

Yes, absolutely. As it relates to AV and winner-take-most, I think this is true of technology platforms. I would remind you that as it relates to mobility and now increasingly delivery, Uber is the winner who has taken most. That wasn't always the case. It is because of how we built, the fact that we have this international footprint, the fact that we go broader than our competitors and the fact that we are a multiproduct and have built those products organically within the system. We are the winner-take-most product as it relates to mobility and delivery certainly outside of the U.S. I think hardware is fundamentally different in that if you look at the OEM industry, there are many car manufacturers and manufacturing is local with local champions. If you look at the trend in AV, it looks more and more like our vision of the future, which is that ten years from now, every single car, a new car sold, will have full L3 and L4 software attached to it. In that kind of world, we think we will have many suppliers, not just one or two. If you look at AV now, there are multiple players getting to the finish line. Obviously, Waymo is safer than humans, which is terrific. You have players like Pony, WeRide, and Baidu in China developing AV-ready technology, whom we are partnering with outside of the U.S. There are many other partners in the U.S., Waabi, Wayve in the U.K., and Nuro here in the U.S. and Avride as well. The big player, NVIDIA, is developing a hardware platform, sensor stack, and compute stack, which we believe will be the industry standard and is now actually building out full self-driving software as well. With all of the players in the space, the fact that it has been solved multiple times by multiple software providers with NVIDIA setting an industry standard, we're confident that AVs will be a net positive to the mobility sector. In other words, it will expand the category. We are the winner-take-most player as it relates to 3P and we think that the marketplace will be very large and healthy.

Sure. We did lay out our capital allocation priorities in quite a lot of detail, but just to quickly summarize how we think about this. Our first priority is to ensure that we are making appropriate reinvestments behind the opportunity we're seeing in our core business. We are in a good position where even as we make those investments, we are throwing off a lot of cash as we said, we were already generating about $10 billion of free cash flows, growing 40% as of last year. That gives us a lot of room to make investments in ensuring that we are advancing our AV strategy and potentially evaluating any selective bolt-on M&A opportunities as they come along. That still leaves us with significant cash that we can return to shareholders. This is not a trade-off for us. We're able to do all of these things in parallel. As for your question on whether we would be returning 50% of free cash flows, based on our current visibility into what we're seeing as well as the fact that our stock remains cheap, we will continue to be aggressive buyers of our stock, and you should expect that it continues at a steady cadence. We are on track to reducing our share count by a healthy amount as we go forward.

The good news here is with our free cash flow generation and our expectation of the free cash flow generation increasing going forward, we can do both. We can invest appropriately as it relates to growth. At the same time, we will continue to reduce the share count because ultimately, all of us are shareholders, and we think right now the opportunity to buy back shares is pretty great.

And our next question comes from the line of Mark Mahaney with Evercore.

Two questions. You talked about acceleration in the U.S. trips and gross bookings in 2026. So that's a little unusual. You don't normally see businesses at your scale accelerating. Could you go through a couple of factors? The biggest reasons for confidence in that acceleration. And then I know this question has come up in the past regarding your willingness to deploy capital into AV fleets. Any changes in your thinking about how capital intensively you want to run your AV business going forward?

Sure. Thanks, Mark. I'll take U.S. acceleration and Dara will take the second question. So when you think about our U.S. business, what we have seen for the last few years is that we had a lot of inflationary impacts from insurance, which we had passed on to the market in the form of consumer pricing, driving a slowdown in the business. Throughout the last year, we have held prices relatively consistent. Looking forward, with the amount of insurance reform and product-driven hundreds of millions of dollars of cost savings that we are seeing, we are in a position where insurance is going from a deleveraging cost item to something that gives us leverage. This allows us to hold prices flat or better in certain markets. Such price consistency has a huge impact on long-term elasticity of demand. The longer we can do this, the better outcomes for us become. We feel confident in our core business accelerating in the U.S. There is also our barbell strategy impacting opportunities here. We talked about both the low end and the high end of our business growing 40% over the last year. That is true even in the U.S. and products like Wait & Save are showing a lot of momentum as well as products on the other hand, XXL shuttle expansion at airports. Additionally, our expansion into sparser markets, which grow as much as 1.5x faster than dense markets, is also an important area for us as it is only 20% of global mobility trips with ample opportunity.

Yes. In terms of the investments we're making in AV and the capital efficiency, we're certainly investing in the players in AV in terms of the software players. For example, our latest investment was in Waabi, a leading AV provider of trucks and is entering passenger mobility as well, which is great. As part of that investment, the first 25,000 passenger vehicles that they produce on their platform will be exclusive to Uber. We are investing capital to guarantee supply going forward. Much of that supply is going to be on profitable economics, which is fantastic. We will continue making these kinds of commitments like with Nuro, Lucid, and others to come. At the same time, we're talking with financial players, the statistics we see regarding AVs and the production of AVs, usage rates and profit will allow us to continue running the largest fleet ecosystem. We will be able to scale operations effectively and have a lower variable cost basis as we work with fleet partners to maintain and charge their vehicles. We are in discussions with financial institutions and banks who are lending to our fleet partners, who typically are going out to buy EVs that will transition into AVs too.

And our next question comes from the line of Doug Anmuth with JPMorgan.

Just on AVs, can you talk about how you see data and simulation accelerating the path to market for those kind of AV 2.0 software players? And then on the 15 markets that could be deployed by the end of this year, what are the key unlocks or hurdles just to get those up and running either through regulatory, manufacturing, safety, or anything else?

Yes, absolutely, Doug. We're very excited about data and simulation generally. SIM capabilities are improving with larger models and stronger compute. The newer SIM capabilities can take pieces of data and simulate thousands of scenarios to create long-tail cases that can be difficult in the real world. Real-world data is essential, and we are well positioned to collect it. We're partnering with NVIDIA to build a real-world data collection factory collecting over 3 million hours of data specific to AVs on passenger pickups, drop-offs, and all the complexities Uber drivers face. We and NVIDIA will be collecting that data to provide it to our partners as well. If there's one area where a smaller player has a disadvantage, it’s data, but we are working to democratize AV data with NVIDIA. You combine that with advanced simulation capabilities that many partners are developing, and you get a faster roadmap to AV readiness for many players. Regarding the 15 cities we expect to be in, we need to strike deals with partners, ensure capital for vehicles, set up depots, real estate, and charging infrastructure, all while involving our government relations team to work with regulators on the ground. We also have to collaborate with our partners on the safety case; safety is crucial for AVs. We usually launch with a driver in the vehicle and then, over time, like we have in Abu Dhabi, we move to full AV capability without a driver.

While you're thinking about launching, we also need to consider scalability. Launching will have all of the work that Dara discussed, but a big focus will be avoiding bottlenecks down the road. In parallel, we also need OEMs to ramp capacity. As you've seen us announce commitments for tens of thousands of vehicles with a few partnerships, we expect more OEM relationships to be established soon. Over time, we also envision that these commitments will get financialized and for asset owners to take ownership of those vehicles. In the first years, we will step in with some vehicle purchases.

And our next question comes from the line of Michael Morton with MoffettNathanson.

Congratulations on the new seat, Balaji. I was wondering, AVs require investors to think about things long term. If you could talk about the different stages and the duration in which you expect them to play out. We're in Stage 1 today, like launching in small markets like San Francisco. Can you discuss how we get to the tens of thousands of AVs on Uber's networks over the next several years? And I know it's a moving target, but how should the market expect that to play out?

Absolutely. As you think about these deployments on Uber's network, our initial goal is to get baseload supply from AVs to meet demand at the trough of the week’s demand curve. We have launched in markets like Austin, where we can deliver consistent demand to the AVs on the road. Our data shows that while the total drop in demand from Saturday to Monday is about 45%, for AVs, that number is much more consistent. We aim to launch in multiple markets and achieve this baseload supply first. Moving forward, our goal is to lower the vehicle platform costs to expand our TAM significantly, allowing us to lower prices for consumers. Eventually, the long-term vision is for a significant portion of our supply to come from AVs. However, given where OEMs are on their production ramp curves, this future is still far away. In essence, getting to tens of thousands of vehicles depends heavily on how quickly OEMs can ramp production for AVs. Additionally, we will support our partners with purchase commitments, which will allow for more financial commitments around production.

One key aspect is how these companies can use AVs in off-peak times when they are largely not busy. Our logistics ecosystem allows us to use these vehicles more efficiently than others. We already dominate in terms of network utilization. Even when supply is low, our network drives higher utilization rates. As supply increases, our utilization advantage in both mobility and delivery will be instrumental, highlighting our structural advantage that no other player has.

Greg, we'll take one last question, please.

Okay. And the final question then comes from the line of John Colantuoni with Jefferies.

Starting with advertising. The advertising business has continued to see impressive growth with penetration in delivery now exceeding your prior target of 2%. Maybe you can update us on how you're thinking about the long-term potential of delivery advertising and any key opportunities you see to keep growing that business at a fast pace? And second, with delivery growth accelerating to multiyear highs, could you just talk about drivers of that faster growth and provide your perspective on sustainability in the coming quarters?

Thanks, John. I'll take ads and Dara will take delivery. So on ads, we're pleased with the momentum we’re seeing. As you pointed out, we previously estimated 2% as the potential ceiling for penetration with delivery advertising, but the opportunity size seems much larger now. We're seeing that SMB ad penetration is much higher than 2%, and enterprise year-on-year growth is outpacing SMBs significantly. This dynamic means enterprise advertising has significant runway for growth. Our products in grocery and retail are nascent and will compete for growth as well. Dara, do you want to take delivery?

Yes, absolutely. In terms of delivery, there are five factors contributing to the growth rate. First, just the basics of selection. Our selection still in many countries is 30% to 40% of the addressable market, especially in the U.S., particularly for less dense markets with small and medium businesses. Increased selection will drive more items to sell, bring more users, and improve conversion rates. Second, we see growth in less dense areas where our category position remains significantly lower than in big cities. Third, we’re seeing growth in newer products we are selling in Eats. Going into grocery retail entails a $1 trillion opportunity. We're continuing to add grocery partners. For example, we have five of the top ten in the U.S., and we have announcements coming up around that. Fourth, membership continues to grow rapidly, with 46 million members and over 50% of our gross bookings coming from members. Lastly, we are expanding into new markets. Our international footprint on Eats is not where it is with our mobility business. Launching Eats alongside mobility gives us an advantage, leading to continued growth in top line while increasing our margins. Thank you, everyone, for joining us on the call. Huge thank you to the Uber team for delivering another great year. A big thank you to Prashanth for guiding us through this journey. This is a very different company than it was when you joined, and a lot of that is due to your leadership. I believe you have prepared Balaji very well to carry on what you started and take us to the next level. So big congrats to Balaji.