Uber Technologies, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023; compared with the three months ended March 31, 2022. Financial statements are unaudited. Uber operates Mobility, Delivery, and Freight platforms.
Financial and operating performance
| Metric | Q1 2022 | Q1 2023 | Change / context |
|---|---|---|---|
| Revenue | $6.854 billion | $8.823 billion | Up 29% reported; up 33% on a constant-currency basis |
| Operating loss | $482 million | $262 million | Improved by $220 million |
| Net loss attributable to Uber | $5.930 billion | $157 million | Q1 2022 included large unrealized investment losses |
| Adjusted EBITDA | $168 million | $761 million | Up $593 million; non-GAAP measure |
| Cash from operating activities | $15 million | $606 million | Improved by $591 million |
| Free cash flow | $(47) million | $549 million | Non-GAAP measure; operating cash flow less capital expenditures |
| Gross Bookings | $26.449 billion | $31.408 billion | Up 19% reported; up 22% constant currency |
| MAPCs / Trips | 115 million / 1.713 billion | 130 million / 2.124 billion | MAPCs up 13%; Trips up 24% year over year |
Revenue by segment was Mobility $4.330 billion (up 72%), Delivery $3.093 billion (up 23%), and Freight $1.400 billion (down 23%). Segment Adjusted EBITDA was $1.060 billion for Mobility, $288 million for Delivery, and a $23 million loss for Freight.
Revenue growth was driven principally by Mobility trip growth and a $925 million net increase in Mobility revenue associated with business-model changes in certain markets, including the UK, that changed the presentation of certain payments and incentives. Delivery revenue also benefited by $98 million from related presentation changes. These items affect comparability of reported revenue and costs.
Operating expenses totaled $9.085 billion, versus $7.336 billion a year earlier. Cost of revenue rose 31% to $5.259 billion, including higher Driver payments and incentives, insurance costs, and Courier payments; lower Freight Carrier payments partly offset the increase. General and administrative expense rose 49% to $942 million, primarily reflecting a $250 million increase in legal, tax, and regulatory reserve changes and settlements. Stock-based compensation was $470 million, compared with $359 million.
Financial position and liquidity
- At March 31, 2023, cash and cash equivalents were $4.045 billion and short-term investments were $121 million. Cash, cash equivalents, and restricted cash totaled $6.793 billion.
- Total debt principal was $9.355 billion; reported long-term debt, net of discounts and current portion, was $9.257 billion. In March, Uber refinanced approximately $2.5 billion of term loans to loans maturing in 2030, at SOFR plus 2.75%. The company reported compliance with debt covenants.
- No balance was outstanding on the revolving credit facility. The facility provides approximately $2.2 billion of commitments and matures in 2027; letters of credit reduce availability.
- Management said existing cash and available funding were expected to meet anticipated cash requirements for at least the next 12 months. Approximately $2.6 billion of cash and cash equivalents was held by foreign subsidiaries.
- Current assets were $9.196 billion and current liabilities were $8.683 billion. Insurance reserves totaled $5.070 billion, including short-term and long-term reserves.
Management commentary, outlook, and notable items
- Management attributed Mobility growth primarily to increased trip volumes and Delivery growth to higher orders and basket sizes. Freight was affected by macroeconomic weakness across the freight brokerage industry.
- MAPCs declined 1% sequentially from Q4 2022, which management attributed to normal seasonality, while growing 13% year over year.
- The filing provides no specific numerical earnings or revenue guidance. Management expects certain operating expenses, including research and development, to increase in absolute dollars, while anticipating operating efficiencies in some support costs as revenue and trip volumes grow.
- Q1 net loss included a $320 million net unrealized gain on debt and equity securities, primarily a $357 million gain on Didi and a $54 million gain on Aurora, partly offset by a $113 million loss on Grab. By contrast, Q1 2022 included $5.570 billion of net unrealized investment losses. These valuation changes materially affect period-to-period net income comparisons.
- Uber recorded aggregate liabilities of $1.8 billion for legal, regulatory, and non-income tax matters; $0.6 billion related to non-income tax matters. The company says outcomes are uncertain and some potential losses cannot be estimated.
- Driver classification remains a significant risk. The California Court of Appeal ruled in March 2023 that Proposition 22 remains in effect, subject to further review; other classification proceedings continue. Uber disclosed approximately $523 million paid through March 31, 2023 to settle classification arbitration claims brought or contemplated by more than 150,000 U.S. drivers.
- Subsequent events: In April 2023, Uber agreed to a transaction under which e& would invest $400 million for a majority interest in Careem’s non-ridesharing business, subject to closing conditions; Uber expected to retain approximately 42%. On April 21, Uber sold its remaining 29% interest in MLU B.V. to Yandex for $702.5 million in cash.
Most important facts for investors to verify
- How much of Mobility and Delivery revenue growth reflects increased activity versus gross presentation changes from business-model changes.
- Whether the improvement in operating cash flow and free cash flow is sustained, given working-capital movements and non-cash adjustments.
- The potential cash and operating impact of Driver classification cases, regulatory matters, tax disputes, and the $1.8 billion recorded liability.
- Freight performance and whether the segment can recover as freight-market conditions change.
- Debt service, floating-rate exposure on the 2030 term loans, and actual liquidity available after letters of credit and other restrictions.
- Investment valuation volatility and the final proceeds, accounting treatment, and use of cash from the MLU B.V. sale and Careem transaction.
- Adjusted EBITDA and free cash flow are non-GAAP measures; review the filing’s reconciliations and exclusions, including stock-based compensation and legal, tax, and regulatory items.