Uber Technologies, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. Financial statements are unaudited. Uber operates Mobility, Delivery, and Freight platforms.
Financial and operating results
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $8.343B | $4.845B | $23.270B | $11.677B |
| Operating loss | $495M | $572M | $1.690B | $3.284B |
| Net loss attributable to Uber | $1.206B | $2.424B | $9.736B | $1.388B |
| Adjusted EBITDA (non-GAAP) | $516M | $8M | $1.048B | $(860)M |
| Operating cash flow | Not provided for quarter | Not provided for quarter | $886M | $(338)M |
| Free cash flow (non-GAAP) | Not provided for quarter | Not provided for quarter | $693M | $(556)M |
- Q3 Gross Bookings were $29.119B, up 26% reported and 32% in constant currency; MAPCs reached 124M, up 14%, and Trips were 1.953B, up 19%.
- Q3 revenue by segment: Mobility $3.822B, Delivery $2.770B, Freight $1.751B. Segment Adjusted EBITDA was $898M, $181M, and $1M, respectively.
- Cost of revenue was 62% of revenue in Q3, versus 50% a year earlier; total costs and expenses were 106% of revenue versus 112%. Operating loss was 6% of revenue versus 12%.
- At September 30, cash and cash equivalents were $4.865B; restricted cash was $3.769B. Total debt principal was $9.367B, with $9.268B reported as long-term debt net of current portion and discount. The amended $2.2B revolving facility had no amount outstanding.
- Current assets were $9.368B and current liabilities were $9.020B. Insurance reserves totaled $4.469B. Uber reported an accumulated deficit of $33.363B.
Changes and unusual items
- Revenue growth reflected higher Mobility activity as demand recovered, the Transplace acquisition’s contribution to Freight, and UK Mobility business-model changes. The UK changes shifted certain transactions to gross revenue presentation, with related Driver payments included in cost of revenue; therefore, reported revenue growth is not directly comparable in those markets.
- Q3 other expense included $550M of net unrealized losses on debt and equity securities, mainly a $641M Didi loss partly offset by a $90M Aurora gain. For the first nine months, net unrealized investment losses were $7.797B, including losses on Aurora, Grab, Didi, and Zomato. These fair-value items drove much of the nine-month net loss.
- Stock-based compensation was $482M in Q3 and $1.311B for the nine months. Q3 Adjusted EBITDA improved substantially year over year, but this non-GAAP measure excludes stock compensation and other items and should be considered alongside GAAP results.
- Revenue rose 72% in Q3 and 99% for the nine months. Nine-month growth also reflected Transplace and changes in UK revenue presentation, not solely underlying transaction growth.
Outlook, liquidity, and risks
- No specific quantitative forward guidance is provided in the filing. Management said it expects operating expenses to rise in absolute dollars in several functions, while anticipating improved expense leverage in some functions as revenue and trip volumes grow. It stated that available funding and the revolving facility should cover anticipated cash requirements for at least 12 months.
- After quarter-end, on October 31, 2022, Uber resolved outstanding UK HMRC VAT claims for periods before its March 2022 model change. It expected a Q4 cash outflow of approximately GBP 615M, with no significant income-statement impact expected because reserves had been recorded.
- Driver classification remains a significant legal and operating risk across jurisdictions. Uber disclosed $2.2B of aggregate recorded liabilities for legal, regulatory, and non-income tax matters, including $1.3B for non-income tax matters. Outcomes and any additional exposure remain uncertain.
- Other risks include competition and incentive spending, Driver supply constraints, inflation and higher insurance costs, foreign exchange exposure, COVID-19 uncertainty, regulation, and volatility in minority-investment valuations. A September 2022 cybersecurity incident involving access to internal systems remained under investigation.
- Management concluded disclosure controls were effective at a reasonable assurance level. The company was reviewing and adapting Transplace controls; no other material quarterly changes to internal control over financial reporting were reported.
Important facts for investors to verify
- How much of revenue and Mobility growth reflects the UK gross-presentation changes and related historical-claims accruals, versus underlying volume and pricing.
- Whether investment fair-value swings continue to materially affect GAAP earnings, and the assumptions and liquidity of the remaining equity stakes.
- Whether operating cash flow and free cash flow remain positive after working-capital movements, insurance collateral needs, and the GBP 615M HMRC settlement payment.
- Progress and potential financial consequences of driver-classification cases, non-income tax disputes, and other legal and regulatory matters.
- Whether Adjusted EBITDA improvements translate into sustained GAAP profitability, considering stock-based compensation, insurance costs, and other excluded items.