Uber Technologies, Inc. — Q2 2022 Form 10-Q
Business context and reporting period. Uber operates Mobility, Delivery and Freight platforms. This unaudited quarterly report covers the three and six months ended June 30, 2022; comparisons are with the corresponding 2021 periods. Results are not necessarily indicative of full-year performance.
Key financial and operating metrics
| Metric | Q2 2022 | Q2 2021 | Change / context |
|---|---|---|---|
| Revenue | $8.073 billion | $3.929 billion | Up 105%; up 111% on a constant-currency basis |
| Operating loss | $713 million | $1.188 billion | Operating margin improved to approximately negative 9% from negative 30% |
| Net income (loss) attributable to Uber | Loss of $2.601 billion | Income of $1.144 billion | Q2 2022 included $1.677 billion of net unrealized losses on debt and equity securities |
| Adjusted EBITDA | $364 million | Loss of $509 million | Non-GAAP measure; improvement of $873 million |
| Gross Bookings | $29.078 billion | $21.900 billion | Up 33%; up 36% on a constant-currency basis |
| MAPCs / Trips | 122 million / 1.872 billion | 101 million / 1.511 billion | Up 21% / 24%, respectively |
Six-month cash flow. Operating cash flow was $454 million, compared with cash used of $952 million in H1 2021. Free cash flow, a non-GAAP measure defined by Uber as operating cash flow less capital expenditures, was $335 million versus negative $1.080 billion. Capital expenditures were $119 million. Management attributed the cash-flow improvement in part to non-cash investment losses and changes in working capital.
Liquidity and debt. At June 30, 2022, Uber reported $4.397 billion of unrestricted cash and cash equivalents and $7.864 billion including restricted cash. Current assets were $8.751 billion and current liabilities were $8.945 billion. Long-term debt, net of current portion, was $9.271 billion; total debt principal was $9.374 billion. The amended revolving facility provides approximately $2.2 billion of commitments, matures in April 2027, and had no borrowings outstanding; $213 million of letters of credit reduced availability. Uber reported compliance with debt covenants and said existing cash and funding sources should meet anticipated requirements for at least the next 12 months.
Balance-sheet changes. Total assets fell to $31.014 billion from $38.774 billion at year-end 2021, largely alongside a decline in investments to $4.572 billion from $11.806 billion. Total equity decreased to $7.369 billion from $15.145 billion, while accumulated deficit grew to $32.157 billion.
Material changes versus prior period
- Revenue growth reflected recovering Mobility activity, the Transplace acquisition, and a change in UK Mobility arrangements. The UK change led Uber to present certain transactions gross, recording driver payments in cost of revenue; the company also recorded an accrual related to historical UK driver-classification claims. These items make reported revenue growth less comparable with underlying bookings growth.
- By offering, Q2 revenue was $3.553 billion Mobility, $2.688 billion Delivery and $1.832 billion Freight. Freight revenue growth was primarily driven by Transplace, acquired in Q4 2021. Mobility Gross Bookings rose 57% and Delivery Gross Bookings rose 12% year over year on a constant-currency basis; Freight Gross Bookings rose 428%.
- Segment Adjusted EBITDA improved: Mobility earned $771 million versus $179 million; Delivery earned $99 million versus a $161 million loss; Freight earned $5 million versus a $41 million loss. Corporate G&A and Platform R&D costs increased to $511 million from $486 million.
- Cost of revenue rose 145% to $5.153 billion, faster than revenue, and increased to 64% of revenue from 53%. Uber cited higher Freight carrier payments, UK driver payments, insurance costs and Courier payments. Selling and marketing expense declined 3% to $1.218 billion, while research and development rose 44% to $704 million and general and administrative expense rose 38% to $851 million.
- Net income swung to a loss as investment fair-value movements reversed from substantial gains in 2021. Q2 2022 investment losses primarily included Aurora ($1.1 billion), Grab ($520 million) and Zomato ($245 million), partly offset by a $259 million Didi gain. For H1 2022, net investment losses were $7.247 billion; H1 2021 included $1.975 billion of gains and a $1.644 billion gain on the ATG business sale.
Outlook, commentary and risks
The filing provides no quantified company-wide revenue, earnings or cash-flow guidance. Management highlighted recovery in Mobility demand but noted driver-supply constraints, including demand recovering faster than driver availability. It expects several operating expense categories to rise in absolute dollars as activity and investment grow, while some costs may decline as a percentage of revenue through scale and efficiency. Management cautioned that COVID-19 impacts and interim results remain uncertain.
- Driver classification and legal exposure: Proceedings and regulatory reviews continue across jurisdictions. The filing reports $2.2 billion of accrued liabilities for legal, regulatory and non-income-tax matters, including $1.3 billion relating to non-income-tax matters. Uber states that certain possible losses cannot be estimated; adverse outcomes could materially affect costs, operations or cash flows. UK worker treatment and related historical claims, California Proposition 22 litigation, and Swiss classification decisions are notable developments.
- Investment volatility and geopolitical risk: Minority investments can materially affect GAAP earnings. Uber recorded a $182 million impairment of its MLU B.V. investment related primarily to the Russia-Ukraine conflict and said it was seeking opportunities to accelerate sale of its remaining Yandex.Taxi interest. The Didi delisting also changed the investment’s accounting and valuation basis.
- Business and market risks: Competition, incentives, inflation and higher fuel, insurance and labor costs may pressure margins, driver supply and demand. COVID-19, economic weakness, foreign-exchange movements and regulatory limits could also affect results.
- Other exposures: The filing highlights safety, privacy and cybersecurity, payment and insurance risks, tax disputes (including UK VAT matters), and regulatory and antitrust investigations. The revolving facility requires minimum liquidity, reduced from $1.5 billion to $1.0 billion under the April 2022 amendment.
Most important facts for investors to verify
- Separate underlying operating performance from the effects of gross revenue presentation in the UK, Transplace consolidation and the UK historical-claims accrual.
- Track Mobility, Delivery and Freight segment profitability, particularly whether positive Adjusted EBITDA converts into sustained GAAP operating profitability and cash flow.
- Monitor the valuation and liquidity of equity investments, and distinguish non-cash fair-value movements from operating results.
- Follow driver-classification litigation, tax assessments and related accruals; outcomes and potential losses may differ materially from recorded estimates.
- Reconcile liquidity claims with restricted cash, insurance collateral needs, debt maturities and available revolving-credit capacity.
- Consider the limitations of Adjusted EBITDA and other non-GAAP measures, including exclusions for stock compensation, legal and regulatory items, and investment gains or losses.