Business context and reporting period
Uber Technologies, Inc. filed this Form 10-K for the fiscal year ended December 31, 2020. Uber operates a global technology platform for Mobility, Delivery, Freight and, until its January 2021 sale, autonomous-vehicle development. COVID-19 sharply reduced Mobility demand while accelerating Delivery growth. Q4 figures below are for the three months ended December 31, 2020; other figures are full-year unless noted.
Financial and operating performance
| Metric | 2020 | 2019 |
|---|---|---|
| Revenue | $11.139 billion | $13.000 billion |
| Loss from operations | $4.863 billion | $8.596 billion |
| Net loss attributable to Uber | $6.768 billion | $8.506 billion |
| Adjusted EBITDA loss (non-GAAP) | $2.528 billion | $2.725 billion |
| Net cash used in operating activities | $2.745 billion | $4.321 billion |
| Cash and cash equivalents plus short-term investments, year-end | $6.827 billion | $11.313 billion |
| Working capital, year-end | $3.017 billion | $8.286 billion |
| Long-term debt, net of current portion, year-end | $7.560 billion | $5.707 billion |
Revenue fell 14% year over year (13% in constant currency). Total costs and expenses declined 26%, but remained above revenue; the operating loss was about 44% of revenue. Interest expense was $458 million. Cash used in investing activities was $2.869 billion and cash provided by financing activities was $1.379 billion. Separately, outstanding debt principal was $7.914 billion; Uber reported compliance with debt covenants and access to a $2.3 billion revolving facility, with no balance drawn at year-end.
Platform activity declined: Q4 MAPCs were 93 million, down from 111 million in Q4 2019; full-year Trips were 5.025 billion, down 27%; Gross Bookings were $57.897 billion, down 11% (9% constant currency). Full-year Take Rate was 19.2%.
| Segment | 2020 revenue | 2020 Adjusted EBITDA | Change versus 2019 |
|---|---|---|---|
| Mobility | $6.089 billion | $1.169 billion profit | Revenue down 43%; Adjusted EBITDA down 44% |
| Delivery | $3.904 billion | $873 million loss | Revenue up 179%; loss improved $499 million |
| Freight | $1.011 billion | $227 million loss | Revenue up 38%; loss increased $10 million |
| ATG and Other Technology Programs | $100 million | $375 million loss | Revenue up 138%; loss improved $124 million |
In Q4, revenue was $3.165 billion and net loss attributable to Uber was $968 million, compared with $3.747 billion and $1.096 billion, respectively, in Q4 2019. Q4 Gross Bookings were $6.789 billion for Mobility, $10.050 billion for Delivery and $313 million for Freight.
Material changes versus the prior comparable period
- Mobility Gross Bookings fell 44% in constant currency for the year, reflecting pandemic-related restrictions and reduced travel. Delivery Gross Bookings grew 110% in constant currency, supported by increased orders and larger baskets.
- Expense reductions, lower Mobility-related insurance and processing costs, and improved Delivery results narrowed the Adjusted EBITDA loss by $197 million. This measure excludes stock compensation and other items; it is not a substitute for GAAP results.
- Uber recorded a $1.690 billion impairment, primarily on its Didi investment, and $362 million of restructuring and related charges. It announced workforce reductions of approximately 6,700 roles.
- Uber acquired Careem, Cornershop operations outside Mexico, Routematch and Postmates. The Postmates acquisition was completed for approximately $3.9 billion, primarily in Uber stock, and contributed to the year-end increase in goodwill and intangible assets.
- During Q4, Uber changed the presentation of certain excess payments to Drivers from cost of revenue to a reduction of revenue. Prior periods were retrospectively adjusted; the change did not affect operating loss, net income or loss per share.
Outlook, commentary and risks
Uber provided no quantified financial guidance in the supplied filing text. Management said it could not predict the pandemic’s ultimate effects or when Mobility demand might return to pre-pandemic levels. It expected near-term losses to continue and anticipated that some operating expenses could rise in absolute dollars as the business recovered. Management stated that restructuring actions were intended to generate at least $1 billion of annual cost savings versus the original planned Q4 2020 cost structure; achievement was not assured.
Key risks include continued pandemic effects; intense competition and spending on incentives; dependence on classifying Drivers as independent contractors; regulatory and licensing restrictions; safety incidents; privacy and cybersecurity exposure; and execution and integration risks from acquisitions. The UK Supreme Court upheld the worker classification ruling in February 2021, after year-end; potential damages, including minimum wage, holiday pay and pension contributions, remained uncertain. California Proposition 22 took effect in December 2020, but related litigation and potential liabilities for prior periods remained. Uber recorded $1.8 billion in aggregate liabilities for probable and reasonably estimable legal, regulatory and non-income-tax matters; the filing says adverse outcomes beyond estimates could materially affect results.
Other significant items include $3.466 billion of insurance reserves, whose ultimate cost is uncertain, and substantial valuation uncertainty in private-company investments. The ATG business sale to Aurora closed in January 2021; Uber also invested $400 million in Aurora and entered a commercialization collaboration. The filing was audited by PwC, which gave an unqualified opinion on the financial statements and concluded internal control over financial reporting was effective as of year-end.
Important facts for investors to verify
- Whether Mobility demand and Gross Bookings recover, and whether Delivery growth can be sustained while improving its economics.
- Cash burn, debt maturities, access to the revolving credit facility and liquidity needs if recovery is delayed.
- Developments in Driver classification cases, including UK worker claims, California litigation and related tax or benefit exposure.
- Valuation and potential further impairment of Didi and other private investments, plus integration and goodwill risks from acquisitions.
- Whether management achieves the stated cost savings and how restructuring, stock-based compensation and other excluded items affect GAAP results.