Uber delivered another record quarter with strong, profitable growth across its platform, demonstrating resilience and execution capabilities.
Top 5 Key Takeaways
- Record profitability with 71% year-over-year adjusted EBITDA growth and positive GAAP operating income.
- Strong consumer demand across income cohorts, with no signs of softness or trading down.
- Significant progress in autonomous vehicle partnerships, with more announcements expected soon.
- Advertising revenue reaching a $1 billion run rate, growing over 50% year-over-year.
- Continued expansion of the addressable market, with less than 20% penetration in top 10 countries.
Summary
Uber reported a strong Q2 2024, with gross bookings growing 21% year-over-year on a constant currency basis, consistent with trip growth. The company’s audience expanded 14% while frequency grew 6%. Adjusted EBITDA grew 71% year-over-year, and Uber generated record quarterly GAAP operating income. CEO Dara Khosrowshahi emphasized the company’s ability to deliver profitable growth at scale:
“Q2 was another record quarter for Uber and further demonstrated our ability to deliver profitable growth at scale.”
Main Themes
- Guidance: Q3 mobility growth expected in the mid-20s range on a constant currency basis
- Competition: Gaining category position in delivery in every top 10 market year-over-year
- Economy: Strong consumer demand across all income cohorts, no signs of softness or trading down
- New Product Announcements: Expansion of autonomous vehicle partnerships, with more announcements expected in coming weeks and months
- Market-moving information: Record quarterly GAAP operating income achieved
- Economic outlook: Uber positioned to perform well in any economic scenario due to countercyclical nature of the platform
Insights
Uber’s platform demonstrates strong resilience across economic cycles. In a potential downturn, increased driver supply could lead to lower prices and improved reliability in mobility, while merchants invest more in performance channels like Uber for growth in delivery. The company’s multi-product strategy is driving higher engagement, with multi-product consumers spending three times more than single-product users.
Market Opportunity
Uber’s addressable market remains largely untapped. Monthly penetration of consumers over 18 years old is less than 20% across the company’s top 10 countries. The grocery and retail TAM is larger than the online food delivery TAM, presenting significant growth opportunities. If the United States were to reach the same TAM penetration as the UK, it would add approximately $13 billion in gross bookings, representing about 8% of Uber’s current run rate.
Market Commentary
The autonomous vehicle (AV) market is evolving into a multi-player ecosystem rather than a winner-take-all scenario. Uber is positioning itself as an indispensable partner for AV players, leveraging its marketplace technology and demand generation capabilities. The company is in late-stage discussions with additional global AV players to join its platform.
Customer Behaviors
Consumer behavior on the Uber platform remains strong across all segments:
- No softness or trading down observed across income cohorts
- Delivery becoming more habitual, with Uber One membership covering 50% of delivery gross bookings
- Number of first-time consumers on Uber Eats in the U.S. higher than at any point over the past five quarters
- Consumers not trading down in restaurant categories, maintaining spending in higher-priced establishments
Regulatory Policy
Uber reached a deal with the Massachusetts Attorney General, settling on standards for earners that include healthcare, family, and medical leave benefits. This agreement resulted in the Attorney General dropping their action against Uber and the company no longer pursuing a ballot issue in Massachusetts.
Economy Insights
Despite macroeconomic concerns, Uber’s management sees strong consumer demand:
“Based on what we’re seeing today, the Uber consumer is in great shape. Our audience is bigger than ever and using our services more frequently than ever. While our consumers tend to be higher income, we’re not seeing any softness or trading down across any income cohort.”
Industry Insights
The food delivery industry is proving to be more resilient and habitual than previously assumed. Prashanth Mahendra-Rajah, CFO, noted:
“I’m surprised–I was surprised to learn how sticky the food delivery business is. It is very habitual, and we’ve got great data that shows that stickiness is improving.”
This insight suggests that food delivery platforms may have stronger long-term growth prospects and customer retention than initially believed.
Key Metrics
Financial Metrics
- Gross bookings growth: 21% year-over-year (constant currency)
- Adjusted EBITDA growth: 71% year-over-year
- Advertising revenue run rate: Over $1 billion
KPIs
- Audience growth: 14% year-over-year
- Frequency growth: 6% year-over-year
- Uber One membership: Covering 50% of delivery gross bookings
- Restaurant-funded offers growth: 70% year-over-year globally
Competitive Differentiators
- Global multi-product platform (mobility, delivery, and freight)
- Strong marketplace technology driving high utilization and reliability
- Strategic partnerships and investments in autonomous vehicle companies
- Ability to shape supply and demand through incentives and surge pricing
- Growing advertising capabilities, including sponsored listings and merchant-funded offers
Key Risks
- Potential regulatory challenges in various markets regarding worker classification
- Competition from standalone autonomous vehicle providers
- Economic downturn impacting consumer spending on ride-sharing and food delivery
- Execution risks in scaling new products and markets
Analyst Q&A Focus Areas
- Autonomous vehicle strategy and partnerships
- Delivery profitability and growth drivers
- Consumer behavior and potential recession impacts
- Advertising revenue growth and merchant adoption
- Market penetration and expansion opportunities
Uber Summary:
Uber demonstrated strong execution in Q2 2024, delivering record profitability while maintaining robust growth across its platform. The company’s multi-product strategy and global scale position it well for continued expansion in both mobility and delivery. Key areas to watch include the development of autonomous vehicle partnerships, the scaling of advertising revenue, and Uber’s ability to maintain growth and profitability in various economic scenarios. The company’s low market penetration in key countries suggests significant room for future growth, while its adaptability to economic cycles provides resilience in uncertain times.
