Uber Technologies, Inc.

My name is Jeric and I will be your conference operator today. At this time, I would like to welcome everyone to the Uber Q2 2019 earnings conference call. All lines will be placed on mute to prevent any background noise. After this speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then one on your telephone keypad. If you would like to withdraw your question, please press the found key. It is now my pleasure to turn today's program over to Mr. Kent Schofield. Sir, the floor is yours.

Thank you, Operator. Thank you for joining us today, and welcome to Uber Technology's Q2 2019 earnings presentation. On the call today, we have Dara Khosrowshahi, CEO, Nelson Che, CFO, and this is Ken Scofield, Head of Investor Relations. During today's call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, is included in the press release, supplemental slides, and on filings with SEC. each of which is posted to investor.uber.com. I'll remind you that these numbers are unaudited and may be subject to change. Certain statements in this presentation and on this call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, and may. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as risks and uncertainties included in the sections under the captions Risk Factors and Management Discussion and Analysis of Financial Condition and Results of Operations. and our final prospectus filed with the SEC in connection with our IPO on May 13, 2019, as well as our first quarter form 10Q that was filed on June 4, 2019. Following prepared remarks today, we will open the call to questions. With that, let me hand it over to Dara.

Thanks, Kent. We're proud of the progress we made in Q2 2019 towards becoming the platform of choice for the movement of people empowering local commerce all around the world. During the quarter, we continued to produce strong growth in gross bookings across all of our platform offerings, with overall growth of 37% year-on-year at constant currency, producing a $63 billion annual run rate. Adjusted net revenue, or ANR, was $2.9 billion, up 12% year-on-year, excluding a driver appreciation award, non-cash, made in connection with our IPO, and on a constant currency basis, A&R accelerated nicely, up 26%, powered by strongly monthly active platform consumers, or MAPC growth, of 30%. Our MAPC growth has continued into the second half of the year, and we're proud to announce that we passed 100 million MAPCs in the month of June. Note that we expect A&R growth to continue to accelerate beyond the 30% mark in constant currency during the back half of the year as we continue to grow MAPCs, increased multi-offering users, improved take rates sequentially, and with the help of easier comps in the prior year periods. Our Q2 2019 adjusted EBITDA loss came in at $656 million, a big improvement versus Q1, and handily beating our own internal plan due to strong execution of our teams across the businesses. The competitive environment and our position in the ride-sharing space continues to be stable to improve. We will take some of that improvement to continue to lean into our e-business, where we see plenty of competition and significant capital investment, but incredible potential. While you often have to make tradeoffs in life, we believe that we can continue to invest aggressively in growth while driving efficiencies from scale by building great tech to improve effectiveness and from good old-fashioned focus on the bottom line. Our much-improved core platform contributions of $220 million in Q2 was driven by increased focus on product, service, tech, and brand differentiation in the U.S. and Latin America ride-sharing categories, a more effective deployment of incentives, greater efficiency in shared rides, and a focus on higher-margin products. Our shared ride teams are focusing more of their energy and tech capabilities in driving shared ride efficiency rather than simply discounting for volume. This is resulting in a mixed shift into more profitable UberX volumes. We'll continue to innovate in the shared ride space with exciting new products such as non-stop shared rides, much more sophisticated pricing algorithms, and some pretty interesting innovations coming up in the second half of the year. We're also ramping up our emphasis on consumer segmentation. Uber Rewards, which you'll recall became available to 100% of U.S. rides and eats consumers in March, has seen great momentum. Enrolled users are about twice as likely to use both rides and eats than unenrolled users. Uber Rewards is just one part of a broader suite of loyalty products, including Uber Cash, our Uber-branded credit cards, and ongoing experimentation with subscription products in rides and eats. Uber Comfort, our new premium economy offering, has been a hit and continues to roll out globally. And our Uber for Business solution suite grew quite strongly at 60% on a year-on-year basis. Finally, our Uber Health platform that helps improve access to healthcare organizations grew at over 400% year-on-year this quarter. Now moving to Eats, Q2 2019 massive growth of over 140% helped drive 98% year-on-year gross bookings growth at constant currency to 3.4 billion, while our take rate improved 240 basis points over our Q1 take rate. We made significant progress in expanding restaurant selection with over 315,000 restaurant partners now on the platform at the end of the quarter. We launched several Eats product features during the quarter, including pilots to test subscription pricing strategies with our most engaged users. We continue to work on improving restaurant onboarding efficiency by reducing friction, including point of sale integration through partnerships such as OLO and custom integration via our own APIs. And lastly, we enabled even more ways for restaurants to engage Eats customers through new options like dine-in, pick-up, and the ability to use their own delivery personnel. We continue to be the number one or number two player in the online food delivery category in multiple geographies, including the U.S., Japan, France, Mexico, Australia, and New Zealand. And in the back half of 2019, we'll continue to invest in our most strategic eats markets, lean in on co-marketing programs with partners such as McDonald's and Starbucks, and accelerate our innovation and restaurant selection engine. We continue to invest and innovate in our other best segments, growing Q2 growth bookings by 160% year-on-year at constant currency to $132 million. Uber Freight continued to see impressive growth and great progress in Q2 despite soft market conditions. And Nemo trips grew triple digits quarter-on-quarter as we launched in 11 new markets, including Paris and Berlin, which have quickly become two of our best-performing cities. Finally, in our advanced technologies group, we unveiled our first production car capable of self-driving, with Volvo's newest XC90 SUV. Direct from the factory, the platform is designed with a chassis ready to integrate into ATG's self-driving system. And now on to Nelson for some more details on the numbers.