Uber Technologies, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Uber Technologies Inc. Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Emily Reuter, Investor Relations.

Please go ahead. Thank you, Operator. Thank you for joining us today, and welcome to Uber Technologies' fourth quarter 2019 earnings presentation. On the call today, we have Dara Khosrowshahi and Nelson Che. We also have Ken Schofield, and this is Emily Reuter from the Investor Relations Team. 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, are included in the press release, supplemental slides, and our filings with the SEC, each of which is posted to investor.uber.com. Please note that we have also posted our 2020 investor presentation on our investor page. I will 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 section under the caption Risk Factors and Management's Discussion and Analysis of Financial Conditions and Results of Operations in Our Perspectives, filed with the SEC in connection with our IPO on May 13, 2019, as well as our third quarter Form 10Q that was filed on November 5, 2019. Following prepared remarks today, we will open the call to questions. For the remainder of the discussion, all growth rates reflect year-over-year growth, unless otherwise noted. With that, let me hand it over to Dara.

Thanks, Emily, and thank you all for joining us today. 2019 was a major milestone year for Uber. We achieved $65 billion in gross bookings, up 35%. We crossed the $100 million mark for MAPCs, reaching $111 million in the fourth quarter. And we increased the number of consumers using both rides and Eats by 68%. We grew adjusted net revenue 28% to $13 billion, with growth accelerating from 18% in Q1 to 43% in Q4. We improved totally quarterly adjusted EBITDA by over 200 million year over year, or by 14 percentage points as a percentage of adjusted net revenue. In 2020, we expect to see adjusted EBITDA losses to continue to decline. To me, these results are a validation of the strategy we set in 2019. We'll continue to relentlessly execute our plans for each of our businesses in 2020. In rides, we generated $742 million in rides-adjusted EBITDA in the fourth quarter, covering our corporate overhead by $98 million. We exited 2019 at a $3 billion run rate for rides-adjusted EBITDA, with A&R growth continuing to accelerate in Q4. We grossed gross bookings in our high-priority markets, Argentina, Germany, Italy, Japan, South Korea, and Spain, by four times the rate of overall rides GB growth. We expanded our set of products serving high-value consumers and use cases, including the launch of Uber Comfort, which drove premium rides growth of 55% in Q4, and Uber for Business, which achieved $1.2 billion in gross bookings in Q4. We also continue pursuing low-cost products such as two- and three-wheelers and are using our superior matching capabilities and data models to drive more efficient shared rides products. In Eats, we steadily delivered on our strategy to be number one or number two in every market by leaning into our investment in some countries and exiting others. We grew gross bookings by over 70% and are now in first or second position in well over half of our countries, reflecting the significant majority of our gross bookings, including the US, UK, France, Mexico, and Japan. The divestiture of our Eats business in India and our exit from Eats in South Korea are recent examples of a strategic discipline. We also saw promising results in the U.S., our largest Eats market. We grow our U.S. Eats business 44% to 1.7 billion in GBs and maintain a strong number two position. At the same time, we increase their U.S. take rate 500 basis points year over year to the mid-teens, despite a competitive environment. In 2020, we'll continue to follow the rides playbook, focusing on turning the dial towards healthy growth, market leadership, and margin expansion, significantly curtailing losses throughout the year, with Q4 2019 and Q1 2020 reflecting peak investment for our EATS business. Interfreight and other bet segments were focused on responsible expansion with a heavy focus on unit economics. We'll continue to be thoughtful and disciplined in allocating capital by weighing growth, ROI, and the impact on total company profitability to determine the appropriate investment in each of these segments. In our advanced technologies group, having completed $1 billion in funding, we expanded mapping and data collection efforts in five cities and continue to make progress towards an autonomous future with plans to expand our on-road testing of cars in autonomous mode with the vehicle operator present in select cities. Just this week, we were issued a permit which gives us the ability to resume testing in California. In 2020, we'll continue to drive our roadmap for ATG through the hard work of our dedicated employees, Pittsburgh, San Francisco, Denver, and Toronto, alongside the support from our investors and partners such as Toyota and Denso. I also want to touch on the regulatory environment. We're a boots-on-the-ground business with a physical presence in every market in which we operate. Regulation has been and always will be a constant for us. And while our dialogue with regulators is ongoing, as it should be, we have, by and large, moved away from the question of whether ride-sharing should exist to more nuanced questions around taxes, fees, and driver status. We've achieved significant wins this year, including a successful lawsuit against the cruising cap in New York, expansion into several additional states in Mexico, movement on reform in Korea, continued growth in Japan and Germany, and, just yesterday, a positive ruling on employment classification from Brazil's highest labor court. We firmly believe we share many of the same goals of the cities in which we operate. That's why we'll continue to work in a positive, collaborative manner while at the same time defending the interests of drivers, riders, and others who rely on the Uber platform. Lastly, we believe that a more disciplined capital environment will be favorable for business going forward, but we aren't just sitting here hoping for a better environment. We're making proactive changes to achieve significant cost leverage for both rides and eats through a focused operating playbook including improved machine learning algos and further automation and targeting of our incentive and online marketing spend, stronger tracking and focus for our offline marketing campaigns, the reduction of defect rates and improved self-service tools to improve customer sentiment as well as contact ratios, continued improvement in payment costs, improved matching, routing, pricing algos to increase our marketplace efficiency, allowing our drivers to earn more per active hour, and tech-enabled automation, as well as good old-fashioned cost control to leverage our operational cost structure across the board. With many of the one-time changes from 2019 behind us, we're excited to sharpen our focus on execution to grow our business at massive scale, innovate faster than anyone else, improve margins considerably, allocate our capital effectively and efficiently, and do the right thing for all of our constituencies, ultimately driving to excellent revenue growth and profitability. Our progress in 2019 and our 2020 plans gives me the confidence to challenge our teams to accelerate our EBITDA profitability target from full year 2021 to Q4 2020. It's important to emphasize that we plan to achieve this profitability target assuming only modest improvements in the current competitive environment and without the assumption of any significant changes to our current portfolio of businesses. Further, long-term, we remain confident about achieving our overall company-adjusted EBITDA margin of 25%. Specifically, we expect Rods to deliver adjusted EBITDA margin of 45% with a 25% take rate, and our Eats business to deliver adjusted EBITDA margin of 30% with a 15% take rate. Now to Nelson for more details on the numbers.