Uber Technologies, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Uber's Q4 2020 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 speaker today, Balaji Krishnamurti, Investor Relations, Thank you. Please go ahead, sir.

Thank you, David. Thank you for joining us today, and welcome to Uber Technologies' fourth quarter and full year 2020 earnings presentation. On the call today, we have Uber CEO Dara Khosrowshahi and CFO Nelson Che. This is Balaji Krishnamoorthy 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. I will remind you that these numbers are unaudited and may be subject to change. Certain statements in this presentation and on this call are 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, except as required by law. 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 the risks and uncertainties described in our most recent quarterly report on Form 10Q for the quarter ended September 30, 2020, and in other filings made with the SEC when available. Following prepared remarks today, we will open the call to questions. For the remainder of this discussion, all growth rates reflect year-over-year growth and are on a constant currency basis, unless otherwise noted. With that, let me hand it over to Dara.

Thank you, Balaji, and thanks for everyone joining us today. Since our last earnings call, the world has made considerable progress in the fight against COVID. While there's still a lot of work to do, we're cautiously optimistic that this progress will continue and, in fact, accelerate over the next quarter. However long the recovery takes, Uber's business remains well-positioned. Despite renewed lockdowns in Q4, the end of the year, with total company growth bookings nearly flat year-on-year in December, with growth bookings turning positive in January. Discipline execution and increased scale in our delivery business allowed us to improve adjusted EBITDA by $161 million year-on-year in Q4. This quarter marks the completion of a series of portfolio actions that began in Q2 with the goal of focusing the company on its two massive core opportunities of mobility and delivery. We executed 17 transactions in 2020, including acquisitions that increased our run rate gross by over $6 billion. and divestitures of non-core operations that, combined with other cost optimization actions, reduce their annualized EBITDA losses by over $1 billion. These transactions, coupled with disciplined operational execution and continued product innovation, have put us in a stronger and more focused foundation heading into 2021. As such, we have increased confidence in our ability to reach break-even this year while continuing to invest in long-term initiatives close to our core. Looking ahead, our strategic priority in 2021 is to continue to harness the power that our Class I, with its multiple and growing product offerings, can uniquely provide. Wherever you need to go, whatever you need to get, Uber can help. We believe a highly engaged consumer base on delivery will drive stronger mobility growth as cities reopen. On the flip side, we expect mobility to become an increasingly powerful acquisition channel for our delivery business. For instance, our redesigned Uber Super app already generated more than 10% of first-time heaters in Q4. We plan to accelerate cross-platform usage for a renewed focus on our UberPass and ePass membership programs. We believe these will only become more valuable as we add new benefits and verticals like pharmacy and alcohol. Memberships ramped up significantly in Q4 with over 5 million members across 16 countries, and we have aggressive global expansion plans in 2021. Now we'll dive into each of the core segments. First, mobility, which continues to be affected by lockdowns around the world. Mobility GVs improved modestly in the fourth quarter, up 15% from Q3 levels, but still down 47% year-on-year. In January, growth bookings were down 47% year-on-year, declining 10% month-on-month close elevator holiday activity in December. We're seeing extremely encouraging trends in APAC and Latin America, with growth in those two regions down only 25% to 30% in January. Two of our largest markets, Brazil and Australia, were down only 10% to 20% in January, while Taiwan grew 16% year-on-year. The recovery in these markets demonstrates consumers' pent-up desire to start moving again, while Uber is continuing to gain share versus other modes of transportation. Over the next six months, we'll begin to prepare our business to go from preservation mode to re-ignition. This means investing in new mobility products such as Uber Reserve, rentals, transit, taxis, and motorbikes, and rolling out new segmented offerings like Uber Comfort. We will focus on re-engaging riders for their second first trips and re-engaging drivers to meet ramping demands. If we do these things right, and the public health situation improves as expected, we're bullish that we can deliver strong growth and expanding margins in the second half of the year. Now turning to delivery, where we continue to execute well against the massive expansion of mechanicals. We narrowed our focus to markets that we consider attractive and where we can win, and we're now number one or number two in nearly the entirety of our delivery footprint. At the same time, we're scaling our next strategic leg of 10-plus-year growth, expanding our offerings into adjacencies beyond food delivery and into broader, instant, on-demand local commerce. Q4 growth bookings grew 128% and reached a $44 billion run rate in December. Revenue more than tripled, and adjusted EBITDA margin as a percentage of revenue improved 100 points year-on-year. We've seen our business accelerate in January to over 150% year-on-year growth as delivery continues to provide a natural hedge and lockdowns. It's become clear that the pandemic has increased consumers' appetite for on-demand delivery of not just food, but all goods, and we've taken major steps to address this enormous opportunity. Our acquisition of Corner Shop opened up grocery delivery for Uber, where we've rapidly expanded globally. With Postmates, we bolstered our local commerce capability through their delivery as a service offering that already counts Walmart, Apple, and 7-Eleven as customers. In December, delivery as a service represented 18% of Postmates orders, and we intend to scale this out further along with our Uber Direct product. Lastly, we announced our agreement to acquire Drizzly, which will add the leading online alcohol marketplace to our portfolio. Drizzly is growing at 300% year-on-year and is already profitable on an EBITDA basis. These new initiatives will remain an investment priority going forward, and in 2021, we expect to invest $200 to $250 million pre-integration synergies to grow the business by meaningful multiples. While we lean into growth, we also make significant progress overall on overall delivery profitability. In Q4, we have 15 countries generating over $100 million of EBITDA on just over $2.5 billion of gross booking. We remain confident that delivery will turn EBITDA profitable in 2021, although we will not hesitate to lean in during the first half of the year. While the external environment remains uncertain, I am more optimistic than ever about Uber's future. We've established the world's largest mobility platform with a leading position in every major region that we operate in. In five years, we built the world's largest food delivery platform outside of China, which is growing substantially faster than the category and which we're using to expand into high potential adjacencies. These two platforms are synergistic and are powered by many common components built by the most talented tech team in the business. We're lean, we're focused, and we're operating at global scale, and we will innovate relentlessly to make consumers' lives a bit easier and to create more earnings opportunities for drivers, couriers, and our merchant partners. Uber is ready to go. Now we're going to ask him for more details on the numbers.