Uber Q2 2024 Earnings: Strong Growth and AV Market Plans
In the second quarter of 2024, Uber Technologies Inc. reported significant growth, with CEO Dara Khosrowshahi emphasizing the company's strong performance during the earnings call. Gross bookings increased by 21% on a constant currency basis, while adjusted EBITDA saw a substantial rise of 71% year-over-year.
Key Takeaways
- Uber's Q2 gross bookings grew by 21% on a constant currency basis.
- Adjusted EBITDA increased by a robust 71% year-over-year.
- The company is engaging with global autonomous vehicle (AV) players to potentially join its platform.
- Uber's newer products, including AV, have lower margins but are expected to scale and reinvest profits.
- The delivery business remains profitable, with growth driven by operational improvements and advertising revenue.
- Uber has improved its category position in delivery in its top 10 markets.
- The company has reached an independent contractor agreement in Massachusetts, with further operational cost reductions planned.
Company Outlook
- Uber plans to expand into new geographies while maintaining its operating framework.
- The company targets mid to high teens gross bookings growth and 30% to 40% EBITDA growth over the next three years.
- The UK market presents a significant growth opportunity, potentially increasing Uber's run rate by 8%.
Bearish Highlights
- Autonomous vehicles are not expected to generate substantial profits for Uber in the next five to ten years.
- The potential impact of a consumer downturn on mobility was discussed, although Uber anticipates maintaining volumes through improved driver supply and service.
Bullish Highlights
- The partnership with BYD is poised to bring electric vehicles into global markets, with potential investment in AV by BYD.
- The grocery segment is showing profitability, with cost reduction strategies in place.
- Uber's partnership with Instacart has resulted in positive trends, with Instacart baskets being 20% higher than Uber's base basket sizes.
Misses
- While the company is performing well, it acknowledges that newer products like AV have lower margins compared to the base business.
Q&A Highlights
- Uber is investing in its sales and technical teams to grow merchant-funded offers and sponsored listings. The company has seen a 70% year-over-year growth in these offers.
- Uber's Teams product has doubled its trips, indicating successful scaling.
- The company is confident in its ability to expand mobility products and increase demand as supply improves.
Uber's Q2 performance demonstrates a strong trajectory for growth, with strategic investments in technology and partnerships aimed at expanding its market presence. The company's focus on operational efficiency and growth in both the delivery and mobility sectors positions it to navigate potential economic challenges while continuing to innovate and scale its services.
