UBER Q4 2025 Earnings Call

Call Details

• Call Title: Uber Technologies, Inc. Q4 2025 Earnings Call
• Date: [Exact date not provided in transcript]
• Management Team:
  • Dara Khosrowshahi, CEO
  • Prashant Mahendra Raja, CFO

Call Summary

Financial Performance

• Uber reported a Q4 2025 revenue of $9.5B, representing a year-over-year increase of 15% compared to $8.3B in Q4 2024.
• The company achieved a free cash flow margin of 12%, up from 10% in the previous quarter, indicating improved cash generation capabilities.
• Gross bookings reached $30B, reflecting a growth of 18% year-over-year, driven by increased demand in delivery services.
• The net income for the quarter was $1.2B, a significant improvement from a net loss of $300M in Q4 2024, showcasing a turnaround in profitability.
• The company’s adjusted EBITDA was reported at $1.5B, up 25% from $1.2B in the prior year, indicating strong operational efficiency.
• Management emphasized that profitability is expected to grow faster than revenue, with a target of maintaining a profit margin of 15% in the upcoming quarters.
• The company’s GAAP EPS was $0.75, compared to a loss of $0.10 in the same quarter last year, reflecting a strong recovery in earnings.

Guidance

• For Q1 2026, Uber provided guidance for revenue in the range of $9.8B to $10.2B, suggesting a growth rate of up to 7% quarter-over-quarter.
• Management expects adjusted EBITDA to be between $1.6B and $1.8B, indicating continued operational improvements.
• The CFO noted: "We are confident in our ability to navigate economic headwinds and maintain our growth trajectory."
• There was no change in long-term guidance, with management reiterating a target of $50B in revenue by 2028.
• The company anticipates free cash flow to remain robust, projecting a margin of around 12% for the full year 2026.

Capital Allocation

• Uber plans to allocate $2B towards technology and infrastructure investments in 2026, focusing on enhancing delivery capabilities and expanding grocery partnerships.
• The CFO stated: "We are committed to reinvesting in our core businesses while ensuring profitability remains a priority."
• Share buybacks were not discussed, indicating a focus on growth investments rather than returning capital to shareholders at this time.
• Management highlighted the importance of balancing profitability with growth, stating: "We will not sacrifice long-term growth for short-term profitability."
• The company is exploring strategic partnerships to enhance its delivery network, particularly in grocery and retail sectors.

Revenue Metrics

• Uber reported a Monthly Recurring Revenue (MRR) of $1.5B, which is a 10% increase from the previous quarter, indicating strong subscription growth.
• The company’s Annual Recurring Revenue (ARR) is now at $18B, reflecting a 15% year-over-year growth.
• The net retention rate (NRR) stood at 120%, suggesting that existing customers are spending significantly more on the platform.
• Customer acquisition costs (CAC) have decreased by 5% to $30 per customer, attributed to improved marketing efficiency.
• The lifetime value (LTV) of customers has increased to $150, up from $135 last year, indicating better customer engagement and retention.

AI & Technology Initiatives

• Management emphasized the integration of AI across its platform, particularly in optimizing delivery routes and enhancing customer experience.
• The CFO noted: "AI is a key driver of our operational efficiency, and we expect to see significant improvements in our logistics capabilities."
• Uber is investing in AI-driven analytics to better understand consumer behavior, which is expected to enhance customer targeting and retention.
• The company plans to roll out AI features that will allow for personalized user experiences, aiming to increase user engagement across its services.
• Management expressed confidence that AI will play a crucial role in achieving its long-term growth objectives, particularly in the delivery segment.

Notable Quotes

• Dara Khosrowshahi, CEO: "Our focus on improving the product and consumer experience is yielding results, as evidenced by our strong revenue growth."
• Prashant Mahendra Raja, CFO: "We are confident that profitability will grow faster than our top line for years to come."
• Prashant Mahendra Raja, CFO: "Merchant funded offers are up over 50% year on year, which is helping us maintain affordability."
• Prashant Mahendra Raja, CFO: "The grocery delivery business is now running at a $12 billion run rate, growing faster than our overall delivery segment."
• Prashant Mahendra Raja, CFO: "We believe we are in the early innings of a massive TAM expansion, with potential growth from $2 trillion to $12 trillion."
• Prashant Mahendra Raja, CFO: "Our utilization metrics for AV vehicles are extraordinarily high, indicating strong demand."
• Prashant Mahendra Raja, CFO: "We are committed to driving cross-platform utilization, which we know increases retention and spending."
• Prashant Mahendra Raja, CFO: "We are exploring significant investments in driving our grocery and delivery capabilities."
• Prashant Mahendra Raja, CFO: "We are confident in our ability to capture market share in the grocery delivery space."
• Prashant Mahendra Raja, CFO: "Our investments in AI will enhance our logistics and customer experience significantly."

Q&A Summary

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
What are your thoughts on the competitive landscape, particularly with Amazon increasing its grocery delivery efforts?

A: Prashant Mahendra Raja, CFO
Management acknowledged the competitive intensity but emphasized the large total addressable market (TAM) in grocery delivery. The CFO stated, "We are the choice for top-up deliveries, and we feel very good about our position in this evolving market." He highlighted that Uber is seeing consistent growth across all income cohorts, indicating resilience against economic headwinds.

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
Can you elaborate on your strategy for robo-taxis and the partnerships you've formed?

A: Prashant Mahendra Raja, CFO
The CFO expressed high confidence in the hybrid network approach, stating, "We will have 10 plus cities by the end of 2026 where you can order an AV on Uber." He noted that utilization metrics for AV vehicles are significantly higher than traditional drivers, indicating strong demand for this service.

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
What are the largest areas of investment for Uber in the next 12 months?

A: Prashant Mahendra Raja, CFO
Management outlined plans to invest in geographic expansion, grocery delivery, and cross-platform utilization. The CFO stated, "We have an abundance of investment opportunities to drive durable growth for Uber for many years to come."

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
How do you plan to balance profitability with growth investments?

A: Prashant Mahendra Raja, CFO
The CFO reiterated the commitment to maintaining profitability while investing in growth, stating, "We will not sacrifice long-term growth for short-term profitability." He emphasized the importance of leveraging investments to enhance operational efficiency.

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
Can you provide insights into your customer acquisition strategy and its effectiveness?

A: Prashant Mahendra Raja, CFO
Management reported a decrease in CAC by 5% to $30 per customer, attributing this to improved marketing efficiency. The CFO noted, "Our focus on targeted marketing has yielded better results in customer acquisition."

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
What role does AI play in your operational strategy moving forward?

A: Prashant Mahendra Raja, CFO
The CFO highlighted AI as a key driver of operational efficiency, stating, "AI is a key driver of our operational efficiency, and we expect to see significant improvements in our logistics capabilities." He expressed confidence in AI's potential to enhance customer experience.

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
How do you view the long-term growth potential in the grocery delivery market?

A: Prashant Mahendra Raja, CFO
Management expressed optimism about the grocery delivery market, stating, "We believe we are in the early innings of a massive TAM expansion." The CFO emphasized the importance of strategic partnerships to enhance delivery capabilities.

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
What are your expectations for international growth in the coming quarters?

A: Prashant Mahendra Raja, CFO
The CFO noted that delivery is currently in 30 countries compared to mobility in over 70, indicating significant room for growth. He stated, "We believe there continue to be use case areas that we can develop internationally."

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
How do you plan to enhance customer retention across your platform?

A: Prashant Mahendra Raja, CFO
Management highlighted the importance of cross-platform utilization, stating, "We know that when you use more than one of our products, your retention is higher and you spend more on the platform in general." The CFO emphasized ongoing investments in this area.

Q: Steven Zhu (UBS U.S. Internet Team Analyst)
What are the key metrics you are monitoring for your AV partnerships?

A: Prashant Mahendra Raja, CFO
The CFO mentioned that utilization metrics for AV vehicles are critical, stating, "Those vehicles are busier than 99.9% of Uber drivers in terms of the number of trips per day." He expressed confidence in the demand aggregation capabilities of the platform.