UBER Q4 2025 Earnings Call

I think we're going to go ahead and get started. Steven Zhu with the UBS U. S.

Internet team. Sitting to my left is, of course, the CFO of Uber, Prashant Mahendra Raja. So welcome back to the conference.

Thank you.

Thank you. It's great to be here. I have the privilege of having one of the collector's items, which was the last vest they gave out at this conference, which was before Credit Suisse imploded.

So, yeah, I have that saved. I don't know how many of you have saved yours, but if you remember the one from the I think it was the 35th anniversary.

Yeah, I think it was the 25th anniversary, and it's somewhere deep in the closet in my office. I don't dare bring it out. So, yeah.

So, great to see you. And focus on improving the product, right?

to increase our selection, adding the Improving our tech to economic headwinds that are coming at us.

Partly contributed to by restaurants and merchants who are funding offers to make their products more affordable. So merchant funded offers are up over 50% year on year. And that is where a merchant says, buy one sandwich, get one free, buy this, get a free French fries, whatever it might be, but offers that they're driving to attract you to their store.

also competing with other merchants who are doing the same, but helping to keep the affordability levels for folks quite good. I think an interesting metric on that, by the way, is we look at our users on an income cohort basis. So, I mean, I may not get these buckets exactly right, but I believe it is under 70,000, 72% 90,000 and then over 90,000.

So based on your zip code, we sort of know what income you are in. The growth in all three of those income buckets has remained very steady, even in more recent quarters where I think folks are saying, hey, what how is delivery growing at a time when it feels like the economy is not as strong as it used to be? But the growth that we're seeing in all of those cohort groups continues to be very strong, which I think just speaks to the sort of the habit and the convenience and the value that delivery is bringing.

It's an overall catalyze the change in behavior. Yes, very much so, right? I mean, no different than we did with rides, you know, many years ago, right?

And then lastly is the that's been really a big boom behind the delivery growth has been our grocery and retail, which has been a big focus for us, adding a number of key groceries that have come on and a number of key merchants. I think it's been a parade. If you look back at our earnings over the last several quarters, you'll see that every quarter we are announcing key merchants, key large grocery stores coming onto the platform and We expect that to continue for several quarters.

There's still a whole great set of negotiations that are ongoing. And it sort of feeds on itself as you become more relevant, the more merchants and grocers want to be on your platform.

Yeah. I think you brought up groceries. So I think it's go time for Amazon now, it sounds like.

They've been building the infrastructure for the last couple of years. They've done some things to lure the customers back. So it sounds like they're now going to step up their efforts in the category.

So why should investors not worry about the competitive intensity here? And as a result, there's going to be impacts to your business. Maybe the consumer incentives go up.

There's going to be other factors here. So help us think through that and how the environment might change. Sure, sure.

This is a massive TAM, massive. We as an industry are still in early innings of the behavioral changes that are underway where consumers will get their grocery activity, grocery purchases delivered to them. Where Uber is fitting into that secular trend is we are the choice for top-up.

We are the choice that folks go to when you are in the kitchen preparing something and you're missing one or two ingredients. We are the choice that you go to when... You're deciding to cook tonight.

And these are the things that I need to finish out what I need. So it's a clear set for how folks use Uber. And we feel very good that that is sort of what comes to mind as you think about it.

I think you will also see a growing trend as this becomes more pervasive. to sort of break the... It's a very U.

S. mindset. For those of you who are not from the U.

S. , you'll appreciate this. It's a very U.

S. mindset to go to the grocery store on a Saturday or Sunday and come back with two full cartloads of groceries to load into your SUV or your minivan. In the rest of the world, you're hitting the grocery store multiple times during the week.

It's just behavioral. And I... I'm confident we will continue to see that behavioral change come through here in the U.

S. and as folks move to that more, what am I going to do tonight? Am I going to order food or am I going to get restaurant food delivered and what's on Uber Eats or am I going to cook and therefore what am I going to need from Uber Eats to be able to prepare that meal?

We feel very comfortable behaviorally. That business is now running at a $12 billion run rate. It's been growing meaningfully faster than delivery.

And then if you look across the globe, because it's not just a US market, it's a global market, we are number one in, I think, seven or eight of the top 10 markets. And of course, you have the customer already there.

So that just sticks in the collection in front of them. Great. I think you touched on this earlier, and I think you guys have been fairly vocal about reinvesting a part of the margins in both businesses, back into growth.

And there's an opportunity for higher TAM capture here. I think on the deck you've laid out, I think, what's going to be an increase in TAM of 6x, $2 to $12 trillion, and eventually what should be higher profit dollars over time. Can you help us understand a bit more what are the largest areas of investments that you're going to be looking at over the next 12 months and what might be some of the new investments that might be coming up?

Yeah, sure. Let's first make certain that there's clarity on how we think about running the company's P&L. We're very confident that we have a an abundance of investment opportunities to continue to drive durable growth for Uber for many years to come.

And as has always been the case with our business, that requires us to invest now, to build the product out, to build the use, and then sort of let it loose and watch that grow. An easy example would be, think of Germany, which four or five years ago we entered the market, very limited presence, we're losing money. Now it's a great growing market for us and it's profitable.

So we know how to do this repeatedly, whether it's at a geography level or a product level. So we have these lists of ideas. We need to balance that with what is the right level of profitability to deliver to the owners versus investing in the business.

So what we've talked about for the last couple quarters, and again, more specifically at our third quarter earnings call here, is that we see profitability growing faster than our top line for years to come. But we want to continue to invest in the ideas that grow that top line, so you probably won't see the same level of margin expansion that you've historically seen. But the leverage will be there, and we're committed to leverage for, again, as far out as I can see.

Now, where are those ideas? They're really across all of these areas that we've talked about. We believe that there are still geographic opportunities for us.

For example, mobility is in 70-plus country. Delivery is only in 30. We believe that there continue to be use case areas that we can develop.

We've just launched Seniors, which is gaining traction, very similar to Teens. It's a product that's a little more tuned for folks who may not be as tech savvy or need someone's assistance in ordering an Uber. We're going to continue to invest in the grocery and delivery space that I have already mentioned.

Again, there's merchant selection there. There's product development. There's a lot of search that needs to be improved for us.

I think we are early innings on how we help consumers find what they're looking for on the product. And then I think a big area that sort of was reflected in the organizational change Dara made earlier this year is we've historically looked at our businesses as discrete P&Ls. There's the mobility and then the delivery.

And as a result of doing that, we missed opportunities to optimize across the platform. And so you will see us make significant investments in driving that cross-platform utilization. And that cross-platform utilization comes from things like discovering when do we show you a product or an opportunity that's in a different P&L structure.

For example, if you are on your morning ride to an office or to a meeting, that's an ideal time to offer you a Starbucks product. When we know what restaurants you have ordered from in the past, then what can we do to encourage you on the mobility side? take an Uber to that restaurant to eat in person.

Membership benefits that go across both ways. So lots of investments in those areas that we think can continue to drive the cross-platform utilization. And 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.

I think it's a you spend 3x more.

Yeah. Gotcha. We only have a couple of minutes left, so this is a topic that we have to touch on.

Sure. Of course, the topic of robo-taxis, which everybody has been focused on over the last year plus. So, you know, walk us through where you are in terms of your strategy here.

You know, you've probably been speed dating a bunch of people over the last year plus. So where are you now between potentially buying and owning fleets longer term? Is there even a likelihood that you might own thousands, if not thousands?

got a minute and 20 here let me do this so one we are we are highly we have very high conviction that the platform is the right way for this market why because you're solving two incredibly important problems first if you are a manufacturer and provider of AV vehicles you need to maximize the revenue per vehicle and the way to maximize the revenue per vehicle is to make sure that it is never empty it always has a paying passenger in it we can do that better than anyone because we have the demand The second problem you're solving that's critical is if you are a consumer, you want a seamless experience. I'm sure everyone in here has called an Uber at some point. You've had a very long delay in when that ride can get to you.

You've canceled, you've tried again, or maybe you've switched to a different app. That ability for you to get that ride in the time you want it is critical in terms of how consumers interact with the product. So having a hybrid network that allows you to serve folks through AV or through non-AV vehicles will be critical.

The technology problem has been solved. Multiple vendors have solved that. It is now really how do you commercialize this and scale this for profits.

We will have 10 plus cities by the end of 2026 where you can order an AV on Uber. I think we just announced this morning that Dallas is launching with one of our partners and then last week we announced I think Abu Dhabi, the driver, is now out of the car. So the wave is coming, and we think we're really extremely well positioned to help both the AV providers make money and the consumers have the right experience.

We're a little bit over, but any thoughts or details that you can share in terms of what your partnership with Waymo has yielded? Because I think what that's yielded in Austin as well as Atlanta.

Sure. So we're operating with Waymo in Phoenix, Austin, and Atlanta. And I think that our kind of the key metric that both of us look at is that utilization metric.

And that utilization metric has been extraordinarily high. Those vehicles are busier than... 99.

9% of Uber drivers in terms of the number of trips per day that they're doing. And for us, that's sort of that proof point that we need to know that the platform provides the right level of demand because we can aggregate that demand. And in the end, We know this from our 15 years of experience.

Consumers want to get from A to B. How they get there is a secondary consideration. The price they pay is really what's most important.

And that is why you've seen so much effort from us, not only on maintaining the affordability of UberX, but investing in low-cost products. Because we know that that's what drives demand. What drives demand is how I get there at what cost versus the vehicle that takes me there.

We're going to have to leave it there, Prashant. Thank you so much for joining us. And we'll see you about getting your UBS pass to face the old ones.