1/ Thread: $UBER 3Q’2020 Earnings Update
If you have been following me for a while, you know I haven’t been bullish on $UBER.
Mr. Market has so far disagreed with me. It’s up 20% in the last two months.
Let’s see how this quarter went.
If you have been following me for a while, you know I haven’t been bullish on $UBER.
Mr. Market has so far disagreed with me. It’s up 20% in the last two months.
Let’s see how this quarter went.
2/ Rides was down 50% YoY. Take rates down ~290 bps QoQ. Adj EBITDA is coming back strongly from last quarter. 
3/ Is Mobility segment improving in October? Not much.
In October, Mobility was ~$28 Bn run-rate bookings. For context, in 2019, it was $49.7 Bn.
In October, Mobility was ~$28 Bn run-rate bookings. For context, in 2019, it was $49.7 Bn.
4/ Delivery continues to grow at a staggering triple digit rate.
More importantly, take rates is also up ~60 bps QoQ.
More importantly, take rates is also up ~60 bps QoQ.
5/ $UBER guided breakeven of delivery segment sometime in 2021.
They reiterated even if Mobility is 10-20% lower than Q4’19 run rate next year, they will still reach breakeven on company-wide adj. EBITDA basis.
They reiterated even if Mobility is 10-20% lower than Q4’19 run rate next year, they will still reach breakeven on company-wide adj. EBITDA basis.
6/ I wonder whether my personal biases led me underestimate the growth momentum of Eats.
Just the other day, I was ordering Five Guys via DoorDash. Sub-total was ~$24. Total Bill after including everything? ~$41!
Just the other day, I was ordering Five Guys via DoorDash. Sub-total was ~$24. Total Bill after including everything? ~$41!
7/ And I thought how many people would possibly look at that and think “yeah, it makes sense.”
One of my concerns was post-pandemic people would not use food delivery nearly as much as they do now since there is a mismatch between value and comfort.
One of my concerns was post-pandemic people would not use food delivery nearly as much as they do now since there is a mismatch between value and comfort.
8/ $UBER management shared some data that may indicate my concern was overblown.
Currently, ~30% restaurants in the US is on Eats platform.
UK 16%
France 15%
Brazil 10%
Mexico 10%
Japan <5%
The growth runway is perhaps longer than I imagined.
Currently, ~30% restaurants in the US is on Eats platform.
UK 16%
France 15%
Brazil 10%
Mexico 10%
Japan <5%
The growth runway is perhaps longer than I imagined.
9/ Eats is growing faster than everyone else and currently at $35 Bn run-rate, a feat Eats has reached sooner than its Rides segment.
That’s mighty impressive despite the help from pandemic.
That’s mighty impressive despite the help from pandemic.
10/ What’s driving this growth?
Active partnered restaurants grew +70% YoY.
Eats is experiencing higher retention, higher basket size, higher frequency of order.
Active partnered restaurants grew +70% YoY.
Eats is experiencing higher retention, higher basket size, higher frequency of order.
11/ And analyzing different geography trends, $UBER thinks even when things reopen, the data doesn’t change much which convinces them that it’s a behavioral shift.
12/ Other tidbits: Grocery bookings now >$1 Bn and available in 10 countries. Prescription drug delivery pilot in Dallas and Seattle.
>1 mn people subscribed to Uber Pass (available in US, Brazil, Mexico)+ Eats Pass (US, Taiwan, South Africa, Canada, and Japan).
>1 mn people subscribed to Uber Pass (available in US, Brazil, Mexico)+ Eats Pass (US, Taiwan, South Africa, Canada, and Japan).
13/ Redeemed 7.5% 2023 Notes and issued 6.5% 2028 Senior Notes.
Divested European Freight Business, and received $500 mn Series A investment for Uber Freight.
Given $7B cash and ~$3 Bn negative FCF so far this year, it’s good to raise funds externally to fund these bets.
Divested European Freight Business, and received $500 mn Series A investment for Uber Freight.
Given $7B cash and ~$3 Bn negative FCF so far this year, it’s good to raise funds externally to fund these bets.
End/ I will take another look at my model once $UBER 10-Q is filed.
Here’s my deep dive on $UBER: mbi-deepdives.com/deep-dive-on-u…
I’m publishing on $LULU early morning tomorrow.
Subscribe here to get in your inbox: mbi-deepdives.com/subscription/
Here’s my deep dive on $UBER: mbi-deepdives.com/deep-dive-on-u…
I’m publishing on $LULU early morning tomorrow.
Subscribe here to get in your inbox: mbi-deepdives.com/subscription/
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