Uber Technologies (NYSE: UBER) is an American technology company, which develops and uses the eponymous mobile application for search, calling and paying for taxis and food delivery. In total, the company operates in 72 countries.
In early February, Uber submitted a report for 4 Quarter 2021, which informed investors of its second consecutive quarterly adjusted EBITDA earnings amid the return of the company's operating results to pre-pandemic levels.
Key points:
- Revenue increased by 83% — from 3,165 to 5,778 billion dollars - against the market consensus forecast of $ 5.36 billion. The main reason is the growth in the number of trips and indicators: MAPC and gross booking.
- Number of trips, MAPC and Gross Booking increase to 1.769 billion trips, 119 million people and $25.866 billion, which is fully consistent with pre-pandemic levels.
- Adjusted EBITDA came out of the negative zone and amounted to 0.086 billion dollars - against a loss of -0.454 billion dollars in 4 quarter of 2020.
- Net income per share, as well as EBITDA, turned out to be positive, increased to 0,44 $, What's on 0,73 $ higher than forecast. The market expected to see a figure of -0.29 $.
Sales structure of the company
Uber divides its business in two ways – by operating segments and by sales geography.
Operating segments. Consists of three operating divisions and one sold business:
- Mobility is the most affected destination from COVID-19, which is engaged in passenger transport, and the main income comes from fees, paid by taxi drivers for using the Uber platform.
- Delivery – deals with the delivery of food from local restaurants and grocery stores. Main Applications: Uber Eats, Postmates, Cornershop and others.
- Freight transportation is the smallest division, which, through its platform, connects carriers with shippers.
- Cutting-edge technology is the business, engaged in the development of autonomous vehicles and ridesharing technologies - the sharing of vehicles, — the company sold in early 2021.
Sales geography. Uber's business is present in four regions:
- USA and Canada.
- Europe, Middle East and Africa.
- Asia.
- Latin America.
IN 4 in the quarter of 2021, all operating segments of Uber showed excellent results. Mobility revenue increased by 55% thanks to the growth on 67% total bookings and strong data in Asia. The direction "Delivery" added year to year 78% against the backdrop of shock indicators in North America and Europe, which fully offset the decline in Asia. The freight segment increased almost in 2,5 times through the purchase of Transplace, without it, organic growth would be 27%.
Sales structure of the company, billion dollars
| By Operating Segment | 4к2020 | 4к2021 | The change |
|---|---|---|---|
| mobility | 1,471 | 2,278 | 55% |
| Delivery | 1,356 | 2,420 | 78% |
| Freight transportation | 0,313 | 1,080 | 245% |
| Hi-tech | 25 | 0 | − |
Sales structure of the company by segments, billion dollars
| By sales geography | 4к2020 | 4к2021 | The change |
|---|---|---|---|
| USA and Canada | 1,814 | 3,613 | 99% |
| Europe, Middle East and Africa | 0,664 | 0,995 | 50% |
| Asia | 0,385 | 0,751 | 95% |
| Latin America | 0,302 | 0,419 | 39% |
Sales structure of the company by geography, billion dollars
Profit
Net profit for the second time in the history of Uber showed a positive trend, but, as in the first case, her company earned thanks to the revaluation of previously made investments. IN 4 in the quarter of 2021, Uber's net profit increased from -0.968 to 0.892 billion dollars amid strong growth in other income.
The main articles of the section "Other income":
- Sale of share in MLU B. V. ("Yandex Taxi"): +0,242 billion dollars.
- Unrealized, or "paper", Profit in Grab: +1,6 billion dollars.
- Unrealized, or "paper", profit in Aurora: +1 billion dollars.
- Unrealized, or "paper", profit in Didi: −1.3 billion dollars.
- Other articles: approximately −0.1 billion dollars.
- Final result: +1,471 billion dollars.
Net income generation also contributed to adjusted EBITDA growth, which has increased almost in 11 times — from 0.008 to 0.086 billion dollars — compared to 3 quarter of 2021. As before, Mobility remains the most profitable division, its segment EBITDA is $0.575 billion, but this result is almost completely covered by Uber's corporate spending.: general administrative expenses, research and development of the platform.
Segment Adjusted EBITDA:
- "Mobility": +0,575 billion dollars.
- "Delivery": +0,025 billion dollars.
- "Freight transportation": −0.025 billion dollars.
- "Corporate expenses": −0.489 billion dollars.
- Final result: +0,086 billion dollars.
Key financial results of the company
| 4к2020 | 4к2021 | The change | |
|---|---|---|---|
| Revenue, billion dollars | 3,165 | 5,778 | 83% |
| Total Bookings, billion dollars | 17,152 | 25,866 | 51% |
| Number of trips, million pieces | 1 443 | 1 769 | 23% |
| MAPC, million people | 93 | 118 | 27% |
| Adjusted EBITDA, billion dollars | −0,454 | 0,086 | − |
| Net profit, billion dollars | −0,968 | 0,892 | − |
| net debt, billion dollars | 1,913 | 4,981 | 260% |
Growth Drivers
The main driver of growth in 2021 is the first profit, namely, positive adjusted EBITDA. According to the original plan, the company was supposed to go into the black at the end of 2020., but that didn't happen because of COVID-19, and the target automatically moved to 2021. IN 3 In the quarter of 2021, Uber fulfilled its goal and reached a symbolic profit on adjusted EBITDA.
The main driver of 2022 will be further recovery and growth of financial and operational results, mainly three indicators. The first is adjusted EBITDA, companies need to demonstrate to investors, that received in 2 Half a year the result was not an accident. The second is MAPC, Uber needs to get back on track, dock-like growth rates, when he grew up on 6% quarter to quarter. The third indicator is the number of trips, the situation with it is similar, as with MAPC: the company needs to restore the previous growth dynamics by about 7% quarter to quarter.
Investor day
The day after the publication of the financial results for 4 Quarter of 2021 Uber management held Investor Day, under which he presented his medium-term forecast until 2024 in addition to the short-term plan for the next quarter.
Short-term forecast for 1 Quarter 2022:
- Total bookings will grow by 28-33%: from 19,536 to 25-26 billion dollars.
- Adjusted EBITDA to increase from −0.359 to $0.100 to $0.13 billion.
Medium-term forecast until 2024:
- Total bookings will grow from 90 to 165-175 billion dollars, which implies an annual growth rate of 22-25%.
- Adjusted EBITDA during 3 years will increase from −0.8 to 5 billion dollars, and the EBITDA margin from gross booking is from −0.9 to approximately 3%.
- In the long term, management wants to reach the following EBITDA margins from gross booking: for mobility — 11,25%, for the "Delivery" division — 4,5%, the overall result for the company — 7%.
- Uber is waiting, that its first positive FCF will receive in 4 quarter of 2022, and by 2024, management plans to significantly increase this indicator..
Comparison of Uber with the main competitor
In general, Uber is rated by the market at the level of its main American competitor - Lyft, although it is larger, market share and geography of presence. Lyft's business is only present in North America , in the US and Canada, – while Uber operates around the world.
Compare Uber results to your top competitor
| Uber | Lift | |
|---|---|---|
| Capitalization, billion dollars | 73 | 14 |
| Revenue Growth Rate | 83% | 70% |
| Adjusted EBITDA, billion dollars | 0,086 | 0,075 |
| Net income per share, Dollars | 0,44 $ | −0,75 $ |
| Money and its equivalents, billion dollars | 5,647 | 0,457 |
| net debt, billion dollars | 4,981 | 0,198 |
| Uber | Lift | |
|---|---|---|
| EV / sales | 4,48 | 4,42 |
| P / S | 4,20 | 4,36 |
Share of Uber and Lyft in the US market of mobile taxi applications
| Uber | Lift | |
|---|---|---|
| 2015 | 85% | 8% |
| 2016 | 83% | 10% |
| 2017 | 74% | 22% |
| 2018 | 65% | 33% |
| 2019 | 68% | 31% |
| 2020 | 71% | 29% |
| 2021 | 68% | 32% |
What's the bottom line?
Uber delivered excellent operating performance in the last quarter of 2021: total bookings increased by 51%, number of trips — on 23%, MAPC - on 27%. These results allowed the company to earn profits for shareholders for the second time in its history..
The market, which did not expect such indicators, initially reacted to the postmarket with rapid growth - Uber shares grew to 13%, — but after, somewhere in the middle of the day, management had a disappointing Investor Day, which, coupled with inflation data, collapsed the company's quotes on that day with +3 up to −6%.
In the future, if Uber's management manages to strictly follow its planned medium-term plan until 2024, probably, the company's valuation will not remain at the current low level for the US market: EV / adjusted EBITDA 2024 = 15,6.
