Uber Technologies (UBER) Q3 2026 earnings call transcript

Thank you, Sarah. Thank you for joining us today. And welcome to Uber's third quarter, 2026 earnings presentation on the call today. We have Uber CEO, Dara Kajrashahi and CFO, Apology Krishnamurthy. During today's call, we'll present both GAP and non-GAP financial measures. Additional disclosures regarding these non-GAP measures, including a reconciliation of GAP to non-GAP measures, are included in the press release, supplemental slides, and our filings with the ICC, each of which is posted to investor. uber. com.

Certain statements in this presentation and on this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as risk and uncertainty, describes in our most recent form 10K and in other filings made with the ICC.

We published our quarterly earnings press release, prepared remarks, and supplemental slides to our investor relations website earlier today, and we ask you to review those documents if you haven't already. We will open up calls to questions following brief, opening remarks from Dara.

With that, let me hand it over to Dara.

Thanks, Alex. Q3 was another strong quarter of growth and expanding profitability for Uber. With record, audience, and engagement across our platform. We reached 215 million monthly active platform consumers who are using Uber more frequently than ever. That helps us deliver a fifth consecutive quarter of 20-plus percent year-over-year growth bookings growth, alongside 35 percent growth in non-GAH EPS, and record trailing 12-month free cash flow of 10.4 billion.

Mobility continued to see healthy growth, but came in below our expectations as a result of driver supply not keeping pace with strong consumer demand in several international markets. We're responding with targeted investments to improve driver availability and marketplace balance, and we saw encouraging improvement in October. Our focus is on driving consistent growth while maintaining strong profitability of the business. Delivery had another excellent quarter, with growth bookings up 23 percent year-over-year, and organic growth accelerating.

Our investments in selection, affordability, and reliability are making Uber E's even more useful for everyday occasions, from restaurants, meals, to weekly groceries, and last-minute essentials, and with approximately 55 million Uber One members were deepening consumer relationships across both mobility and delivery. Those direct consumer relationships are central to our approach to AI. We're using AI to make everyday transactions simpler and discovering more personalized, while selectively exploring new distribution channels that can bring incremental demand.

In ADs, our focus is shifting from partnerships and testing to driverless commercial service. We're excited for Zeus to launch on Uber in Las Vegas later this month, with motional moving up to fully driverless operations soon thereafter. We expect approximately 700 fully driverless vehicles on Uber by year end, and more than 2,000 by the end of 2027. Just as importantly, we're focused on demonstrating utilization and economics that are needed to scale.

As we answer Q4, our priorities are clear. Improved mobility supply, build-on deliveries momentum, and deliver against our AD milestones all while continuing to grow, possibly. Before I headed off to the operator, I did also want to offer a special thanks to Jill Hazel Baker, our president, and chief corporate affairs officer. After 10 years here at Uber, she's moving on to open AI.

It's a big win for them. It's a loss for us to lose someone like Jill. She's been such a big part of our culture, our company, but fortunately she has built a great team who get to step up to more senior positions. Many of them are working with me directly, so I want to personally thank Jill for her 10 years here.

She's helped me in innumerable ways, both professionally and personally as well. She's been a great advisor. It's a big win for open AI. I'm really glad that the team that she built is ready to step up to bigger positions, which they fully deserve at the company. So, big thank you to Jill. And with that, I will turn it over to the operator for questions.

Thanks, Eric. I can take this. So, I think, you know, we aren't ready to say a lot on the structures that we are working on just yet, but what I would point you to is the billion dollar financing arrangement that we had set up with St. And earlier in the year that was focused on our traditional fleet partners. That is a template for what we could be doing with our AV fleets as we go through the next few months. We are actively working on these kinds of setups. And specifically, you should expect that we will have announcements to make both on infrastructure financing, but also on vehicle financing as we go forward.

So our long run expectation is that this should be financed by third party capital, not by Uber's balance sheet. And, you know, in the near term, as you've seen with the announcement that we had in the release, that we will have about 700 tribalist vehicles on our network this year, 2000 by the end of next year. The, you know, capital deployment against those is fairly limited. But as we start scaling out into the 10,000 plus territory in 2028 and beyond, we want to bring in third party capital against that and we feel good about the ROI that the third parties can get there.

And they're just a little bit more for me, which is we do think that fleet financing for these cars is going to be someone unusual, in that if you look at like fleet financing for rental car fleets, et cetera, they're all based on residual value of vehicles. And I think the residual value of the AV vehicles isn't established yet. And so as a result, in the early days, we're going to take these vehicles on our balance sheet. We have a very strong balance sheet, are capable of doing so.

And I think a lot of the fleet financing is going to be based on revenue, kind of revenue potential of these fleets. And what we're able to demonstrate is that cars on our network get very, very high utilization and actually higher utilization on cars that aren't on our network. You know, we show a 30% kind of utilization premium on our network and we're able to do so very flexibly. So, you know, if there's a fleet that for some reason fails in terms of their operations, we can take that AV vehicle and put it under separate ownership and it will still earn on the Uber network, so to speak. So, we think that the financing on the Uber network can have a real advantage in terms of cost of capital versus alternatives.

And it is kind of a business model that we're working with to establish with partners. The reaction has been actually, you know, they're quite interested. They want to diversify away from data centers, so to speak. So we're quite optimistic on it, but we do have to establish the business model, the utilization advantages, demonstrate that to the banks and then go from there.

Yeah. Yeah. Thank you, Nikhil. So I think what I would say is a lot of this is a continuation of the dynamics that we have seen through the year. And if you zoom out and look at the macro environment with the escalation in the war in the Middle East, fuel costs impacts have been felt globally. Where it shows up most materially for us is in emerging markets where there is a level of price sensitivity on both the consumer and the driver side.

And what we talked about last quarter in Brazil was specifically focused on motor supply from delivery competition in the market. But through the last quarter, we have seen the elevated fuel price impact in markets like Brazil and India, in particular, quite meaningfully impacting the supply situation.

Similarly, you know, the immigration dynamics have been in place through the year, but as we go through the back half of the year and we see elevated demand from the holiday season that you have coming through right now, which again, the demand picture is pretty strong. We see an elevated impact on the supply on the marketplace when the supply is short. So that's kind of what we're calling out in Canada as well.

Now, this is a good problem where, you know, we are at the scale that we are operating at and we still are running into supply constraints rather than demand constraints and we know exactly how to address those kinds of challenges with the history that we have demonstrated. We're making targeted supply investments. So this is focused on driver acquisition retention and engagement.

And as we go through that kind of investment, we are already encouraged with the early signs of supply improvement we saw in October and supply ours growth globally accelerated in October, including notable improvements in Brazil and India. So I think, you know, with all of that, you see our outlook, which is steady at the 18 to 22% growth range, which is steady from the last couple of quarters. So we feel good about where we are and the growth runway in front of us is extremely long over the last five years. We have doubled our eligible population penetration in our top 10 markets, but it's still at only 10%. Right. So we feel really good about that.

We can go. I think just the additional factor that we are dealing with is that we obviously have a year over year pressure on supply, but then we also have seasonal pressure on supplies law, which is September, October, November, December are kind of peak season for us, both in mobility and delivery. And in some markets like Brazil, mobility and delivery depend on two wheel supply, which for us is, for example, one of the examples of supply that we need to add. So those kind of intermingles. So it's a seasonal issue. And it's a year on year issue that are hitting together.

We've got a good handle on it. We're very optimistic about the trends as we seem in October and going into key four. And again, this is not the first time we have dealt with this kind of situation.

Yeah, absolutely, Brian. So we're very excited about the progress of our grocery and retail business. We're, you know, run right now at $15 billion, run rate growing 40% on a year on your basis. You know, I think this is like a $10 trillion, so it's an enormous market for us. And what we see from consumers is over and over is, you know, they want more stuff faster. They want everything faster. You know, I think when Amazon brought overnight shipping, it was magic.

And now, you know, next hour shipping is magic and pretty soon people are going to expect everything in 15 minutes. And we play right into that area. You know, the areas of investment for us are really about selection. They're about affordability. And they're about kind of consumer experience. You know, on the selection side, we're very excited to expand to Costco nationwide.

We also have added a number of international players target the cash line, price line in Australia, Tesco in the UK, really in Germany as well. So we continue to invest in selection. And as we add selection, we have more consumers coming online as well, and also conversion rates improved. We continue to invest in affordability, whether it's fresh off Tuesdays or, for example, members not having any fees above 60 bucks that our members are loving as well.

And then we continue to invest in product innovation as well to make sure that, you know, our pick pack is as accurate as it can be shopper or investing in shopper qualities. So we are paying high quality shoppers more. And we're also introducing technology, for example, where our shoppers will take a photo of an empty shelf to verify that, you know, the item that you're looking for isn't there. It also helps our consumers too, because when they see the empty shelf, they don't get upset. It's not the shoppers fault. It's just what they want. It wasn't there. And so it helps establish trust between both sides of the marketplace.

So for us, it's just all about execution. You know, as it relates to dark stores, our number one priority has been to work with our partners and to help them grow their businesses. Now, we're very excited as it relates to delivery hero, they have built a substantial quick commerce and dark store business. And the benefit of dark stores is that you have a much better handle on inventory, usually your pick and pack success percentages, your found rates are much higher. So quality goes up as a result of the vertical integration. And, you know, this is a part of the delivery hero hopeful potential acquisition that we're very excited about that team has been building their quick commerce business for, you know, well over, you know, seven, eight years.

It is, it hit break even. It is growing at very attractive rates. And we're very excited to add that as part of our portfolio once we close the on delivery hero.

And just one additional comment on the dark store question. This is for us. We are very excited to add that as part of our portfolio as part of our portfolio as part of our portfolio as part of our portfolio as part of our portfolio as part of our portfolio as part of our portfolio as part of our portfolio as part of our portfolio.

So ultimately it needs to be a business that can be run well, has to meet the market conditions and has to have a good return on assets when you go into that sort of a field. So we'll be selective in very engaged with this. Otherwise, we would work with our grocery partners who are experts at doing that in their own space.

Yeah, absolutely. So we're very excited. I mean, we got launches. Obviously, we're in market with Waymo already in the U. S. where market with we ride and buy do with no drivers in a number of international markets. We expect to launch zooks and motion as we mentioned in Vegas this year. And then next year, we expect to add neuro in California and then in Houston as well in Texas, at least early on in 2027. We're no vehicle operator kind of inventory. You know, in late 27, I do think we are going to be doing kind of testing rods vehicle operator testing rods with NVIDIA with Ruby and hopefully with lobby as well.

And also wave outside of the U. S. So, you know, there's going to the partner strategy and the monopoly of all these partners are really going to start adding up and we're quite confident of getting to the 2000 vehicles in 2027. But the real goal is to get to tens of thousand vehicles, tens of thousands of vehicles and 28 and beyond and really scaling the ecosystem.

And, you know, we are in market in these markets. We have relationships with the cities. We have operations in those markets. We don't have to build demand. The demand is already there. So we think we can launch very quickly at very high utilization for our partners, which makes us even more optimistic about the opportunity here.

So on the utilization lift, I would stop by saying we believe it's a very durable advantage for Uber. And maybe just for context, when we're talking about the 30% lift here, we are comparing Uber's deployments on a hybrid basis in the US with mature 1P deployments, right? And these mature 1P deployments have the advantage of mixed that in that they include San Francisco, which is a uniquely favorable market for AV deployments today.

As that deployment scale broadens out, we expect that 1P deployments will likely have utilization that will be worse than what they're seeing in San Francisco. And in fact, what you're seeing on the ground today is exactly that both for Waymo and Tesla, their trips per vehicle per day in the new markets that they have launched this year is in the low team versus high 20s that we are seeing on our network in these hybrid markets. And effectively, you're looking at 100% plus utilization for us in those markets. I think the other part of this is we are also going to likely have advantages on additional pieces of the unit economics pile.

First, the vehicle costs over time are going to come down. And that will be true for many players. But in general, what we are trying to ensure here is that as we work with OEMs, we want to ensure that we have line aside to advantage pricing that we can deliver because we have scale. Second piece that we will have advantage on also is on shared charging maintenance and fleet infrastructure, since that can be shared across multiple EV partners. And I would think about this as the hyperscalers getting advantage versus on-prem data centers that were serving one one conference. So I think those two pieces in addition to the utilization will support long-term economics.

Our goal is for AV trips to deliver margins comparable to human driven trips over time. And as we get beyond that kind of point, we can share savings with consumers and truly expand them beyond what we are already seeing on the ground. Right.

And in terms of capital allocation, et cetera, our priorities haven't changed. Obviously, our number one priority is to drive organic growth.

Investment in the AV ecosystem, we talked about a $10 billion commitment based on certain deliverables, both an investment in partners and or AV fleets, et cetera. That's another priority. And then there's M&A and buybacks as well. And we have plenty of capital for both. We are going to shift to, I would say, more of the top two. And we're going to pull back on M&A chiefly because we're really focused on integration of the deal. That we've already announced.

Generally, they're performing great, but we want to make sure we get the right cost of capital as it relates to M&A. And if you look at kind of our M&A philosophy historically and going forward, it's really in a couple of categories. You know, one, you'll see deals that extend our geographies. They allow us to offer our services in more countries.

Delivery hero is an example of that. Trendy all goes and is an example of that. And not only do we get into new geographies that are growing very, very fast, but it allows us to offer the platform advantage to power the platform, which is mobility and delivery cross promoting each other, membership programs cross promoting each other in more countries. So we're in many, many of the delivery hero markets were many, many of the delivery hero markets. And it's just the extension of our platform geographically.

The second area we look at are what are capabilities that we can build that are specialized and we think really profitable. We talked about our premium business growing, and we talked for example, it's grown 35% year on year, and our U4B business grew almost 50% year on year. And those, for example, are the acquisitions of black lane and easy cater that you asked about. You know, black lane gives us more specialty, very high quality inventory and easy cater have specialized capabilities. You know, they only work with merchant partners who focus on catering.

A lot of times the delivery partner has to come into the office, set things up. It's a different level of service. And there's a huge advantage in being able to offer both black lane and easy cater to our U4B audience, which I think now we've got like half of Fortune 500 companies now as well. So those are established businesses, different capabilities, and we can introduce our U4B audience and really embed with them even more.

And then third is kind of new products that can grow with our audience. So spot for your example of that. We want our product to be more relevant, for example, to commuters. Commute is one of our largest categories. And to be able to offer commuters, you know, and Uber to work, a pass to avoid surge, and parking if they want it when they want to drive is a great, for example, example for us building out our inventory of services to the commuter, who is a top customer for us. So those are the themes that we're going after. We're really excited about the acquisitions that we have on our books. We're very excited about EasyGator.

And generally, at stand-alones, they are operating at higher levels than our deal cases. And now we just want to make sure that the integration is right. The teams are treated well, and everything goes well, which is why next year I think the focus is going to be more on organic, autonomous, and then, of course, buying back stock opportunistic.

I just said that from a problem standpoint, for any deal that you see us do, we are always evaluating the build versus buy case. And we're looking at the accretion math relative to what it would look like if we just bought back our own stock. In this specific case, since you are specifically about EasyGator, the build versus buy math could not be more obvious. We are talking about acquiring a business that is profitable right now. We have more synergies coming.

And relative to building this business, we expect that you would see a few hundred million dollars of profit swing in the build case versus buy. So, I think, you know, we feel very good about the logic and we now are focused on executing against it.

Yeah, absolutely. So, I don't think, honestly, Michael, it's going to affect us too much. Our grocery retail business is growing, you know, it's a $15 billion run rate growing 40%. Our focus really is to continue to improve the product. And the product still has a lot of improvement ahead of it in terms of selection, in terms of quality, in terms of on-time rate, in terms of still rates, et cetera. You know, when we talk to our merchant partners, they want choice.

They want to develop direct channels. They want plenty of partners, including us and DoorDash and Instacart to work with. So, this potential deal takes one of those partners off the table. And we've already had kind of reach out from our partners, you know, both who are very worried about the potential transaction and asking us, what do you think?

And then two, wanting to actually work with us more, wanting to build their business with us so that they are not overly dependent on a single platform. If DoorDash and Instacart happens, which will be a very, very large percentage of the online markets. But from our standpoint, the promise of this market is a $10 trillion market. You know, this would create a competitor that has a big share of certainly the online portion of that market. But we think for us, we're going to continue to invest in. And, you know, these acquisitions create a lot of distractions. And at this point, the reach out, we've gone from merchants or merchants who want to embed with us more deeply and want to build their business with us so that they have alternatives.

And, you know, it's going to be up to the government to decide whether your alternatives or two alternatives is better.

Yeah. Thanks, Ken. On the U. S. for mobility, we are seeing relatively resilient growth in the U. S. versus the international trends we talked about earlier in the call. You know, growth moderated a bit in Q3, but not as much as in the international markets. You know, integrated gas prices are an issue globally. And there is some level of supply pressure that we're seeing in the U. S. as well. But we are responding with the targeted investment, supply investments that we talked about earlier.

I think beyond the supply question, what we are seeing in the U. S. that continues to be true is the insurance tailwinds, continue to build. You know, we talked about the meaningful acceleration in California trip growth. They continue to outperform relative to the rest of the country. Two are barbell strategy on the product side. Continues should be really, really healthy in the U. S. barbell products grew at 3x the rate of the overall business in Q3.

And it's driven by strong innovation around growth. That's portfolio, including made and safe comfort, reserve, black, but then also expanding to new demographics with teams and women preferences that are targeting just new cohorts of consumers and creating more options for our consumer base. And then finally, from a sparse market standpoint, you know, we just see so much runway in the U. S. less than 10% of eligible consumers in sparse markets have used Uber in the last 12 months.

That number in dense markets is 50% of consumers. So, you know, we continue to make improvements on supply and reliability in these markets and that should have long-term impacts that are very favorable.

Yeah, and we're quite pleased in terms of U. S. delivery, which accelerated nicely. It's a second quarter in a row that organic growth and delivery and U. S. delivery accelerated and really is for a number of factors. One is mathematically our grosser and retail business and direct business, which are growing faster than our OFC business are becoming a higher percentage of the portfolio, so to speak. So, you just have kind of a bigger, faster growing part of the business, getting even larger.

Our core restaurant business is also accelerating and that is because of really merchant selection, the number of merchants that we added in the U. S. was up nicely about 12% on a year on your basis. So, as we add more selection, you know, everything helps conversion improves. We get new customers on the platform as well. Membership is definitely tailwind for us. So, members are now 70% of delivery growth bookings.

So, membership is deepening engagement with our consumers as well. And then, of course, sparse markets, you know, as Paul already said, sparse markets is a play that we're running globally, but it's absolutely play that we're running in the U. S. as well for delivery. That helps. And then last but not least, it is really deals. We are focused on kind of merchant funded promotions in addition to the membership discounts that we give to our consumers.

If you look at our ad business and merchant funded promotions, they grew to over 10 billion on a year on your basis.

And, you know, these are dollars that we're giving to our consumers and the return for merchant says, you know, new consumers and kind of higher penetration in the marketplace. So, all of it is working at this point. If there's one issue, it's, it runs with mobility in that we continue to invest in delivery in careers to make sure that, you know, kind of our career growth keeps up with the consumer demand that we're seeing on the food side. That is right now the biggest challenge that we've got. But the team we think is more than up work.

Yeah, Mark, I think I would just take you back to our philosophy as always, which is that we want to drive margin expansion for the total company on a year on your basis. And ideally, we want to do the same for the segments as well. But on a quarterly basis, there is some variability in the business, both from just the investments we typically make in supply in holiday season, et cetera. So I wouldn't call out any kind of meaningful changes in the margin trajectory for the business. And, you know, we would have some color on just the Q4 supply investments for mobility that would have an impact on take trade, but not necessarily from a margin standpoint, anything meaningful.

Look, I think the final point I'd make here is on profitability. If you look at our outlook, we delivered a quarter of mid 30% EPS growth. The Q4 outlook that we just provided at the midpoint is a 37% year on your growth on our non gap EPS. So if anything, you're seeing the profit ramp expand and that puts us in a pretty good spot for 2027.

And Mark, just a little bit more so you understand the picture in terms of supply demand. You know, we have base pricing for both kind of our consumer pricing and then base pricing for driver, courier, pay, et cetera. Then we have incentives and there are kind of call it rider side incentives, driver side incentives, eater side incentives, you know, that kind of courier incentives as well. These are more flexible dollars that we target times, you know, like Halloween, make sure drivers show up, et cetera. Or we'll target places if we think that there's a ball game going on, we'll put incentives for drivers to show up to the ball game at the right time.

But the cool thing is that we just rebalance incentives between riders and drivers, for example, in this case. And so whereas last year, more of the incentives went to riders to reduce price. Now this year we're taking down rider incentives and we're using those dollars to fund driver incentives. Now that does mean sometimes higher prices for riders, which is something that we watch out for. We will do trade offs against profitability, but that's something that we handle. But there is a flexible incentive pool that we allocate to supply or demand based on the balance of the marketplace. And that's part of kind of the art that we've got. And then there's a lot of science, algorithmic science that goes into a, if you have a dollar, what is the maximum predicted return for that dollar?

And should I get, invest that dollar in a driver in Brazil, or should I invest that dollar in a rider in India, for example? And the algorithms are making these choices. Then they structurally can make these choices based on, you know, trading on billions of, of, of, and, you know, they can allocate these investments in a way that humans just can't.

Thank you.

Yeah, definitely. So Doug, I think our focus is, is making sure that we invest for the best possible experience to become direct. You know, it's, it's price, your delivery time, reliability, selection. Obviously we have membership benefits and members now account for more than 50% of our booking to just build the best experience when you come direct. And we're really focused on making sure that the direct app experience is already frictionless, right? So like the mean ride time booking is less than a minute. It's actually 50 seconds. That's how much time people spend on our app and 75% of our rides are a single tap based on personalizing, you know, your destination based on the data that we have on you.

You know, our mean, if you look at the meeting time for an eater to reorder their favorite food, it's only 90 seconds. So we make sure that kind of coming to Uber doesn't require a bunch of toil. You can get in, you can get out and because of the data that we have, you know, where you're going, when you're going there, et cetera. We think we're going to have a ton of people come direct to our site and listen, I used to work in a travel business where we're dependent on the Googles of the world. I don't want to go back there.

So really kind of the best in class marketplace technology that we're building operational execution, I think is going to have more and more people coming direct to us. And we are building our own AI experiences. You know, for example, we have a cart assistant, which we're very excited about in early signal shows that baskets that you build with a cart assistant are roughly twice the average of the average basket as well. And we're working on kind of each assistant, driver assistant, et cetera, to make sure that AI kind of, we have the best AI systems that can get you in and out of our services very, very quickly.

That said, we will have discussions with kind of third party AI agents. We think that it's another opportunity to reach our platform. We think it'll be a net positive in terms of demand into the ecosystem. And you can get based on kind of our services. There are a lot of every single AI system company is talking to us and we're really now negotiating the terms of trade.

And the good news here is in most markets, you have two mobility, big mobility providers, two big delivery providers. You know, I think I've counted now there are eight different assistants and I think they'll be more than 10 assistants. So I think, you know, the content players in our space in the physical space were kind of, you know, the fulfillment that demands on, you know, the services that we build are very large. I think the demands on our services are going to be very, very high.

So something we're really excited about now. It's pretty small. I think you were telling me what were the transactions are going to this point?

Yeah, so I think just to put numbers to it. We had our one of our largest weeks last week because it was Halloween. So we did just around 320 million trips on Uber and Breathe. The volumes coming from AI agents for Uber Eats were around 500, 500 orders total. And for our rice business, it was a grand total of four trips that we fulfilled from the agents. So it's very, very early and very limited traction that we're seeing so far.

Yeah, but we hope that there will be more traction. Like we do think that we want to make services that are available to consumers in a delightful, easy way. We think our direct services are going to be almost delightful and easy, but we will work with these third parties. It's just very, very early. And we want to make sure we're not dependent on anyone player. And I think we're very well positioned in this environment going forward.

All right. Well, I think that's it. Thank you everyone for joining. Thank you, Uber team for everything that you've done to deliver a great quarter. We're excited to close out the year, hopefully with a really, really strong quarter. And a big thank you to our investors and our owners who put their dollars and faith in us as a company.

More to come. Thank you.