The new website (in the works) will include an integrated place for me to share real-time push notifications on stock news — without inundating your inbox with emails. That’s when I plan to move much of my X content there. The service will be included with current subscriptions. For now, I am still using X to share headline news, so I wanted to include three important notes here for you all.

“Uber delivered a strong start to the year against a dizzying backdrop of headlines on trade and economic policy.”

CEO Dara Khosrowshahi

FXN growth is arguably more important for Uber than any other company we talk about. It hedges out all upside and downside risk pertaining to profits. So? FXN revenue growth is what is correlated with profit growth. Not GAAP revenue growth.

Delivery’s incremental EBITDA margin surpassed mobility this quarter as that segment margin closes the gap. Notably, delivery’s restaurant EBITDA margin is approaching UberX. Grocery and retail (G&R) delivery is also now contributing positively to profit dollars (not margins).

Q2 bookings guidance beat estimates by 1.5%. FXN bookings growth guidance of 18% Y/Y. Q2 EBITDA guidance also beat estimates by 1.5%.

Uber trades for 22x free cash flow (FCF). FCF is the best metric for this business given lack of non-GAAP adjustments on the income statement, as well as the equity & tax noise. FCF is expected to grow by 17% this year and by 24% next year. Estimates will rise for 2025 following this report.

Delivery, UberOne & Cross-Selling:

Broken record alert: The Uber One subscription is where this company differentiates most and shines brightest. It’s where it leverages unmatched product breadth to drive best-in-class engagement and retention. It’s where Uber takes advantage of leading economies of scale to offer consumers more value, more savings and more reasons to use its products. It’s a key enabler for creating the kind of revenue quality and margin profile that allows it to rationally offer promotions where others can’t. It’s the secret weapon in turbo-charging its cross-selling engine, with multi-product customers spending 3x more than single-product users. Uber One is why retention rates are at all-time highs across the globe… why engagement is at record highs… and why margins are too.

Delivery is the clearest example of this cross-selling engine working and fostering the excellent results you see above. 60% of Delivery gross bookings came from members during the quarter, with more room for upside considering some markets are already over 70%.

Going forward, the cross-selling focus will shift a bit to grocery and delivery for existing restaurant delivery (and mobility) customers. Just 18% of its overall delivery users interact with these services, and it sees so many levers to pull to raise that. One key item will be leaning into “seasonal moments and holidays” through partnerships with merchants like 1-800-Flowers, which it added to quickly enjoy its largest grocery and retail (G&R) volume ever on Valentine’s Day. They’ve done similar things with other merchants like Spirit Halloween in the past, and this will be a theme going forward.

“Just as our foundational excellence in Mobility powered the rise of restaurant delivery on UberEats, our platform will drive consumer adoption of G&R globally.”

CEO Dara Khosrowshahi

It will also look to non-merchant partners to augment its value proposition, interoperability and traction. Toast was the big announcement last quarter, but it’s also been working closely with Instacart to power their delivery business. That has helped Uber gain quick access to under-penetrated suburban areas. This quarter, it added a new integration with OpenTable and there’s “more to come.” All of this work should help Uber maintain the strong market share gains it has enjoyed and its top-ranked positioning in 8 of its 10 largest markets. They just took the top spot in the UK (without the help of M&A) and are taking meaningful share in Germany.

“We can’t rest for a second, and because of our global position and because of the unique platform that we have, we think we can hold our own and then some.”

CEO Dara Khosrowshahi

Mobility:

Low-density growth initiatives are going as well or better than planned (a theme for Uber under Dara Khosrowshahi). Its Uber Reserve product is showing real traction for use cases outside of airport rides. 40% of total volume for Reserve is now separate from airports, while “sparser markets” represent 20% of total mobility.

It’s also effectively controlling price inflation, as the gap between gross bookings and trip growth continues to narrow. And? It’s doing that while setting new margin highs. Economies of scale and best-in-class revenue quality are wonderful things… especially in a low-margin business like this one. Uber has figured out how to print cash amid this reality and that’s impressive. Additionally, lower levels of insurance inflation (as expected) are helping it control costs for consumers; it’s passing some of the savings onto them. It expects that to continue throughout 2025, with the aforementioned dashboard also potentially creating some risk and premium favorability. Leadership was noticeably irritated with U.S. regulators and how insurance premiums here are higher than most other places (despite similar levels of driver safety). They’re hopeful that things will change but are not reliant on that to meet their multi-year financial targets.

Driver & Merchant Supply:

Uber continues to enjoy strong supply-side growth, fostering best-in-class surcharge rates, wait times and, generally speaking, customer service. Drivers rose 20% Y/Y with earnings rising 18% Y/Y. Its new Driver Insights dashboard, which grades safety and allows the best drivers to access more earning opportunities, is working as planned. Outside of individual drivers, it keeps adding more supply through legacy taxi fleet partnerships. It debuted 40 city partnerships across important places like Florence and Rio de Janeiro this quarter and now collects $3.5B in annual bookings from this outlet. That’s up 60% Y/Y.

Advertising:

The ads business is thriving. It’s up to a $1.5B annualized run rate, with 60% Y/Y growth. A new partnership with Carrot Ads (from Instacart) will simply rev that already racing engine. It will give Uber immediate access to 7,000 consumer packaged goods brands with a tight integration and a low friction buying experience. They’re “positively surprised” by restaurant ad demand, which is already 2% of delivery gross bookings. Mobility is still a less tapped opportunity, but growth there will keep becoming a larger priority going forward.

Autonomous Vehicles:

“We are confident that AV technology is the single greatest opportunity ahead for Uber.”

CEO Dara Khosrowshahi

Uber is up to 1.5M autonomous trips per year and is generating great results from its exclusive launch with Waymo in Austin. Specifically, Waymo cars have higher utilization rates than 99% of manned Uber vehicles in that city. That is the single most important proof of concept to showcase if Uber wants to keep working with Waymo and everyone else. We already saw Yippit data on rides being 80% higher in that market than others where Uber doesn’t have exclusive access to Waymo’s cars. This meshes very well with that. Google is now gearing up to boost the fleet size from one-hundred to hundreds in the Texas city.

And the non-Waymo partnership momentum keeps humming. Coincidence? I think not. They will deploy test vans with Volkswagen in LA, cars with AVRide in Dallas and cars with May Mobility in Arlington… all this year. It’s expanding to 15 new cities outside of the USA with WeRide, Europe with Momenta and the Middle East with Pony.ai this year. Many people think Tesla, Waymo (and maybe Zoox) are the only 2 (or 3) players in this market. Those people are wrong. There are dozens of competitors racing to market. Many will fail. Many won’t. And as more succeed, market fragmentation will deepen and Uber’s demand aggregation will get increasingly valuable. 

On AV cost, Dara had some interesting color to add. He sees companies moving from models that resemble if-then functions, to end-to-end agentic algorithms with far more scalability at lower cost. He sees the Waymo/Toyota partnership as the future roadmap, meaning partnerships between legacy automakers and AV disruptors to bring the technology to the masses. Waymo, May Mobility and everyone else on the software and AV sensor side will work hard on optimizing cost through things like Nvidia’s synthetic data generation services and habitual upgrades. As a reminder, Waymo expects to roll out a new version of its model this year at half the cost. They’ll keep rolling out new models thereafter.

“Waymo is definitely the AV leader [in the USA].”

CEO Dara Khosrowshahi

M&A:

Uber bought a majority stake in Trendyol’s Turkish delivery business. They did $2B in volume last year, so this will add a bit of inorganic growth during the four quarters after it closes. Uber sees Turkey as the most compelling under-penetrated growth market outside of Brazil and India and is excited to combine its foundation with Trendyol’s “deep relationships with beloved local merchants.” Uber’s mobility business is already doing quite well there, so this should add another powerful cross-selling tool to its toolkit.

Macro & Tariffs:

Uber has seen lower levels of inbound USA travel, which did slow growth a bit this quarter. Still, that slowing was very subtle and the Q2 guide points to stable growth looking ahead. They see no real changes in consumer behavior outside of that specific example. Customers aren’t cutting frequency rates or trading down to cheaper restaurants. Food and transportation are generally pretty insulated from macro cycles.

Good quarter. I can’t call it amazing, considering the FXN bookings growth miss vs. its guidance. Still, everything else looks phenomenal.

The scale at which this business is delivering wonderfully consistent top-line compounding is special. The leverage it’s delivering while doing so is equally special. The guidance points to more of the same going forward. Uber One is morphing into one of the most valuable subscriptions on the planet and everything this company is doing is working. Its niche is perhaps second to none in providing adjacent, relevant products to introduce and cross-sell to its user base; its product breadth leads the market by a mile.

The only thing that can stand in their way is a formidable AV hardware monopoly to diminish the value of its network effect. That monopoly is quite unlikely and becoming less likely by the month. I continue to be a confident shareholder.