UBER Uber's Adjusted EBITDA More Than Quadrupled - and Net Loss Narrowed 97% to Just $157 Million

Seven Straight Positive Quarters, a Record Free Cash Flow, and a Loss That's Nearly Gone

Uber's FY2022 10-K closed out a first full year of positive free cash flow, with Q4 2022 alone swinging to a rare profit despite a $733 million UK tax settlement. This quarter extends every one of those trends further: Adjusted EBITDA^» more than quadrupled year-over-year to $761 million, up from $168 million a year ago - Uber's seventh straight positive Adjusted EBITDA quarter, continuing the streak that began in Q3 2021 (a new high, ahead of Q4 2022's derived ~$665 million, per the 2022-12 post). Free cash flow reached $549 million, up from $(47) million a year ago, on operating cash flow of $606 million versus $15 million a year ago.

Net loss attributable to Uber narrowed 97% to just $(157) million, from $(5,930) million a year ago (Q1 2022's record loss - see the Q1 2022 post). As in Q4 2022 (about $752 million favorable, derived from FY2022's $(7,045) million less the nine-month $(7,797) million), the swing this quarter was a net favorable one: a $320 million pre-tax unrealized gain, driven by a $357 million gain on the Didi stake and a $54 million gain on Aurora, partially offset by a $113 million loss on Grab. Mobility Adjusted EBITDA grew 72% to $1,060 million and Delivery Adjusted EBITDA nearly tenfold to $288 million from $30 million - both records. The stock rose 28% during the quarter, from $24.73 to $31.70, its first quarterly gain since Q3 2022's 30% rise, after Q4 2022's 7% fall (see the Q2 2022, Q3 2022, and FY2022 posts for the intervening moves).

The Prescription

Uber should keep leading with the free-cash-flow number: $549 million in a single quarter is a genuinely different scale from the $335-693 million cumulative multi-quarter figures through 2022, and confirms the FY2022 full-year milestone (see the 2022-12 post) is compounding into Uber's best quarter yet rather than plateauing.

What's worth flagging rather than ignoring: this quarter's net loss improvement is partly a favorable equity-stake swing (a $320 million gain, versus a $5.6 billion loss a year ago) as much as it is an operating improvement. Uber's own disclosure is clear about this breakdown, which is the right instinct - continuing to separate "the equity stakes moved in our favor this quarter" from "the underlying business generated $761 million of Adjusted EBITDA and $549 million of free cash flow" keeps the two signals from blurring together, especially since these stakes have swung the GAAP headline in both directions across the last eight quarters.

Key Financial Metrics

Q1 2023 vs. Q1 2022 - consolidated, reported in USD

Metric	Q1 2023	Q1 2022	YoY
Revenue	$8,823M	$6,854M	+29%
Adjusted EBITDA»	$761M	$168M	+353%, seventh straight positive quarter
Loss from Operations	$(262)M	$(482)M	loss narrowed 46%
Net Loss attributable to Uber	$(157)M	$(5,930)M	loss narrowed 97%, aided by a $320M net unrealized gain on equity stakes
Free Cash Flow	$549M	$(47)M	record quarterly figure

Balance sheet: Dec 2022 vs. Mar 2023

Balance sheet metric	Mar 2023	Dec 2022	Change
Cash and Cash Equivalents	$4,045M	$4,208M	roughly flat
Total Assets	$32,451M	$32,109M	roughly flat
Total Liabilities	$23,779M	$23,605M	roughly flat
Long-term Debt, net of current	$9,257M	$9,265M	roughly flat
Goodwill	$8,185M	$8,263M	roughly flat

The balance sheet held broadly steady this quarter - a change from the prior five quarters' equity-stake-driven asset erosion. The Investments line actually rose slightly to $4,718 million from $4,401 million, consistent with this quarter's net favorable unrealized swing on the Didi and Aurora stakes. Every other major balance-sheet line - cash, liabilities, debt, goodwill - stayed within a few percent of year-end 2022.

Uber posted its strongest quarter yet across nearly every metric: Adjusted EBITDA more than quadrupled year-over-year to $761 million, free cash flow hit a record $549 million, and net loss narrowed 97% to just $157 million - though that last figure was aided by the equity-stake mechanism swinging favorable.

Segment Results

Segment Adjusted EBITDA, Q1 2023 vs. Q1 2022

Segment	Adj. EBITDA Q1 2023	Adj. EBITDA Q1 2022	Change
Mobility	$1,060M	$618M	+72%
Delivery	$288M	$30M	+860%
Freight	$(23)M	$2M	swung to a loss

Mobility and Delivery both posted their strongest quarters yet. Freight, however, swung to a $(23) million Adjusted EBITDA loss from a small $2 million profit a year ago - the 10-Q attributes this to "macroeconomic headwinds impacting the broader freight industry," consistent with the 23% constant-currency decline in Freight Gross Bookings disclosed this quarter, Uber's weakest freight demand signal since the Transplace acquisition closed in Q4 2021.

Beyond the Usual

The Equity-Stake Mechanism Swung Favorable Again - a $320 Million Net Gain

As in Q4 2022 (about $752 million favorable, derived from FY2022's $(7,045) million less the nine-month $(7,797) million), this quarter's swing was a net unrealized gain: $357 million on Didi and $54 million on Aurora, partially offset by a $113 million loss on Grab, for a net $320 million pre-tax favorable impact. This follows three unfavorable quarters (Q1 2022's $5.6 billion combined loss, Q2 2022's $1.7 billion loss and Q3 2022's $550 million net loss) and then the net favorable Q4 2022; Q4 2021 had also been net favorable (about $1.2 billion, derived from FY2021's $1,142 million less the nine-month $(56) million), after Q3 2021's Didi loss. The magnitude here - $320 million - is far smaller than the multi-billion-dollar swings of early-to-mid 2022, consistent with the Investments balance-sheet line's much smaller remaining base ($4.4-4.7 billion, versus $11.8 billion at the start of 2022) after two years of markdowns.

Freight's Adjusted EBITDA Loss Deepened to $(23) Million on Industry-Wide Weakness

Freight Adjusted EBITDA fell to $(23) million from a small $2 million profit a year ago, driven by a 23% constant-currency decline in Freight Gross Bookings that management attributed to broader freight-industry macroeconomic headwinds rather than an Uber-specific issue. This is the segment's second straight Adjusted EBITDA loss, after a modest Q4 2022 loss (about $(8) million: the full-year $0 less $2 million, $5 million and $1 million in Q1 to Q3) and breakeven for full-year 2022 (see the 2022-12 post) - worth watching next quarter for whether this is a one-quarter freight-cycle dip or the start of a renewed trend of losses in the smallest of Uber's three segments.

Stock Price Since Last Quarter

Uber's stock rose through the first quarter of 2023: from a December 30, 2022 close of $24.73, up to $30.93 in January, $33.26 in February, before settling to $31.70 at the March 31, 2023 close - a gain of 28% for the quarter, Uber's first quarterly gain since Q3 2022's 30% rise (Q4 2022 fell 7%, from $26.50 to $24.73). This continues the partial recovery from 2022's broad growth-stock selloff, now tracking more closely with Uber's own operating improvement than the divergence seen through most of 2022.

Target Valuation Range

Undervalued. Uber traded at an EV/Revenue multiple of roughly 2.5x against TTM revenue as of this quarter's close - roughly in line with Q3 2022's ~2.5x and up from year-end 2022's ~2.2x, as the stock's 28% quarterly gain outpaced trailing revenue growth.

With approximately 2,023,827,162 shares outstanding as of April 27, 2023 (per the 10-Q's cover page) and a March 31, 2023 close of $31.70, Uber's market capitalization was approximately $64.2 billion. Against total liabilities of $23.78 billion and cash and cash equivalents of $4.05 billion, enterprise value was roughly $83.9 billion - up from the ~$69.1 billion calculated in the 2022-12 post, on the stock's quarterly gain. Against TTM revenue of roughly $33.8 billion (FY2022's $31,877 million, less Q1 2022's $6,854 million, plus this quarter's $8,823 million), that implies an EV/Revenue^» of roughly 2.5x.

	Mar 2023	Dec 2022
TTM Revenue	$33.8B	$31.9B
Enterprise Value	$83.9B	$69.1B
EV/Revenue	2.5x	2.2x

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