Uber Technologies, Inc 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K . We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented. Refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 15, 2024, for reference to discussion of the fiscal year ended December 31, 2022, the earliest of the three fiscal years presented. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. You should review the sections titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and in Part I, Item 1A, “Risk Factors”, for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Annual Report on Form 10-K. 48 Overview We are a technology platform that uses a massive network, leading technology, operational excellence, and product expertise to power movement from point A to point B. We develop and operate proprietary technology applications supporting a variety of offerings on our platform. We connect consumers with providers of ride services, merchants as well as delivery service providers for meal preparation, grocery and other delivery services. Uber also connects consumers with public transportation networks. We use this same network, technology, operational excellence, and product expertise to connect Shippers with Carriers in the freight industry by providing Carriers with the ability to book a shipment, transportation management and other logistics services. We are also developing technologies designed to provide new solutions to solve everyday problems. Driver Classification Developments The classification of Drivers is currently being challenged in courts, by legislators and by government agencies in the United States and abroad. We are involved in numerous legal proceedings globally, including putative class and collective class action lawsuits, demands for arbitration, charges and claims before administrative agencies, and investigations or audits by labor, social security, and tax authorities that claim that Drivers should be treated as our employees (or as workers or quasi-employees where those statuses exist), rather than as independent contractors. Of particular note are proceedings in California, where on May 5, 2020, the California Attorney General, in conjunction with the city attorneys for San Francisco, Los Angeles and San Diego, filed a complaint in San Francisco Superior Court (the “Court”) against Uber and Lyft, Inc., alleging that drivers are misclassified, and sought an injunction and monetary damages related to the alleged competitive advantage caused by the alleged misclassification of drivers. To comply with Proposition 22, we have incurred and expect to incur additional expenses, including expenses associated with a guaranteed minimum earnings floor for Drivers, insurance for injury protection and subsidies for health care. We do not expect these changes will have a material impact on our business, results of operations, financial position, or cash flows. If, as a result of legislation or judicial decisions, we are required to classify Drivers as employees, workers or quasi-employees where those statuses exist, we would incur significant additional expenses for compensating Drivers, including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes (direct and indirect), and potential penalties. Additionally, we may not have adequate Driver supply as Drivers may opt out of our platform given the loss of flexibility under an employment model, and we may not be able to hire a majority of the Drivers currently using our platform. Any of these events could negatively impact our business, results of operations, financial position, and cash flows. For a discussion of risk factors related to how misclassification challenges may impact our business, result of operations, financial position and operating condition and cash flows, see the risk factor titled “-Our business would be adversely affected if Drivers were classified as employees, workers or quasi-employees” included in Part I, Item 1A, “Risk Factors”, and Note 14 – Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. In addition, if we are required to classify Drivers as employees, this may impact our current financial statement presentation including revenue, cost of revenue, incentives and promotions as further described in Note 1 – Description of Business and Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” and the section titled “Critical Accounting Estimates” in Part II, Item 7, of this Annual Report on Form 10-K. Financial and Operational Highlights Year Ended December 31, (In millions, except percentages) 2023 2024 % Change % Change (Constant Currency (1) ) Monthly Active Platform Consumers (“MAPCs”) (2), (3) 150 171 14 % Trips (2) 9,448 11,273 19 % Gross Bookings (2) $ 137,865 $ 162,773 18 % 21 % Revenue $ 37,281 $ 43,978 18 % 19 % Income from operations $ 1,110 $ 2,799 152 % Net income attributable to Uber Technologies, Inc. $ 1,887 $ 9,856 ** Adjusted EBITDA (1), (2) $ 4,052 $ 6,484 60 % Net cash provided by operating activities (4) $ 3,585 $ 7,137 99 % Free cash flow (1), (4) $ 3,362 $ 6,895 105 % (1) See the section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measure. (2) See the section titled “Certain Key Metrics and Non-GAAP Financial Measures” below for more information. 49 (3) MAPCs presented for annual periods are MAPCs for the fourth quarter of the year. (4) Net cash provided by operating activities and free cash flow during the year ended December 31, 2023 reflected an approximately $789 million (£631 million) cash outflow related to payments of HMRC VAT assessments for the period of March 2022 to June 2023. For additional information on these matters, refer to Note 14 – Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K as well as the section titled “Liquidity and Capital Resources”. ** Percentage not meaningful. Highlights for 2024 In the fourth quarter of 2024, our MAPCs were 171 million, growing 14% compared to the same period in 2023. Overall Gross Bookings increased by $24.9 billion in 2024, up 18%, or 21% on a constant currency basis, compared to 2023. Mobility Gross Bookings grew 25% year-over-year, on a constant currency basis, primarily due to an increase in Mobility Trip volumes. Delivery Gross Bookings grew 17% year-over-year, on a constant currency basis, primarily driven by an increase in Delivery Trip volumes. Freight Gross Bookings declined 2% year-over-year, on a constant currency basis. Revenue was $44.0 billion, up 18% year-over-year, primarily attributable to an increase in Gross Bookings of 18%. The increase in Gross Bookings was primarily driven by an increase in Mobility and Delivery Trip volumes. The increase in revenue was partially offset by business model changes in some countries that classified certain sales and marketing costs as contra revenue, which negatively impacted revenue by $863 million and $713 million across Mobility and Delivery, respectively. Net income attributable to Uber Technologies, Inc. was $9.9 billion, which includes: (i) a $6.4 billion benefit from the release of our valuation allowance of certain U.S. federal and state deferred tax assets and (ii) the favorable impact of a pre-tax unrealized gain on debt and equity securities, net, of $1.8 billion primarily related to changes in the fair value of our equity securities, including: a $723 million net unrealized gain on our Grab investment, a $629 million net unrealized gain on our Aurora investment, and a $357 million net unrealized gain on our Didi investment. Adjusted EBITDA was $6.5 billion, growing $2.4 billion year-over-year. Mobility Adjusted EBITDA was $6.5 billion, up $1.5 billion year-over-year. Delivery Adjusted EBITDA was $2.5 billion, up $965 million year-over-year. These increases were partially offset by a $57 million increase in Corporate G&A and Platform R&D costs, year-over-year We ended the year with $7.0 billion in unrestricted cash, cash equivalents and short-term investments. During the fourth quarter of 2024, we redeemed $2.0 billion of our outstanding debt. For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. In January 2025, we announced that we entered into an accelerated share repurchase (“ASR”) agreement with a large financial institution to repurchase $1.5 billion of our outstanding common stock as part of our previously announced Share Repurchase Program. The transactions under the ASR agreement were completed during the first quarter of 2025. For additional information, see Note 10 – Stockholders' Equity to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Components of Results of Operations Revenue We generate substantially all of our revenue from fees paid by Drivers and Merchants for use of our platform. We have concluded that we are an agent in these arrangements as we arrange for other parties to provide the service to the end-user. Under this model, revenue is net of Driver and Merchant earnings and Driver incentives. We act as an agent in these transactions by connecting consumers to Drivers and Merchants to facilitate a Trip, meal, grocery or other delivery service. In certain markets we are responsible for the Mobility or Delivery services (and in most markets we are responsible for the Freight services), and in these markets we present revenue from end-users and from Shippers on a gross basis, with the payments to Drivers and Carriers classified within cost of revenue, exclusive of depreciation and amortization. We would expect revenue to fluctuate on an absolute dollar basis for the foreseeable future based upon factors such as Trip volume, Driver supply, macroeconomic conditions, global travel activities and management pricing and promotional activities. During the year ended December 31, 2023, we implemented a business model change in certain major markets resulting in end-users becoming our customers. Promotions to end-users considered customers are recognized as contra-revenue while promotions to end-users not considered customers are recognized as sales and marketing expenses. For additional discussion related to our revenue, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Revenue Recognition” as well as “Note 1 – Description of Business and Summary of Significant Accounting Policies - Revenue Recognition,” and “Note 2 – Revenue” to our consolidated 50 financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Cost of Revenue, Exclusive of Depreciation and Amortization Cost of revenue, exclusive of depreciation and amortization, primarily consists of costs incurred for certain Mobility and Delivery transactions where we are primarily responsible for Mobility and Delivery services and pay Drivers and Couriers for services, certain insurance costs related to our Mobility and Delivery offerings, costs incurred with Carriers for Uber Freight transportation services, credit card processing fees, bank fees, data center and networking expenses, mobile device and service costs, and amounts related to fare chargebacks and other credit card losses. We expect that cost of revenue, exclusive of depreciation and amortization, will fluctuate on an absolute dollar basis for the foreseeable future primarily driven by Trip volume changes on the platform. Operations and Support Operations and support expenses primarily consist of compensation expenses, including stock-based compensation, for employees that support operations in cities, including the general managers, Driver operations, platform user support representatives and community managers. Also included is the cost of customer support, Driver background checks and the allocation of certain corporate costs. We would expect operations and support expenses to vary from period to period on an absolute dollar basis, but decrease as a percentage of revenue as we become more efficient in supporting platform users. Sales and Marketing Sales and marketing expenses primarily consist of advertising costs, product marketing costs, consumer discounts, promotions, credits and refunds provided to end-users who are not customers, compensation costs, including stock-based compensation to sales and marketing employees, and the allocation of certain corporate costs. We expense advertising and other promotional expenditures as incurred. We would expect sales and marketing expenses to vary from period to period as a percentage of revenue due to timing of marketing campaigns. During the year ended December 31, 2023, we implemented a business model change in certain major markets resulting in end-users becoming our customers. Promotions to end-users considered customers are recognized as contra-revenue while promotions to end-users not considered customers are recognized as sales and marketing expenses. Research and Development Research and development expenses primarily consist of compensation costs, including stock-based compensation, for employees in engineering, design and product development. Expenses also include ongoing improvements to, and maintenance of, existing products and services, and allocation of certain corporate costs. We expense substantially all research and development expenses as incurred. We would expect research and development expenses to increase on an absolute dollar basis and vary from period to period as a percentage of revenue as we continue to invest in research and development activities relating to ongoing improvements to and maintenance of our platform offerings and other research and development programs. General and Administrative General and administrative expenses primarily consist of compensation costs, including stock-based compensation, for executive management and administrative employees, including finance and accounting, human resources, policy and communications, legal, and certain impairment charges, as well as allocation of certain corporate costs, occupancy, and general corporate insurance costs. General and administrative expenses also include certain legal related accruals and expenses. We would expect general and administrative expenses to increase on an absolute dollar basis for the foreseeable future as our business continues to grow and Trip volume increases, but decrease as a percentage of revenue as we achieve improved fixed cost leverage and efficiencies in our internal support functions. General and administrative expenses as a percentage of revenue may vary from period to period as a percentage of revenue due to the variability of legal and regulatory-related expenses. Depreciation and Amortization Depreciation and amortization expenses primarily consist of depreciation on buildings, site improvements, computer and network equipment, software, leasehold improvements, furniture and fixtures, and amortization of intangible assets. Depreciation includes expenses associated with buildings, site improvements, computer and network equipment, and furniture, fixtures, as well as leasehold improvements. Amortization includes expenses associated with our capitalized internal-use software and acquired intangible assets. 51 Interest Expense Interest expense consists primarily of interest expense associated with our outstanding debt, including amortization of debt discount and issuance costs. For additional detail related to our debt obligations, see “Note 8 – Long-Term Debt and Revolving Credit Arrangements” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Other Income (Expense), Net Other income (expense), net primarily includes the following items: • Interest income, which consists primarily of interest earned on our cash and cash equivalents, short-term investments, restricted cash and cash equivalents and restricted investments. • Foreign currency exchange gains (losses), net, which consist primarily of remeasurement of transactions and monetary assets and liabilities denominated in currencies other than the functional currency at the end of the period. • Gain on business divestitures, net. • Gain (loss) from sale of investments. • Unrealized gain (loss) on debt and equity securities, net, which consists primarily of gains (losses) from fair value adjustments relating to our marketable and non-marketable securities. • Impairment of equity method investment. • Revaluation of MLU B.V. call option, which represents changes in fair value recorded on the call option granted to Yandex (“MLU B.V. Call Option”). • Acquisition termination fee. • Other, net. Provision for (Benefit from) Income Taxes We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have different statutory tax rates than those in the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, changes in the valuation allowance on our U.S. and Netherlands' deferred tax assets, and changes in tax laws. The income tax benefit was $5.8 billion for the year ended December 31, 2024, which includes a $6.4 billion benefit related to the release of our valuation allowance on the U.S. federal and state deferred tax assets, with the exception of our California R&D credits and other non-material deferred tax assets. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of all available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. As of December 31, 2024, we demonstrated sustained profitability in the U.S. based on U.S. pre-tax book income adjusted for permanent book-to-tax differences. Further, given our taxable income position for the annual period ended on December 31, 2024, we utilized more attributes than we generated, which reduces our U.S. federal and state net deferred tax assets. This information is both objective and verifiable; thereby, representing strong positive evidence that carries significant weight. Based on all available positive and negative evidence, including the objective and verifiable positive evidence as described above and anticipated future earnings, we concluded it is more-likely-than-not that a majority of our U.S. federal and state deferred tax assets will be realizable. We continue to maintain a valuation allowance against the California R&D credits, as we believe it is not more-likely-than-not to be realized, as we expect R&D tax credit generation to exceed our ability to use these credits in future periods. Furthermore, based on available evidence, we believe it is more-likely-than-not that the Netherlands’ net deferred tax assets will not be fully realizable. We will continue to maintain a valuation allowance against these net deferred tax assets. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies by jurisdiction. Based on our assessment of current income and anticipated future earnings, there is a reasonable possibility that we will have sufficient evidence to release a significant portion of the valuation allowance in the Netherlands within the next 12 months. However, our judgment regarding future earnings and the exact timing and amount of any valuation allowance release is subject to change due to many factors, including future market conditions and the ability to successfully execute our business plans and/or tax planning strategies. Release of the valuation allowance would result in the recognition of net deferred tax assets on our consolidated balance sheet and would result in an income tax benefit in the period the release is recorded. 52 The Inflation Reduction Act Corporate Alternative Minimum Tax (“CAMT”), which is a minimum tax calculated by reference to financial statement income, does not apply to the Company for the year ended December 31, 2024. We could be subject to the CAMT in future years, which would require us to make minimum cash tax payments. In addition, the Organisation for Economic Co-operation and Development has led international efforts among approximately 140 countries and taxing jurisdictions to propose and implement changes to numerous long-standing tax principles, including a framework that imposes a minimum tax rate of 15% in each taxing jurisdiction. Under this guidance, we will be required to determine a combined effective tax rate for all entities located in a jurisdiction. If the jurisdictional effective tax rate determined under these rules is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%. We are continuing to monitor the pending implementation of these rules by individual countries and the potential impact on our business. The provision effective in 2024 had an insignificant impact on our tax obligations for 2024. Income (Loss) from Equity Method Investments Income (loss) from equity method investments primarily includes the results of our share of income or loss from our equity method investments. For additional information, see “Note 4 - Equity Method Investments” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Results of Operations The following table summarizes our consolidated statements of operations for each of the periods presented (in millions): Year Ended December 31, 2023 2024 Revenue $ 37,281 $ 43,978 Costs and expenses Cost of revenue, exclusive of depreciation and amortization shown separately below 22,457 26,651 Operations and support 2,689 2,732 Sales and marketing 4,356 4,337 Research and development 3,164 3,109 General and administrative 2,682 3,639 Depreciation and amortization 823 711 Total costs and expenses 36,171 41,179 Income from operations 1,110 2,799 Interest expense (633) (523) Other income (expense), net 1,844 1,849 Income before income taxes and income (loss) from equity method investments 2,321 4,125 Provision for (benefit from) income taxes 213 (5,758) Income (loss) from equity method investments 48 (38) Net income including non-controlling interests 2,156 9,845 Less: net income (loss) attributable to non-controlling interests, net of tax 269 (11) Net income attributable to Uber Technologies, Inc. $ 1,887 $ 9,856 53 The following table sets forth the components of our consolidated statements of operations for each of the periods presented as a percentage of revenue (1) : Year Ended December 31, 2023 2024 Revenue 100 % 100 % Costs and expenses Cost of revenue, exclusive of depreciation and amortization shown separately below 60 % 61 % Operations and support 7 % 6 % Sales and marketing 12 % 10 % Research and development 8 % 7 % General and administrative 7 % 8 % Depreciation and amortization 2 % 2 % Total costs and expenses 97 % 94 % Income from operations 3 % 6 % Interest expense (2) % (1) % Other income (expense), net 5 % 4 % Income before income taxes and income (loss) from equity method investments 6 % 9 % Provision for (benefit from) income taxes 1 % (13) % Income (loss) from equity method investments — % — % Net income including non-controlling interests 6 % 22 % Less: net income (loss) attributable to non-controlling interests, net of tax 1 % — % Net income attributable to Uber Technologies, Inc. 5 % 22 % (1) Totals of percentage of revenues may not foot due to rounding. Comparison of the Years Ended December 31, 2023 and 2024 Revenue Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Revenue $ 37,281 $ 43,978 18 % 2024 Compared to 2023 Revenue increased $6.7 billion, or 18% year-over-year, primarily attributable to an increase in Gross Bookings of 18%. The increase in Gross Bookings was primarily driven by an increase in Mobility and Delivery Trip volumes. The increase in revenue was partially offset by business model changes in some countries that classified certain sales and marketing costs as contra revenue, which negatively impacted revenue by $863 million and $713 million across Mobility and Delivery, respectively. Cost of Revenue, Exclusive of Depreciation and Amortization Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Cost of revenue, exclusive of depreciation and amortization $ 22,457 $ 26,651 19 % Percentage of revenue 60 % 61 % 2024 Compared to 2023 Cost of revenue, exclusive of depreciation and amortization, increased $4.2 billion, or 19%, mainly due to a $1.3 billion increase in insurance expense primarily due to an increase in insurance rate per mile and miles driven in our Mobility business, a $1.3 billion increase in Driver payments and incentives that are recorded in cost of revenue, exclusive of depreciation and amortization, as a result of increased Mobility Gross Bookings in certain markets, a $718 million increase in Courier payments and incentives that are recorded in cost of revenue, exclusive of depreciation and amortization, as a result of increased Delivery Gross Bookings in certain markets, and a $303 million increase in credit card processing costs, as a result of increased Gross Bookings. 54 Operations and Support Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Operations and support $ 2,689 $ 2,732 2 % Percentage of revenue 7 % 6 % 2024 Compared to 2023 Operations and support expenses increased $43 million, or 2%, primarily attributable to a $66 million increase in employee headcount costs and a $34 million increase in stock-based compensation, partially offset by a $63 million decrease in Driver background check costs. Sales and Marketing Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Sales and marketing $ 4,356 $ 4,337 — % Percentage of revenue 12 % 10 % 2024 Compared to 2023 Sales and marketing expenses decreased $19 million, primarily attributable to a $299 million decrease in consumer discounts, promotions, credits and refunds to $1.4 billion compared to $1.7 billion in the same period in 2023, partially offset by a $238 million increase in indirect advertising and marketing and a $41 million increase in external contractor expenses. The decrease in consumer discounts, promotions, credits and refunds includes: a decrease of $1.6 billion, primarily attributed to business model changes in some countries that classified certain sales and marketing costs as contra revenue, partially offset by a $1.3 billion increase in consumer discounts, promotions, credits and refunds globally. Research and Development Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Research and development $ 3,164 $ 3,109 (2) % Percentage of revenue 8 % 7 % 2024 Compared to 2023 Research and development expenses decreased $55 million, or 2%, primarily attributable to a $112 million decrease in stock-based compensation, partially offset by a $48 million increase in employee headcount costs. General and Administrative Year Ended December 31, % Change (In millions, except percentages) 2023 2024 General and administrative $ 2,682 $ 3,639 36 % Percentage of revenue 7 % 8 % 2024 Compared to 2023 General and administrative expenses increased $957 million, or 36%, primarily attributable to a $753 million increase in legal-related accruals and expenses and a $185 million increase in other corporate expenses. 55 Depreciation and Amortization Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Depreciation and amortization $ 823 $ 711 (14) % Percentage of revenue 2 % 2 % 2024 Compared to 2023 Depreciation and amortization expenses decreased $112 million, or 14%, primarily attributable to a $103 million decrease in amortization and depreciation expenses due to various acquired intangible and fixed assets becoming fully amortized and depreciated during the period. Interest Expense Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Interest expense $ (633) $ (523) (17) % Percentage of revenue (2) % (1) % 2024 Compared to 2023 Interest expense decreased by $110 million, or 17%, primarily attributable to the extinguishment of the 2025 Senior Note in the fourth quarter of 2023, extinguishment of our 2030 Refinanced Term Loans and the 2026 Senior Note in the third quarter and fourth quarter of 2024, respectively. For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Other Income (Expense), Net Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Interest income $ 484 $ 721 49 % Foreign currency exchange gains (losses), net (182) (391) (115) % Gain on business divestitures, net 204 — (100) % Loss from sale of investment (74) — 100 % Unrealized gain (loss) on debt and equity securities, net 1,610 1,832 14 % Acquisition termination fee (1) — (236) (100) % Other, net (198) (77) 61 % Other income (expense), net $ 1,844 $ 1,849 — % Percentage of revenue 5 % 4 % (1) Refer to Note 1 – Description of Business and Summary of Significant Accounting Policies included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K for further information on Foodpanda Taiwan. 2024 Compared to 2023 Interest income increased by $237 million primarily attributable to a larger investment portfolio compared to the same period in 2023. Gain on business divestitures, net decreased by $204 million primarily due to a $204 million gain on the sale of interest in Careem Technologies in the fourth quarter of 2023. For additional information, see Note 17 – Divestitures included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Unrealized gain (loss) on debt and equity securities, net increased by $222 million primarily represents changes in the fair value of our equity investments. In 2023, unrealized gain on debt and equity securities, net, includes: a $985 million net unrealized gain on our Aurora investments, a $443 million net unrealized gain on our Didi investment, a $84 million net unrealized gain on our Joby investment, and an $80 million net unrealized gain on our Grab investment, In 2024, net unrealized gain on debt and equity securities, net, includes: a $723 million net unrealized gain on our Grab investment, a $629 million net unrealized gain on our Aurora investment, and a $357 million net unrealized gain on our Didi 56 investment. For additional information, see Note 3 – Investments and Fair Value Measurement included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Provision for (Benefit from) Income Taxes Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Provision for (benefit from) income taxes $ 213 $ (5,758) ** Effective tax rate 9.2 % (139.6) % ** Percentage not meaningful. 2024 Compared to 2023 We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of all available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. As of December 31, 2024, we demonstrated sustained profitability in the U.S. based on U.S. pre-tax book income adjusted for permanent book-to-tax differences. Further, given our taxable income position for the annual period ended on December 31, 2024, we utilized more attributes than we generated, which reduces our U.S. federal and state net deferred tax assets. This information is both objective and verifiable; thereby, representing strong positive evidence that carries significant weight. Based on all available positive and negative evidence, including the objective and verifiable positive evidence as described above and anticipated future earnings, we concluded it is more-likely-than-not that a majority of our U.S. federal and state deferred tax assets will be realizable. We continue to maintain a valuation allowance against the California R&D credits, as we believe it is not more-likely-than-not to be realized, as we expect R&D tax credit generation to exceed our ability to use these credits in future periods. Provision for income taxes decreased by $6.0 billion primarily attributable to the release of $6.4 billion of our valuation allowance of certain U.S. federal and state deferred tax assets in the fourth quarter of 2024. Income from Equity Method Investments Year Ended December 31, % Change (In millions, except percentages) 2023 2024 Income (loss) from equity method investments $ 48 $ (38) ** Percentage of revenue — % — % ** Percentage not meaningful. 2024 Compared to 2023 The change in income (loss) from equity method investments primarily due to our portion of the net income (loss) of our equity method investment in Careem Technologies in 2024. Segment Results of Operations We operate our business as three operating and reportable segments: Mobility, Delivery, and Freight. For additional information about our segments, see Note 13 – Segment Information and Geographic Information in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Revenue Year Ended December 31, 2023 to 2024 % Change (In millions, except percentages) 2023 2024 Mobility $ 19,832 $ 25,087 26 % Delivery 12,204 13,750 13 % Freight 5,245 5,141 (2) % Total revenue $ 37,281 $ 43,978 18 % Segment Adjusted EBITDA For additional information, see Note 13 – Segment Information and Geographic Information to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. 57 Year Ended December 31, 2023 to 2024 % Change (In millions, except percentages) 2023 2024 Mobility $ 4,963 $ 6,497 31 % Delivery 1,506 2,471 64 % Freight (64) (74) (16) % Corporate G&A and Platform R&D (1) (2,353) (2,410) (2) % Adjusted EBITDA (2) $ 4,052 $ 6,484 60 % (1) Includes costs that are not directly attributable to our reportable segments. Corporate G&A also includes certain shared costs such as finance, accounting, tax, human resources, information technology and legal costs. Platform R&D also includes mapping and payment technologies and support and development of the internal technology infrastructure. Our allocation methodology is periodically evaluated and may change. (2) See the section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measure. Mobility Segment For the year ended December 31, 2024 compared to the same period in 2023, Mobility revenue increased $5.3 billion, or 26%, and Mobility Adjusted EBITDA increased $1.5 billion, or 31%. Mobility revenue increased primarily attributable to an increase in Mobility Gross Bookings of 21%, driven by an increase in Trip volumes. The increase in revenue was partially offset by business model changes in some countries that classified certain sales and marketing costs as contra revenue, which negatively impacted Mobility revenue growth by $863 million. Mobility Adjusted EBITDA increased primarily attributable to an increase in Mobility Gross Bookings, partially offset by a $1.3 billion increase in Driver payments and incentives recorded in Mobility Platform Participant direct transaction costs, and a $1.3 billion increase in insurance expense primarily due to an increase in insurance rate per mile and miles driven, a $188 million increase in credit card processing costs as a result of increased Gross Bookings, a $182 million increase in network costs, and a $125 million increase in headcount costs, recorded in Mobility other expense. Delivery Segment For the year ended December 31, 2024 compared to the same period in 2023, Delivery revenue increased $1.5 billion, or 13%, and Delivery Adjusted EBITDA increased $965 million, or 64%. Delivery revenue increased primarily attributable to an increase in Delivery Gross Bookings of 17%, driven by an increase in Trip volumes, and a $461 million increase in advertising revenue. The increase in revenue was partially offset by business model changes in some countries that classified certain sales and marketing costs as contra revenue, which negatively impacted Delivery revenue growth by $713 million. Delivery Adjusted EBITDA increased primarily attributable to an increase in Delivery revenue including advertising, partially offset by a $718 million increase in Courier payments and incentives recorded in Delivery Platform Participant direct transaction costs, and a $168 million increase in indirect advertising and marketing, a $160 million increase in insurance expense primarily due to an increase in miles driven, and a $127 million increase in credit card processing costs as a result of increased Gross Bookings, recorded in Delivery other expense. Freight Segment For the year ended December 31, 2024 compared to the same period in 2023, Freight revenue decreased $104 million, or 2%, and Freight Adjusted EBITDA declined $10 million, or 16% . Freight revenue decreased primarily attributable to a 2% decrease in Freight Gross Bookings due to lower revenue per load as a result of the challenging freight market cycle, partially offset by an increase in volume. Freight Adjusted EBITDA declined primarily attributable to a $104 million decrease in revenue, partially offset by a $62 million decrease in Freight Carrier payments recorded in Freight Platform Participant direct transaction costs, and a $32 million decrease in Freight other expenses. 58 Certain Key Metrics and Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure. For more information about how we use this and other non-GAAP financial measures in our business, the limitations of these measures, and reconciliations of these measures to the most directly comparable GAAP financial measures, see the section titled “Reconciliations of Non-GAAP Financial Measures.” Monthly Active Platform Consumers. MAPCs is the number of unique consumers who completed a Mobility ride or received a Delivery order on our platform at least once in a given month, averaged over each month in the quarter. While a unique consumer can use multiple product offerings on our platform in a given month, that unique consumer is counted as only one MAPC. We use MAPCs to assess the adoption of our platform and frequency of transactions, which are key factors in our penetration of the countries in which we operate. Trips. We define Trips as the number of completed consumer Mobility rides and Delivery orders in a given period. For example, an UberX Share ride with three paying consumers represents three unique Trips, whereas an UberX ride with three passengers represents one Trip. We believe that Trips are a useful metric to measure the scale and usage of our platform. 59 Gross Bookings. We define Gross Bookings as the total dollar value, including any applicable taxes, tolls, and fees, of: Mobility rides, Delivery orders (in each case without any adjustment for consumer discounts and refunds, Driver and Merchant earnings, and Driver incentives) and Freight revenue. Gross Bookings do not include tips earned by Drivers. Gross Bookings are an indication of the scale of our current platform, which ultimately impacts revenue. (In millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Mobility $ 14,981 $ 16,728 $ 17,903 $ 19,285 $ 18,670 $ 20,554 $ 21,002 $ 22,798 Delivery 15,026 15,595 16,094 17,011 17,699 18,126 18,663 20,126 Freight 1,401 1,278 1,284 1,279 1,282 1,272 1,308 1,273 Adjusted EBITDA. See the section titled “Reconciliations of Non-GAAP Financial Measures” for our definition and a reconciliation of net income attributable to Uber Technologies, Inc. to Adjusted EBITDA. Year Ended December 31, (In millions, except percentages) 2023 2024 % Change Adjusted EBITDA $ 4,052 $ 6,484 60 % 2024 Compared to 2023 Adjusted EBITDA improved $2.4 billion, to $6.5 billion, primarily attributable to a $1.5 billion increase in Mobility Adjusted EBITDA, a $965 million improvement in Delivery Adjusted EBITDA, partially offset by a $57 million increase in Corporate G&A and Platform R&D costs. Reconciliations of Non-GAAP Financial Measures We collect and analyze operating and financial data to evaluate the health of our business and assess our performance. In addition to revenue, net income (loss), income (loss) from operations, and other results under GAAP, we use Adjusted EBITDA, revenue growth rates in constant currency and free cash flow, which are described below, to evaluate our business. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Our calculation of these non-GAAP financial measures may differ from similarly-titled non-GAAP measures, if any, reported by our peer companies. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. 60 Adjusted EBITDA We define Adjusted EBITDA as net income (loss), excluding (i) income (loss) from discontinued operations, net of income taxes, (ii) net income (loss) attributable to non-controlling interests, net of tax, (iii) provision for (benefit from) income taxes, (iv) income (loss) from equity method investments, (v) interest expense, (vi) other income (expense), net, (vii) depreciation and amortization, (viii) stock-based compensation expense, (ix) certain legal, tax, and regulatory reserve changes and settlements, (x) goodwill and asset impairments/loss on sale of assets, (xi) acquisition, financing and divestitures related expenses, (xii) restructuring and related charges and (xiii) other items not indicative of our ongoing operating performance. We have included Adjusted EBITDA in this Annual Report on Form 10-K because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and certain variable charges. Legal, tax, and regulatory reserve changes and settlements Legal, tax, and regulatory reserve changes and settlements are primarily related to certain significant legal proceedings or governmental investigations related to worker classification definitions, or tax agencies challenging our non-income tax positions. These matters have limited precedent, cover extended historical periods and are unpredictable in both magnitude and timing, therefore are distinct from normal, recurring legal, tax and regulatory matters and related expenses incurred in our ongoing operating performance. Limitations of Non-GAAP Financial Measures and Adjusted EBITDA Reconciliation Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following: • Adjusted EBITDA excludes certain recurring, non-cash charges, such as depreciation of property and equipment and amortization of intangible assets, and although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy; • Adjusted EBITDA excludes certain restructuring and related charges, part of which may be settled in cash; • Adjusted EBITDA excludes other items not indicative of our ongoing operating performance; • Adjusted EBITDA does not reflect period-to-period changes in taxes, income tax expense or the cash necessary to pay income taxes; • Adjusted EBITDA does not reflect the components of other income (expense), net, which primarily includes: interest income; foreign currency exchange gains (losses), net; gain (loss) on business divestitures, net; unrealized gain (loss) on debt and equity securities, net; and impairment of debt and equity securities; and • Adjusted EBITDA excludes certain legal, tax, and regulatory reserve changes and settlements that may reduce cash available to us. 61 The following table presents a reconciliation of net income attributable to Uber Technologies, Inc., the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the periods indicated: Year Ended December 31, (In millions) 2023 2024 Adjusted EBITDA reconciliation: Net income attributable to Uber Technologies, Inc. $ 1,887 $ 9,856 Add (deduct): Net income (loss) attributable to non-controlling interests, net of tax 269 (11) (Income) loss from equity method investments (48) 38 Provision for (benefit from) income taxes 213 (5,758) Other (income) expense, net (1,844) (1,849) Interest expense 633 523 Income from operations 1,110 2,799 Add (deduct): Depreciation and amortization 823 711 Stock-based compensation expense 1,935 1,796 Legal, tax, and regulatory reserve changes and settlements 9 1,123 Goodwill and asset impairments/loss on sale of assets 84 3 Acquisition, financing and divestitures related expenses 36 25 Loss on lease arrangements, net 4 2 Restructuring and related charges, net 51 25 Adjusted EBITDA $ 4,052 $ 6,484 Constant Currency We compare the percent change in our current period results from the corresponding prior period using constant currency disclosure. We present constant currency growth rate information to provide a framework for assessing how our underlying revenue performed excluding the effect of foreign currency rate fluctuations. We calculate constant currency by translating our current period financial results using the corresponding prior period’s monthly exchange rates for our transacted currencies other than the U.S. dollar. Free Cash Flow We define free cash flow as net cash flows from operating activities less capital expenditures. The following table presents a reconciliation of free cash flow to the most directly comparable GAAP financial measure for each of the periods indicated: Year Ended December 31, (In millions) 2023 2024 Free cash flow reconciliation: Net cash provided by operating activities $ 3,585 $ 7,137 Purchases of property and equipment (223) (242) Free cash flow $ 3,362 $ 6,895 62 Liquidity and Capital Resources Year Ended December 31, (In millions) 2023 2024 Net cash provided by operating activities $ 3,585 $ 7,137 Net cash used in investing activities (3,226) (3,177) Net cash used in financing activities (95) (2,087) Operating Activities Net cash provided by operating activities was $7.1 billion for the year ended December 31, 2024, primarily consisting of $9.8 billion of net income including non-controlling interests, adjusted for certain non-cash items, which primarily included $6.0 billion of deferred income taxes, $1.8 billion of stock-based compensation expense, $1.8 billion of unrealized gains from equity securities, $737 million of depreciation and amortization expense, as well as a $2.4 billion increase in cash from working capital. The increase in cash from working capital was primarily driven by an increase in our accrued insurance reserves primarily due to liabilities recorded during the period exceeding claims paid out, and accrued expenses and other liabilities, partially offset by an increase in accounts receivable and prepaid expenses and other assets primarily due to tax matters recorded as a receivable in other assets described in the Non-Income Tax Matters section below. Net cash provided by operating activities was $3.6 billion for the year ended December 31, 2023, primarily consisting of $2.2 billion of net income including non-controlling interests, adjusted for certain non-cash items, which primarily included $1.9 billion of stock-based compensation expense, $1.6 billion of unrealized gains from equity securities, $823 million of depreciation and amortization expense, $204 million gain from business divestiture, as well as a $165 million increase in cash from working capital. The increase in cash from working capital was primarily driven by an increase in our insurance reserves, partially offset by an increase in prepaid expenses and other assets as well as accounts receivable. Net cash provided by operating activities reflects a cash outflow of approximately $789 million (£631 million) cash outflow related to payments of HMRC VAT for assessments for the period of March 2022 to June 2023. For additional information on this matter, refer to Note 14 – Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Investing Activities Net cash used in investing activities was $3.2 billion for the year ended December 31, 2024, primarily consisting of $12.8 billion in purchases of marketable securities, $289 million in purchases of non-marketable equity securities, $242 million in purchases of property and equipment, partially offset by proceeds from maturities and sales of marketable securities of $10.2 billion. Net cash used in investing activities was $3.2 billion for the year ended December 31, 2023, primarily consisting of $8.8 billion in purchases of marketable securities, $223 million in purchases of property and equipment, partially offset by proceeds from maturities and sales of marketable securities of $5.1 billion and proceeds from the sale of an equity method investment of $721 million. Financing Activities Net cash used in financing activities was $2.1 billion for the year ended December 31, 2024, primarily consisting of $4.0 billion in principal repayment on term loan and notes, $1.3 billion in repurchases of common stock, $851 million in redemption of non-controlling interests, and $172 million of principal payments on finance leases, partially offset by $4.0 billion of proceeds from issuance of term loan and notes, net of issuance costs. For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Net cash used in financing activities was $95 million for the year ended December 31, 2023, primarily consisting of $2.7 billion in principal repayment on term loan and notes, $171 million of principal payments on finance leases and $141 million to fund the cost of entering into the capped call transactions related to our 2028 Convertible Notes, partially offset by $2.8 billion of proceeds from issuance of term loan and notes, net of issuance costs. For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Other Information As of December 31, 2024, $2.7 billion of our $5.9 billion in cash and cash equivalents was held by our foreign subsidiaries. Cash held outside the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. Repatriation of funds may result in immaterial tax liabilities. We believe that our existing cash balance in the United States is sufficient to fund our working capital needs in the United States. We are in compliance with our debt and line of credit covenants as of December 31, 2024, including by meeting our reporting obligations. We also believe that our sources of funding and our available line of credit will be sufficient to satisfy our currently anticipated cash requirements including capital expenditures, working capital requirements, collateral requirements, potential 63 acquisitions, potential prepayments of contested indirect tax assessments (“pay-to-play”), and other liquidity requirements through at least the next 12 months. We intend to continue to evaluate and may, in certain circumstances, take preemptive action to preserve liquidity. Debt Redemptions On September 12, 2024, we exercised the call option for a partial redemption of $500 million for the 2027 Senior Note. The partial redemption was completed on October 3, 2024. In addition, on October 2, 2024, we exercised the call option to redeem the $1.5 billion 2026 Senior Note, we completed the redemption on November 1, 2024. For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Share Repurchase Program In February 2024, our board of directors authorized the repurchase of up to $7.0 billion in shares of our outstanding common stock (the “Share Repurchase Program”). The timing, manner, price and amount of any repurchases are determined by the discretion of management, depending on market conditions and other factors. Repurchases may be made through open market purchases and accelerated share repurchases. The exact number of shares to be repurchased by us, if any, is not guaranteed. Depending on market conditions and other factors, these repurchases may be commenced or suspended at any time or periodically without prior notice. As of December 31, 2024, we had $5.8 billion available to repurchase shares pursuant to the Share Repurchase Program For additional information, see Note 10 – Stockholders' Equity in the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. In January 2025, we announced that we entered into an accelerated share repurchase (“ASR”) agreement with a large financial institution to repurchase $1.5 billion of our outstanding common stock as part of our previously announced Share Repurchase Program. The transactions under the ASR agreement were completed during the first quarter of 2025. Freight Series A Preferred Stock On October 6, 2023, the 2020 Freight Series A Investor exercised their right to require that either Freight Holding conduct an IPO or we redeem them. Upon the redemption date in October 2024, we repurchased the 2020 Freight Series A Investor’s Freight Series A preferred stock in cash for $851 million. For additional information, see Note 16 – Non-Controlling Interests in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Non-Income Tax Matters United Kingdom As of March 14, 2022, we modified our operating model in the UK, such that as of that date Uber UK is a merchant of transportation and is required to remit VAT. Uber UK is remitting VAT under the Value Added (Tour Operators) Order 1987 (“VAT Order 1987”), which allows for VAT remittance on a calculated margin, rather than on Gross Bookings. As of December 31, 2024, we have received multiple assessments from the HMRC disputing our application of VAT Order 1987 for the period of March 2022 to June 2024, totaling approximately $1.6 billion (£1.3 billion) for unpaid VAT. Uber paid the assessments in order to proceed with the appeal process. The payments do not represent our acceptance of the assessments. The payments made in 2023 and 2024 are recorded as a receivable in other assets on our consolidated balance sheet because we believe that we will be successful in our appeal, upon which, the full amount of our payments will be returned to us with interest upon completion of the appeals process. We expect to receive additional assessments related to this matter and will be required to pay the assessments in order to continue with the appeals process. Any payments are expected to decrease operating cash flow and have no impact on our results of operations. We plan to vigorously defend our application of the VAT Order 1987 and are waiting to obtain hearing dates from the Tax Tribunal. For additional information, see Note 14 – Commitments and Contingencies in the section titled “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report on Form 10-K. Commitments Leases Our operating lease portfolio primarily consists of corporate offices. For additional information, see Note 6 - Leases in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Long-Term Debt We have long-term debt with varying maturities dates through 2054. For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. 64 Purchase Commitments We have non-cancelable commitments which primarily relate to network and cloud services and other items in the ordinary course of business. These amounts are determined based on the non-cancelable quantities to which we are contractually obligated. In November 2022, we entered into commercial technology agreements with vendors for cloud computing services (“2022 Cloud Computing Service Agreements”). We are committed to spend an aggregate of at least $2.5 billion through November 2029, of which $412 million is short-term. We may pay more than the minimum purchase commitment to our cloud-computing web services providers based on usage. For the year ended December 31, 2024, Uber satisfied its commitment for the 2022 Cloud Computing Service Agreements. As of December 31, 2024, we had $2.7 billion in non-cancelable commitments, this includes the $2.5 billion in 2022 Cloud Computing Service Agreements discussed above. The non-cancellable commitments have varying expiration terms through November 2029. Critical Accounting Estimates We believe that the following accounting policies involve a high degree of judgment and complexity and are critical to understanding and evaluating our consolidated financial condition and results of our operations. An accounting policy is considered to be critical if it requires judgment on a significant accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the reported amounts of assets, liabilities, revenue and expenses, and related disclosures in our audited consolidated financial statements. We have based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. We believe that the following critical accounting policies reflect the more significant judgments, estimates and assumptions used in the preparation of our consolidated financial statements. For additional information, see the disclosure included in Note 1 – Description of Business and Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Revenue Recognition We derive our revenue from service fees paid by Drivers and Merchants for the use of our platform in connection with our Mobility products and Delivery offering provided by Drivers and Merchants to end-users. Our sole performance obligation in the transaction is to connect Drivers and Merchants with end-users to facilitate the completion of a successful ridesharing trip or delivery. In many of our markets, we also generate revenue from end-users and charge a direct fee for use of the platform or in exchange for Mobility or Delivery services. Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether we control the service provided to the end-user and are the principal in the transaction (gross), or we arrange for other parties to provide the service to the end-user and are the agent in the transaction (net). The assessment of whether we are considered the principal or the agent in a transaction could impact the accounting for certain payments and incentives provided to Drivers and end-users and change the amount of revenue recognized. End-User Discounts and Promotions We offer discounts and promotions to end-users (that are not customers) to encourage use of our platform. Judgment is required to determine the appropriate classification of these incentives. End-user discounts and promotions are recorded to sales and marketing expenses with the exception of market-wide promotions which are recorded as a reduction of revenue. Business Combinations We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired advertiser, fleet, merchant, and end-user contracts, acquired technology, and trade names, based on expected future growth rates and margins, attrition rates, future changes in technology and royalty for similar brand licenses, useful lives, and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects our amortization expense, as acquired finite-lived intangible assets are amortized over the useful life, whereas any indefinite lived intangible assets, including goodwill, are not amortized. During the measurement period, which may be up to one 65 year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Investments—Non-Marketable Equity and Debt Securities We hold investments in privately held companies in the form of equity securities and debt securities without readily determinable fair values and in which we do not have a controlling interest or significant influence. Investments in equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value for impairments and price changes from observable transactions in the same or a similar security from the same issuer. Investments in material available-for-sale debt securities are recorded initially at fair value and subsequently remeasured to fair value at each reporting date with the changes in fair value recognized in other comprehensive income (loss), net of tax. We may elect the fair value option for financial instruments and account for investments in debt and equity securities at fair value with changes reported in net income (loss) from continuing operations. Investments in privately held equity and debt securities are valued using significant unobservable inputs or data in inactive markets. This valuation requires judgment due to the absence of market prices and inherent lack of liquidity and are classified as Level 3 in the fair value hierarchy. In determining the estimated fair value of our investments in privately held companies, we utilize the most recent data available including observed transactions such as equity financing transactions of the investees and sales of the existing shares of the investees’ securities. In addition, the determination of whether an observed transaction is similar to the equity and debt securities held by us requires significant management judgment based on the rights and preferences of the securities. We assess our investment portfolio of privately held equity and debt securities quarterly for impairment. The impairment analysis for investments in equity securities includes a qualitative analysis of factors including the investee’s financial performance, industry and market conditions, and other relevant factors. If an equity investment is considered to be impaired we will establish a new carrying value for the investment and recognize an impairment loss through our consolidated statement of operations. Investments in debt securities are evaluated for impairment quarterly based on whether its fair value has declined below its amortized cost. In circumstances where we intend to sell, or are more likely than not required to sell the security before it recovers its amortized cost basis, the difference between the fair value and amortized cost is recognized as a loss in the consolidated financial statement of operations, with a corresponding write-down of the security’s amortized cost. In circumstances where neither condition exists, we then evaluate whether a decline is due to credit-related factors. The factors considered in determining whether a credit loss exists can include the extent to which fair value is less than the amortized cost basis, changes in the credit quality of the underlying loan obligor’s, credit ratings actions, as well as other factors. To determine the portion of a decline in fair value that is credit-related, we compare the present value of the expected cash flows of the security discounted at the security’s effective interest rate to the amortized cost basis of the security. A credit-related impairment is limited to the difference between fair value and amortized cost, and recognized as an allowance for credit loss on the consolidated balance sheet with a corresponding adjustment to net income (loss). Any remaining decline in fair value that is non-credit related is recognized in other comprehensive income (loss), net of tax. Improvements in expected cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. Equity Method Investments We account for investments in the common stock or in-substance common stock of entities that provide us with the ability to exercise significant influence, but not a controlling financial interest, using the equity method. Investments accounted for under the equity method are initially recorded at cost. Subsequently, we recognize through the consolidated statements of operations, and as an adjustment to the investment balance, our proportionate share of the investee entities’ net income or loss, and the amortization of basis differences. In accounting for these investments, we record our share of the entities’ net income or loss one quarter in arrears. Equity method investments for which the fair value option is elected are measured at fair value on a recurring basis with changes in fair value reflected in earnings. We review our equity method investments for impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Qualitative and quantitative factors considered as indicators of a potential impairment include financial results and operating trends of the investees, implied values in transactions of the investee’s securities, severity and length of decline in value, and our intention for holding the investment, among other factors. If an impairment is determined to be other-than-temporary, the fair value of the impaired investment would have to be determined and an impairment charge recorded for the difference between the fair value and the carrying value of the investment. The fair value determination, particularly for investments in privately held companies, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of the impairment charges. Goodwill Impairment Assessment We review goodwill for impairment annually (in the fourth quarter) and whenever events or changes in circumstances indicate that goodwill might be impaired. We make certain judgments and assumptions to determine our reporting units and in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. Determination of reporting units is based 66 on a judgmental evaluation of the level at which our segment managers review financial results, evaluate performance, and allocate resources. Judgment in the assessment of qualitative factors of impairment include, among other factors: financial performance; legal, regulatory, contractual, political, business, and other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit. To the extent we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions. These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparables. Loss Contingencies We are involved in legal proceedings, claims, and regulatory, indirect tax examinations, or government inquiries and investigations that may arise in the ordinary course of business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, we disclose the possible loss in the accompanying notes to the consolidated financial statements. We review the developments in our contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of loss. These estimates have been based on our assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events. The outcomes of litigation, regulatory, indirect tax examinations and investigations are inherently uncertain. Therefore, if one or more of these matters were resolved against us for amounts in excess of management’s expectations, our results of operations, financial condition, or cash flows, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected. Income Taxes We are subject to income taxes in the United States and foreign jurisdictions. We account for income taxes using the asset and liability method. The establishment of deferred tax assets from intra-entity transfers of intangible assets requires management to make significant estimates and assumptions to determine the fair value of such intangible assets. Significant estimates in valuing intangible assets may include, but are not necessarily limited to, internal revenue and expense forecasts, the estimated life of the intangible assets, comparable transaction values, and/or discount rates. The discount rates used to discount expected future cash flows to present value are derived from a weighted-average cost of capital analysis and are adjusted to reflect the inherent risks related to the cash flow. Although we believe the assumptions and estimates we have made are reasonable and appropriate, they are based, in part, on historical experience, internal and external comparable data and are inherently uncertain. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results. We account for uncertainty in tax positions by recognizing a tax benefit from uncertain tax positions when it is more-likely-than-not that the position will be sustained upon examination. Evaluating our uncertain tax positions and determining our provision for income taxes are inherently uncertain and require making judgments, assumptions, and estimates. While we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may impact the provision for income taxes and the effective tax rate in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves as well as the related net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities which may assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes. The income tax benefit was $5.8 billion for the year ended December 31, 2024, which includes a $6.4 billion benefit related to the release of our valuation allowance on the U.S. federal and state deferred tax assets, with the exception of our California R&D credits and other non-material deferred tax assets. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of all available evidence, whether it is more-likely-than -not that some or all of the deferred tax assets will be realized. 67 As of December 31, 2024, we demonstrated sustained profitability in the U.S. based on U.S. pre-tax book income adjusted for permanent book-to-tax differences. Further, given our taxable income position for the annual period ended on December 31, 2024, we utilized more attributes than we generated, which reduces our U.S. federal and state net deferred tax assets. This information is both objective and verifiable; thereby, representing strong positive evidence that carries significant weight. Based on all available positive and negative evidence, including the objective and verifiable positive evidence as described above and anticipated future earnings, we concluded it is more-likely-than-not that a majority of our U.S. federal and state deferred tax assets will be realizable. We continue to maintain a valuation allowance against the California R&D credits, as we believe it is not more-likely-than-not to be realized, as we expect R&D tax credit generation to exceed our ability to use these credits in future periods. Furthermore, based on available evidence, we believe it is more-likely-than-not that the Netherlands’ net deferred tax assets will not be fully realizable. We will continue to maintain a valuation allowance against these net deferred tax assets. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies by jurisdiction. Based on our assessment of current income and anticipated future earnings, there is a reasonable possibility that we will have sufficient evidence to release a significant portion of the valuation allowance in the Netherlands within the next 12 months. However, our judgment regarding future earnings and the exact timing and amount of any valuation allowance release is subject to change due to many factors, including future market conditions and the ability to successfully execute our business plans and/or tax planning strategies. Release of the valuation allowance would result in the recognition of net deferred tax assets on our consolidated balance sheet and would result in an income tax benefit in the period the release is recorded. Insurance Reserves We use a combination of third-party insurance and self-insurance mechanisms, including a wholly-owned captive insurance subsidiary, to provide for the potential liabilities for certain risks, including auto liability, uninsured and underinsured motorist, auto physical damage, general liability, and workers’ compensation. Insurance reserves is an estimate of our potential liability for unpaid losses and loss adjustment expenses, which represents the estimate of the ultimate unpaid obligation for such insurance related risks and includes an amount for case reserves related to reported claims and an amount for losses incurred but not reported as of the balance sheet date. The estimate of the ultimate unpaid obligation utilizes generally accepted actuarial methods applied to historical claim and loss experience. In addition, we use assumptions based on actuarial judgment related to claim and loss development patterns and expected loss costs, which consider frequency trends, severity trends, and relevant industry data. These reserves are continually reviewed and adjusted as experience develops and new information becomes known. Adjustments to reserves retained by us, if any, relating to accidents that occurred in prior years are reflected in the current year results of operations. All estimates of ultimate losses and allocated loss adjustment expenses, and of resulting reserves, are subject to inherent variability caused by the nature of the insurance claim settlement process. Such variability is increased for us due to limited historical experience and the nature of the coverage provided. Actual results depend upon the outcome of future contingent events and can be affected by many factors, such as claim settlement processes and changes in the economic, legal, and social environments. As a result, the net amounts that will ultimately be paid to settle the liability, and when these amounts will be paid, may vary in the near term from the estimated amounts. While management believes that the insurance reserve amount is adequate, the ultimate liability may be in excess of, or less than, the amount provided. Recent Accounting Pronouncements See Note 1 – Description of Business and Summary of Significant Accounting Policies, to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.