Q1 2023 Uber Technologies Inc Earnings Call
Already.
Speaker 1: those documents if you haven't already. We will open the call to questions following brief opening remarks from Dharam. With that, let me hand it over to Dharam. Thanks Balaji. Uber is off to a strong start in 2023 with gross bookings of 22% year-on-year constant currency.
Speaker 1: trips to outpaced gross bookings growth and accelerated to 24% growth from 19% last quarter. Adjusted EBITDA of 761 million exceeded the high end of our guidance and we delivered strong incremental adjusted EBITDA margin of 12% and record free cash flow of 549 million.
Speaker 1: Over the past two years, we've consistently delivered results that have exceeded both investor expectations and our own internal plans.
Speaker 1: like out.
Speaker 1: a breed of cashflow growth. Uber platform has never been stronger. Our own expectations have never been higher, and we're excited to leave no doubt as to the scope of our ambitions for exceptionally profitable growth. With that, let's open it and pick all questions.
Speaker 2: Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad.
Speaker 1: Our first question comes from Doug Annmouth from JP Morgan. Please go ahead and line this open. Thanks so much for taking the questions. Dara, good evening. Outside the $449 million pre-cash flow and talking about gap operating income this year. I think headcount flat to down this year. Do you believe in that?
Speaker 1: for Uber. Yeah absolutely so I think as far as the cost structure goes listen we manage the cost structure dynamically based on an environment that we're seeing and I think you the results speak for themselves in terms of our bookings grow trip acceleration on a quarter on quarter basis and then you look at our EBITDA that we delivered well above street expectations well above our guidance
Speaker 1: at the low end above what street expectations were. So we will be managing our cost structure to the opportunity that had and also with a very strong kind of dose of discipline. So even in a market where we're getting any category position.
Speaker 1: We expect our head count to be flat to down for the balance of the year. And that is going to be our starting point as we go into next year as well. So I think you're going to keep pretty extraordinary leverage in terms of the top line and bottom line. The incremental EBITDA that we deliver this last quarter was 12% which is well above the 7% target that we...
Speaker 1: the rest of the team have demonstrated the ability to deliver in good markets and bad markets. Remember, this is not a fair way to accompany. It was in through a lot of difficult things. We came out of COVID. So just the muscle, the peanut, I'm up over there. And hopefully you'll remember early last year before everyone else was raising alarms about the reality of...
Speaker 1: to be in. You know, as far as AI goes, we are looking full stack at AI. I think a lot of people obviously want to talk about the SEXY kind of new consumer applications. I would tell you that I think that the earliest and most significant effect that AI is going to have.
Speaker 1: On our company is going to have to, is actually going to be as it relates to our developer productivity. Some of the tools that we're seeing in terms of co-pilot are going to allow our devs to kind of be super devs and to be able to innovate more, build more faster having co-pilot along with them. And that will essentially
Speaker 1: leverage and accelerate innovation across the platform. And this is with the platform, but I think is innovating faster than anyone else. I think on the cost side, you can see chatbots power in a lot more experiences as opposed to, let's say, live agents. I think the quality of those chatbots experiences is going to increase with AI with a voice that can be more human that can interact.
Speaker 1: and AI can power those kinds of experiences. So it's gonna go from productivity to cost the delight and we're thrilled. It's like, it's a wonderful toy that hopefully will return significantly going forward for the company.
Speaker 2: Thank you, Daph. Our next question comes from Ross Sandler from Barclays. Please go ahead, your line is open.
Speaker 3: Hey guys, congrats. Question on the ride to take rate. So you mentioned in the prepare remarks that both rider and driver incentives were down pretty nicely in the US and your category position stable. So is that the primary driver of the improvement in ride to take rate?
Speaker 3: You know, our marketplace in order to both make sure that we are driving and overachieving against the guidance that we put out on the bottom line. But certainly we also want to try to allocate and drive growth on the top line as well. And so right now things are working quite well if you look at both the top line as well as the bottom line growth in the quarter.
Speaker 3: So I would say it's a combination of both. So we leaned in a lot, as you know, last year in terms of bringing drivers back. And so the marketplace is much more healthy from a supply perspective. So periodically, we will put in some more incentive to continue to drive demand.
Speaker 3: And again, what I would say is that we work very hard at balancing our marketplace because it's not just delivering the EBITDA on the free cash flow that we're promising. We are trying to continue to grow the company's scale and so you saw that our gross bookings were up 22% on a constant basis and the ability to business even higher. And so as we go into next year, what's actually exciting about is our trip growth.
Speaker 1: And Ross, just to add one point, is part of the take rate increase that you saw Q4 to Q1 on the mobility business is seasonal. Q4 tends to be very, very busy from a demand perspective. So we put more money so to speak into incentives to make sure that supplies down. Q1 usually demand.
Speaker 1: is a bit lower and supplies elevated. Therefore, we can take down incentives which...
Speaker 1: you know, has the effect of increasing our take rate. If you take a look, if you ignore, you know, the merchant model kind of the accounting adjustments that we had, our take rate found up to 4 to Q1 went from college 21 to 4 to 21 to 1. So there's a slight.
Speaker 3: Yeah, so what are as referencing is the business model change in the UK that happened last March and so you're seeing that overlap which so that that was the
Speaker 4: What with our point of view. Thank you. Our next question comes from Brian Noak from Morgan family. Please go ahead. Your line is open. Great. Thanks for taking my questions. I have two. The first one, I appreciate the new, the rider cohort data in the slide deck. I'd be curious to hear a little more detail about. I'll try not find time for donation, but take your time. paucrloud to address ready page 10 and
Speaker 4: which use cases or products are sort of driving this strong new user cohort frequency and spend behavior that you're using that you're seeing. And then the second one on delivery, you're talking about a celebration in the business really healthy. Can you just talk to us about which products or regions are driving that acceleration, how we should think about that over the course of the year. Thanks.
Speaker 1: Yeah, Brian , in terms of the mobility cohorts, which are positive kind of on your on your basis and then the newer cohorts are actually even more healthy in terms of for frequency, it comes really from the amalgamation of all of the work that we are doing on the platform.
Speaker 1: Supplies are strong. ETAs are coming down. Surge came down from Q4Q1 and that's resulting in higher conversion rates in terms of how many sessions does a rider have and do they convert on that set on that session. So the quality of the marketplace is clearly how they affect.
Speaker 1: But at the same time we're innovating and we're adding a ton of new product and choices for the rider as well. Reserve is an example. I talked about 20% now of our airport drop-offs being reserve trips. And what we're finding is that...
Speaker 1: Reserve has a combination of riders who used to use your on-demand marketplace, now using reserve to make sure that they're kind of guaranteed availability or guaranteed a much higher reliability, but it's also bringing new riders into the system as well.
Speaker 1: that is a use case travel, is a strong use case with high average fares as well. So I think it's a combination of marketplace health and innovation around new use cases that is driving the frequency that we are seeing. In terms of delivery, as far as the growth there and the growth in the market, we're seeing a lot of growth in the market and in the market in the market.
Speaker 1: And the other factor in terms of delivery is, again, the customer cohort data is actually quite healthy. Herner's eater retention has improved significantly, so eaters are staying with the platform. Frequency is up.
Speaker 1: and a higher percentage of our eaters and riders, but especially eaters are members. And as you know, members spend four times not the non-members do. So all of that is adding up to continued healthy growth for the platform, both on the mobility side and on each side as well.
Speaker 4: Great, thanks, Sarah. You're welcome. Next question.
Speaker 2: Our next question comes from Eric Sheridan from Goldman Sachs. Please go ahead, your line is open.
Speaker 5: Maybe following up on that with two on the delivery side of the equation, Darya called out in the letter improving your category position in large markets. Can you give us a little bit better sense of what you see as the key investments to improve category position are and how investors should think about the growth output or the yield from those investments looking out over the medium to long term? And then second with respect to the delivery business.
Speaker 5: How should we think about market share dynamics broadly in the delivery business versus where you see yourself as the best position to compete where there's an overlap between you were one subscription and the mobility business where that might put you on a competitive footing that's different than markets where that may not be as prevalent. Thank you.
Speaker 1: Yeah, absolutely. I think on this delivery side, we're seeing the result of a couple of factors. First of all, we've got the power of the platform in that we have our mobility business that is actively upselling our mobility customers to our e-mail.
Speaker 1: So against our competitors who are monolong competitors, who are delivery only competitors, we have a source of low cost traffic, significantly low cost traffic. Our mobility business sense is more customers than we get from Facebook and Google and Snap and all of these different platforms combined. And that's just a structural advantage that we have again.
Speaker 1: the overall market certainly against the competitors. And then I think we're actually getting particularly well algorithmically as it relates to improving our market place efficiency on the delivery side, higher percentage of batching orders, and using deep learning techniques to drive down cost per transaction on the delivery side. You add on top of that our advertising product, which continues to grow at high rates, advertisers are up 70% year on year using our platform.
Speaker 1: and you get some pre-powerful economic drivers that's allowing us to deliver the kinds of online that you saw on our delivery business, which is well ahead of estimates while getting category position in nine of our top 10 markets on a global basis. So I think that it's happening broadly, it's not.
Speaker 1: 5 out of 10, it's 9 out of 10 markets where we're gaining category position and I do think it's the power of the platform and Again, we see it in almost every single market out there
Speaker 2: Great. Thank you. Our next question comes from Justin Post from Bank of America. Please go ahead. Your line is open.
Speaker 4: Great, thanks. Nelson, maybe you just give us an update on the EBITDAW progress. If you take 80-50 times four, you're already over a $3 billion run rate. Where did it drivers to get over $5 billion here? Is it network efficiencies, marketing spend, leverage on personnel? How do you think it about the growth from here? And then I noticed you had some interesting comments on the taxi business.
Speaker 4: Just just to high level how much that's helping your mobility growth. Thank you.
Speaker 3: Okay, so I'll handle the first half of it. So again, when we put out the targets last year, our expectation was at least make it achieve them on the top line, put over deliver on the bottom. And we're five quarters into putting out a 12-inch plan. And I think...
Speaker 3: History shows that we've overachieved every quarter and we intend to continue to do so. So again, if you take the Q2 trajectory, which is actually what you're referencing, we don't stop there. So we're continuing to invest in our marketplace and continue to grow the marketplace. And we actually are optimizing every single line of the PNL.
Speaker 3: And we're seeing those benefits. And so last year we talked a lot about the cost per trip benefits were getting on the delivery. This year you heard us talk a little bit about our RNA and some of the benefits we can have there. And these are big dollars. And so the platform really is operating quite well. And so like what we're doing is we work with our teams and work with our product, our tech folks to make sure we're just optimizing the platform.
Speaker 3: So to be able to grow 22% constant currency at our scale, you're over year. It's hard, it's tremendous. So what we're doing here and be able to deliver the incremental. So I think what you should think through is more about
Speaker 3: Where we think we're going to end up next year, understanding that we think we'll continue that outpace on the bottom line. And you heard the commentary about this. We think we were 12% incremental margins in Q1. Right now, if you look at the midpoint of the guide, and it's 10%. So our expectation is that we'll continue to do better. And importantly, generate.
Speaker 3: a lot of free cash flow that we think is going to ramp in the coming quarters. So while we're not touching upon new guidance for 24 or the out years, hopefully we're building track records to show you that the company is really operating at a high level right now. And then as it relates to the taxi market, we don't disclose, let's say, taxi bookings. When we look at haliboles, which is taxi to wheelers, three wheelers, insert markets, that's a business that's already over a billion dollars.
Speaker 1: But really the way that we look at our portfolio is a set of growth bets that we're making. These are tax-d2 wheelers, 3 wheelers, low cost, our Uber X share, high capacity vehicles that we're investing in, our Uber for business, Uber for health, and then newer products like Reserve.
Speaker 1: that are creating entirely new instances for our riders to use the service. If you add up all those growth bets, we're about a $6 billion run rate growing at a hundred percent year on year. So we talked about when we put together growth platform, we talked about
Speaker 1: 50% of our growth coming from our base business, 35% of our growth coming from NewVap, 15% of our growth coming from certain international expansion. It's the traditional Uber business, but with its list. And if you look at our growth bets, our growth bets were about 10% of our volume Q1. They're about 20% of our growth in Q1.
Speaker 1: And they also account for 20% of new riders coming onto the platform. So not only are they a big part of our growth and kind of a new business segment that we're building, but we're introducing an entirely new audience to the Uber platform. And those new riders tend to use other products. They'll come in on you for B, they'll use this main line.
Speaker 1: So, coming on low cost and then both treat themselves to a new breast or comfort as well. So, we see TACSI as a part of a portfolio. Nelson and his team are constantly allocating capital to the base business to the growth that as well in a dynamic way.
Speaker 3: to deliver the kinds of top lines and then excellent bottom lines that you're seeing. So think about our GBs are up 22% on constant basis just to go back to that and our EBITDA is up for X.
Speaker 3: bottom mark that you're seeing. So think about our RGBs are up 22% on constant basis just to go back to that and our EVA does up 4x. You're over here.
Speaker 3: And so again, I think that we really are pulling all the levers to make sure we deliver top and bottom line growth. And so again, I think we're both very confident that we'll continue to do that in the coming quarters. Great. Thanks, Nelson. Thanks, Star. Sure. Thank you. Next question. Our next question comes from Lloyd Womzley from UBS. Please go ahead and line it open.
Speaker 6: Thanks a lot. Two of I can. First just kind of continuing on the last question. Appreciate the color on halloween and the new formats. I guess on that international side of the meeting term growth. What is the update the latest update on some of the market chief flagged at the National outlets have travel on
Speaker 6: Spain and Germany. And then second one, falling up on some of the earlier delivery questions, how much do you think of the benefit you guys are seeing in terms of market shares, a function of product improvements versus maybe more discipline across?
Speaker 6: the competitive landscape just with the rising cost of capital. You know, you flag, I think Japan in particular, but like anything, you feel like those are also part of the benefit and like where are we and seeing the benefit of just a more rational competitive landscape. Thanks. Yeah, I'll start in terms of the international markets. A couple that I will call out.
Speaker 1: believe we're gaining category position in Spain, same with Germany. It's a market that we started on probably around four years ago and it developed very well. We're playing by the rules and Germany is the largest GDP in Europe . So it's a very, very large market to go after and we're seeing promise.
Speaker 1: Both on the mobility side and the delivery side in Germany were happy with that development. A couple of other markets are Turkey where Turkey's a taxi market and we're innovating around hallowables when building a taxi product has allowed us to penetrate into that market as well.
Speaker 1: And then our container as well showing real promise in South America. You know, we're seeing with South Korea and Japan the market development there is slower than we'd like frankly and partially because of regulatory issues as it relates to dynamic crisis etc., Tell us details in the accomplishments of UN sites, this is a speedy integral. 2.
Speaker 1: We're not really, we're not able to kind of flex all of the muscles of the marketplace of what makes Uber great especially on the pricing side. We think pricing reform there will benefit drivers, so we think it's absolutely something that will help out the market, but it's taking a little more time than we would like.
And then nothing you want to talk about. Yeah, so on the delivery. So yes, you're partially correct. I think the rationalization of the marketplace is driven by the higher cost capital. As you know, we've led in terms of trying to drive companies towards profitability. And frankly, for me, companies need to make free cash flow. And so we've led from the front on that.
And certainly, everybody's had to follow given where the market is right now. And so we are seeing the benefit of having a bigger and frankly a more efficient platform. And it's allowing us to really make progress in certain marketplaces like most of Asia, and particularly the UK or big call-outs in the first quarter.
And importantly, what's important now is that right now, if you look at our top 20 delivery markets, so overall on delivery, we're generating 2% EBITDA margin. We're profitable in 15 of our top 20. And actually, six of our top 20 markets today in the first quarter are already above our long-term targets. So we're growing our market, our category position, we're gaining, we're growing at the top line, and we're delivering on the bottom line. I think that's just a good format
So I wanted to ask about two questions. On the advertising side, what traction you're seeing for advertising, on the mobility side. And then in terms of the Uber One program, and they prepared comments you talked about seeing really nice traction record high levels in North America, could you talk about in the rest of the world, and also kind of the, what if their product development areas you want to lean into to make the Uber One program even more attractive? Thank you.
Yeah, absolutely. So we are very happy overall with our app products. We talked about the number of advertisers who are using our product grow in 70% of the pension, 45,000 businesses. And the majority of our revenue is to be clear is on over each.
And it's obviously a big growing platform, along with the new products that we're launching on the new vertical ad side with sponsored items in the US that are designed for CPG advertisers. We continue to see strong momentum on the mobility side with Journey Ads. And these Journey Ads.
are getting us premium CPMs because if you think about the Uber rider, this is a very high demographic rider. They tend to be younger. So obviously, more open to first-rate brands and advertising. They tend to be mobile. They tend to be urban. And they go places.
you know, they are moving and they are spending. So we are seeing very high CPMs as it relates to our mobility advertisers. One of the newer products that we're quite excited about are part-offs that you see in CPMs like New York City and also tablets that we're launching in CPMs as well.
These are newer formats and what's exciting about these new formats is that they are a way for us to improve driver earnings. So for example, with a car top, the driver who has a car top, we'll make an average of $100 extra a week as it relates to those earnings. So drivers are making more money.
retention as higher, supply hours are higher, and they're happier and making more, which helps out the marketplace. So we're quite optimistic about our process there. As it relates to Uber1, I'd say strength across the board. We are, you know, the goal of Uber1 is really we are giving a discount to our best customers.
continues to be higher and higher percentage of our bookings. It's about 27% now, and we have a target of dropping that to 50 plus percent. And in certain markets outside of the U.S., over one penetration is significantly higher.
Then that's 50% target. So that's not a theoretical target. That's a target that is absolutely achievable. And I will also add that Uber 1 members are profitable and what we find is it's a very, very effective way essentially to draw frequency and higher engagement with our customer base. Okay, thank you.
You're welcome. Next question. Our next question comes from Deepak, Matthew Bannon from Wolf Research. Please go ahead. Your line is open.
Great. Thanks for taking the questions. All right, your competitor in the US is going through a transition currently. How do you think about the potential impact of this on the US right share market? And philosophically, what is Uber's priority between kind of defending category position and profitability if, you know, for some reason competition intensifies in this space? And then a second question, maybe for Nelson.
You noted in responsible prayer question that you intend to outperform on EBITDAB. You know, certainly the incremental margins have been great, but wanted to ask if there is any update on your thinking on top line bookings for 2024. Now, since you provided the guidance at the analyst day, FX has been a headwind and some markets are on different trajectory. You know, wanted to ask if you have any update thoughts on 24 top line growth.
Thank you so much. So I'll go first and dark and answer the competitive question in a second. So certainly if you think about what we did in the first quarter, 22% constant currency and even 19% reported across our businesses is extremely strong, especially given some of the headlines on freight. And if you just think about...
what we're doing in terms of the forecast and Q2. So we expect our core mobility and delivery business is gross bookings to grow 18 to 22% depending where you are on the guidance on a constant currency basis. So as we said, we are committed, and we are enabled because we are been so efficient in terms of operating the business and getting the leverage. And we've been mindful about our costs to be able to invest back in some of the products that you've heard Dar talk about already today. Absolute confidence with FM.
And so we are seeing some of that meaningful benefit as we think about going into 24. And so again, we are trying to do both, which is continue to invest in products that we think will enable us to deliver against the top line. But importantly, we expect to continue to do what we've been doing, which is over to deliver against the bottom and generate a very, very strong free cash flow in the coming quarters.
And so again, I would just say that we spend a lot of time on capital allocation inside the company. And right now the formula is working quite well because we're able to do both, as well as, again, invest in new geographies and invest in new products. And I think you should just expect that to continue. Yeah, and deep back in force it's trade off between DPM profitability. That's the first thing I'll tell you.
I hope that we have demonstrated over the past six to seven quarters that that's a false trade-off. We've been consistently gating category position. And as you've seen, we've been delivering on profitability at a rate, well in excess of our internal targets and in excess of external expectations, right, 12%.
this flat quarter. And again, delivery, delivering essentially record a justice ed, but doubt 288 million in justice ed, but doubt over 20% incremental margins, while gaining category position in nine out of 10 markets. And if the combination of the team executing really well.
are being the scale player, are being the global player, and are having the power of the platform that our competitors don't. As far as what we are seeing domestically with Lyft, obviously they're going through a lot of changes. It's a very, very strong brand. It's not going anywhere. And what we're seeing is they're looking to price competitively with us.
And we think that sets up a competitive environment where we're competing on brand and we're competing on service and ETAs and accuracy, reliability, et cetera. So we think it sets up a constructive competitive environment going forward. We haven't seen any signal otherwise.
But I think you'll have to ask them that question when they report their earnings as far as what their strategy is going forward. But so far what we see is constructive. And we don't see any reason why it would change. I do think a more disciplined marketplace, you know, I think the market has said. Very, very clearly that the days of paying for share.
and essentially using shareholder money to buy share temporarily. Those days are over. And so we think that overall competitive environment for tech generally, but especially in our market, is going to be constructed going forward.
and essentially using shareholder money to buy share temporarily, those days are over. And so we think that overall competitive environment for tech generally, but especially in our market, is going to be constructed going forward. Great, thank you so much.
Thank you. Next question. Our next question comes from John Colantoni from Jeffries. Please go ahead to line is open.
Hey, thanks for taking my questions. I wanted to look at the US and Canada cohort figures again. I'm curious why frequency among the pre-COVID cohorts in 2022 was lower than the newer cohorts. Is there something about demographics or adoption of reserve for the newer cohorts or something else that's causing the higher frequency?
And mainly I'm curious if there's an opportunity to improve adoption of reserve or over one in the older cohorts. And the second question. Oh, sorry. Go ahead. Go ahead. Go ahead and ask your second question number one. Yeah, just quickly on freight. Freight's been falling short on expectations from industry headwinds.
Can you just sort of update us on how you envision performance of that business trending throughout the year? And when you think about ROIC and capital allocation to build that business relative to your core mobility and delivery businesses, are you looking for opportunities to pair back a bit or even to look for strategic opportunities to monetize that business to help accelerate your path to gap, profitability, and investment grade? Thanks.
It's significantly higher than it was whether it's reserve or reimagined F-share, et cetera. There are just more opportunities for someone to use our products. And that's resulting in higher frequency kind of on a year-on-year basis. But if you look at each cohort, the 2021 cohort, their frequency increases as well as we have healthy pricing, healthy availability, and a newer product available for them. Also remember that our membership program, we think over a third of time, is just mathematically going to draw higher frequency across the business. It'll have a higher impact because in Cermontality generally...
And a lot of the supply chain challenges that came during COVID have arrested. So right now you're seeing a very oversupplied market. So that really impacts rates and it really impacts the combination of spot versus contract rates. And so that's actually going on globally. And you probably will see that as you think about other freight carriers and certainly in the brokerage space.
We raised external capital to fund freight, and we actually fund it separately. And in fact, even the employees are getting freight equity as well. And so there's a separate board that manages it as well. So freight really is something that we still believe in. The team continues to make progress in terms of...
impact, if you will, or minimal impact as we think about the guidance that we give at the corporate perspective in terms of generating both gap operating profit as well as recast for. I mean just one other number of phone gap frequency to add one of the reasons why we're quite optimistic.
about our frequency on the mobility side is if you look at the 2019 cohort, actually Uber Pool, which was a high frequency but extremely low margin product, negative margin product for us, was a much more significant part of the portfolio than Uber X shares now.
We are now launching UberX share in the right way with economics at work. We are aligning incentives between the rider and the driver and ourselves in terms of pricing as well. So as we expand UberX share, as consumers experience it and we are seeing strong signal there.
We think that could be an additional tailwind for frequency going forward in addition to general experience and the membership program.
Next question. Our last question. Our last question will come from Ron Josie from City. Please go ahead. Your line is open.
Great, thanks for taking the question. I wanted to ask a little bit more about Uber1, just given it now, Councillor 27% of gross bookings. Talk to a little bit more about the programs just to drive continued adoption of Uber1. And then in the letter, as your late delivery, there was talk about investments around grocery convenience, just newer verticals within delivery. Would love to hear the progress there as well.
Thank you very much. Yeah, absolutely. So in terms of our Uber1 program, adoption of Uber1 is incredibly important. We're actually more focused on retention. You know, any time that you build a membership program, it's easy to get college initial numbers up.
But if your retention statistics are not where we want them to be, then at some point you're going to hit a wall. So actually, if you look at the team and what their priorities are, it's very much on retention, making sure that the experience of an Uber1 member is first rate. If they get a delivery that way, we make it up for them.
making sure that even details like payments for renewal, payment failure rates are minimized, etc. All of this work that is kind of gritty work behind the scenes is actually our priority in making sure that we improve retention rates for our members.
really is the focus of the group. And it's definitely showing up in the increased penetration as it relates to our overall growth bookings. You will see more experiential benefits of the Uber one. Right now it's all about discounts and discounts are awesome and a much higher percentage of our...
Members just logically should be using the program because they will save a ton of money, but also we will look for experiential benefits like the priority dispatch during certain periods to introduce into the program as well. Those are unique benefits that we can offer that really no one else can offer. As far as new verticals, we're very, very optimistic on our progress there. We're now at an excess of a $5 billion annual on gross bookings run rate, the business is growing 30% year on year, and really it's a discipline investment path into
And it's all about selection. It's about launching new retail partners, so selection like partners like Kohl's in Australia, they're the second largest grocer. As we add selection, as experience continues to improve, those Eats customers who use new verticals are gonna be happy and they're gonna come back. So,
The trend here is positive, but we have a very long way to go. Our ambition for new verticals are multiples of the $5 billion that we're at now, but it is going to take disciplined growth to get there. And I think by the results that you've seen, you have seen us able to invest in new products like new verticals. So to help get us started—we created verticals in this last year. Therefore, we created hamburgers on different platforms.
quite at the same time deliver substantial increases in margins at the same time. And I think it will be more the same going forward if we do our jobs.
Let's wrap it up there. Thank you, everyone, for dining. Thank you very much for joining, and we'll talk to you next quarter. Thank you.
This concludes today's conference call. Thank you for your participation. You may now disconnect.