Uber Technologies Inc. filed for an initial public offering with the Securities and Exchange Commission on Thursday, setting up the most anticipated Silicon Valley IPO since Facebook Inc. Uber did not list a target price for shares, putting in a placeholder target of $1 billion for the total amount the San Francisco company seeks to raise. Reports this week stated that Uber expects to raise about $10 billion at a valuation of roughly $100 billion, but there is not enough information in the initial filing to support that information. The Uber offering is being led by Morgan Stanley and Goldman Sachs, two of 29 banks listed as underwriters on the offering. The company expects to eventually list shares on the New York Stock Exchange under the ticker symbol UBER. Uber, a ride-hailing service that uses a mobile app to connect prospective riders and drivers, is the most highly valued private company among a host of touted “unicorn” tech startups. It has collected a total of $13.6 billion in private investment, according to FactSet, and was valued at $76 billion in an August 2018 investment round, according to the Wall Street Journal. The interest in an Uber IPO could eventually rival Facebook FB, -0.04% , which went public with much fanfare in 2012. The social network raised about $16 billion in its IPO, the largest for a U.S. tech IPO after Visa Inc.’s V, -0.85% 2008 offering that neared $18 billion. Chinese e-commerce giant Alibaba Group Holding Ltd. BABA, +0.31% raised about $25 billion in its 2014 IPO, the largest in history. See also: As unicorn deals loom, IPO market has work to do to catch up with last year’s pace As Facebook was the face of a new breed of tech companies that built off the advances of the dot-com boom, Uber is the most prominent example of the next generation of Silicon Valley startups, which leveraged mobile phones to create new avenues for commerce. Uber’s generation has stayed private much longer than Facebook and its ilk and collected more private investment, but there appears to be a flood of the so-called unicorn startups approaching Wall Street. Smaller U.S. ride-hailing rival Lyft Inc. LYFT, +4.09% went public late last month, raising more than $2 billion at a valuation of roughly $24 billion. Shares have dipped well lower than the $72-per-share IPO in the two weeks since, however, and closed Thursday at $61.01, giving Lyft a market capitalization of $17.4 billion. Other big-name startups that are expected to go public soon include Pinterest Inc. PINS, -1.29% , which is expected to price next week, and Slack Technologies Inc. PagerDuty Inc. PD, +5.69% , a San Francisco DevOps software company, shot 60% higher in its debut Thursday after receiving a valuation topping $2 billion in its IPO. For more: Here are the big-name startups preparing for 2019 IPOs Those companies pale in comparison to Uber in terms of name recognition and money raised, however. “Uber is a once-in-a-generation company, and the opportunity ahead of it is enormous,” Chief Executive Dara Khosrowshahi wrote in a letter included in Thursday’s filing. Khosrowshahi, previously the CEO of Expedia Group Inc. EXPE, +1.02% , took over the helm of Uber in August 2017, after founder Travis Kalanick stepped down amid controversy around the company’s culture and business tactics. Khosrowshahi admitted “missteps along the way” to the IPO in his letter, but insisted that he has established a new structure. “Over the last decade, as the needs and preferences of our customers have changed, we’ve changed too,” he wrote. “Now, we’re becoming something different once again: A public company.” Like Lyft, Uber said it would offer drivers on its platform a one-time cash bonus and reserve shares for drivers at the IPO price if they wish to buy them. Uber said it expected to pay out a total of $300 million to 1.1 million qualifying drivers, in amounts of $100, $500, $1,000 or $10,000, based on number of miles driven for the company. Read: Meet the O.G. Uber and Lyft drivers who could cash in from the IPO Uber reported $11.3 billion in revenue for the calendar year 2018, up 42.1% from the year before. The company reports only the portion of revenue it receives for rides and other services, as MarketWatch reported in 2017. The company said it had an operating loss of more than $3 billion in 2018, an improvement from an operating loss of more than $4 billion in 2017, but claimed net income of almost $1 billion for the year thanks to the divestiture of operations in Russia and Southeast Asia and an increase in the value of its investments. Uber reported more than $3 billion in gains from the divestitures and almost $2 billion in unrealized gains from investments. Overall, Uber reported an accumulated deficit of $7.87 billion from its 10 years of operations. Uber reported providing 5.22 billion rides in 2018, up from 3.74 billion in 2017 and 1.81 billion in 2016, though that number also includes trips made for its Uber Eats food-delivery service and made on what it calls “New Mobility” vehicles, such as scooters and bikes. Uber counts each passenger that uses its carpool service as separate trips even when they are in the same car, but multiple passengers riding together in a more traditional service like UberX as a single trip.<doc-sep>The ride-hailing leader is still reporting substantial losses, and its revenue growth and take rate on transactions has been dropping. The numbers shared in Uber's IPO filing could make it hard for the ride-hailing leader to obtain the $90 billion to $100 billion valuation it's reportedly seeking. Indeed, many of the metrics that Uber shared in its filing actually compare unfavorably with those of smaller rival Lyft, which currently trades 15% below its $72 IPO price. On Thursday afternoon, Uber announced that it plans to list on the NYSE under the symbol (you guessed it) UBER. The company reported having 2018 revenue of $11.27 billion, up 42% annually. And though it officially turned a profit thanks to asset sales and an unrealized investment gain, Uber reporting having a 2018 operating loss of $3.03 billion, down from $4.08 billion in 2017. Here are some initial takeaways from Uber's filing, which comes ahead of an IPO that's reportedly set to happen in early May. 1. The Uber Eats Service Is Driving a Lot of Uber's Bookings Growth In line with prior disclosures, Uber says its gross bookings, which cover all of the customer payments generated by ride-sharing and food-delivery services outside of tips, rose 45% annually in 2018 to $49.8 billion and 37% in Q4 to $14.2 billion. However, Uber's S-1 filing makes it clear that much of this growth is coming from its Uber Eats food-delivery service, rather than ride-hailing services. In Q4, Uber's ride-sharing bookings rose 25% annually to $11.48 billion, while its Uber Eats bookings rose 129% to $2.56 billion. The company also got $129 million in bookings from "Other Bets," which primarily consists of its Uber Freight service for shippers, up from $35 million a year ago. 2. A Declining Take Rate (Driven in Large Part By Uber Eats) Is Weighing on Revenue Growth Uber's total take rate, defined as the percentage of bookings it keeps after backing out driver payments, restaurant payments and things like tolls and taxes, fell to 17.9% in Q4 from 21.7% a year earlier. As a result, while Q4 bookings were up 37% annually, revenue only grew 22% to $2.97 billion. The biggest culprit behind the take rate decline: Uber Eats, which as previously noted is seeing much stronger bookings growth than Uber's ride-sharing services, had a take rate of just 6.4%. That more than 50% below a year-ago level of 13.3%. Uber observes that whereas its ride-sharing business only has to make payments to drivers, Uber Eats has to pay out both drivers and restaurants. The company also says its Uber Eats take rate has been pressured by deals with "large-volume restaurants" that carry low service fees, and by strong competition in places such as the U.S. and India. In the U.S., both GrubHub (GRUB) - Get Report and private DoorDash are major rivals, and Amazon.com (AMZN) - Get Report has also been trying to grow its restaurant-delivery business. Uber's ride-sharing take rate has also been slipping, something the company blames on "competitive pressure" (Lyft (LYFT) - Get Report , it should be noted, has been taking some share in the U.S.). In Q4, the company's ride-sharing take rate fell to 20.2% from a year-ago level of 21.7%. Not surprisingly, Uber expects its take rate to continue dropping in the near-term. This trend is very different from what's being seen by Lyft, which doesn't have a food-delivery service. In Q4, Lyft's take rate rose to 28.7% from a year-ago level of 23.4%. That, along with price hikes and ride growth, helped its revenue rise 94% to $669.6 million. Amazon.com is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now. 3. User and Trip Growth Is Healthy, But More Details Would Be Helpful Uber's "monthly active platform consumers" (MAPCs), defined as anyone who used its consumer transportation or food-delivery services in a given month, rose 11% sequentially and 35% annually in Q4 to 91 million. Total trips on Uber's platform rose by 37% annually to 1.49 billion. However, Uber doesn't break out how many MAPCs it respectively has for its ride-sharing services and Uber EATS, nor how fast those user bases are growing (presumably, Uber Eats has been seeing much faster growth). And though Uber says 52% of its Q4 bookings came from outside the U.S., the company doesn't break out its MAPCs by geography. 4. Emerging Markets and Carpooling Services Are Weighing on Uber's Bookings Per Ride In contrast to Lyft, which has been seeing its bookings per ride grow, Uber's ride-sharing gross bookings per trip fell by 1% in 2018. Uber notes that bookings per trip are lower in regions such as Latin America, India, the Middle East and Africa than they are in places such as the U.S. and Europe. It also notes that carpooling services such as UberPOOL and Express POOL have weighed on bookings per trip. 5. Uber Still Has a Ways to Go Before it Turns Profitable Amid a 25% increase in revenue to $2.97 billion, Uber reported a $1.05 billion GAAP operating loss in Q4, compared with a $1.2 billion operating loss a year earlier. Operating loss would have risen if not for the fact that Uber's general & administrative (G&A) spend, which was inflated a year earlier by one-time expenses, fell 42% to $555 million. While its depreciation and amortization expenses fell 9% to $109 million, Uber's cost of revenue rose 34% to $1.62 billion, its sales and marketing spend rose 43% to $974 million, its R&D spend rose 14% to $366 million and its operations and support spend rose 13% to $408 million. It's worth adding here that Uber previously reported an "adjusted" Q4 net loss of $768 million, and an adjusted Q3 net loss of $939 million. Clearly Uber, like Lyft, still has a lot of work left to do to improve its cost structure and margin profile. 6. Uber's Cash Burn Isn't Quite as Bad as its Operating Losses Uber's free cash flow (FCF), defined as its operating cash flow minus its capital expenses, was negative $2.1 billion. That's less than its $3.03 billion operating loss for the year, and improved a bit from 2017 FCF of negative $2.24 billion. 7. Uber Is About to See a Lot of Debt Converted Into Stock Of the $7.5 billion in debt that Uber had at the end of 2018, $2.8 billion consists of convertible notes that are expected to be converted into stock at the time of its IPO. In addition, the company is set to issue $1.7 billion in convertible debt to help finance its pending acquisition of Middle Eastern ride-sharing rival Careem; the debt matures 90 days after its issuance, and features a conversion price of $55.00 per share. 8. Following the IPO, Uber Should Have Enough Cash to Last a While Uber had $6.4 billion in cash at the end of 2018, and Reuters recently reported that the company is looking to raise about $10 billion through its IPO. Even if Uber ends up raising less than this sum -- given the numbers shared in Uber's IPO filing, as well as Lyft's performance to date, this wouldn't be surprising -- the company should have ample funds for quite some time as it works to pare its losses and cash burn. This article has been corrected to state Uber's Q4 revenue grew 22% annually, rather than 25%.<doc-sep>Uber released its long-awaited IPO prospectus. The company will list on the New York Stock Exchange under the symbol "UBER." The company has self-reported unaudited financials for several quarters — one of the few tech giants expected to debut this year to do so. That means the public S-1 serves less as the typical first look into financials and acts more as a contextualized official record. The filing comes about two weeks after rival Lyft debuted on the public markets. The two ride-hailing companies had been racing toward the public markets practically in tandem, though Uber's offering is likely to be significantly larger, and one of the largest offerings this year. The company was previously reported to be seeking a valuation of up to $120 billion. Uber is expected to provide a price range for its shares later this month and go public in May. Below are the highlights from Uber's filing.<doc-sep>
Uber filed documents for its long-awaited initial public offering (IPO) on Thursday. The ride-hailing company could net a valuation of more than $100 billion as it hits the stock market. Lyft, the company's biggest competitor, went public in March, and its stock has dropped more than 20% since. Uber has officially filed for an initial public offering (IPO), according to regulatory documents filed on Thursday. The company's long-awaited prospectus, which was filed confidentially in December, was made public for the first time on Thursday, providing the first public look into Uber's investor pitch and its plans for future growth in ride-hailing, food delivery, self-driving cars, flying taxis, and more. Uber will list on the New York Stock Exchange under the ticker symbol UBER, according to its prospectus. Morgan Stanley, Goldman Sachs, Bank of America Merrill Lynch, Barclays, Citigroup, and Allen & Company, among others, are underwriting the offering. "Our continued success will come from stellar execution and the strength of the platform we have worked so hard to build," CEO Dara Khosrowshahi said in a letter in the filing. "Our network spans tens of millions of consumers and partners and represents one of the world's largest platforms for independent work." Uber did not disclose in the filing the price at which it plans to list, though the company's public valuation could easily top that of earlier venture-capital rounds, especially given that Lyft's offering last week was oversubscribed. Before the stock prices or begins trading, Uber's executives and bankers will head out on an investor roadshow to drum up demand across the country. Bloomberg reported on Tuesday that the roadshow is likely to kick off this month, with shares hitting markets in May. One of the biggest IPO's in years As a private company, Uber has raised nearly $20 billion in venture capital across more than a dozen funding rounds that have left the company valued at a reported $120 billion. If the valuation holds, Uber would find itself ranked somewhere between the railroad operator Union Pacific and its fellow tech giant Salesforce in terms of the most valuable public companies. That massive amount of capital raised over the past decade has helped Uber to cover most of the world's cities in more than 60 countries, compared with Lyft's much narrower focus on the US and Canada. Those funding rounds have also helped subsidize a massively unprofitable ride-hailing business while also investing in other ventures in notoriously expensive self-driving-car research. Unlike Lyft, Uber has been self-reporting some quarterly financial information, so the numbers disclosed aren't completely new, but they are our first look at audited financial statements. However, in the IPO filing, Uber said it was cash-flow positive in 2018, with a net income of $997 million. That's a massive increase from its 2017 full-year loss of more than $4 million, according to its disclosed balance sheets. At the same time, Uber's revenue has grown by more than tenfold since 2014. Last year, the company brought in $11.2 billion, according to the filing, up from $495 million (unaudited) in 2014. Uber for Everything While Uber is best known for hailing a car ride with the tap of a button, the company has plenty of other bets. In Pittsburgh (as well as in Toronto and at its San Francisco headquarters), for example, the company's advanced technologies group (ATG) is developing self-driving-car tech to power an eventual autonomous taxi fleet. Uber Eats, meanwhile, is one of the fastest growing segments of Uber's business. In many areas, the food-delivery startup is growing even faster than Uber's ride-hailing business. Executives have told Business Insider that Eats is the first of many soon-to-come examples of other services piggybacking on the Uber platform. Groceries could soon be the next entrant to that delivery offering, and the company is rapidly scaling up a team to deliver pantry items in its Toronto office, Business Insider reported last year. In 2018, Uber purchased a bike-share company called Jump bikes. Like Lyft's purchase of the bike-share operator Motivate, Jump is Uber's pawn in the bike-and-scooter wars that have overtaken many of the world's cities in recent years. Rachel Holt, Uber's head of new mobility, said at Business Insider's IGNITION conference in 2018 that users could expect to see a "pretty massive" expansion of the bikes and scooters into more cities this year. Lyft's shadow Lyft, Uber's biggest competitor, went public first in March.