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7,200 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Prashanth Mahendra-Rajah: Thanks, Brian. Let me start then. So maybe as a reminder, when we think about investments on a quarterly basis across the market, we think about investments as what do we need to do to encourage drivers and couriers to come on to the platform, what can we do to be helpful to bring merchants to the platform. And then lastly, what can we do to encourage consumers. So we rotate among those 3 on a quarterly basis based on what we are trying to drive in the different markets in which we operate.
For the first quarter in Mobility, because of the seasonality trends in the first quarter, the return we get on some of those investment dollars tends to be lower than we see later in the quarter just because of seasonal patterns. And because that ROI is lower, it didn't make sense for us put as much into the first quarter as we would in other quarters. So you'll see us ramp that back up in 2Q. We called it out purely to keep folks from running too far ahead with enthusiasm on Mobility margin improvement. We are very confident that Mobility is still on a great trend for continuous margin improvement. But just from a timing standpoint, we didn't want to -- we wanted to acknowledge some of the lumpiness that you are likely to see. |
7,201 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes. And I think in terms of Latin America and the competitive environment there, first thing I'd say, I'm assuming you're asking about Mobility, we're seeing very healthy Mobility volume growth in Latin America, in mid-20s. So we like the market, and we certainly like the volumes that we're seeing there. I would say that while -- I think you're referring to DiDi, they signaled a bit more capital discipline, we're not seeing that as of yet. We see DiDi being highly competitive in the marketplace and spending into the marketplace quite aggressively. Listen, it could be temporary. It might be driven by their desire to show international growth as the China markets have slowed down a bit as the prep for the IPO, but it's difficult for us to speculate on that.
And I'd say, we've seen this behavior before, Brian. And we have a very strong record of effectively responding to defend our category position when our competitors spend up and we do the same thing, and typically, we're much more efficient than our competition in terms of financial efficiency, network efficiency, et cetera. But at this point, we see DiDi leaning in, certainly not leaning out. And we are leaning in as a response, just like we do with other competitors all around the world. The good news for us is we have a very strong P&L, you see our margins continue to increase, so we have lots of pockets of investments to reach into, but we are going to be aggressive.
Prashanth Mahendra-Rajah: Brian, just to shout out for the note last week, I thought that was nice. And we're very much aligned with the more public participants in this market, the better it is for everyone.
Operator: Your next question comes from the line of Doug Anmuth with JPMorgan.
Douglas Anmuth: I just wanted to go back to the decel that you saw in monthly trips for MAPC in 1Q. Just hoping you could unpack that a little bit in terms of LatAm and some of the holiday impact there and what that means in 2Q. |
7,202 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | And then, Dara, can you just talk more about your Delivery strategy in the suburbs, the key levers to success there? And then how you think the Instacart partnership fits in as well?
Prashanth Mahendra-Rajah: Yes. Let me take the first part of that. So again, the Mobility gross bookings growth for the first quarter was -- on a constant currency basis was 26%. Included in that 26% is about 1 point, whether you look at it sequentially or on a year-over-year basis, that came from us deconsolidating the non-ridesharing portion of our Careem business in December. Remember that used to be included in Mobility's results. And when we split that out, you have it in the compares, but you don't have it in Q1. So that's roughly about 1 point.
And then from a more seasonal impact, we'd call out 2 items. First, in Latin America, last year, we saw stronger demand in Brazil around Carnival that we did not see recur in Q1 of this year. And then from a timing standpoint, both Easter and Ramadan shifted on us between the quarters. So again, on a comp basis, that creates some lumpiness. But overall, I would say that we are very much -- remain confident on the growth of the Mobility business. Again, mid-20s year-over-year at constant currency for Q2. Sort of very consistent with what was done in Q1. And the -- as we mentioned in Dara's opening remarks, audience and frequency are both strong at the overall Uber level and remain very strong at the individual LOB levels.
Dara Khosrowshahi: Yes. And Doug, in terms of our suburban strategy for Eats, it's very similar to our general strategy for our Delivery business on a global basis. We're very happy about our growth rates here, 17% constant currency growth rates for the second quarter in a row. Our U.S. growth rates are higher than that -- our U.S. and Canada growth rates are actually higher than that, which we're quite happy about. And generally, we are growing faster in the suburbs than we are in urban destinations, where we have higher penetration. |
7,203 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | And it's about getting the basics right. Building an audience and a brand, increasing selection, making sure we've got pricing right and making sure the quality of the service continues to be high. And really with the Instacart deal that we have, represents the addition of a very high-quality and highly targeted audience, suburban audience, to the Uber Eats ecosystems and to our merchants. And we think that additional demand from this high-end consumer is going to be welcomed by our merchants. And at the same time, we continue to increase, for example, penetration with Domino's and a bunch of other merchants in the suburbs.
So we think that we're well positioned to continue to grow into the suburbs, and we definitely think that the Instacart deal puts us in a better position for growth going forward in the suburbs.
Operator: Your next question comes from the line of Eric Sheridan with Goldman Sachs.
Eric Sheridan: Maybe a 2-parter on Uber One. Would love to learn anything that you've sort of continued to evolve and develop with respect to Uber One internationally as some of those markets have rolled out and they've begun to scale the longer Uber One has been available in some of the more overseas markets?
And second, you have the call out in the prepared remarks around the subscription revenue run rate, what do you see as some of the biggest white spaces to drive more subscription revenue, but also continue to add more value and depth to Uber One at the subscription layer in terms of incentivizing adoption?
Prashanth Mahendra-Rajah: Before Dara jumps into that, I just want to remind everyone on what the -- is being referred to. We announced in the prepared remarks that our Uber One membership fees are now in excess of $1 billion. So that's a -- that's the first time we've called that out, but it's a big waypoint for us on our way to continue driving that. |
7,204 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, Eric, in terms of our strategy for Uber One internationally, it's largely the same as our strategy domestically and globally. It's a global product. We see penetration of Uber One consistently increasing in the U.S., Canada and internationally. Members are now generating 32% of Mobility and Delivery gross bookings, which are nicely up year-over-year. It's over 45% in Delivery gross bookings, where generally kind of were -- more highly penetrated. And I'll remind folks that members spend 3.4x as much as nonmembers per month. So it is a great vehicle for us to drive adoption and drive really attachment with our various services as well.
We are kind of working on a bunch of pretty exciting new initiatives. One that I would call out is continuing to optimize on the use of Uber Cash on the Mobility side. On Delivery, you get a discount on -- you don't have a delivery fee, you get a discount on your food often. With Mobility, you get back Uber Cash. And actually, 25% of Uber Cash earned on Mobility in the U.S., for example, is being redeemed on Delivery, and that's up from the mid-teens when we originally rolled out the benefit. Business riders also get Uber Cash, which is pretty cool. And we're seeing over 60% of the Uber Cash that's earned on Mobility actually redeemed on Delivery as well.
So we think that membership is a powerful lever in terms of general penetration into our marketplace and the frequency growth that we're seeing, but it's also a great lever in terms of using Uber Cash and introducing more of our users to the Delivery benefit as well. In terms of Mobility, we do think that we can penetrate more deeply into Mobility and like we're now introducing cash-back accelerators, where you can increase the cash-back amount for any product to the extent that we're trying to drive a product or quest that encourage users to use more premium products as well but carry higher margins for us. |
7,205 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | You will see more member exclusives coming up where members have exclusive access to events and experiences, which will kind of surprise and delight our members. And then lastly, I would say that we are now moving more of our members on a global basis to annual pass. Annual pass actually results in significantly higher retention rates. So we'll cut the -- our members are able to save money, so to speak, and we see it in the retention benefits. And that has resulted in retention increasing nearly 200 basis points on a year-on-year basis in March, for example.
So there's a lot going on. We think we are -- there's a ton of white space as it relates to our membership product. We're very pleased with $1 billion in revenue, but we think that there's a lot more growth there in membership generally and in terms of membership revenue.
Operator: Your next question comes from the line of Nikhil Devnani with Bernstein.
Nikhil Devnani: Dara, I wanted to ask about U.S. rideshare growth. First, is it keeping pace with your mid-20s growth overall for the business? And then second, can you talk a bit more about where the growth is coming from? Obviously, the service is not new anymore. So it feels like it's more frequency led but is there still a healthy supply -- or healthy funnel, sorry, of new customer acquisition that you're still finding maybe it's suburbs or smaller cities or new demos, however you want to frame it. But just your overall thoughts on how this growth sustains would be very helpful. |
7,206 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes. See, in terms of U.S. Mobility growth, we don't disclose U.S. versus non-U.S. But obviously, by the overall numbers that you see in terms of our Mobility growth, 26% on a year-on-year basis compared to 28% last quarter and 100 basis points of kind of slowdown was because of Careem on a comparable basis. These are very, very high growth rates, and the U.S. is our largest market in terms of gross bookings. So we wouldn't be able to grow at these rates, so to speak, without the U.S. growth being very, very healthy.
In terms of where Mobility growth is coming from, I'd say the significant -- the most significant part of growth is coming from audience. Our MAPC growth in Mobility was up 17% on a year-on-year basis, overall, 15%. So the audience growth for Mobility is actually growing faster. And one particular area of growth that we're seeing is our new products. When you look at our Hailables product, U4B, our new Health business, Reserve, UberX Share, all of these products, kind of our new growth bets, are growing 80% year-on-year. But at the same time, over 20% of our new customers are coming from this new product category as well. So it's a good business. It's growing very, very quickly, but it's also introducing a whole new audience into our marketplace.
Last thing that I would add is that with the pandemic, I think a lot of people who were kind of commuting to work, et cetera, stopped commuting. We have lost some of our most frequent customers. We see the weekday commute use case being particularly strong as people are coming back to work. Some folks may not like that, but we love it here at Uber, people getting back to work and getting back to the office. So there is an audience who kind of stopped using us as frequently as they used to. We were kind of a daily habit. And hopefully, we will see that audience come back, and we're seeing evidence of that in terms of the weekday volumes being super strong.
Operator: Your next question comes from the line of Ross Sandler with Barclays. |
7,207 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Operator: Your next question comes from the line of Ross Sandler with Barclays.
Ross Sandler: Great. The prepared remarks flagged a bunch of new features in the advertising business, enterprise features. So can you guys give us an update on where we are with the non-restaurant advertising as a percentage of just the total advertising ARR?
And then somewhat related, with the new Instacart partnership, can we sell advertising against that engagement? And I guess just how does the Instacart partnership change your own -- your kind of O&O efforts in U.S. grocery? And how are the unit economics going to work in this partnership?
Prashanth Mahendra-Rajah: Ross, it's Prashanth. Let me start just with a couple of data points and then hand off to Dara. First, as a reminder to everyone, we hit a $900 million run rate for advertising in Q4 of 2023. We do not break that down between Delivery and Mobility.
And then on the Instacart arrangement, as Dara had mentioned and we discussed yesterday, when folks click through Instacart and they come to the Uber Eats WebView app, that was -- our ads and those are our -- that's our space to use and monetize. So with that, let me pass off to Dara to make some more comments.
Dara Khosrowshahi: Yes. In terms of the non-restaurant advertising, listen, it's still really in nascent stages. So we talked about restaurant advertising getting to 2% of gross bookings. We actually think that our sponsored items, product, for example, grocery, can get the higher percentages of that. Instacart, for example, we think, is in the mid-2s in terms of advertising as a percentage of gross bookings. And we fully launched out our sponsored items in the U.S. and Canada, and now we're scaling it in 8 additional priority markets in 2024. |
7,208 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | So I'd say like sponsored items is where we were in sponsored listings for restaurants 3 years ago. We gave you a very clear growth map to $1 billion in terms of revenue, and we're going to beat that this year. And we're quite confident we can start moving in a similar direction as it relates to nonrestaurant-sponsored items in the grocery space. We're already active with about 500 top CPG brands, and we're seeing very strong retention as we expand. And really, it's going to be about the growth of the underlying grocery platform.
As we increase grocery audience -- this last quarter about 15% of our monthly actives on Eats bought from grocery. That's up nicely on a year-on-year basis. As that audience increases, we think we can monetize that audience with the base business. But with advertising just as we've done with restaurants, and we think it's -- it can be an enormous opportunity, and it can be a high-margin opportunity as well.
I would also point out that we're quite bullish on a rider ads. We're seeing very strong engagement from riders, a click-through rate of about 2.5%, more than 2.5% compared to an industry average of less than 1%. So video ads and tablets continue to be a very promising growth area for us, and we're quite happy to see the progress there.
Operator: Your next question comes from the line of Mark Mahaney with Evercore.
Mark Stephen Mahaney: Two questions, please. I think in the prepared remarks, you talked about delivery, MAPC growth accelerating in markets like the U.S. Can you go into the -- why MAPC growth accelerated for you? And then secondly, in Delivery, grocery and retail delivery, can you talk about what impact that's having on segment margins or what the unit economics are there -- are like there? Or yes, how much of a drag or when do you see a path to profitability? And maybe it's already there for those 2 segments, but just talk about the impact of those 2 segments on the Delivery's overall profitability. |
7,209 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, Mark. So in terms of delivery growth and audience growth, this has been pretty consistent, right? We've accelerated the growth rate of our Delivery business. It was growing closer to 10% early last year. It's now growing in the teens. And we think the nature of that growth is improving as well, which is most of the growth last year was on price. Now actually, price is a relatively small portion of the growth, and audience and frequency are the largest portion of the growth in Delivery. And it is about just getting the basics right. It's about having a great service, having a significant selection, or selections. Active merchants is up 12% on a year-on-year basis.
It's about improving pricing. So for example, merchant-funded promos, these are -- merchants put in promos, pricing promos into the marketplace in order to drive volumes. Those are up 100 basis points on a year-on-year basis. Again, lowering effective price to the consumer. And then it's about quality. We continue to improve our defect rates. All that adds up to higher frequency, higher retention of audience. And we continue to spend aggressively in terms of marketing our brand. We think the Uber Eats brand is a top brand out there. And then on top of that, of course, we've got the unique platform benefits of our Mobility business that continues to grow audience, throwing over some of that audience to our Delivery business.
So this is all part of the formula that we have in this journey that we've been on over the past couple of years. We're able to do so while we're increasing margins because of the efficiency that we are getting in our marketplace, because of the efficiency, the kind of structural benefits that the platform brings, and we see no signs of that slowing down. Prashanth, do you want to talk about grocery, retail? |
7,210 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Prashanth Mahendra-Rajah: Yes. I'll take the last part of that. So we remain very positive on grocery and retail. The business growth remains quite strong. GBs are up about 40% on a constant currency basis. Once again, 40%, so very strong top line there. And despite that very strong growth, we were still able to expand our Delivery EBITDA margins by about 20% sequentially, and that was partly contributed to by improvement in the profitability of the grocery business. So it is still not where we want it to be. It's still not at a positive EBITDA margin, but it is improving both year-over-year and sequentially, and we feel very good about the path we have to getting to profitability on grocery.
It's going to come from a couple of items. First, the power of the platform, which we refer to quite frequently here. About 15% of our Delivery users are ordering on -- are ordering groceries, and that's up set from where we left Q4. Continuing to see opportunities on ads, which are great margin accretive for us as we bring those CPG players into the platform for grocery advertising. Being able to lower some of the consumer promotions we have. So overall, a number of different drivers. And we think that grocery will eventually be a very strong part of the overall portfolio.
With that, I think we have time for our final question, operator. So if we could go to that.
Operator: Your final question comes from the line of James Lee with Mizuho.
James Lee: Two here on Delivery. Can you guys give us an update on maybe the European gig economy regulation, maybe what policy we should pay attention to, and how should we think about implication of labor costs? And maybe on the U.S. side, can we get a sense of the impact of minimum wage in Seattle and New York on GB and EBITDA? And how do you guys plan to mitigate impact going forward? |
7,211 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes. As far as the EU platform work directive, EU lawmakers essentially voted to maintain a status quo there, with platform worker status continuing to be decided on a country-by-country basis. Member states have until mid-2026 to implement that. And we think that the deal is really unlikely to bring major changes to the current situation in the vast majority of EU countries. And for us, our view remains the same, which is we believe that we should bring kind of the flexibility that gig works brings to couriers, to drivers in the marketplace, along with certain protections that we kind of talk to and have discussions with on a local basis. So we really don't see any changes coming in terms of the EU.
In terms of the -- Seattle and New York, I think some of the regulation that we've seen has actually been very unpopular with couriers, restaurants and customers. So for example, we saw in Seattle, which is a relatively small market for us, Delivery order volumes decreasing by 45%, which has resulted in courier wait time actually increasing 50% on a year-on-year basis. So couriers may be making more per order, but they're getting a lot less orders, which has resulted in 30% of active couriers actually leaving the platform, which I think is certainly not what the City Council had in mind.
So we're actually seeing the City Council in Seattle, for example, bring forward a reform in Seattle to make the standard lower and much more viable for the platforms. We're not there yet. But there's a vote coming up in -- I think it's actually tomorrow, and we think we'll have a positive outcome there. And it's important that it's a positive outcome for couriers and restaurants and customers, because certainly, the Seattle -- the regulation that has been in place in Seattle has clearly been poor regulation that has hurt the people that they're supposed to protect. |
7,212 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | We'll see what happens in New York City. Unfortunately, again, in New York City, we have had to essentially slot couriers, and we've got a waitlist of over 20,000 couriers who want to be on the platform. But because of that regulation, we've had to reduce the number of couriers on the platform by close to 25% since the standard went in place. So less people get to earn in New York, we don't think that's a good thing.
Now again, we have been able to absorb the financial hit of all these different regulations in our platform. You've seen in our profitability, which is up over 80% in Uber Eats on a year-on-year basis. So we're a big company. We have a lot of markets. We're quite diversified. Our technology continues to drive a more effective marketplace that allows us to absorb these regulations. But I think couriers in New York City who want to work, couriers in Seattle who want to work, they're getting hit hard by these regulations, and we're hoping that kind of regulators see the right path going forward because, so far, regulation has definitely hurt the people that it's supposed to protect.
Prashanth Mahendra-Rajah: Okay. Before Dara wraps it up, I wanted to remind everyone next week is our annual Uber GO-GET. This is our event which showcases new products and features across both the Mobility and Delivery. Obviously, we're not going to get ahead of the announcements, but our theme is togetherness. And in addition to the product piece, we've got a great fireside chat with Dara and Maria Shriver. This will be in New York. So if any of you are looking to get out of the office, please reach out to Deepa and we can see what space we have.
If you do join us, my only request is you travel by Uber. And with that, let me have Dara wrap it up. |
7,213 | UBER | 1 | 2,024 | 2024-05-08 08:00:00 | Uber Technologies, Inc. | 144,524,848 | If you do join us, my only request is you travel by Uber. And with that, let me have Dara wrap it up.
Dara Khosrowshahi: I like it. My CFO is upselling. And thank you, everyone, for joining us on the call, and a huge thank you for the Uber teams. There's a ton of work that goes into all of the new products that we're launching, into the products that we'll be talking about in GO-GET, and into delivering the kind of growth and profitability that we've seen from Uber over the past couple of years. So a big thank you for the team for continuing to deliver this quarter.
Prashanth Mahendra-Rajah: Thanks, everyone. Talk to you next quarter.
Operator: This concludes today's conference call. Thank you for joining. You may now disconnect your lines. |
7,214 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Operator: Hello and welcome to the Uber first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during this time, press star, one on your telephone keypad. I would now like to turn the conference over to Balaji Krishnamurthy, Vice President, Strategic Finance and Investor Relations. You may begin.
Balaji Krishnamurthy: Thank you Operator. Thank you for joining us today, and welcome to Uber’s first quarter 2025 earnings presentation. On the call today, we have Uber CEO, Dara Khosrowshahi, and CFO Prashanth Mahendra-Rajah. During today’s call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures are included in the press release, supplemental slides, and our filings with the SEC, each of which is posted to investor.uber.com. Certain statements in this presentation and on this call are forward-looking statements. You should not place undue reliance on forward-looking statements, and actual results may differ materially from these forward-looking statements. We do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as the risks and uncertainties described in our most recent Form 10-K and in other filings made with the SEC. We published our quarterly earnings press release, prepared remarks, and supplemental slides to our Investor Relations website earlier today, and we ask you to review those documents if you haven’t already. We will open the call to questions following brief opening remarks from Dara. With that, let me hand it over to Dara. |
7,215 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Thanks Balaji. We’re off to a strong start this year against a dizzying backdrop of headlines on trade and economic policy. Each component of our multi-year growth framework is humming. Our audience grew 14% to 170 million monthly active consumers, engagement strength continued with trips up 18% and with retention rates hitting all-time highs globally, and gross bookings grew in line with trips, fueled by strength across both mobility and delivery. We see this as robust, healthy growth, growth that’s coming from engagement and frequency, not just price. We think that’s the right way to maximize long term free cash flow per share, and in Q1 we generated record adjusted EBITDA of $1.9 billion, up 35% year-on-year, and free cash flow of $2.3 billion. The Uber team has been in major execution mode. We launched with Waymo in Austin with around 100 cars that are all exceptionally utilized. We announced five AD partnerships with deployments that come in the U.S., Europe and the Middle East. We signed a partnership with Open Table to integrate dining, delivery and transportation for our customers and we went live with our Delta SkyMiles partnership, and we announced the acquisition of Trendyol Go to supercharge our future growth in Turkey, and that is all just in the last two months. Looking ahead, our Q2 outlook should underscore our expectation to reliably deliver more of the same: strong top line growth combined with even stronger profitability growth, setting us well for the seasonally stronger second half of the year. As I’ve said to my team, I feel great about where we stand. We’re on solid footing with a clear strategy and ambitions that have never been higher, and that’s why I’m emphasizing that good is not going to be good enough. We need to be great to continue to deliver for the people and cities that we serve, and of course for all of you. With that, let’s get some questions going.
Balaji Krishnamurthy: Thank you. Operator, we’re ready. |
7,216 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Balaji Krishnamurthy: Thank you. Operator, we’re ready.
Operator: Thank you. Your first question comes from the line of Doug Anmuth with JP Morgan. Please go ahead.
Doug Anmuth: Thanks for taking the questions. I have two. First just on mobility, as you work to keep prices low, curious what kind of elasticity you think you’re seeing in terms of the response and how that’s showing up in rides. Then on AV, you talked about almost 100 cars in Austin, on the way to hundreds. What are you seeing there in terms of utilization of those Waymos relative to some of their other markets? Thanks. |
7,217 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, absolutely. Doug, on mobility, the elasticity that we’re seeing is similar to the past - you know, usually a dollar of increase in terms of price, transactions are negatively affected. Now, there’s short term elasticity and long term elasticity. There’s elasticity that you see in sessions and then we think there’s longer term elasticity, which is as you tend to get used to prices not increasing as much as they were in the past couple of years, how does your--how do your habits change, how does sessioning change? We’re happy with the results that we saw in terms of the pricing that we were able to deliver to the consumers as we saw the insurance headwinds ease a little bit, and hopefully we’ll keep that going. There was also kind of a mix shift in terms of trips, a bit more growth internationally than the U.S., especially in the travel sector that affected overall price mix, so to speak. But so far, I’d say so good in terms of elasticity. In terms of AV in Austin, we’re very, very encouraged with what we’re seeing. Obviously Waymo has a safety track record that’s second to none. Consumers are loving the product. Opt-in rates are very, very healthy, and the ratings are healthy. The team on the ground is doing a terrific job in terms of repairs and cleaning and recharging the cars, etc. to make sure that the Waymos are available for rides, and then when the Waymos are available for rides, they are very, very busy. We’re seeing very high utilization of the vehicles in terms of trips per vehicle per day; as a matter of fact, the average Waymo in Austin is busier than 99% of Austin drivers, as defined by the number of trips per day per Waymo as well, so very, very encouraging early days. We are going to continue to increase the vehicle count in Austin and we’re super excited for expansion in Atlanta, as well as some of the other AV announcements that we’ve made and expansion that we see both in the U.S. and especially outside the U.S. as well.
Doug Anmuth: Thank you Dara. |
7,218 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Doug Anmuth: Thank you Dara.
Dara Khosrowshahi: You’re welcome. Next question?
Operator: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead.
Eric Sheridan: Thank you so much for taking the question. I wanted to know if we could go a little bit deeper on the broader competitive landscape, if you could give us a bit of an update on what you’re seeing competitively, especially around either pricing dynamics or incenting supply and demand across both mobility and delivery, and if there were any specific geos you wanted to call out from a competitive intensity standpoint. Thank you. |
7,219 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes Eric, these markets continue to be very competitive on a global basis. In terms of mobility, we’ve got a strong competitor domestically here in Lyft. I think we’re more focused on competing with each other on service, on quality. Obviously insurance is something that’s hit both of us as well, so I’d say the competitive intensity in the U.S. is pretty consistent; and then internationally of course, we’ve got Bolt in Europe and DiDi in Latin America, they’re strong competitors. They continue to focus on expansion. I think as you see by our results, we’re the number one player in the vast majority of markets in which we operate, and even in a very competitive market, our category position continues to be market leading. Then the same with delivery as well - obviously the U.S. market is highly competitive. We’re seeing terrific growth both in terms of top line, in terms of margin, in terms of our grocer and retail business that accelerated this quarter versus last quarter, and then you are seeing some consolidation in the sector, in the food delivery sector. We were early to the game in terms of growing internationally organically. We’re seeing some consolidation happen, inorganic consolidation happening, and that’s to be expected in markets that are as large and as competitive as ours, so I’d say no change. We can’t rest for a second, and because of our global position and because of the unique platform that we have, we think we can hold our own and then some.
Eric Sheridan: Great, thank you.
Dara Khosrowshahi: You’re welcome. Next question?
Operator: Your next question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead. |
7,220 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Operator: Your next question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead.
Brian Nowak: Great, thanks for taking my questions. I have two, one on Austin and one on U.S. mobility. Just going back to Austin, Dara, can you sort of walk us through how you’re thinking about the size of the fleet or an internal timeline or target when Austin Waymo, combined with Austin human drivers could sort of better be matched supply-demand to drive incremental volumes to Uber overall. When do you think that could happen? Then the second one, maybe just drilling a little more into U.S. mobility, any update on how quickly U.S. mobility is growing and how the suburbs versus the more urban areas are trending? Thanks.
Dara Khosrowshahi: Yes Brian, in terms of Austin, we’re really focused on making sure that the experience every single day is an excellent experience. We’re absolutely growing the fleet, it’s going to be over 100 vehicles soon based on the trends that we’re seeing, and really the focus is on keeping the utilization of the vehicles at the high levels that we’re seeing and making sure that safety and customer experience aren’t compromised in any way. At this point, we’re not really--our goal in Austin isn’t necessarily for incremental trips one way or the other, it’s just to make sure that every single ride is the perfect ride. What we see over the long term is if we provide a service that is highly reliable, where every single trip is exceptional, prices are reasonable, ETAs are predictable, then over a period of time the business grows and we are able to gain category position, and we see more consumers kind of coming onto our platform. The fact is that less than 20% of adults 18 and over use our platform on a regular basis, so we think there’s plenty of room for growth. The focus right now is kind of day-to-day, making sure we get it right and making sure that the streets of Austin are safe. Do you want to talk to the second question? |
7,221 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Prashanth Mahendra-Rajah: Yes Brian, it’s Prashanth. I’ll take the second part on mobility growth. Maybe let’s set some context - for the last couple quarters, I think three quarters now, we’ve had about 19% year-over-year trip growth, so very strong trip growth, and as we look at what we’ve incorporated into the guide, we’re thinking that it should be around the same and that we’re fortunate it’s still very heavily led by audience growth. When we look at that conversion from trip growth to GB growth, we are starting to see the gap between trips and gross bookings narrow a bit because we’ve been able to pass along lower insurance costs, primarily here in the U.S. You might remember we indicated that in the latter part of the year, that we would expect better insurance costs in this year, and that’s exactly how it’s turning out. The other item that Dara made mention of earlier in one of his answers is we are seeing a slightly higher mix of international trips, and that’s a bit due to that lower inbound U.S. travel which comes with lower gross bookings per trip. But despite this mix shift, you’ll notice that we were able to print all-time margins for the quarter, so we’re able to really continue to pass those insurance costs through. There’s no economic impact of that to our shareholders, and we’re able to put the margins and continue to show that margin accretion story. Then lastly, I think you asked a bit about growth in the suburbs versus the urbans. A metric that we’re now able to share is that sparser markets, which are growing at a faster rate than our core, represent about 20% on a trip basis for mobility, so we’re continuing to see great growth in those sparser markets because it’s growing faster, but it’s also a sizeable percentage of the overall mobility volume.
Brian Nowak: Great, thank you both.
Prashanth Mahendra-Rajah: We’ll take the next question, Operator.
Operator: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead. |
7,222 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Operator: Your next question comes from the line of Ross Sandler with Barclays. Please go ahead.
Ross Sandler: Great. Just a question on the delivery margin and a call-out you guys made in the prepared remarks. You said that restaurant delivery has profit margins that are modestly lower than Uber X profit margins, so that’s an interesting nugget in itself. I guess the question is, looking at that, what does that say about the cadence of margin expansion at grocery and retail - I think you also said that that part is at a 2018 kind of equivalent maturity, and then how much of the restaurant margin being way up there is because of advertising, just because of time in market and the usual retention cadence, etc.? Any thoughts on that? |
7,223 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Prashanth Mahendra-Rajah: Sure, thank you Ross - it’s Prashanth. I’ll go ahead and take that. Delivery has been a pretty incredible profit story for us. If you look at the results for the quarter, delivery margins are at a 3.7 percentage EBs - that’s up 70 BPs versus where it was just a year ago, very strong expansion. Now, that margin expansion is primarily being driven by advertising and the leverage we’re getting just from the scale, the opex leverage that we get from scale, and that’s been a fairly consistent driver of what’s been behind the margin expansion over the last couple quarters. The item that I’d probably highlight there is that our cost per trip continues to show great improvement - that’s the benefit of the scale we have, it’s declined both quarter-over-quarter and year-over-year. In the delivery profitability numbers, that includes our grocery and retail which you made reference to, remember that we’d said in Q4 of last year, grocery and retail hit breakeven for variable contribution, and Q1 it’s now starting to accrete at variable contribution levels, so that grocery and retail business has great upside and is going to continue to grow, both as a result of advertising but also as we continue to improve selection. I will call out one item that may not be notable to everyone, is incremental margins for delivery in Q1 were 9%, so with that very strong top line growth, it’s a reflection of what the earnings power of this business can be, with continuing to see that opportunity to drive margin expansion. Having said that, as we’ve said consistently in our calls, we need to always find the balance between growing profitability and growing the top line, so I don’t want to over-commit to the growth in delivery profitability. We’re looking for steady margin expansion, so we continue to invest in growing the top line of the business given that we have so many opportunities to invest in.
Balaji Krishnamurthy: Next question, please. |
7,224 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Balaji Krishnamurthy: Next question, please.
Operator: Your next question comes from the line of Mark Mahaney with Evercore. Please go ahead.
Mark Mahaney: Okay, thanks. I’ll try two. First just on the insurance headwinds, do you feel like that’s mostly behind you now? Just talk about where you think ongoing leverage against insurance costs are - is that something that’s kind of structural to the industry, or are those things work-arounds or improvements that you’ve been able to do? Then Dara, in terms of AV partners, and you’ve got a pretty good view on all the different offerings that are out there, Waymo’s doing a fantastic job. Who do you think is coming--who do you think in the marketplace is closest to Waymo now in terms of having the ability to roll out at decent scale a true AV experience? Thanks.
Prashanth Mahendra-Rajah: Dara, why don’t you take the Waymo one first, and then I’ll close with insurance.
Dara Khosrowshahi: Yes, sure. Mark, it’s hard to tell exactly who has what capability because AV is still very, very early in terms of its development. I’d tell you that, listen, in China you have AV product that is in market today, from WeRide who is a partner in Abu Dhabi and Dubai and expanding in 15 countries, Pony whom we expect to introduce to the Middle East sometime, and Baidu as well. They have essentially AVs running in Chinese cities right now, very challenging traffic conditions and conditions generally, and then there are a lot of other players that are showing incredible promise as well. We announced a partnership with May Mobility, with VW, with Momenta as well where we expect to see an AV development deployment in Europe as well, and AV ride. This is a technology that has been proven. Waymo is definitely the leader there, but there are many other players investing in the space and we expect to see a number of successful companies in the space, hopefully partnering with us. |
7,225 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Prashanth Mahendra-Rajah: Yes, so Mark, on the insurance question, if you remember in Q4 of last year, we indicated that for 2025, we thought insurance increases would moderate and more likely be in the high single, perhaps low teens area, and we actually over-estimated it. CPI print for March was coming in at 7% year-over-year, and that’s the lowest we’ve seen in almost three years. As we think about our U.S. mobility insurance cost expectations for the balance of the year, we’re thinking that it will continue to be a very modest headwind of high single digits through 2025, and that is meaningfully lower than we’ve seen in the last two years. Certainly given the rate of growth for the U.S. mobility business, that’s going to create some leverage for us, but as I said in my prior response, we intend to pass those opportunities onto consumers. Now where we are getting some incremental strength from the great efforts of our team are in a few areas. First on safety tech, some great innovation that we’re driving in this space, including giving our drivers insights into how their driving behavior is being scored, and that is now live in all U.S. markets and drivers are responding very favorably to being able to understand their actions, like speeding, harsh braking, acceleration, etc. That’s one element that we’ve now deployed across the U.S. On the policy side, which has also been an area that we’ve been talking about for a while, we’re getting some great momentum there. For example, just in the first quarter, a tort reform bill in Georgia is awaiting the governor’s signature, and if we get through that, that’s going to be a meaningful step to combat some of the legal system abuse and is going to help us continue to drive down insurance costs over time. We have other bills in other states, like Nevada and Texas, and continue to have some good discussions in other areas. Overall, I think that the energy that we are spending on insurance, both because we have a captive that allows us to create tension on pricing, we |
7,226 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | the energy that we are spending on insurance, both because we have a captive that allows us to create tension on pricing, we have an organization of engineers that’s really working on finding new technologies, and the efforts that we’re doing on the policy side are going to continue to make this a more favorable situation for us than it has been over the past couple of years. |
7,227 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: And Mark, I’d just stress on the policy angle that U.S. drivers are not less safe than drivers internationally. The cost of insurance that has to be paid onto consumers outside of the U.S. is de minimis compared to the U.S., so this is just--it’s a huge part of the inflation that consumers are experiencing. We’re hoping that local policymakers and the administration in place wants to fight inflation as much as we do, because really this inflation is caused by abuse of the legal system - it’s entirely unnecessary, and we’re hoping that policymakers can work with us to bring prices down for consumers, and more of the fares going into the drivers’ pockets. That, we really think is a win-win.
Mark Mahaney: Thank you very much.
Dara Khosrowshahi: You’re welcome.
Operator: Your next question comes from the line of Justin Post with Bank of America. Please go ahead.
Justin Post: Great, thanks. Just would like a question on the macro. You mentioned maybe slower airport trips, but any impact on mobility rides or pricing or delivery - you know, lower AOVs or anything like that on the macro, or contemplated going forward? Then can you give us an update on competition in the Bay Area and San Francisco--sorry, the Bay Area and L.A.? I know those are areas where Waymo’s operating. Just any update on the competition there, thank you. |
7,228 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, absolutely. In terms of macro, Justin, we’re watching it pretty closely. We don’t see any signals that I’d describe as significant. Audience growth is very consistent with last quarter, up 14%; frequency is consistent as well. We are looking to modulate price increases, and you saw that in our results as well, but we’re not seeing--you know, basket size has continued to increase, so I think that was the leading indicator to the extent that there was macro uncertainty. We’re not seeing trade downs in terms of the kinds of restaurants that our eaters are eating at, so it’s absolutely something that we’re watching but we don’t see any signal as of yet in terms of the consumer. Remember - the categories that we operate in, these are restaurants, transportation, grocery, tend to be categories that are quite consistent even during periods of macro uncertainty, so I think from a relative standpoint, we’re a little bit less subject to these issues, but right now we don’t see any signal whatsoever, and hopefully it will remain the same. You kind of see that in the guidance, which is pretty consistent in terms of top line this quarter. In terms of San Francisco and L.A., the competitive environment, pretty stable, Justin. We’re not seeing any change there. We are very supportive of Mayor Lurie’s plans to get San Francisco going again, and we think that will benefit all the competitors in that marketplace.
Justin Post: Great, thank you.
Dara Khosrowshahi: You’re welcome. Next question?
Operator: Your next question comes from the line of Ken Gawrelski with Wells Fargo. Please go ahead. |
7,229 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Operator: Your next question comes from the line of Ken Gawrelski with Wells Fargo. Please go ahead.
Ken Gawrelski: Thank you. Two, if I may, please. First, maybe one for Prashanth, given the affordability initiatives and the commentary on insurance, but also your preview of the Go Get event later this month, could you talk about the impact potentially on mobility margins in the second half of this year and beyond? Then one for Dara, please. If you could talk--expand a little bit more about your view of the AV landscape, kind of both inside the U.S. and outside the U.S. When do you see software-enabled AV solutions as a scale commercial option? Thank you.
Prashanth Mahendra-Rajah: Yes Ken, I’m reluctant to guide for the second half, but I can say this, that we are committed to continually showing steady margin improvement on a year-over-year basis, but as we’ve said many times, we’re going to manage the P&L across both lines of business and striking that really tough balance of investing for growth when we have so many opportunities to invest in, while continuing to drive the profitability of the company. We shared some pretty strong profit expansion in the mobility business this quarter on a sequential basis and on a year-over-year basis. I would not take that as an indicator for how you want to model the balance of year. I think that steady margin expansion throughout the cycle of this company on a year-over-year basis is how you want to model us out. |
7,230 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, and in terms of AV, we’re seeing a ton of innovation in the marketplace that we’re actually quite excited about, and generally you see--you know, rurally, I would say AV tech was based on heuristics, a bunch of if-thens based on different scenarios that were being built, and we’re seeing players like Waymo and a number of others move more and more the heuristics logic into large transformer models to create more flexibility, better scalability, better cost, etc. Those kinds of models also have the benefit of not having to be over [indiscernible] to a particular compute or hardware or sensor stack as well. They are generalizable in terms of where they drive, and they’re more generalizable in terms of the hardware kit that’s necessary, the sensor kit, etc. That is all moving in the right direction as far as separating the software stack from the hardware stack. I think a lot of you probably saw the announcement of Waymo partnering up with Toyota - that’s just indicative, we think, of where AV is going, which is you’re got pure play software developers increasingly offering more sophisticated AV platforms to OEMs around the world, and a world in which 10 years from now every single new car sold comes with Level 4, Level 5 AV, we think is a terrific outcome in terms of safety for the streets, and also our platform which will allow any player, any owner of those vehicles, whether it’s financial institutions, etc. to monetize those vehicles with the highest utilization, so that they’ve got the lowest cost of capital. The direction that we’re seeing is absolutely very encouraging. There are some players out there that are pure, call it next generation large models, end-to-end models as well - you know, these are the Wayves or the Waabis of the world in trucking, or Momenta as well, and that is a more pure AI kind of direction which has been incredibly promising in terms of the pace of development and, again, the generalizability of a software both in terms of where its driving and the hardware |
7,231 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | of the pace of development and, again, the generalizability of a software both in terms of where its driving and the hardware kits as well. The innovation that we see is pretty incredible. We are obviously working with many of these partners around the world. I think we’ve got an excellent point of view as to who the leaders are, and you’re seeing us partner with many of the leaders in the industry, so hopefully more to come. We’ve announced, I think five partnerships in the past week. It is coming fast and furious, and the innovation and the development there is pretty exciting for us. |
7,232 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Ken Gawrelski: Thank you both.
Dara Khosrowshahi: You’re welcome.
Operator: Your next question comes from the line of Shweta Khajuria with Wolfe Research. Please go ahead.
Shweta Khajuria: Thanks a lot for taking my questions. I have two on delivery, please. Dara, could you please talk about your affordability efforts? In your letter, you talked to four key areas, and affordability was one of them, so if you could please expand on that, that’d be great. Then the second is in Europe in particular, we have seen now you have a majority stake you just announced, and then DoorDash announced delivery, so you could please talk to that market - how fast is it growing, what does the competitive landscape look like there, and how do you view consolidation? Thanks a lot. |
7,233 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, absolutely. In terms of delivery, we are very focused on affordability as it relates to delivery as well, and the two efforts that I would point out, one is memberships. Memberships essentially is our lowering prices, no delivery fee for example for members and for the most loyal customers that we’ve got. Members tend to have higher retention, they spend three times more than non-members as well, and our membership program now with 30 million members is delivering billions of discounts, so to speak, for those members, and our penetration of membership continues to increase on delivery - it’s over 60% now, and in certain markets it’s at the 70%-plus mark as well. We think more members getting better deals, getting more discounts is a good thing, and that’s part of our business that continues to grow. The second area of focus that I’d point out are what we call merchant-funded offers. These are essentially offers that merchants can put into the system. I just enjoyed one a couple of nights ago, it’s buy one, get one free, or other kinds of discounts. Merchants like those discounts because their cost of food isn’t necessarily--they get to kind of use the cost of food as the discount and they can enjoy a margin on their food, and we’re seeing higher and higher percentages of merchant-funded offers in the marketplace. Merchants who put these offers into the marketplace increase their visibility in the marketplace and are able to increase their sales in the marketplace as well. We’re seeing growth in both, and we think that is partially responsible for the consistently high gross bookings growth that we’re seeing in delivery, both in the U.S. and internationally as well. Then to your question in terms of competition, especially in Europe, we’re really, really happy about our results in Europe. We’ve recently, we believe, got to the number one category position in the U.K. with Eats entirely organically - we didn’t have to buy our way into glory, so to speak. France remains a top market for us, |
7,234 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | with Eats entirely organically - we didn’t have to buy our way into glory, so to speak. France remains a top market for us, and we think that Germany, for example, is a market that holds a significant amount of promise. I think we launched in Germany three to four years ago and our category position continues to increase in Germany as we invest in that market, both on the mobility and delivery side. We’re seeing very encouraging trends in Europe, and frankly it’s not a surprise to see some of our competitors look to expand there inorganically. We like organic expansion more. We’ve been investing for years in these marketplaces, and I think it shows in our results. |
7,235 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Shweta Khajuria: Thank you Dara, that was helpful.
Dara Khosrowshahi: You’re welcome. Next question?
Operator: Your next question comes from the line of Michael Morton with SVB MoffettNathanson. Please go ahead.
Michael Morton: Good morning everybody. Thank you for the questions. One on delivery and then one on mobility. First, delivery. As we see the continued adoption of these large language models introducing shopping experiences, they seem to be preferring different retailers than, let’s just say, the two giants which we’re all aware of, and it seems like a natural opportunity for Uber to work in partnership with these retailers you already work with to deliver the local inventory. Dara, I was curious, any possibility of partnerships with the ChatGPTs of the world? Then I think one for Prashanth on the sparse markets, could you talk about the duration of this opportunity and the ability to continue offsetting some of the natural deceleration you’ve seen in some of your urban markets, and then maybe help investors think about the margin profile of the sparse mobility markets compared to your core urban markets. Thank you so much. |
7,236 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Yes, I think on delivery and large language models, we’re very, very early in terms of the development of the models and their application to consumer experiences or enterprise technology. I wouldn’t say that right now, our focus is to push volume from one merchant to the other, it’s really to focus on improving the customer experience. It starts in smaller ways, so for example we’re using larger models in terms of our restaurant and grocery search so that we understand more about the context of the consumer, we get to know the consumer more, and we’re able to surface better results, higher quality results in terms of search, in terms of the sort order of restaurants that we’re offering you or the promotions that we’re offering you as well. Then we absolutely are working with the open AIs of the world and the other leading LLMs and LLM companies in terms of some of the agents that are being built and being able to offer an Uber experience that is seamless and delightful, that you can talk to as well. I’d stress that it’s very, very early in the experimentation phase, and we’re going to be working with them to understand what the possibilities are. We have unique access to transportation inventory. We are global, obviously. We have human drivers, we have AV drivers, we have food available, grocery available, so I think we’re kind of the partner of choice for many of these players, but right now the focus is how do you build consumer experiences that are delightful, how do you make every single service of ours a little bit more optimized for consumers, and then we’ll deal with the after-effects later in terms of merchant concentration. It’s just not something we’re focused on right now. Prashanth, do you want to take the other one? |
7,237 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Prashanth Mahendra-Rajah: I will. I’ll take the second one. Thanks for the question, Michael. Maybe I could start with just a gentle correction to a comment you made about deceleration. It may surprise folks to know that the vast majority of our top 20 cities are still continuing to grow at double-digit rates, so we are still very--still seeing very strong growth in our core areas. But what we do see is we see the opportunity to increase the length of time that that core business can grow at attractive rates by investing into these sparse markets, and we’re already seeing great indications, for example in mobility - I think I’d already mentioned that 20% of our trips are now coming from sparser markets, and those are growing even faster than the urban core. Having said all that, I think the way to maybe capture all this is once these markets hit the full investment profile and they’re running well, margins are very much in line with what we see in our other markets, and the rate at which we’re investing is we’re launching hundreds of new cities in 2025, so there’s plenty of room for us to run here. Obviously there’s an investment period before they achieve those more continuity-level margin profiles, but that’s all part of the growth opportunities that we see in front of us.
Balaji Krishnamurthy: Great. Operator, we’ll take our last question, please?
Operator: Your last question comes from the line of Nikhil Devnani with Bernstein. Please go ahead. |
7,238 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Operator: Your last question comes from the line of Nikhil Devnani with Bernstein. Please go ahead.
Nikhil Devnani: Hi, thanks for taking my questions. I have two on mobility, please. First, how should we think about the slope of deceleration in mobility gross bookings over the next year? Q1 stepped down by several points, and maybe that’s just pricing and mix given the trip growth comments; but how do we get comfortable with mobility bookings not decelerating more aggressively here in the quarters to come? Then separately, a follow-up on the less dense markets. Do you think the frequency opportunity in these markets is the same as your larger cities? I would imagine there’s far more car ownership and some reliability differences, so how do you think about the opportunity set on a frequency basis relative to your core urban centers? Thank you.
Prashanth Mahendra-Rajah: Thanks Nikhil. I’ll start and then hand off to Dara. I think if you go back to the algorithm, it is bookings equals trips times our average price. If you look at the strong growth that we’ve been putting up over the last several quarters, those have all been built on top of a 19% year-over-year trip growth for the last three quarters, and our indication is that Q2 is going to be in a similar vein. The contributor to that trip growth continues to be heavily led by audience growth, so that narrowing of the delta between trips and gross bookings is coming from, as I mentioned, a little bit of mix because we saw higher international mix, and the favorable versus expected delta on insurance costs. We would, I guess softly let you think about balance of year gross bookings should--you shouldn’t be looking for a deceleration, you should be looking for that trip growth to continue to be led heavily by audience growth, and then we’ll have to see where the pricing opportunities continue to be provided by insurance. |
7,239 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Dara Khosrowshahi: Nikhil, I’d just add in terms of mobility trip growth as well, is that the base trip growth, the core trip growth is supercharged by the growth in less dense areas as well, and some of the growth that we’ve had in terms of lower cost products. Two-wheelers and three-wheelers are growing incredibly quickly, our taxi business continues to grow. We’re not even close to the majority of taxis in the world, and as we add more taxi supply, trip growth continues to grow and kind of extends the runway of our growth there. Then of course for shared rides, both in terms of high capacity vehicles that bring the price envelope down, and/or ex-share, our product set essentially allows a single driver to serve multiple riders as well. We’ve got a business that continues to have a lot of growth runway. We’re expanding into new markets, both geographically but into less dense markets, and there is a whole portfolio of newer products that continue to grow faster than the core, so to speak, that have substantial runway ahead of them. In terms of frequency in the less dense areas, our less dense initiative really started with delivery, and what we’re seeing is that in those markets, you actually typically have families ordering, etc., and the frequency that we see in delivery continues to grow in both dense markets and less dense markets, so it’s unclear as to whether expansion into less dense markets would hurt frequency on the delivery side. Certainly frequency continues to increase in delivery, so we’re very happy as it relates to those results. On mobility, I do think that you’re right - people will have--car ownership will be higher in suburbs, etc., so I would expect frequency in mobility as we expand into these lower dense--less dense areas to be a headwind. I do think that price will be a tailwind, especially as it relates to reserve. In some of these markets, people kind of use reserve in order to drive reliability in the suburbs. About 40% of reserve trips are now not related to travel as well, so it’s |
7,240 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | reserve in order to drive reliability in the suburbs. About 40% of reserve trips are now not related to travel as well, so it’s becoming kind of an everyday habit, going out to dinner, and I do think that the concentration of reserve in these less dense markets is going to be higher than in urban markets, as people are willing to pay a premium for higher reliability in these less dense markets. I do think frequency will be lower, but I think pricing and margins as it relates to product mix will be higher. |
7,241 | UBER | 1 | 2,025 | 2025-05-07 08:00:00 | Uber Technologies, Inc. | 144,524,848 | Nikhil Devnani: Thank you both.
Dara Khosrowshahi: All right, I think that’s it, Operator, for the call. Thank you everyone for joining us this quarter, and a huge thank you to the Uber team, as well as our partners. None of this would be possible without the hard work of the team, so thank you to the team, and we’ll see you next quarter and hopefully this will be the start of a strong year for the company.
Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect. |
7,242 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Operator: Good morning, and welcome to UnitedHealth Group Fourth Quarter and Full Year 2024 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group's prepared remarks. As a reminder, this call is being recorded. Here are some important introductory information. This call contains forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings. This call will also reference non-GAAP amounts. A reconciliation of the non-GAAP to GAAP amount is available on the financial and earnings reports section of the company's investor relations page at www.unitedhealthgroupcom. Information presented on this call is contained in the earnings release we issued this morning and in our form 8-K dated January 16, 2025, which may be accessed from the Investor Relations page of the company's website. I will now turn the conference over to the Chief Executive Officer of UnitedHealth Group, Andrew Witty. |
7,243 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Jennifer, thank you very much, and good morning, everyone. I'd like to start by expressing a sincere thank you from my colleagues and from me for the overwhelming expressions of condolence and support following the murder of our friend, Brian Thompson. Many of you knew Brian personally. You knew how much he meant to all of us and how he devoted his time to helping make the health system work better for all of the people we're privileged to serve. He would dive in with passion and caring to find solutions to improve experiences, whether for an individual consumer, an employer or a public health agency. Right now, there are 400,000 nurses, doctors, case workers, customer service specialists, pharmacists, technologists and so many others in this organization, who share that commitment and are determined to advance that work. The task in front of us, all of us, healthcare providers, payers, employers, drug companies and policymakers is to continue improving quality and health outcomes for individuals and their families, while lowering costs for everyone. We need to build on the unique foundational strengths of healthcare in America and address the areas we can make work better. Among those strengths, world-leading innovation, the U.S. has developed the most advanced clinical approaches and patient-centric care at a pace not seen anywhere else. It's why, if provided with the option, people from all over the world come here to seek care for the most complex conditions. Yet, the health system needs to function better. Through decades of federal and state policy making and private sector innovation, we have a variety of program structures and processes. There are strong merits to that variety as they can be more tailored to meet the specific needs of individuals at various stages of life and health status and provide extra help for those who need it. It avoids a one-size-fits-all approach, but it needs to be less confusing, less complex and less costly. America faces the same fundamental healthcare dynamic |
7,244 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | but it needs to be less confusing, less complex and less costly. America faces the same fundamental healthcare dynamic as the rest of the world. The resources available to pay for healthcare are limited, while demand for healthcare is unlimited. Every society wrestles with that issue and approaches it in various ways. We have incredible opportunities here to improve system performance both from a care and a cost perspective, while building upon the foundational strengths I just mentioned. The mission of this company, why we exist, is to improve this system for everybody and help people live healthier lives. That means getting more people into high-quality value-based care and keeping them healthy in the first place, so fewer Americans find themselves with a chronic and, in many cases, preventable disease. It means continuing to invest in programs like Medicare Advantage, which by providing coordinated care to seniors is proven to deliver better health outcomes at lower cost to consumers and taxpayers compared to fee-for-service Medicare. Seniors recognize that value, which is why the majority of them choose Medicare Advantage. It means making healthcare easier to navigate. We're enhancing digital tools for consumers, harnessing data and using AI so they can find the best value care option and decide what is best for themselves and their families. People's health interaction should be as intuitive and seamless as every other aspect of their lives: banking, shopping, streaming. This past year, we saw an extraordinary increase in the use of these modern channels. We know there is still a large gap there, and we intend to keep at it until it is closed. It means making coverage and cost easier to understand. Just one example where we already have advanced plans, we're eager to work with policy leaders to use standardization and technology to speed up turnaround times for approval of procedures and services for Medicare Advantage patients and to materially reduce the overall number of prior authorizations used for |
7,245 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | and services for Medicare Advantage patients and to materially reduce the overall number of prior authorizations used for certain MA services. Some of this work we can do on our own, and we're doing it, but we're encouraged also by industry and policymaker interest in solving for this particular friction across the whole system. Ultimately, improving healthcare means addressing the root cause of healthcare costs. Fundamentally, healthcare costs more in the U.S., because the price of a single procedure, visit or prescription is higher here than it is in other countries. The core fact is that price, more than utilization, drives system costs higher. Tackling that problem will require all parts of the system and policymakers to come together. Yet, there are participants in the system who benefit from these high prices, lower-cost equivalent quality sites of service, for example, can be good for consumers and patients, but threaten revenue streams for organizations that depend on charging more for care. Another example is the persistently high cost of drugs in the U.S., leaving American consumers, employers and public agencies to pay disproportionately more than people in other countries. Just look at GLP-1 prices. One drug, which costs $900 in the U.S., costs about a tenth of that in Europe. Pharmacy benefit managers play a vital role in holding those prices down, which is why drug companies and their allies have spent the past several years attacking them. Optum Rx alone delivers many tens of billions of dollars in savings annually versus the pricing set by the manufacturers, including on the GLP-1s. That sharply reduces the gap versus other countries, but even then prices in the U.S. are still multiples of what the rest of the world pays for the same drugs. Last year, our PBM passed through more than 98% of the rebate discounts we negotiated with drug companies to our clients. While we offer customers 100% pass-through options, a small number have historically elected other models. We're committed to fully |
7,246 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | we offer customers 100% pass-through options, a small number have historically elected other models. We're committed to fully phasing out those remaining arrangements so that 100% of rebates will go to customers by 2028 at the latest. We will continue to encourage all of our clients to fully pass these savings directly to patients at the point of sale, as we already do for all of the people we serve in our fully insured employer offerings. This will help make more transparent who is really responsible for drug pricing in this country, the drug companies themselves. Healthcare in every country is complex and the solutions are not simple, but you should expect this company to continue to work at it, finding what is needed, developing solutions, bringing those solutions to scale, making a positive impact on the lives of millions of people. We deliver on our commitments to the people we serve, including our investors. Even in highly challenging periods like 2024, our results bear out that we find a way, even if it's not always how we may have initially envisioned the path. Among some of the formidable challenges we navigated over the course of the year were the first year of the three-year CMS Medicare rate cuts, the effects of the state-driven Medicaid member redeterminations, and the Change Healthcare cyberattack. Our people found a way to deliver solidly within the range we first offered back in November of 2023, all while improving patient and consumer health outcomes and experiences, focusing on quality and expanding upon our potential to help make the health system work better for everyone. We're invigorated by the path ahead. There are so many areas that can be enhanced, reworked, reengineered or even scrapped to make the health system work better as we know it needs to. That is both our responsibility and it's our passion. We begin 2025 with a strong outlook for the year as we continue to deliver on our commitments and excel for those we serve in all of our key growth pillars. Now, John will walk you through |
7,247 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | to deliver on our commitments and excel for those we serve in all of our key growth pillars. Now, John will walk you through this performance in a little more detail. |
7,248 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: Thank you, Andrew. And I'll add my deep gratitude for the enormous outpouring of support over the past few weeks. Brian helped build this company and forged deep trusted relationships for over 20 years, and the positive impact he had on people will be felt for years to come. This morning, I'll discuss both 2024 results and our performance expectations for '25, including some of what we had planned to discuss with you in December. 2024 revenues of over $400 billion and adjusted earnings per share of $27.66 were well within the outlook ranges we set out over a year ago. To be sure, things played out differently than initially anticipated, but it is an enduring trait of this enterprise that we deliver on our commitments to the people we serve and to you, even amid unforeseen circumstances. Over the course of '24, we undertook initiatives and made investments to strengthen us for the future, initiatives to improve consumer experience and bring new innovations to market more quickly, drive the most compelling ways to further our mission to help make the health system work better for everyone, and continue to optimize and refine our offerings and business portfolio to enhance future growth potential, whether that meant moving into new opportunities, reconfiguring or moving out of areas, which contributed historically but may no longer be core, all with an eye to unlocking value. We know you have a number of questions that we were not able to discuss last month. So, today, I'll start by stepping through a couple you have indicated are top of mind. The first one is, why our '24 medical care ratio was 150 basis points above our original outlook? It's important to frame up the challenges of '24 to offer some perspectives on the commitment and response of our people. Compared to the midpoint of the care ratio range we stepped out with over a year ago, that alone created a nearly $5 billion gap we needed to overcome, and that's before we get to the nearly $1 billion in business disruption impact due to the |
7,249 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | billion gap we needed to overcome, and that's before we get to the nearly $1 billion in business disruption impact due to the cyberattack. So, we start with about $6 billion in unanticipated impacts just from these two examples, in addition to managing through the already known multibillion dollar impact of the Medicare rate cuts, as we sought to preserve as much benefit stability for seniors as possible. Regarding the elements impacting our '24 care ratio, we've spoken about the key factors on prior earnings calls, so no surprises here. The first comprise about 70% of the total impact and are comparable in magnitude to each other. First, the mix of people served. We ended up with a different profile of consumer than expected. This is because of one factor. We didn't grow as anticipated due to the unusual Medicare Advantage benefit designs in the marketplace in '24. Next, the timing mismatch between the health status of the remaining people being served by Medicaid and lagging state rate updates. Then, there were the costs related to the cyberattack and our South America business impacts. The remaining two elements comprise about 30% of the impact and are evenly split. These include a more rapid-than-expected acceleration in the prescribing of certain high-cost medications as drug companies took early advantage of the Inflation Reduction Act, and an aggressive upshift in hospital coding intensity. This is incorporated into our outlook even as we work to get it back in line. Those are the '24 care ratio elements. Next question, given all that, are we confident in the adequacy of our pricing for '25? The answer is yes, and here's why. To start, for '25, the outlook we shared in December incorporates a view of care activity commensurate with what we saw in '24, even the care activity we experienced as we exited the year. I'll break that down with some business line perspectives. In Medicaid, we see the gap between people's health status and state rates narrowing over the course of the year. Our outlook assumes a |
7,250 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | we see the gap between people's health status and state rates narrowing over the course of the year. Our outlook assumes a measured pacing of that process. Actions to date, including the important January 1 renewal cycle, support this view. In commercial, pricing for '25 is appropriately capturing the care activity we are seeing. This is evidenced by growth heavily weighted towards self-funded offerings. We will continue our disciplined approach. In Medicare, we had strong AEP results, which included winning back people we had served previously and near-record retention. These are a direct result of our long history of offering sustainable benefits for seniors. With strong retention and the many returning consumers, we start the year with highly informed insights into the care needs of the people we will be serving. In addition, this year, we have seen a notable uptake of our more managed offerings; think HMO style, which provides strong value for consumers, effective care tools for doctors and more predictable performance. We expect a '25 full year medical care ratio of 86.5%, plus or minus 50 basis points, 100 basis points above the '24 result. In addition to factors discussed earlier, the increase is driven by IRA impacts, the second year of the Medicare funding cuts, a continued mix shift toward public sector offerings, and a respectful view of care activity. Our '24 operating cost ratio improved about 150 basis points over the prior year. Roughly half of the change was driven by contributions from the business portfolio initiatives mentioned earlier. The other half was due to accelerating our efforts to realize operating efficiencies, even as we improve consumer experiences. Some of these advances are a result of the very early stage impacts we are beginning to realize from AI-driven initiatives to help our customer service representatives respond to consumers' needs more effectively and quickly. And we see continuing opportunities both in the near-term, with operating costs for '25 improving still further, |
7,251 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | and quickly. And we see continuing opportunities both in the near-term, with operating costs for '25 improving still further, and well beyond, given the rapidly expanding scope and impact of these initiatives. These actions and the resourcefulness of our people helped deliver upon the objectives set out over one year ago, and helped to partially balance the multiple billions of unanticipated impacts. With that, I'll run through our businesses, offering some key points for each, starting with Optum Health, where revenues grew to about $105 billion in '24 and are expected to approach $117 billion in '25. Our care delivery business continues to deepen its presence in existing areas, while expanding into new geographies and services. In '25, we expect Optum Health will serve about 5.4 million value-based care patients, growth of 650,000 over '24. While our current position provides a solid footing, it's a small fraction of the hundreds of millions of patients who can ultimately benefit from value-based care. We see value-based care as foundational. It is perhaps the fullest expression of our mission. As Andrew noted, the outdated activities-based fee-for-service system won't help the health system work better for people. Value-based care is outcomes-based, aligning processes, actions and incentives, helping keep people healthy in the first place rather than just seeing them when they are sick. Optum Health is an integrated multi-payer care delivery company, helping to lead the transition to a truly sustainable value-based care system. As we move into '25, we will continue to enhance access and care integration through the home, a much needed area to help people with their health. More than three quarters of our in-home patient visits result in a primary care visit within 90 days. Medicare Advantage patients with chronic conditions who receive a home care visit have a lower rate of ER visits, fewer in-patient stays, stronger health outcomes and a better experience, all while saving the health system billions. Turning |
7,252 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | fewer in-patient stays, stronger health outcomes and a better experience, all while saving the health system billions. Turning to Optum Rx. Revenues in '24 grew to over $130 billion and will be about $146 billion in '25. Our pharmacy benefits management team again had customer retention exceeding 98%, while welcoming a record 750 new clients. Further proof of the value sophisticators, employers, health plans and labor unions see in Optum Rx's ability to negotiate lower drug prices for consumers. Optum Rx's pharmacy care services support the entire system in the delivery of clinically-driven pharmacy care, serving the highest need and hardest to reach patients. These offerings include community pharmacies, specialty and infusion drug services, all large, strongly growing areas, with our current presence quite small. Optum Insight revenues were $19 billion in '24, and in '25, we'll approach $22 billion, with a backlog of $35 billion as sales of new products begin to take hold and the customer clearinghouse business continues to rebuild. The solutions offered through Optum Insight and our health technology growth pillar, delivered at scale, will improve consumer experience and payment and claims flows, enable access to the next best action guidance in a doctor's workflow, and help life sciences customers more rapidly bring innovations to market. And there will be much more to follow. Shifting to UnitedHealthcare. Full year revenues in '24 approached $300 billion, and for '25, we'll approach $340 billion as we grow to serve upwards of an additional 1.9 million people balanced across both the commercial and public sectors. Within our domestic commercial offerings, we grew to serve 2.4 million more people in '24 and expects to continue to grow strongly in '25, especially in our self-funded offerings, which serve some of the most sophisticated buyers of healthcare, large employers. The fact that so many more people are choosing UnitedHealthcare is a direct result of our bringing much needed innovation to these more |
7,253 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | that so many more people are choosing UnitedHealthcare is a direct result of our bringing much needed innovation to these more mature markets through consumer-centric offerings. As noted earlier, UnitedHealthcare's '24 Medicare Advantage growth was impacted by the unusual benefit designs in the market. Our focus has always been on providing consumer stability and sustainable value, a factor that has built confidence and trust over the long-term. As a result, in '25, we expect growth of up to 800,000 people in individual, group and special needs offerings. And the growth outlook for the years ahead remains strong, with nearly half of American seniors still in outdated Medicare fee-for-service offerings, which provide less value to them and cost taxpayers more. In Medicaid, we expect to serve more people in '25 with redetermination activities now concluded. UnitedHealthcare's value proposition is resonating with state customers, consumers and provider partners, and we are participating in a substantial number of expansion proposals. Most recently, we were honored to have been awarded a new opportunity in Georgia. Our growing businesses support and -- are supported by substantial financial capacities and a strong balance sheet. In '24, we deployed nearly $17 billion in growth capital to help build for the future, further strengthening our capabilities to serve more people more comprehensively. We also returned over $16 billion to shareholders through dividends and share repurchase. In '25, we expect cash flow from operations will approach $33 billion or 1.2 times net income. We will continue to deploy growth capital and remain committed to returning to shareholders as outlined in December. Our growth capital deployment efforts delivered their greatest benefits over the course of two, four, or even six years, and as new capabilities are scaled and deployed across the enterprise and beyond. To summarize, our strong start to the year reinforces the growth objectives we shared last month and is underpinned by the broad |
7,254 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | summarize, our strong start to the year reinforces the growth objectives we shared last month and is underpinned by the broad growth drivers, operational excellence and strategic capital deployment you have come to expect from us. Now, I'll turn it back to Andrew. |
7,255 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: John, thank you. The strength of this organization lies in the resilience of our people and the fundamental belief that there is no higher calling than helping other people and nothing more vital to the human condition than healthcare. Looking ahead to 2025 and beyond, we're confident in our ability to continue to add value to the health system through our focus on value-based care and consumer-orientated efforts to help build the health system America deserves. And that's also why we remain solidly committed to our long-term 13% to 16% growth objective, a goal that reflects both the opportunities and the capabilities that we have. And now, operator, we'll open it up for questions.
Operator: The floor is now open for questions. [Operator Instructions] We'll go first to A.J. Rice with UBS.
A.J. Rice: Hello, everybody. And I appreciate the words about Brian. He's missed by all of us. Just maybe to focus in on the comments about cost trends and the MLR. Obviously, in the fourth quarter, there's variance relative to consensus expectations. It was probably a little greater than what we thought. It sounds like the cost items you're calling out are similar to the things you had seen all year long. Was there anything that changed in those - the intensity of any of those trends? And anything -- any unusual items in there that impacted the results? And it sounds like you're still confident in your '25 MLR outlook, so nothing you saw in the fourth quarter changes your view on '25? |
7,256 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: A.J., thanks so much for your question. I'm going to ask John in a sec to obviously go much deeper in response to your question, but just to the last part of your question, yeah, you're totally right, nothing we saw there that changes our view of '25. We feel very good about how we priced into '25. We feel really good about how the mix has come in, in terms of that growth. That's a huge difference to '24, and we really didn't see anything in Q4 that we believe represents a challenge to that view going to '25, but I'd love John to go deeper for you on the Q. Thanks. |
7,257 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: Good morning, A.J. So, a few things on this. So, in terms of the items that we called out on the third quarter call, so hospital coding intensity and the specialty prescribing trends that we are seeing, very much in line with what we saw in the third quarter in terms of that ran into the fourth quarter. So, in line with the view on that, we weren't seeing acceleration in that. We're seeing stabilization in those trends, I would tell you, at the levels we saw before, and we expect that to continue. That specialty prescribing, those trends were something we anticipated in our '25 outlook. And as we had noted back in the third quarter, that was something that just moved faster in '24 than we expected, but in terms of the levels we're seeing and how we anticipated that in our '25, we feel very good about that. Those coding intensity levels staying at the levels that we thought that we had seen also. And then, the other elements that we talked to mix kind of important element in terms of the improvement we see as we move into '25 in those elements. For the call out kind of things in the 4Q, a couple of things I'd say. So, first of all, the move vast -- mostly driven by seasonality. Typical seasonality, we see normal deductible wear offs, those elements. A move, sequentially that was similar in terms of the basis point move that we saw a year ago also, 3Q to 4Q on that, but I'd call out a couple of things, A.J., just to your point here. So, in the sequential move, I'd call out probably 80 basis points to 90 basis points I put in the revenue effect category here. So, in that, think about some elements that might have been coming in, such as group MA refunds and elements there where our performance, which was strong over the course of the year, and those hitting in the quarter. Just some elements like that, that I'd put in the non-recurring revenue -- non-run rate revenue category in terms of impacts. And that was probably about 80 basis points to 90 basis points of the impact 3Q to 4Q. The flu RSV impact, |
7,258 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | in terms of impacts. And that was probably about 80 basis points to 90 basis points of the impact 3Q to 4Q. The flu RSV impact, that typical seasonal, that was kind of a, I'd say, in the quarter 50 basis points to 60 basis points. That's kind of a normal move. And then, think of the rest of that move being in the zone of pretty much expected seasonal impact. So, the one element I'd call out there is the revenue effects that probably would be -- would probably be having some impact. Thank you. |
7,259 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Great. Thanks so much, John, and thanks again, A.J., for your question. Next question, please.
Operator: We'll go next to Josh Raskin with Nephron.
Josh Raskin: Hi, thanks. A question on the Optum Health segment. I guess, and I apologize if I missed this, but did you comment on the change in the consumers? I know you talked about portfolio changes and things like that, but the consumer count dropped about 4 million. And then, sort of a noticeable drop in margins. And I'm wondering if some of that is related to the MA rebates that you just mentioned in terms of the impact on the UHC side as well.
Andrew Witty: Yeah, Josh, thanks so much for your question. Let me ask John to start and then ask Dr. Desai to pick up a few details on that, please. Thanks. |
7,260 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: Good morning, Josh. So, in terms of the consumer count and impacts on that, so that would go into the category of some of the strategic initiatives that have been ongoing here. So, think about some elements where -- that we may have just been -- that we are maybe deemphasizing in terms of our focus on that. So, an area that we deemphasize that would go in that category is urgent care. We're approaching that a bit differently now. There was a time when kind of standalone urgent care was an important element here. As you start developing more geographic density, however, in a marketplace, you can probably better serve those patients by just having one of your clinics have afterhours of presence and focus on that. So, one area that we have diminished in terms of emphasis is urgent care. And that's one of the areas we got out of. So, really those counts are driven by, I'll call it, somewhat narrow offerings typically, that we have been diminishing and that were part of kind of some of the strategic initiatives that we talked about. In terms of kind of some of the broader margin impacts you're seeing and some of the emphasis and where Optum Health was headed in terms of in the 4Q and where their focus was, I'll turn that to Dr. Amar Desai to comment on. |
7,261 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Amar Desai: Thanks, John. Hi, Josh. So, to take a step back, post V28, we've been executing on our multiple year plan to reshape the business, including efforts around direct patient engagement and medical management as well as integrating our business to deliver on operating cost efficiencies. So, as we look at the quarter, we took a number of planned actions, including restructuring and refining some of our legacy contracts, which had a one-time impact of the year. We had some membership mix changes, which has been noted. And then, we did make some investments in the quarter around clinical quality and the STARS program as well as onboarding for new membership coming on for 1/1. That being said, we feel very good about our position stepping into 2025. Our AEP growth was strong. We've also had very strong retention across our care delivery organizations, again reflecting the strength of our provider network and the differentiated care they provide. We also have a better understanding of V28 as we're in the second year of it. And with this progression, our payer relationships and contracts have evolved into the year. As we step into '25, we're in a more favorable spot. And then, the impact of our engagement efforts in 2024, 85% of our value-based patients were engaged and 90% among our highest risk patients. And again, this is best ever patient engagement for us and is the foundation for the maturation of our value-based cohorts over time. So, overall, our operating model for Optum Health is stronger, it's underpinned by significant momentum around these engagement and affordability as well as operating efficiencies and we're confident in delivering against our long-term margin targets. Thanks for the question, Josh. |
7,262 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Amar, thanks so much. And I'll maybe just finish off that response, Josh, if I might, by really reiterating something you heard me say just a month ago that even in a very challenging year of 2024 with a lot of changes coming from the outside world in terms of funding reductions and the like from the administration, alongside our commitment to perform, we're also relentless around how we continue to modernize and shape the company for the longer term. And what you heard John just talk about and you just heard Amar refer to really there is within Optum Health, alongside strengthening our core business, we recognize some parts of that business aren't necessarily as important in the future as they were in the past. We're not going to shy away from making the choices to ensure that we have real clarity and focus on what we know supports our business, and most importantly, gives us the highest chance of giving the best possible service to patients and members who we serve. And I think, during 2024, you saw the organization be very focused not just on the year, but on the shape of how we want the company to develop over the next several years. And that's really what you're seeing reflected in the commentary that John and Amar just touched on. Josh, thanks so much for your question. If we could go to the next question?
Operator: We'll go next to Lisa Gill with JPMorgan.
Lisa Gill: Thanks very much for taking my question. Andrew, I want to talk about PBM reform. There seems to be a very large drumbeat right now that will see reform at some point in 2025. Really two things here. One, what do you think that means to your business? And then, secondly, you talked about educating those in the marketplace to better understand what you actually bring to the market from a PBM perspective. Are there incremental ways that you can potentially maybe educate Congress? Because it seems to be a very big disconnect versus how Congress is viewing this versus what PBMs actually do. |
7,263 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Lisa, thanks so much for your question. And this is, obviously, a topic of a lot of people's interest. And that's not surprising, because pharmaceutical prices in the U.S. are too high. And I just made that super clear in my comments, and it's not the first time you've heard any of us at United make those comments over the last several years. As you think about that, the issue really is that you have a situation where the PBMs are really the only effective mechanism across the system, which really holds the pharmaceutical company to account once it chooses to set its price, and by the way, also has the freedom to inflate that price every single year, which is what we see happen. The PBM is there to try and hold that to account and negotiate on behalf of employers, unions, states and others to try and bring down those prices. But within that, Lisa, is the very first thing that people really need to truly understand. The PBM acts on behalf of the ultimate payer, the employer, the union, the state and such. It acts on their behalf, because they're ultimately the ones who are typically underwriting the ultimate cost of the medicine for the patients, the consumers who are beneficiaries of their plans that are supported by those organizations. That is often lost in terms of how this mechanism works. And it's critical to understand it. What's important, therefore, is that we, and you heard me make a couple of references to this, and I hope alongside others across the sector really focus on the facts of the situation. Prices in America are de novo set too high relative to any other price in the world, first off. Secondly, they're inflated every year, which is pretty unusual when you compare that to the rest of the world. Thirdly, as we negotiate to bring those prices down, the benefit of that negotiation, those rebates which are achieved are very significant, are passed back to the employers, unions and states. They choose what to do with those rebates. Now, in the case of UnitedHealthcare, where in the |
7,264 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | the employers, unions and states. They choose what to do with those rebates. Now, in the case of UnitedHealthcare, where in the population of employer benefits that we manage, where we have essentially control over that decision, we pass those all the way through to the consumer and the patient who receives the drug. So, they see the benefit of that rebate. We'd like to see others do the same. Within that overall system, there is also opportunity for people to lose a thread of where the money goes in the system. And that is often what you hear policymakers be concerned about. That is why this morning we are committing to a full 100% pass-through of all rebates that we negotiate at the PBM back to the payer, the state or the union. Right now, we already passed 98% of that through. But unfortunately, even that's just that small residual that we retain because those clients want to pay us that way is enough to give people the excuse to argue that the system is not working properly. We're taking that excuse off the table today. We are committed to full transparency. We are committed to full pass-through to clients. We believe that takes away the excuse of who really is setting the price, and we would like to work with others across the system to relentlessly achieve the lowest net cost for everybody in the system. We'd like to see patients see the benefits of that, and we'd like to work with anybody who wants to work with us to make it happen. And that's how we're going to engage this year with policymakers and others across the country. With that, Lisa, thanks so much for the question. Let me go to the next question, please. |
7,265 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Operator: We'll go next to Stephen Baxter with Wells Fargo.
Stephen Baxter: Hi, thanks. So, to stay on the policy front, I was wondering if you had any early perspective to share on the Medicare Advantage advance notice for 2026. I guess, anything you see as encouraging or any potential areas of concern as you progress from advance to final? And then, I guess as a related point, it seems like many would think that the reimbursement that's embedded in these rates is still not reflective of the elevated cost trend that we saw in 2024. Even if taking a step in the right direction, is that a company perspective that you share? Thank you.
Andrew Witty: Hey, Stephen, thanks so much for the question. I'm going to ask Tim to -- Tim Noel to comment on that, please.
Tim Noel: Yeah, thanks for the question, Stephen. As you know, these rates are preliminary at this point in time and won't be finalized until April. And so, therefore, probably not super productive to start speculating on elements of that. I will say we are looking forward very much to engaging the new administration on this item and also a host of other items as it relates to the Medicare Advantage program. Thanks. |
7,266 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Great. Thanks so much, Tim. And as you suggest, Stephen, what's most important is that this is all rational, right? So, it's not difficult to figure out in retrospect what trend was, and we'd like hope that over the next few cycles, we see that reflected in a way that it hasn't been over the last several years. And that, for us, is really the important element of what we hope will come. And it's simply just rational and it's interesting. When you look at the states in Medicaid, you see that kind of rational behavior. We've seen that improve. We've been super clear that there's been historic offset lag, if you will, to that. That's not surprising. That can create some discontinuity as we saw this year in '24, but underneath all of that, we see rational understanding and engagement from the state. We super appreciate that. It's important, and that's what we want to hope to see a return around the MA rate setting in a way that we have not seen over the last several years. Okay. Next question, please.
Operator: We'll go next to Justin Lake with Wolfe Research. Thanks.
Justin Lake: Thanks. Good morning. I've got a question here, but first, I wanted to ask a quick follow-up on this Medicare Advantage revenue adjustment. Given the MLR for the quarter came in higher than expected, it appears this might have come as a surprise given that the employers -- the size of the employer segment, feels like this adjustment is pretty large, like maybe 5% or more of annual revenue. So, just trying to understand, can you give us more color here? How did the mechanics work? And what's going on? Maybe you could tell us why this would have been a surprise? And what periods do they relate to? Is it all 2024? And then, my actual question is more on MA growth. Curious what you saw during AEP both in terms of what proportion of your 8% growth expectation do you expect to come from AEP? And then, do you still see industry growth at mid-single digits? Thanks. |
7,267 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Hey, Justin. Thanks so much for the question. That was an impressive way of sneaking two instead of one. I'll let you get away with it just this time. So, John, if you wouldn't mind taking the first part of Justin's good question, and then I'm going to ask Bobby Hunter to take the second. Bobby leads our business in Medicare. So, please go ahead.
John Rex: Justin, good morning. So, yeah, in terms of those elements, so MA kind of group customer refunds was one element of it. And certainly, these are -- and there were a few other adjustments running through that were all putting the non-run rate revenue impacts here. In terms of surprise or not, so perhaps not anticipated a year ago when we set out kind of in terms of our expectation for medical care ratio and revenues and such, not a surprise in terms of where we've been the last while though in terms of understanding these things, because as they develop and you see, okay, better performance in certain group MA plans, there's going to be a refund that's given to those employers as we do, as we're performing well. And then, some of the other elements, I wouldn't call them surprise. Certainly relative to a year ago, we didn't have those incorporated in our view in terms of relative to months ago, it would have been something we would have understood in those elements. And that was one of those, trying to give example. But there were a few and they totaled up to that 80 basis points, 90 basis points. Group MA refunds being one of them. But I wouldn't call it a surprise to where our view has been the last few months here on this. And then, I'll go to Tim...
Andrew Witty: No, to Bobby.
John Rex: Yeah, Bobby. |
7,268 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: No, to Bobby.
John Rex: Yeah, Bobby.
Bobby Hunter: Yeah. Thanks, John, and thanks, Justin, for the question. So, in terms of AEP results, we are very pleased with how things played out for us. They're very much aligned to our expectations, and it puts us on track to achieve the full year MA growth target of up to 800,000 that we've communicated. Really important to remember that with the selling changes for 2025, we do expect more than 50% of our full year growth to come in AEP. Also worth noting, this level of growth is not something we're unfamiliar with, and I'm really proud of our teams and the 1/1 readiness activities we've executed on to ensure a smooth transition for our new and returning customers. Maybe to offer a few highlights on the growth itself, seeing really balanced and diversified growth across our products and our geographies, in particular, some really nice strength within our HMO and full dual plan offerings. John also mentioned retention performing at near record levels, a great testament to the value that we're offering to consumers. And maybe lastly, of the members who have left us in prior years, we are seeing about 3 times as many return to UHC this year as compared to last year. I really view that as a testament to the service models and experiences we offer. And folks clearly put a lot of value in that when they're making their decisions, and I'm really proud to see those individuals coming back to us this year. In terms of the growth rate, we certainly still continue to believe in our long-term growth rate of 7% to 9%, acknowledging that, in certain years, you can see fluctuations based on benefit changes and other factors. Some of that was present in 2024 and similar dynamics will play out here in 2025. So, we expect '25 to generally pace in line with '24 from a growth standpoint. That said, more confident than ever in the value that MA offers to consumers and the path that we're on for MA to surpass 70% penetration over time. |
7,269 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Bobby, thanks so much. And I just want to acknowledge Bobby personally, because he -- over the last couple of years, he's really led the strategizing of how to navigate through the very many external changes, which have played out through V28 and the like. And I think you've always heard us talk about playing a multi-year strategy here, and I think that's really coming to fruition. Bobby owns a ton of the credit associated with that, and I'm delighted to see that reflected in the growth performance in the cycle we're in right now that you've just heard described. And it's that mix improvement that you just heard in Bobby's answer, which completely differentiates 2025 from 2024 for UnitedHealthcare, is super important. And all of those elements you just heard described are essentially what makes up that very important mix improvement, which we've been aiming for and we feel very, very good about. Let me go to the next question, please.
Operator: We'll go next to Lance Wilkes with Bernstein.
Lance Wilkes: Great. Thanks so much. And really appreciate your comments at the beginning of the call. Could you talk a little bit about one of the things I think is hanging over long-term investors out there, which is levels of customer satisfaction. I know that's difficult to measure, but I know [NDS] (ph) and other metrics are things you guys look at. Can you talk a little bit about what you perceive to be the major sources of dissatisfaction in those sorts of measures? And then, what are some of your strategies and priorities? And does it have any impacts on long-term algorithms for the company as far as economic algorithms, growth algorithms or just where you prioritize your capabilities? Thanks. |
7,270 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Yeah, Lance, thanks so much for the question. And listen, I mean, at the core of the company and if you look at the mission of the company, it's all about trying to improve the health system for everybody. And by that, it means not just reducing the cost of that, making it more affordable, but it's also about trying to make it easier to access, less complex, less confusing. And as I said in my opening comments, we recognize there's still a lot of work to be done in that regard. Some of the areas, like, obviously, claims where people get frustrated about how long it takes for a claim to process or maybe some confusion that goes on in that, those are key areas for us to continue to work hard at to improve. And I could tell you when you look across claims, less than half of 1% of claims are ultimately rejected for clinical reason because for whatever reason they're not deemed to be a safe or effective treatment option. But we all know there are other claims which get held up in the process before you get to that stage. Now, the overwhelming majority of those claims which are held up are held up because they were either sent to the wrong company, they didn't have the right information on them, the patient didn't have the right benefits, all of those things. Now that could all be dealt with through technology and a more standardized approach across the industry. And I'm very, very pleased to say that we are experiencing and engaged with a much heightened energy across the organization to solve this across the whole sector for everybody. And in my view, probably 85%-or-more of all of those claims, which end up going to the wrong place and then having to be resubmitted back, could all be avoided with the adoption of real-time processing, a standardized approach, a standardized intake mechanism. That's a key area for us to focus on. And that -- we've alluded to that. I mentioned an effort we're very close to around Medicare Advantage improvement. That's just one of the first steps. And all of this sits |
7,271 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | an effort we're very close to around Medicare Advantage improvement. That's just one of the first steps. And all of this sits very much in line with the work that Brian frankly led over the last several years to really reduce overall activity around PAs and the like and the company will continue to do that. But I just want to emphasize the criticality of collaboration here to try and design something not just for one company, but for all companies, not just for one patient, but for all patients. That's what we got to work toward. Really looking forward to opportunity to engage with the administration on this, because they can also be an important aid to help catalyze those sorts of changes. The second area of consumer improvement opportunity, where I believe we are -- we really are making great progress is just around that consumer experience. So, there's no reason in the world why engaging with the healthcare system should feel any different or any less easy than any other engagement you have in your life. And that's why we've been focused over the last several years on this move toward a consumer capability for the whole company. And that I really believe we're making breakthroughs on in terms of how we're operating. If you just look at 1/1 of this year, so January of this year, and you just look at a couple of examples, our UHC mobile app visits were up 66% year-over-year. That's another record year of growth. The UHC app remains the #1 healthcare app in the Google and Apple App Stores. Across the whole of UnitedHealthcare, our consumers are choosing to increase their digital engagement with us by about a third a year. So, the app is two-thirds up. Everything across the whole of UHC is up by about a third. Our app registrations are up nearly 100% year-over-year. This is us moving to where American consumers want to be. They want to talk to us digitally. They want to use their phone to be able to access us. They don't want to make a phone call. It's been an extraordinary shift. We continue to work that way |
7,272 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | to be able to access us. They don't want to make a phone call. It's been an extraordinary shift. We continue to work that way through. We're able to talk to members now about 10% less every year of our members who are making phone calls. They're getting what they need without needing to pick up the phone and make the call. All of those are fantastic metrics. You go to Optum Rx, the other big consumer engagement point, the most common interaction point across American healthcare is in pharmacy. You look at the 1st of January, you heard already today from John, we enrolled 750 new clients. They represented 1.6 million new American consumers who are now using Optum Rx. We're privileged to serve those people. We were able to bring them on board at a third less cost than in the prior year. That is entirely due to the adoption of digital technology and other modern capabilities. Our digital engagement registrations across Optum Rx themselves are up 16%. Those are all examples of how this company has been investing relentlessly, first and foremost, to understand what American consumers want and then build it. And we are committed to continuing to build those capabilities and deliver the very best, most convenient experience possible, not just in the insurance business, but also in the Optum service business led by Optum Rx. That's where we're going. We're committed to this agenda, Lance. We always have been, and you should continue to see us make substantial improvements to make the experience of engaging with the healthcare system easier tomorrow than it was yesterday. I appreciate the question. Next question. |
7,273 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Operator: We'll go next to David Windley with Jefferies.
David Windley: Thank you for taking my questions. And Andrew, thank you. I want to give you kudos for your emphasis on price. I feel like that's underappreciated in the United States. My question is around SG&A. If I extract -- if I ignore the portfolio changes, the way you might call normal course SG&A improvement, efficiency improvement in '24 was still substantial. You need another step down in 2025 per your guidance. Both of those are significant relative to historical norms. Could you talk about the sources of that efficiency, perhaps a nod to AI and some of the technology that you've talked about, but the sources of those savings and the durability of the savings that you're extracting? Thank you.
Andrew Witty: Yeah, David, thanks so much. I'm going to ask John to give you a kind of overview, and then I'm going to ask our Chief Technology Officer to give you a little like a few examples or a little insight into our ambitious -- I'm going to call it modernization agenda of technology, because it's not just AI, it's all of the different aspects, but I think it'd be good for you to hear from Sandeep. But John, would you mind starting off? |
7,274 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: Good morning, David. So, the source of those savings along the lines of the commentary that Andrew was offering a few moments ago, led by digital adoption. So, we serve roughly almost 150 million people across the breadth of UnitedHealth Group. And as we seek to make those experiences smoother, simpler, faster, that's being led by digital adoption. It's being led by having our customer service representatives much more informed when they do pick up the phone if the customer needs to call, much deeper insight into frustrations or any kind of experience the customer may be having or had so they can get to the root cause much more quickly. So, you're seeing those elements just accelerate. Look, I said it a little bit in my commentary, it feels very early stage to us in terms of what we're actually doing here. And as I work with the technology team, Sandeep and the teams and what they're hitting here, these are -- we're just kind of scratching the surface of the opportunity. So, when you ask the important questions about durability, it's super early stage in terms of what we see as the opportunity. I would tell you these -- what we're doing right now feel like just kind of the initial scratching the surface that we'd be doing in terms of where we could -- where we believe we can take this and the opportunities that we're seeing. So, one of the things we're most excited about is the team as we sit together and we think about the experience that consumers are going to have, how we're going to be able to make these much smoother, simpler and satisfying for everyone, including our employees who work with our customers. And Sandeep, maybe you could offer a few comments? |
7,275 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Sandeep Dadlani: Sure. Thank you, John, and thanks, David, for the question. Our AI, digital, automation and in general, our modernization agenda has focused largely on removing administrative menial tasks in the system and improving consumer experiences. Some examples earlier that you have noticed has been around our call center efforts. Andrew just mentioned, we received 10% less calls for the same consumer base compared to last year. And we haven't even scaled this fully. By the end of 2025, we will be scaling this fully, and that's one of hundreds of use cases that we are scaling. Last quarter, we talked about clinical summaries for nurses that helps our nurses focus on healthcare, and that's getting scaled fully. As we focus in 2025, we actually are excited about more compelling consumer experiences, helping providers and clinicians with documentations and summaries, and frankly, digitizing all the paperwork in the entire healthcare experience; [think of] (ph) benefits documents, facilities, provider contract, helping drive much more automated seamless, frictionless claims processing as well. So, we're excited about the agenda. Thank you.
Andrew Witty: Sandeep, thanks so much. David, I appreciate the question. If we could move on to the next question, please?
Operator: We'll go next to Scott Fidel with Stephens.
Scott Fidel: Hi, thanks. Good morning. I was hoping just given some of the unusual patterns that we saw in '24 and that then will have effects on 2025 when thinking about the sequencing of Medicaid margins and MLRs and some of the utilization patterns, if you would help us maybe in thinking about any comments on EPS seasonality that may be different in 2025 relative to '24? And then similarly, MLR sequencing that you're thinking maybe having a bit of a different pattern around that guidance that you gave for the full year? Thanks.
Andrew Witty: Scott, thanks so much. John? |
7,276 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Scott, thanks so much. John?
John Rex: Good morning, Scott. So, I'd say in terms of seasonality, first half, second half, think of that as relatively balanced in terms of seasonality for earnings progression. In terms of medical care ratio and thinking about kind of those elements, you start first, of course, with a view that at the midpoint, the full year care ratio will be 86.5%. So, as we noted earlier, about 100 basis points above the elevated '24 level. And I just had discussed '24, it's included a number of discrete items. Within that, the quarterly pattern will look familiar with the first quarter below the midpoint of that and the fourth quarter above the midpoint and trending up to the middle of the year. And then, within the year, the pattern familiar. So, those would be the elements we'd kind of think about as that patterns through. Slope a little impacted, of course, by some of the Part D changes that are out there also, that I think you're well aware of already because those have been out for a while. So, the slope of that will be impacted a bit by that also. Those would be the key elements.
Andrew Witty: Great. John, thanks so much. Appreciate it. Next question?
Operator: We'll go next to Sarah James with Cantor Fitzgerald.
Sarah James: Thank you. I'll stick on MLR. John, could you help us bridge '24 to '25 by sizing some of the impact of the components that you called out, like your assumptions on core trends versus IRA, and any offsets like rates or non-repeat of the MA Group refunds? Thanks. |
7,277 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: Yeah, good morning, Sarah. Certainly. So, kind of big elements that we'd call out here, certainly, the IRA impacts, a mix of our -- the people we're serving, we're serving more people than public sector plans. Of course, that's kind of a normal course element. And then, of course, second year of the CMS funding rate reductions here. Elements kind of probably going the other direction here would be certainly the cyber in South America impacts, we'd size those, think about that as about 30 basis points in our 2024. Some of the trend affordability and other initiatives that we have in there also. And then, as I mentioned also, just taking appropriately respectful view of the care activity environment as we step out. Thank you.
Andrew Witty: Thanks so much, John. We just have time for one last question, and operator?
Operator: We'll go next to Joanna Gajuk with Bank of America.
Joanna Gajuk: Hey, good morning. Thanks for squeezing me in. So, I guess something that maybe didn't come up probably in the discussion of MLR being high in '24, but also the outlook for '25, can you talk about the margins in your Medicare Advantage business? So, I appreciate second year of V28 and such, but just can you explain for us how the margin in that particular business was in '24 versus your target margins? And do you expect the margins to improve year-over-year in '25? Thank you.
Andrew Witty: Joanna, thanks so much. Let me ask Tim Noel to respond to that. |
7,278 | UNH | 4 | 2,024 | 2025-01-16 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Joanna, thanks so much. Let me ask Tim Noel to respond to that.
Tim Noel: Thanks, Joanna, for the question. As we think about our long-term planning approach to Medicare Advantage, we remain consistent in our view of targeted margins. And that doesn't change as we were thinking about '25 like any other year, which is good because as we think about our forward view in any sequential year, not a lot of pricing catch-up that we need to engage in and it can really focus on stability for people, the people we serve and the prospects who may want to choose us in the future. So, really not a lot of change here, very consistent with how we've thought about it previously.
Andrew Witty: Great. Tim, thanks so much. And Joanna, thanks so much for the question. Unfortunately, that's all the time we have this morning. And I want to thank you all for a robust and productive discussion. I hope that during our session today, you heard a team that is very focused on both effectively navigating the challenges and distinct growth opportunities ahead for UnitedHealth Group. A team leading an enterprise with the capabilities and energy to help each day to make healthcare better for the people we are privileged and proud to serve. Thanks so much for your time.
Operator: This does conclude today's conference. We thank you for your participation. |
7,279 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Operator: Good morning, and welcome to the UnitedHealth Group's Third Quarter 2024 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group's prepared remarks. As a reminder, this call is being recorded. Here are some important introductory information. This call contains forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings. This call will also reference non-GAAP amounts. A reconciliation of the non-GAAP to GAAP amount is available on the financial and earnings reports section of the company's investor relations page at www.unitedhealthgroupcom. Information presented on this call is contained in the earnings release, we issued this morning and in our form 8-K dated October 15, 2024, which may be accessed from the investor relations page of the company's website. I will now turn the conference over to the Chief Executive Officer of UnitedHealth Group, Andrew Witty. |
7,280 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Good morning and thank you for joining us. As you saw in our release, the people of UnitedHealth Group continue to deliver on our growth pillars. Our teams are providing more people with more high-quality health care services and benefits and restlessly looking for ways to simplify the health system and deliver more value for patients, employers and providers alike. By the end of this year, we will have grown to serve more than 2 million new consumers with commercial offerings, fulfill more than 1.6 billion prescriptions through Optum Rx and care for 4.7 million people in value based arrangements. Our people have done all this and more in a challenging period, navigating the first year of the CMS Medicare rate cuts and its impact on member mix. The effects of the state driven Medicaid member redeterminations, certain novel care patterns and the changed health care cyber-attack. While many of those factors could not have been anticipated, thanks to our people's efforts, we can affirm a full year 2024 earnings outlook still within the range, we first offered back in November 2023. It's a distinctive part of the culture of UnitedHealth Group that we continue to strive to deliver on our financial commitments to you through changing environments and unforeseen challenges. As we look to 2025, and I will address this shortly, we remain in a dynamic period for the healthcare sector. Amid this, it's important that we continue to invest in the durable value creating capabilities of this company that support our 13% to 16% long-term growth objective. We will balance our commitments to investing in the promising future before us with managing the known and potential challenges. We remain highly optimistic for the future, even as we are respectful of the pressures the sector faces again next year. Even within this environment, we're well positioned to continue our growth in the years ahead. I want to highlight two important reasons for this optimism. First is our relentless focus on execution, quality and |
7,281 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | ahead. I want to highlight two important reasons for this optimism. First is our relentless focus on execution, quality and innovation. In particular, we continue to work tirelessly to improve people's experiences with the health system. To that end, this month, we launched a first of its kind national gold card program, which will reduce the number of prior authorizations by 500,000 every year for qualified in network providers. This can help improve both the quality and the affordability of care while reducing friction in the system. Artificial intelligence is starting to be an important tool in improving our work. Our advanced practice clinicians use AI to summarize lengthy patient histories, freeing up hundreds of hours that can be better spent caring for people. Our nurses use Generative AI to review documentation more efficiently, saving time and improving patient service. AI is helping our consumer advocates, powering tens of millions of consumer interactions and provider searches. This allows our advocates to spend more time with people on more complex inquiries, driving better efficiency while also improving the consumer experience as reflected in higher NPS scores. And finally, using AI to help build software is enabling technology engineering teams to enhance the speed and quality necessary to help drive our technology modernization. Our focus on execution and quality is also evident in the Medicare Advantage plans we are offering for 2025. Once again, we focused on consumer value and as much as possible on benefit stability, even as we navigated the adverse Medicare funding environment. With annual enrollment beginning today, we believe we will continue to be a top choice for consumers. A second element underpinning our growth is delivery on our commitment to the transition of the health system to value based care. For over 20 years, there has been a bipartisan consensus among healthcare experts and policymakers that value based care that is integrated, patient centered and outcome focused care is |
7,282 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | healthcare experts and policymakers that value based care that is integrated, patient centered and outcome focused care is superior to the often fragmented and unnecessarily expensive fee for service system. Across four presidential administrations, CMS has called for private public innovation in the development of value based care models in Medicare and Medicaid. It provides better outcomes for patients. It saves money for the customers and taxpayers who fund care. And it empowers clinicians to focus on providing the most beneficial care. The rationale for these decades long effort to develop value based care is both simple and sound. It moves from incentives based solely on volume to incentives based on a patient's health outcomes and experience. And it helps ensure patient care is delivered not at the highest cost sites of service, but rather those that combine the highest quality and value. The effectiveness of value based care for patients is proven and powerful and it's good for the system. At UnitedHealth Group, we're purposefully organized to support the transition to value based care. It requires deep engagement with patients, setting the foundation to move setting the foundation to move to more coordinated care, connecting patients to primary care earlier driving clinically accurate diagnoses, more effectively recognizing and managing chronic conditions, and slowing disease progression. We're seeing the benefits of this work come to fruition. People served by OptumHealth's value-based care models are more likely to receive cancer screenings and be in better control of their diabetes and hypertension than people in fee for service in Medicare and 10% less likely to visit the emergency room or be re-admitted to hospital program. One example of the impact of better care coordination is our emergency room space discharge program, which helps patients who may be at risk for unnecessary and expensive ER use and readmissions. We have learned that the specific ways in which a discharge is managed can have a |
7,283 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | and expensive ER use and readmissions. We have learned that the specific ways in which a discharge is managed can have a substantial impact on readmissions, which are a problem for both patients and facilities. Our nurse care managers proactively engage the emergency teams to provide them relevant information from the outpatient medical record and to facilitate a safe discharge. This approach, currently in eight markets, is already helping to avoid hundreds of inpatient stays each month. It preserves emergency resources for those, who truly need them, saves money and is a better experience for patients. Our many care offerings now serve people in value-based care arrangements in dozens of service areas, integrating primary, surgical behavioral and home care. These patients come from many diverse payers and employers, a clear sign of confidence from the market that we're on the right track. This is the value proposition of UnitedHealth Group, committed to serving patients, providers, payers and customers with quality, integrity and innovation and joining with federal and state governments in the effort to help to build a better health system that meets the needs of all stakeholders now and into the future. Fundamentally, we continue to grow, because more people and organizations are purchasing more of the products and services we offer. It's a simple statement to make, yet a hard thing to do year in and year out. But it's the enduring reason for our optimism about the long-term growth and future of this enterprise. Now I'll turn it over to John Rex, our President and Chief Financial Officer. |
7,284 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: Thank you, Andrew. Strong growth across the company sets us up well to deliver upon our commitments to you. Amid all the puts and takes of this unusual year, we are seeing what we always look for. New products and innovations taking root among customers, more people being served through our services and continued improvement in the experience people have. These are key to our long-term success. I'll start today by offering some observations on care activity patterns, as we know that is most likely top of mind for many of you. Certain care patterns persisted at higher levels than we expected in the period for three specific and we believe primarily transitory reasons, two of which we noted last quarter. First, the still pronounced upshift in coding intensity by hospitals, which we flagged last quarter. In some cases, the coding actions are extreme. Certain entities have been notably and persistently aggressive, having up shifted their coding intensity factors by more than 20%. We are actively addressing this unnecessary additional cost burden to the health system. The second item, also noted last quarter, is the continued timing mismatch between the current health status of Medicaid members and state rate updates. States often use care activity data that is well over a year old in setting their rates. That typically has minimal impact when member mix levels are relatively stable. But with eligibility redetermination significantly shifting, both the number and average acuity of people covered has changed. As a result of the lagging care activity data as well as the annual rate cycle timing, updates remain well short of current care activity, a factor that for us was more pronounced through the period than anticipated. A third item that emerged more substantially in the period was a rather rapid acceleration in the prescribing of certain high cost specialty medications, primarily those used to treat cardiovascular disease, autoimmune disorders and cancer. We believe a contributing factor to the |
7,285 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | primarily those used to treat cardiovascular disease, autoimmune disorders and cancer. We believe a contributing factor to the acceleration was the Inflation Reduction Act, which eliminated the individual coinsurance requirement during the catastrophic coverage phase. As many of you know, more people enter this phase in the second half of the year. While we anticipated this will become a more meaningful factor in 2025, drug manufacturer campaigns pulled some of this activity into this year more sharply than anticipated. With that, let's turn to our Q3 results. Revenues of $101 billion grew more than 9% over the prior year, with strong growth again at both Optum and UnitedHealthcare. OptumHealth revenues grew by over $2 billion and are approaching $26 billion. This was driven by an increase in both the number and type of care services we offer and the patients we serve, especially in the home and among those with complex needs. OptumRx revenues grew by over $5 billion to more than $34 billion driven by strength in our pharmacy care offerings, as well as growth in pharmacy benefits management from new customers and expanding specialty services. OptumInsight revenues in the quarter were stable, approaching $5 billion and the nearly $33 billion revenue backlog increased by more than $1 billion from last year. Turning to UnitedHealthcare. Our domestic commercial business has added more than 2.4 million people through the third quarter. Selling season indications are tracking favorably as we head into ‘25, reflecting continued strong uptake of UnitedHealthcare's innovative offerings. Our Medicare Advantage plans on offer this fall balance providing as much benefit stability as possible for seniors, while contending with the CMS funding cuts, IRA changes and expected care patterns. The initial stars ratings for plan year ‘26 for consumers in four-star or better rated plans is largely consistent with what we saw in our initial results last year. As has been the case in recent years, we expect these percentages to |
7,286 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | with what we saw in our initial results last year. As has been the case in recent years, we expect these percentages to increase. In Medicaid, our new state customer expansion and retention performance remains strong, including recent awards in Massachusetts, Colorado, Rhode Island, Florida and Michigan. We hope to continue to support people and families in the post-redeterminations period and are advocating with states to ensure adequate funding and resources for these often underserved people. Our capital capacities remain strong and continue to underpin our long-term growth objectives. In the quarter, cash flows from operations were $14 billion or 2.2x net income and year-to-date we’re nearly $22 billion. So far this year, we have returned $9.6 billion to shareholders via dividends and share repurchase. Additionally, we have invested more than $11 billion in a wide range of strategic opportunities; including updating and extending our long standing and productive relationship with AARP to better serve older Americans. As highlighted last quarter, after the cyber-attack, we prioritized devoting resources to support care providers, over some activities such as share repurchase. Payments and claim flows for most care providers have normalized, and repayment of these capital advances is underway. Regarding Change Healthcare, for full year '24, we now estimate the business disruption costs will be about $0.75 per share, an increase of $0.10 from the former midpoint. As you may recall, business disruption largely encompasses the loss of revenues combined with the cost of keeping these capabilities fully ready to serve. These effects are not excluded from adjusted earnings. We continue to work with customers to bring transaction volumes back to pre-event levels and to win new business with our now more modern, secure and capable offerings. We expect to continue to build back the business to pre-attack levels over the course of '25 and estimate next year's full year impact will be roughly half of the '24 level. As we |
7,287 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | pre-attack levels over the course of '25 and estimate next year's full year impact will be roughly half of the '24 level. As we enter the final quarter of the year, we are narrowing our '24 adjusted earnings outlook to a range of $27.50 to $27.75 to reflect business disruption impacts and the care patterns we discussed. Our company's ability to deliver within the range of the commitments established nearly a year ago, even in challenging circumstances is another example of the discipline and innovation of the enterprise and the confidence we have in delivering diverse growth for the long-term. Now I'll turn it back to Andrew. |
7,288 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Thanks, John. Before we turn to your questions, I want to provide some preliminary observations about next year, which we'll review in more depth at our upcoming investor conference. Perhaps the most important element is that our businesses are operating well and our growth potential remains strong. We see continued momentum in the selling season performance for UnitedHealthcare's commercial business and Optum Rx, which both offer best-in-class innovation and performance for customers. The consumer value proposition of Medicare Advantage continues to be highly compelling and we see strong growth potentially in this market for many years to come. The Optum Health value-based care businesses that we've been building for well over a decade are beginning to approach the very early stages of their potential and will be a key differentiating growth factor in the years ahead. At the same time, and as we build for the future and contemplate our 2025 outlook, we're taking into account several unique dynamics. First, the concurrent timing of the second year of the CMS Medicare rate cuts and the most significant Inflation Reduction Act impacts into a single year and the negative effects of that on the people we serve. Second, within Medicaid, the timing mismatch of state customer rate actions, which do not yet reflect the higher acuity of remaining consumers. And third, a respectful view of the care activity that John noted. We're actively addressing and managing for these and continuing to believe our 2025 planning assumptions appropriately capture these components, though we will be prudent in an initial early view. The majority of those 2025 factors are expected to be most impactful to the UnitedHealthcare businesses. As a result, we anticipate stepping out for 2025 more conservatively than is typical. At this distance, we expect the upper end of the likely range will offer in December has been around $30 per share. As always, we will seek to advance beyond this initial view as the year progresses and we |
7,289 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | has been around $30 per share. As always, we will seek to advance beyond this initial view as the year progresses and we remain committed to and focused on our long-term 13% to 16% earnings per share growth objective. We see 2025 as a year of opportunity in building to that commitment, so you will see us investing in our growth pillars aggressively, modernizing our company with AI and other technologies and always exercising discipline in our operating performance. We look forward to discussing this with you in much greater detail at our Investor Conference on December 4 in New York. Now operator, we'll take some questions. |
7,290 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Operator: Thank you. The floor is now open for questions. [Operator Instructions] And we'll go first to Lisa Gill with JPMorgan.
Lisa Gill: Thank you for the comments. John, I want to go back to where you talked about your observations here in the fourth quarter. Can you talk about some of those that you expect to impact ‘25? And I really want to focus on the third one, which you talked about the rapid acceleration in Rx, but you also talked about the positive impact that you're seeing within your OptumRx business on the specialty side. How do we think about that playing into 2025?
Andrew Witty: Let me ask John to start, then I'm going to ask Brian, UHC to make a couple of comments, and then we'll come back to Patrick at OptumRx. It's a wide range and set of impacts that you're alluding to. So let me start with John. |
7,291 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | John Rex: So just a few comments here and maybe kind of shape some of these messages here. So first of all, in terms of what we would expect to persist, what we expect to subside here. So I'd start with our planning assumptions, as Andrew noted, we're looking for some of these elements here. What was different for us in the quarter than the thoughts we would have had at the end of last quarter is, most notably, what we saw in terms of the rapid increase in the specialty drugs. And we'll get a little bit more to that. There really was a midyear issue. We think really tied into the IRA and the components that shifted for that. And as you look at some of the prescribing patterns that are out, those shifted sharply in the second half of the year. And we would have been planned on some of that happening really more next year. The pull forward in this year was one of those elements that was a bit unexpected. I think the other elements are probably more understood out there. The timing mismatch in Medicaid has been in the conversation, what we've been seeing in the provider in the providing coding intensity also more understood. So maybe we'll go around a little bit to Brian Thompson, let him address some of those elements. |
7,292 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Brian Thompson: Sure, John. As John mentioned, specialty Rx, again, largely contained to our Medicare Advantage book. And let me start with, I feel very adequately priced for how this will play out in 2025, despite the surprise here in the second half. And you might ask how that's possible. What we had done is planned for the IRA to drive a greater induced utilization as it continued to roll out with the biggest elements being in 2025. Obviously, there's a lower out of pocket maximum for consumers in 2024. We expected that to play out more in 2025. We're seeing that accelerate into 2024, but not at levels that would suggest we're not at levels that would suggest we're not covered for it in 2025. Again, we thought it would be a little more gradual. We've certainly seen some manufacturers doing some promotion. I believe that's also contributing. But, certainly feel good about how we priced for it in 2025 because we did anticipate these step-ups, particularly with the large scale changes and more richness and benefit for consumers that will come to play out in 2025.
Andrew Witty: Patrick, maybe just reflect on it from an OptumRx position.
Patrick Conway: In terms of OptumRx, first, I would call out volume where we had a record PBM selling season last year that plays into this year and renewal rates in the high 90s. The growth in mix, including in specialty, drives significant revenue growth for us. I call it pharmacy services, which as you know, Lisa, in our specialty arena, significant growth but also infusion, hospital health system and our community pharmacy platforms, and then new products and services, including around specialty, whether it's Savings IQ, which has saved consumers over $1 billion this year or Price Edge, where we have over 9 million members and saved consumers $125 million or our [wait engage], we've got a number of new products and services around the specialty arena that continue to deliver value to our customers. We're really purpose built to help our customers manage specialty spend. |
7,293 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Thanks, Patrick. Thanks, Lisa, for the question. Next question.
Operator: We'll go next to A.J. Rice with UBS.
A.J. Rice: I appreciate the early comments on 2025. I wonder if -- relative to sort of a normal year of 13% to 16% growth, is there any way to sort of size some of the different headwinds and tailwinds you're looking at to formulate what looks like at $30 is about 8% growth? |
7,294 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: A.J. thanks so much for the question. Let me just context this a little bit. First off, as you would see in a typical year, we'd always start the year with the plan to obviously deliver but ideally beat and that will continue to be the culture of the organization. We are clearly in an unusual situation right now in terms of the various pressures that we've seen coming externally from particularly government funded reductions and to some extent the continued strength of MedEx cost. Probably net-net, all still somewhat hangover effects of the COVID pandemic still playing through the system, both in terms of volume and also some pressure on unit costs that we've seen, all of which you see in the kind of pressure that we see this year. Now, as we think about 2025, what we're trying to set out here, A.J. is something really important for the long-term future of the company. Those external pressures which we've described, I think, clearly both in the press release and in the commentary this morning, we're being clear about what they are. At the same time, what we mustn't do is pull away from investing in what's going to drive the future of this organization over the next decade. What does that mean? That means, really making sure we're investing in filling out and continuing to build out our value based care platforms. It means really leaning into taking advantage of the technology opportunities, which now exist in reality. So the chance to really modernize our full stack across our organization, transform the way in which we develop new products, give us opportunity to bring forth a new look, OptumInsight based on much newer technologies, give us the opportunity to transform consumer experience, something which is sadly lacking across U.S. healthcare. All of those things are opportunities we sit right now. They sit in the same year, as we have these various headwinds that we've been talking about. And so, what we're doing for 2025 is we're putting in place what we believe is a really responsible plan, |
7,295 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | been talking about. And so, what we're doing for 2025 is we're putting in place what we believe is a really responsible plan, really focused on making sure, we don't pull back from investment in the long-term, not shortchanging the next decade. And that's what we're leaning into in terms of making sure our ‘25 plan is responsible for longer term value creation of the organization. Now as I said at the beginning of the response to your good question, A.J., we're always going to go into every cycle aiming to do better than we lay out at the beginning. But I think it's appropriate for us to make sure that we build a plan for 2025, which acknowledges the external pressures and make sure that we retain the capabilities to continue to build what we think is a really distinctive set of capabilities, which will play out very powerfully for the next 10 years. Next question, please. |
7,296 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Operator: We'll go next to Stephen Baxter with Wells Fargo.
Stephen Baxter: Thanks for the color on the MLR factors that you called out. When you think about the Q3 MLR unfavorably developing in the quarter, is it fair to think that all three of those factors were about the same? Or would you call out one of them as maybe being larger? And when we think about the coding and utilization management, I guess, operationally, what needs to happen if you're to make progress on this front? I don't think you've attributed much of this to midnight rule to date. Can you update us on whether that changed at all in the quarter? And maybe if not, where the pressure is manifesting on the coating side?
Andrew Witty: I'm going to ask John to start and then ask Brian to give you a little bit more perspective on that also.
John Rex: And yes, I would say in the quarter versus our initial expectations that we shared with you a quarter ago, it was really they were all roughly in the same zone in terms of impact in the quarter, those elements that we called out kind of give or take, but they're roughly in the same zone as we look at them. Brian? |
7,297 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Brian Thompson: As it relates to upcoding new inpatient stays versus what we feel is more appropriately build as outpatient, we did expect that behavior to somewhat subside here in the third quarter. Last quarter, we had talked about the timing of that spike being largely related to our own utilization management waivers during the cyber-attack, but it certainly has persisted. As John mentioned at the outset, this is a few large systems driving it. We certainly do remain focused on evaluation of this practice. It's a key part of our utilization management. The difference between an inpatient and outpatient stay is largely borne by our consumers on an already too expensive cost of care in a hospital setting. So we remain vigilant on focusing on this, hoping to see it abate to levels that we're more used to seeing in the past. And we'll continue to review this as we look forward. Right, Brian. Thanks so much. Next question please.
Operator: We'll go next to Josh Raskin with Nephron Research.
Josh Raskin: There seem to be more moving pieces to the Medicare Advantage landscape than usual entering 2025. So maybe can you just take a step back and speak to your strategy over the next few years? And specifically, how important is growth in Medicare Advantage to UnitedHealth's overall enterprise strategy? And then maybe a potential weakness from competitors changes how you think about coming to market? |
7,298 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | Andrew Witty: Josh thanks very much for the question. Let me just make a couple of comments and then ask Tim Noll, who leads our MLR business to go a little deeper for you. And obviously, very timely given that today is the first day of the selling season for the new MA year going into 2025. So as you look across the whole of UnitedHealth Group, Medicare Advantage, of course, is a very important part of the business, but it is one of several different pieces of what is really a very diversified group of health care businesses. There are obviously linkages from Medicare Advantage to Optum, in particular obviously through Optum Health and elsewhere. But I would say over time, what you're seeing is as important as MA is, you'll see many other elements of the business continue to grow, and that's critical for the long term the long-term sustainability of the company, of course. That's why we've laid out the five growth pillars of the business over the last two or three years, Josh, as really signpost of where you should expect us to deploy capital. It's where we put our mindshare. It's where we look for opportunities to improve the health care system. So, whether that be in benefit design, whether that be in building our value-based care, bringing new technologies to the marketplace, transforming and modernizing pharmacy or bringing forward what ought to be a state-of-the-art financial services capability into a part of the economy, which represents 20% of GDP. Those are the five growth areas of the company. MA is an important element within all of that, but it is one of several key opportunities for us to drive forward. Having said all of that, as we come into this cycle, I think, what we're seeing is the benefits of some very thoughtful, calm, not over reactive planning last year. I think the way in which the team led us through 2024 in terms of benefit design has proven out to be on balance, right, given the very, very many moving parts that you correctly alluded to. I think that sets us up in a good place in |
7,299 | UNH | 3 | 2,024 | 2024-10-15 08:45:00 | UnitedHealth Group Incorporated | 104,673 | right, given the very, very many moving parts that you correctly alluded to. I think that sets us up in a good place in terms of how we enter this year. We'll see how this cycle goes. I'll ask Tim to give more comment. But most importantly, it really gives us confidence as we look out over the next four or five years that we're not we don't feel like we're having to fix significant problems that were avoided, if you will, that we didn't make those step mistakes a year ago, which is always a thing to worry about in this situation. We have a lot of moving parts. It's critical not to be over reactive. It's critical to be very much consumer patient centric, and that's really been the guidepost that we followed. And I think it served us well. Tim, I think, is going to serve us well this year. |
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