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Uber expects strong core profit as ride share, food delivery pick up pace

Photo of Uber
An Uber sign is seen at a shopping mall in San Diego, California, U.S., Nov. 23, 2022. (REUTERS/Mike Blake/File Photo)
By Yuvraj Malik | REUTERS

Uber Technologies forecast quarterly core profit and gross bookings above estimates and reported market-beating results for the holiday quarter on Wednesday, fueled by higher demand in its ride sharing and food delivery businesses.

It posted its first annual net profit as a public company as user retention improved, also benefiting from initiatives like memberships, corporate travel and advertising.

Uber will discuss capital allocation plans at its investor day on Feb. 14, it said, lifting hopes of a buyback plan that sent its shares up nearly 2%.

CEO Dara Khosrowshahi had said in September Uber was considering buybacks and dividend.
“Uber’s platform advantages and disciplined investment in new growth opportunities resulted in record engagement and accelerating Gross Bookings in Q4,” Chief Financial Officer Prashanth Mahendra-Rajah said.

The company expects adjusted earnings before interest, taxes, depreciation, and amortization of $1.26 billion to $1.34 billion in the quarter ending March, compared with expectations of $1.26 billion, according to LSEG data.

Uber’s gross bookings forecast of $37 billion to $38.5 billion came in higher than expectations of $37.33 billion.

The outlook follows strong results in the seasonally strong October-December period. Revenue jumped 15% to $9.9 billion and gross bookings rose 22% to $37.6 billion, exceeding Wall Street targets.

Its net profit nearly tripled to $1.43 billion in the fourth quarter, thanks to a $1 billion net pre-tax benefit from re-evaluation of the company’s equity investments.

It posted net profit of $1.89 billion in fiscal 2023.

Uber said revenue from its core ride-share business grew 34%, driven in part from “outsized trip growth” in Latin America and Asia Pacific markets.

Delivery business revenue grew 6%, while gross bookings growth for the segment was the highest in two years.

“Management took the intrigue off the table for today in saying it will address capital return more formally at the investor day, said RBC Capital Markets analyst Brad Erickson, adding that those plans are top of investors’ priority.

Editor’s Note: Reporting by Yuvraj Malik in Bengaluru; Additional reporting by Aishwarya Venugopal in Bengaluru; Editing by Arun Koyyur

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