Uber Anticipates Robust Core Profits Amidst Accelerating Momentum in Ride-Sharing and Food Delivery Services.

On February 7, Uber Technologies (UBER.N) announced robust results for the holiday quarter, surpassing market expectations. The company reported quarterly core profit and gross bookings that exceeded estimates, marking its first annual net profit since going public. The positive outcomes were attributed to increased demand in both its ride-sharing and food delivery sectors, with improved user retention and the success of strategic initiatives such as memberships, corporate travel, and advertising.

Uber's CEO, Dara Khosrowshahi, hinted at potential buybacks and dividends in September, and the upcoming investor day on February 14 raised hopes for a capital allocation plan, causing a nearly 2% increase in the company's shares. Chief Financial Officer Prashanth Mahendra-Rajah credited Uber's platform advantages and disciplined investment in new growth opportunities for the record engagement and accelerating gross bookings in Q4.

Looking ahead, Uber expects adjusted earnings before interest, taxes, depreciation, and amortization in the range of $1.26 billion to $1.34 billion for the quarter ending March, exceeding market expectations. The company's gross bookings forecast of $37 billion to $38.5 billion also outperformed projections.

 

In the seasonally strong October-December period, Uber experienced a 15% revenue increase to $9.9 billion, while gross bookings rose by 22% to $37.6 billion, surpassing Wall Street targets. The net profit nearly tripled to $1.43 billion in Q4, largely due to a $1 billion net pre-tax benefit from the re-evaluation of equity investments. The fiscal year 2023 ended with a net profit of $1.89 billion.

 

Notably, Uber's core ride-share business saw a 34% revenue growth, driven by significant trip growth in Latin America and the Asia Pacific region. The delivery business also performed well, with a 6% revenue increase and the highest gross bookings growth in two years.

  

RBC Capital Markets analyst Brad Erickson commented that management's commitment to addressing capital return plans at the upcoming investor day addresses a key priority for investors, removing uncertainty from the equation.