Uber Technology shares are expected to remain in focus today, February 04, after the company forecast first-quarter profit below market expectations and mixed December quarter performance.
The ride-hailing and delivery services company reported revenue of $14.37 billion for the fourth quarter, marking an increase from $12 billion in the same period a year earlier, reflecting continued user growth and higher activity across multiple services.
In terms of segment-wise performance, revenue from the mobility segment improved 19% year-on-year to $8.2 billion. Trips rose 22% in the fourth quarter, as more consumers opted for Uber’s affordable offerings, such as shared rides and other lower-cost mobility products.
However, the increased focus on affordable ride options weighed on the company’s margins during the quarter. Uber said investments in affordability and low-cost product offerings were partly responsible for accelerating mobility growth, even as they pressured near-term margin expansion.
Meanwhile, revenue from the Delivery segment climbed 30% year-on-year to $4.9 billion. The delivery business has expanded well beyond restaurant orders, with groceries and retail becoming a larger part of the mix, helping smooth demand patterns throughout the year.
In the fourth quarter, total gross bookings—a closely watched metric that includes ride hails, delivery orders, and driver and merchant earnings but excludes tips—grew 22% to $54.1 billion.
Despite the strong revenue growth, the company’s bottom line was impacted, with net income dropping sharply to $296 million from $6.88 billion a year earlier.
Uber said the decline was driven by a $1.6 billion net pre-tax headwind linked to the revaluation of its equity investments, rather than a deterioration in underlying operations.
For the fourth quarter, Uber reported adjusted earnings of 71 cents per share, missing estimates of 79 cents.
Separately, the company announced that Prashanth Mahendra-Rajah, its finance chief since November 2023, will step down. Balaji Krishnamurthy, a former Goldman Sachs executive who joined Uber in 2019, will take over the role.
Uber Technologies forecasts first-quarter profit below expectations
The company expects first-quarter adjusted earnings per share in the range of 65 cents to 72 cents, compared with market expectations of 76 cents.
Uber had last year said it would replace quarterly adjusted core profit guidance with adjusted profit per share to give investors a clearer view of recurring operating performance.
Gross bookings—a measure of the total value of rides, deliveries, and other services—are expected to come in between $52.0 billion and $53.5 billion for the first quarter, above estimates of $51.16 billion, Reuters reported, citing LSEG data.
(With inputs from Reuters, Bloomberg)
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