Uber expects robust profit as ride share, food delivery demand surges

Uber Technologies has guided quarterly core profit and gross bookings above expectations, showcasing impressive results for the holiday quarter driven by increased demand in its ride-sharing and food delivery segments.

The company, having achieved its first full-year profit on a net basis, is strategically expanding initiatives such as memberships, corporate travel, and advertising. These efforts, combined with a resurgence in travel activity, have notably contributed to enhancing user retention rates.

Following a dip during the COVID-19 pandemic, travel demand rebounded last year as individuals resumed outdoor activities, and many companies resumed in-person work arrangements.

According to Chief Financial Officer Prashanth Mahendra-Rajah, Uber's platform advantages and strategic investments in new growth opportunities have led to record engagement and accelerating Gross Bookings in Q4.

For the quarter ending March, the company expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $1.26 billion to $1.34 billion, surpassing market expectations. Similarly, Uber's gross bookings forecast of $37 billion to $38.5 billion also exceeded analyst estimates.

These outlooks follow strong performance in the seasonally robust October-December period, where revenue increased by 15 per cent to $9.9 billion and gross bookings rose by 22 per cent to $37.6 billion, surpassing Wall Street projections.

Notably, Uber's net profit nearly tripled to $1.43 billion, largely attributed to a $1 billion net pre-tax benefit from the re-evaluation of the company's equity investments.

Revenue from Uber's core ride-sharing business surged by 34 per cent, driven by significant trip growth in Latin America and the Asia Pacific markets. The delivery business also experienced growth, with a 6 per cent increase in revenue and the highest gross bookings growth in two years.

CEO Dara Khosrowshahi highlighted that a growing portion of Uber's Delivery Gross Bookings growth stems from increased trip and audience expansion this year, as opposed to pricing adjustments last year.

Furthermore, Uber reported a 15 per cent rise in monthly active platform consumers, reaching 150 million users who have completed a mobility ride or delivery order on the Uber platform at least once a month.

(With Reuters inputs)