Uber posts first annual net profit since IPO on higher demand, user retention
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.
ALSO READ- How much is Uber Eats paying Beckhams for the Super Bowl commercial?
Shares, however, fell more than 1% as Uber deferred announcements related to capital allocation plans to its investor day on Feb. 14. 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.
ALSO READ- NCR’s trending Uber driver-cum-content creator scores hearts and marriage proposals
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.
ALSO READ- Uber, Ola will have to fall in line as Karnataka govt fixes uniform fare for taxis
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.
