Uber Reports Strong Q4 Growth But Stock Falls on Soft Q1 Outlook

Uber's fourth-quarter earnings report for 2024 revealed a solid performance, exceeding revenue expectations but facing a drop in its stock price. The company reported revenue of $11.96 billion, marking a 20% increase from the same period in 2023, which surpassed the $11.77 billion predicted by analysts. However, despite the positive revenue growth, Uber faced challenges with its earnings per share (EPS), which came in at 23 cents adjusted, falling short of the anticipated 50 cents. As a result, Uber's shares fell by more than 7% on the day the report was released.

The company’s overall financial performance showed promising signs, particularly in terms of its adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which rose by 44% year-over-year to reach $1.84 billion. While this figure met analyst expectations, Uber’s net income was boosted by $6.4 billion from a tax valuation release and $556 million from gains on its equity investments. The positive revenue and EBITDA growth reflect Uber's continued dominance in the ride-hailing and delivery sectors, despite its challenges in the stock market.

Key Financial Details and Stock Reaction

In addition to the $11.96 billion in revenue, Uber's total gross bookings during the quarter amounted to $44.2 billion, surpassing the expected $43.49 billion. The company’s mobility segment, which includes ride-hailing services, generated $6.91 billion in revenue, a 25% increase from last year. Meanwhile, the delivery segment, primarily driven by Uber Eats, earned $3.77 billion, representing a 21% increase year-over-year.

However, despite the positive financial outcomes, Uber’s stock declined after the report. This drop was primarily attributed to the missed earnings per share (EPS) and the company’s soft guidance for the first quarter of 2025. For the upcoming quarter, Uber expects gross bookings to fall between $42 billion and $43.5 billion, slightly below the anticipated $43.51 billion. Additionally, the company's adjusted EBITDA for Q1 is projected to be between $1.79 billion and $1.89 billion, under the analyst consensus of $1.85 billion.

Despite Uber’s growth, the company faces ongoing challenges, including concerns raised by Uber drivers in the UK struggling with low earnings amid rising costs, which may impact its long-term financial stability.

Investments in Autonomous Vehicles and Future Growth

As part of its long-term strategy, Uber continues to focus on expanding its autonomous vehicle capabilities. The company is preparing for the public launch of robotaxi rides in Austin, Texas through a partnership with Waymo, Alphabet's autonomous vehicle unit. Uber’s CEO, Dara Khosrowshahi, stated:

"Our performance has been powered by rapid innovation and execution across multiple priorities, including the massive opportunity presented by autonomous vehicles."

Uber has identified the autonomous vehicle market as a trillion-dollar opportunity in the U.S. alone. However, Khosrowshahi emphasized that the commercialization of this technology will take many years due to complex regulatory challenges and the need for further technological advancements. Despite these hurdles, Uber remains committed to building its role as a key market partner for autonomous vehicle developers.

The robotaxi launch in Austin is a significant milestone for Uber, marking the company's entry into self-driving ridesharing. Customers in the area can now join an "interest list" in the Uber app to increase their chances of being paired with a Waymo vehicle during the launch. While the launch of autonomous vehicles is an exciting development, Uber’s leadership has acknowledged that the full impact of the technology on its business is unlikely to be realized in the near future.

Growth in Active Users and Future Outlook

Uber's user base showed strong growth in the fourth quarter, with 3.1 billion trips completed, an 18% increase compared to the previous year. Additionally, the company reported a rise in monthly active platform consumers, which reached 171 million in Q4, a 14% year-over-year increase. These figures reflect Uber's growing presence in the mobility and delivery markets, which continue to drive the company's growth despite challenges in other areas.

For the first quarter of 2025, Uber's management remains cautious in its forecast, expecting moderate growth in gross bookings and adjusted EBITDA. While the company remains optimistic about its future, especially with innovations in autonomous vehicles and the expansion of its services, it faces pressure to meet market expectations in the short term.

Comments from Uber CEO

Dara Khosrowshahi, Uber's CEO, discussed the company's focus on innovation and long-term strategy:

"We have conviction that Uber will be the indispensable go-to-market partner for AV players. This is undoubtedly one of our top priorities, and we’re investing a lot of technical, strategic, and management attention to this topic, with lots more to come."