UBER Technologies reported weaker-than-expected ride bookings and issued a middling forecast for the holiday quarter, even as it delivered record operating profit.
The company posted US$1.06 billion in operating income for the three months ended Sep 30, it said on Thursday (Oct 31), far exceeding estimates for a metric that only turned positive last year.
Despite setting a record, the firm struggled with currency exchange headwinds, which weighed on its rideshare business. Gross bookings, which include ride hails, delivery orders and driver and merchant earnings but not tips, totalled US$41 billion for the third quarter, slightly below the mid-point of Uber’s own guidance range. Wall Street was expecting US$41.2 billion, according to Bloomberg-compiled estimates.
Uber has been investing into new areas across both its ride-hailing and delivery businesses in the US and internationally, where the company said it has seen stronger growth. Over the past year, the firm has added more transportation options to its platform including taxis, carpools and shuttles to airports and other venues.
It’s also expanding service into suburban areas globally and reaching new customer demographics through teen accounts. And it’s struck deals with new Uber Eats merchants – such as H Mart, Michaels and JD Sports – allowing customers to arrange deliveries for things beyond just restaurant orders, which helps boost order frequency.
For the current quarter, it forecast bookings of US$42.75 billion to $44.25 billion, with the mid-point just missing analysts’ estimates of US$43.7 billion. The mid-point of the company’s outlook range for fourth-quarter adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) also fell slightly short of expectations.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Shares of Uber fell 6 per cent in early trading after the results were announced. Shares of its smaller rideshare rival, Lyft, also fell around 2 per cent following Uber’s earnings report.
In prepared remarks, chief executive officer Dara Khosrowshahi said there are still “huge opportunities to increase consumer penetration”, including expanding into less dense markets, and signs that fast, on-demand services are becoming an entrenched habit for more people. Chief financial officer Prashanth Mahendra-Rajah said the company’s performance thus far “should give investors confidence in our ability to deliver on our 2026 commitments”.
Uber has also made progress this year in adding subscribers to its Uber One programme by offering discounts to college students in the US and Canada. The number of members grew about 70 per cent from a year ago to more than 25 million, the company said, adding that these customers spend more than three times as much as non-members each month.
The expansion of Uber’s user base and merchant selection has in turn helped boost its nascent advertising business, which grew nearly 80 per cent year on year and helped contribute to the adjusted earnings beat in the period. BLOOMBERG
