Despite achieving a record operating profit in the third quarter of 2024, Uber Technologies (UBER.US) reports that its ride booking volume was lower than expected for the holiday season. According to the financial report, Uber's third-quarter revenue was $11.2 billion, a 20% year-on-year increase, exceeding market expectations. After the financial report was released, Uber's stock price fell 6% pre-market. Lyft, its smaller ride-hailing competitor, also saw a drop of about 2% in its stock price.

Net income was $2.6 billion, including $1.7 billion in pre-tax earnings, due to the revaluation of net unrealized gains related to Uber's private equity investments. Operating profit was $1.06 billion, a 169% year-on-year increase; earnings per share were $1.20, compared to $0.10 in the same period last year.

Despite setting profit records, the company still faces exchange rate headwinds, putting pressure on its ride-hailing business. The total bookings in the third quarter, including ride-hailing, delivery orders, and driver and merchant earnings (excluding tips), amounted to $41 billion, slightly below Uber's own mid-point guidance range of 41.2 billion, as forecasted on Wall Street.

Uber has been investing in new areas for its ride-hailing and delivery business in the United States and internationally, stating that growth in these areas is stronger. Over the past year, the company has added more transportation options on its platform, including taxis, ridesharing, and shuttles to airports and other locations.

It has also expanded services to suburban areas globally, attracting new customer groups through teen accounts. Additionally, it has partnered with new Uber Eats merchants (such as H Mart, Michaels, and JD Sports), allowing customers to arrange delivery services other than restaurant orders, which helps increase order frequency.

The company anticipates fourth-quarter order volume to be between $42.75 billion and $44.25 billion, slightly below analysts' expectation of $43.7 billion. The company expects fourth-quarter adjusted EBITDA to be between $1.78 billion and $1.88 billion, a 39% to 47% year-on-year increase, also slightly below market expectations.

CEO Dara Khosrowshahi stated that there are 'significant opportunities to increase consumer penetration,' including expanding into markets with lower population density, and indications that fast, on-demand services are becoming more entrenched habits for more people. CFO Prashant Mahendra Raja mentioned that the company's performance so far 'should give investors confidence in our ability to meet our commitments for 2026.'

Uber Technologies also provided discounts to college students in the USA and Canada this year, increasing its subscriptions for the Uber One program. The company stated that the number of memberships has grown by about 70% compared to a year ago, reaching over 25 million, and added that these customers spend more than three times as much as non-members each month.

The expansion of Uber Technologies' user base and merchant selection has, in turn, helped drive its emerging advertising business, which grew by nearly 80% year-on-year, and has helped exceed profit expectations for the current period.