Uber's net profit for the fourth quarter was $296 million, marking a significant year-on-year decline of 96%. For the current quarter, the company forecasts an adjusted earnings per share between $0.65 and $0.72, falling short of the average analyst estimate of $0.77 compiled by Bloomberg. Additionally, the midpoint of its adjusted EBITDA guidance also missed expectations. Despite concerns about the profit outlook, Uber provided an optimistic forecast for gross bookings. The company anticipates that bookings for the current quarter will range between $52 billion and $53.5 billion, surpassing market expectations.
$Uber Technologies (UBER.US)$ A mixed earnings report was released. Although total bookings in the fourth quarter showed strong growth and exceeded expectations, weak profit guidance and a sharp year-on-year drop in net profit triggered market concerns. Meanwhile, the company appointed a staunch advocate of autonomous driving technology as the new Chief Financial Officer, clearly signaling a strategic move to further bet on the Robotaxi business.
The financial report showed that the company's net profit in the fourth quarter was $296 million, a significant year-on-year decrease of 96%. For the current quarter, the company expects adjusted earnings per share to be between 65 cents and 72 cents, below the average analyst estimate of 77 cents compiled by Bloomberg, and the median forecast for adjusted EBITDA also fell short. Affected by this, $Uber Technologies (UBER.US)$ The stock price plummeted by 10% during pre-market trading in the U.S., but then surged strongly to turn positive, currently up over 3%.
Alongside the earnings release, Uber announced that Balaji Krishnamurthy, the current Vice President of Strategic Finance and Investor Relations, will succeed Prashanth Mahendra-Rajah as CFO. As an executive who has long defended Uber’s autonomous driving strategy on social media, Krishnamurthy’s appointment signifies the company’s intention to increase investment in the highly anticipated autonomous driving sector.
Despite concerns over profit prospects, Uber's guidance for bookings was optimistic. The company expects bookings for this quarter to range between $52 billion and $53.5 billion, surpassing market expectations. CEO Dara Khosrowshahi emphasized that a healthier pricing environment, driven by reduced insurance costs and the launch of new products, has laid the foundation for revenue growth and margin expansion in the coming year. As of now, the decline in Uber’s stock price has narrowed to 5%.
Weak Profit Guidance Amid Strong Core Business Growth
Although profit forecasts weighed on the stock price, Uber's core business metrics remained robust. In the fourth quarter, the company’s closely watched total bookings (including ride-hailing, food delivery, driver and merchant revenues, excluding tips) grew by 22% year-over-year to reach $54.1 billion, exceeding analysts' average estimates.
This growth was driven by several new product initiatives launched during the quarter. Transactions contributed by Uber One paid members increased significantly, and premium reservation services targeting ski resorts capitalized on the holiday travel peak. Additionally, the company expanded more affordable options, including extending lower-priced shuttle services to all major airports in New York. The food delivery business also achieved strong growth during the holiday season and set a sales record on 'Black Friday.' By adding non-food merchants and offering more regular discounts, Uber is striving to attract customers away from competitors like DoorDash and Instacart.
CFO Leadership Change Signals Autonomous Driving Strategy
Uber disclosed a significant personnel change in its earnings report. Balaji Krishnamurthy, who has worked at Uber for over six years, will be promoted to Chief Financial Officer. According to regulatory filings released on Wednesday, current CFO Prashanth Mahendra-Rajah will step down on February 16 and remain as a senior financial advisor until July 1.
The newly appointed CFO Krishnamurthy is known for his active advocacy of Uber’s self-driving strategy on social media. In response to skeptics questioning Uber’s ability to compete with rivals such as Waymo and Tesla Inc., he frequently defends the company’s autonomous driving plans. Uber has invested hundreds of millions of dollars in autonomous technology partners and agreed to purchase a fleet of Robotaxis. This leadership transition indicates that Uber is leveraging its experience in operating a profitable ridesharing platform to secure a key position in an increasingly crowded autonomous driving ecosystem.
Expand Robotaxi Footprint, Counter 'Zero-Sum Game' Argument
To further advance the commercialization of autonomous driving, Uber announced the expansion of its Robotaxi services to multiple new markets, including Houston, Hong Kong, Madrid, and Zurich. Notably, Hong Kong will become Uber's first Robotaxi market in Asia. The company plans to roll out self-driving car services across more than 10 global markets within the next few years.
In its earnings presentation, Uber specifically addressed what it described as a 'misunderstanding' propagated by Wall Street skeptics who believe that autonomous driving technology could undermine Uber’s business. The company reiterated that Robotaxis can stimulate growth across the entire ride-hailing industry, emphasizing that this is not a zero-sum game. Uber highlighted that in cities like Austin and Atlanta, where Waymo has integrated into the Uber app, trip growth has outpaced that of its top 20 largest markets.
Uber also subtly pointed out the limitations of its competitor, Waymo. The company noted that due to regulatory restrictions, a significant portion of trips and profits in cities such as New York, Boston, and Chicago are unlikely to be fulfilled by autonomous vehicles in the foreseeable future. Additionally, Robotaxi operators typically do not serve less affluent areas like Oakland. Uber particularly underscored the flexibility of human drivers, pointing out that during last December’s power outage in San Francisco and recent winter storms, when autonomous vehicles faced disruptions or were removed from the platform, human drivers were able to quickly meet demand and ensure a seamless customer experience.
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