Uber shares saw a 7% decline on Wednesday, despite the company reporting strong results for the year. The drop was primarily due to a lower-than-expected operating profit in the fourth quarter.
Fourth-Quarter Results Fall Short
Uber’s fourth-quarter operating profit was reported at $770 million, an 18% increase from the previous year. However, this figure fell short of analysts’ expectations, which had forecasted a profit of $1.2 billion. A $462 million legal settlement reserve, whose details were not disclosed, negatively impacted the earnings.
Strong Annual Performance and Positive Forecasts
Despite the setback in Q4 profits, Uber’s annual performance remained strong. The company posted an adjusted EBITDA of almost $6.5 billion, a significant increase from $4 billion in 2023. The company’s gross bookings for Q1 of 2025 are expected to grow by 17% to 21%, reaching between $42 billion and $43.5 billion. However, analysts had projected $43.5 billion.
CEO Dara Khosrowshahi called the results Uber’s “strongest quarter ever,” highlighting growth in active platform users, trips, and bookings. The company’s revenue surged 20% year-over-year, reaching $12 billion, surpassing analysts’ expectations of $11.77 billion.
Focus on Innovation and Autonomous Vehicles
Khosrowshahi attributed Uber’s growth to ongoing innovation and the company’s focus on autonomous vehicle opportunities. “We enter 2025 with clear momentum and will continue to pursue our long-term strategy relentlessly,” he said.
Uber’s stock price hovered around $65, marking a nearly 6% decline over the past year.
Financial Outlook and Strategic Plans
Uber’s CFO, Prashanth Mahendra-Rajah, expressed confidence in the company’s value, despite the stock’s recent performance. He stated, “We remain undervalued despite strong fundamentals and plan to be active and opportunistic buyers of our stock.”
In the company’s earnings call, Khosrowshahi addressed questions about Uber’s shift in strategy concerning autonomous vehicles. Uber has moved away from building its own robotaxi fleet and is now partnering with autonomous vehicle companies like Waymo. Waymo’s robotaxis will soon launch on the Uber app in Austin next month.
Challenges in Autonomous Vehicle Commercialization
Khosrowshahi noted that the road to full commercialization of autonomous vehicles (AVs) remains long. He explained that AVs must achieve a “superhuman” safety record and emphasized the high costs associated with building an autonomous ride-hailing network. “Right now, the costs of AVs don’t even come close to the cost of drivers,” he said.
Despite this, Uber has not yet seen any significant impact from Waymo’s autonomous vehicles in cities like San Francisco or Los Angeles, where the company’s mobility business has been growing. Khosrowshahi also forecasted that more companies would enter the robotaxi space, drawing a parallel to the recent developments in generative AI. “We think the same thing that’s happening in generative AI is happening in AV as well,” he added.
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