Uber Shares Drop 6% as Q4 Profit Misses Estimates and Q1 Forecast Disappoints

Uber Technologies (NYSE:UBER) shares fell 6% premarket on Wednesday after reporting a lower-than-expected Q4 profit, with rising costs and a weaker Q1 bookings forecast overshadowing its revenue beat.

Q4 Earnings Highlights

• Revenue: $11.96 billion (beat expectations of $11.77 billion)
• Adjusted EPS: $0.23 (missed estimates of $0.50)
• Gross Bookings: $44.2 billion (above expectations of $43.45 billion)
• Total Costs & Expenses: $11.19 billion (↑ 20.5% YoY)
• Operating Income: $770 million (missed estimates of $1.22 billion)

Segment Performance

• Ride-hailing revenue: ↑ 25% YoY (boosted by office commutes and business demand)
• Delivery revenue: ↑ 21% YoY (helped by strong holiday season demand)
• Uber for Business: ↑ 50% in Q4 bookings (boosted by return-to-office mandates)
• Uber for Teens: Now available in ~50 countries

Key Concerns Impacting Stock

1. Lower Q4 Profitability: Despite strong revenue growth, higher costs (+20.5%) weighed on margins, leading to an EPS miss.
2. Weak Q1 2025 Forecast: Uber expects lower-than-expected gross bookings, with the strong US dollar impacting international revenue.
3. Rising Expenses: Insurance costs have been a significant burden for ride-hailing firms.

CEO Strategy for 2025

Uber CEO Dara Khosrowshahi aims to drive growth by:

• Offering better customer rates to retain users.
• Slowing insurance cost hikes to reduce financial strain.

Market Reaction & Outlook

• Investors are concerned about Uber’s profitability trends, despite strong demand growth.
• The company’s cost-control measures and expansion into new markets will be closely watched in 2025.
• The strong dollar remains a headwind for international revenue.

With the stock down 6% premarket, Uber may need to convince investors that its growth strategy can improve profitability in the coming quarters.