Uber stock is trading higher in US premarkets today even as futures point to a weak opening for the US markets. The company posted impressive earnings for the fourth quarter of 2022 and also provided upbeat guidance.
Uber reported gross bookings of $30.7 billion in Q4 2022 which is 19% higher than the corresponding quarter in the previous year. Its revenues increased a whopping 49% YoY to $8.6 billion. In constant currency terms, its gross bookings and revenues respectively increased by 26% and 59%.
The revenues were ahead of the $8.5 billion that analysts expected. Also, the revenue growth surpassed gross booking by a wide margin. Uber attributed the rise in revenues to “a change in the business model for our UK Mobility business and the acquisition of Transplace by Uber Freight.”
Looking at the breakup of Uber’s Q4 2022 revenues, Mobility revenues rose 82% to $4.12 billion while Delivery revenues rose 21% to $2.93 billion. Its Freight revenues rose 43% YoY to $1.54 billion.
Mobility has historically been the biggest revenue driver for Uber. However, during the pandemic, the company got more revenues from the Delivery business as its core Mobility business suffered due to the lockdowns and later employees working from home.
As taxi travel has resumed to near-normal levels, Uber’s Mobility revenues have also spiked. The growth rate of the Delivery business has meanwhile fallen to more normalized levels.
In his prepared comments, Khosrowshahi said that the company’s Mobility business has fully recovered from the impact of the COVID-19 pandemic.
Uber Posts Better-Than-Expected Earnings in Q4 2022
Uber posted an EPS of 29 cents in the quarter while analysts were expecting it to post a per-share loss of 18 cents. Meanwhile, the profits were on account of its equity investments. It reported a $756 million net benefit primarily on account of unrealized gains on equity investments.
Uber holds significant stakes in Aurora, Grab, and Zomato. It acquired the stakes after it sold its businesses to these companies. It is also a major Didi stockholder. Didi delisted from the US markets within months of the IPO which led to massive losses for investors.
Uber posted an adjusted EBITDA of $665 million in the quarter which is $579 million higher than the corresponding quarter in 2021. While it posted negative free cash flows of $303 million in the fourth quarter, in the full year, it posted positive free cash flows of $390 million.
The stock is trading sharply higher today after the earnings beat. Earlier this week, Bank of America issued a bullish note and advised buying Uber stock.
Commenting on the earnings, Uber CEO Dara Khosrowshahi said, “We ended 2022 with our strongest quarter ever, with robust demand and record margins.” It was also the “strongest” year for the company.
Uber Stock Rises on Upbeat Guidance for the First Quarter
Along with posting better-than-expected revenues and profits, Uber also provided strong guidance. In constant currency, it expects its revenues to rise between 20-24% in Q1 2023. In absolute terms, it would mean gross booking between $31 billion-$32 billion.
The company forecast adjusted EBITDA between $660 million-$700 million. The guidance surpassed analysts’ estimate of $612 million in adjusted EBITDA.
Nelson Chai, Uber’s CFO said, “In 2022, we significantly exceeded our profitability outlook, with an incremental margin of 10%.” Chai added, “Our outlook for a Gross Bookings and Adjusted EBITDA step up in Q1 builds on that progress, and sets us up for yet another record year.”
Uber ended 2022 with monthly active platform users of 131 million, which is 11% higher YoY.
Winners and Losers as Economy Reverts to Normal Levels
As consumer behavior has mostly reverted to pre-pandemic levels, there have been both winners and losers. While tech companies are feeling the heat and most have laid off workers, companies like Uber, whose business suffered due to the lockdowns, are now witnessing a surge in revenues.
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