Uber Q3 2024 Earnings Report: Strong Revenue Growth but Slower Bookings
In a recent announcement, Uber Technologies Inc. reported its third-quarter earnings for 2024, which surpassed Wall Street's revenue expectations, though the company did miss projections for gross bookings. This mixed performance has led to a notable reaction in the stock market, with shares experiencing a decline of over 7% shortly after the results were released.
Uber's revenue for the quarter reached an impressive $11.19 billion, marking a substantial 20% increase from the $9.3 billion recorded in the same quarter last year. This figure also exceeded analysts' expectations, which had estimated revenue to be around $10.98 billion. However, when it came to gross bookings, which totaled $40.97 billion, the company fell short of the anticipated $41.25 billion. This dip in bookings growth is particularly concerning for investors, as it signals a slowdown in the company's core business, which has been a key driver of its success.
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CEO Dara Khosrowshahi highlighted the company's solid performance in its primary operations, emphasizing that Uber is in a "fortunate position" to invest organically in new products and capabilities that will enhance its platform in the long term. The company reported a net income of $2.6 billion, equating to $1.20 per share, a significant improvement from just $221 million, or 10 cents per share, a year prior. Notably, this net income includes a substantial pre-tax benefit of $1.7 billion from unrealized gains related to the reevaluation of its equity investments.
In terms of operational metrics, Uber completed 2.9 billion trips during the quarter, reflecting a 17% year-over-year increase. The company's monthly active platform consumers reached 161 million, up 13% from the previous year. While the mobility segment saw gross bookings rise to $21 billion, a 17% increase year-over-year, the delivery segment also reported strong growth, with gross bookings of $18.7 billion, up 16%. However, the freight business lagged slightly, reporting a modest 2% increase to $1.31 billion.
Looking ahead, Uber has forecasted its fourth-quarter gross bookings to range between $42.75 billion and $44.25 billion, which again falls short of Wall Street's expectations. Despite this, the company anticipates adjusted EBITDA between $1.78 billion and $1.88 billion, slightly above analysts' expectations.
Khosrowshahi addressed the future of Uber's mergers and acquisitions strategy, stating that the company is focusing on smaller, more strategic deals rather than pursuing larger, transformational acquisitions. This approach aligns with the company's vision to capitalize on suburban markets, where they see significant growth potential.
Overall, while Uber's third-quarter earnings reflect strong revenue growth and robust performance in key areas, the slower growth in bookings has raised concerns among investors. As Uber navigates these challenges, the focus will likely remain on enhancing user engagement and expanding its services to capture new market opportunities.
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