Uber Technologies Inc. shares fell after the company posted a lower operating resultas expected in the third quarter and issued an adjusted earnings forecast for the current period that also fell short of analyst estimates.
The company announced in a statement Tuesday that its operating income for the quarter ended September 30 reached $1.11 billion. Analysts were expecting $1.62 billion, according to data compiled by Bloomberg. Chief Financial Officer Prashanth Mahendra-Rajah explained in a statement that this difference was partly due to undisclosed legal and regulatory matters. Adjusted earnings before interest, taxes, depreciation and amortization Ebitda came in at $2.26 billion, slightly below estimates.
Uber also announced that fourth-quarter adjusted Ebitda will be between $2.41 billion and $2.51 billion. The midpoint of this range is lower than the average analyst estimate of $2.49 billion. Uber shares fell 3.9% in pre-market trading in New York.
The results and economic outlook overshadowed an otherwise upbeat report, which included Uber’s biggest quarterly growth since the end of 2023. Customers requested more rides and deliveries than expected, a sign that the company’s efforts to offer a broader range of services in more geographic regions are paying off.
Total gross bookings — a key indicator that includes ride-sharing, delivery orders, and driver and merchant earnings, but not tips — grew 21% to $49.7 billion in the third quarter, beating analyst estimates. CEO Dara Khosrowshahi said travel growth in the United States accelerated due to greater adoption of low-cost offerings and less pressure from insurers, while strong summer tourism activity boosted international demand.
That led to a sharp increase in total ride volume during the third quarter, which Uber says is the largest increase in its history outside of the post-pandemic recovery. The company expects this momentum to continue as it enters its busiest period. Fourth-quarter order forecasts of between $52.25 billion and $53.75 billion also topped estimates, representing growth of between 18% and 22%, according to Bloomberg calculations.
Wall Street’s negative reaction to the results is reminiscent of the previous quarter, when investors were disappointed by the ride-sharing unit’s weak growth. The company, based in San Francisco, has been attracting clients from different economic strata and continues its international expansion.
These latest results could influence expectations for other ride-hailing and food delivery companies, as investors look closely for clues about the health of the American consumer. Both ride-sharing competitor Lyft Inc. and delivery rival DoorDash Inc. are scheduled to report results after the close of trading on Wednesday. Lyft shares also fell 2.8% in premarket trading, while DoorDash shares fell 1.3%.
Uber plans to change the way it reports its profitability starting in the first quarter of next year, moving from reporting adjusted Ebitda to adjusted operating income. It will also begin forecasting adjusted earnings per share when presenting its first-quarter guidance.
Mahendra-Rajah said the new format does not change the company’s prospects for the next three years. “We are well positioned to meet our long-term financial commitments, while making strategic investments to adequately fund growth initiatives,” he stated.
On Tuesday, Khosrowshahi publicly presented for the first time the six strategic areas Uber is focusing on for medium-term growth. These include expanding its ride-hailing and delivery businesses, creating a hybrid platform with autonomous and human-driven vehicles, offering various types of independent work, and developing generative artificial intelligence.
Uber has made public progress on these efforts, including signing more than a dozen collaboration agreements for autonomous vehicles, creating an AI-enabled labeling business for enterprises, and launching new digital tasks for drivers. The company began sharing details of its vision earlier this year, and even then, its comments were directed solely at employees.
Mahendra-Rajah said Uber has divested stakes worth about $1.4 billion of the $10.3 billion it has invested in other companies. The funds will go towards priorities such as launching more autonomous taxis globally.
