In This Article:
Uber (NYSE:UBER) dipped in early trading after Q1 revenue and gross bookings came in just shy of Wall Street forecasts, even as profitability surged and guidance topped expectations.
In the quarter ended March, Uber's revenue climbed 13.8% year-over-year to $11.53 billion$90 million below the $11.62 billion consensusdriven by a 15% increase in mobility and an 18% rise in delivery, offset by a 2% drop in freight.
Gross bookings reached $42.8 billion, missing the $43.1 billion consensus as mobility bookings hit $21.2 billion (versus $21.5 billion expected) and delivery bookings came in at $20.4 billion (versus $20.2 billion). Trips grew 18% to 3.04 billion, underlining resilient demand despite mixed top-line results.
On the profitability front, adjusted EBITDA jumped 35% to $1.87 billion, topping the $1.84 billion estimate, while income from operations soared to $1.2 billion from $172 million a year ago. Free cash flow leapt 66% to $2.25 billion, underscoring CEO Dara Khosrowshahi's focus on disciplined cost control.
CFO Nelson Chai highlighted over $2 billion of quarterly free cash flow and said Uber is executing multiple levers in our control to generate industry-leading cash flow growth, as the company sticks to its multiyear financial durability plan.
Looking ahead, Uber forecast Q2 gross bookings of $45.75 billion to $47.25 billion (midpoint $46.50 billion), modestly above the $45.9 billion consensus, and adjusted EBITDA of $2.02 billion to $2.12 billion (midpoint $2.07 billion) versus the $2.05 billion outlook.
The guidance implies continued delivery of margin expansion and cash-flow strength, even as the rideshare market navigates regulatory headwinds and driver cost pressures.
Why it matters: While Uber's top-line misses highlight the challenges of sustaining rapid growth, the beat on EBITDA and robust free cash flow reinforce confidence in its path to durable profitability and capital return.
Investors will be watching Uber's Q2 performance and margin trajectory when the next earnings report arrives in late July, gauging whether the company can translate its cost controls and guidance into renewed share price momentum.
This article first appeared on GuruFocus.