Uber, the popular ride-hailing and food delivery company, reported its first full-year profit since going public in 2019. The news sent the company’s stock soaring to an all-time high on Wednesday. Strong bookings in the final quarter of the year contributed to higher-than-expected profit and revenue, surpassing Wall Street’s forecasts.
Uber’s profitability in 2023 can be attributed to a combination of factors. Like its final year as a private company, Uber received significant investments that helped drive profits, amounting to $1 billion. However, the key distinction now is that Uber has begun generating money from its operations, marking an inflection point for the company, according to CEO Dara Khosrowshahi.
The COVID-19 pandemic presented significant challenges for Uber and other ride-sharing companies, as government-imposed lockdowns restricted movement and reduced demand for transportation services. However, Uber successfully mitigated the impact by focusing on cost reduction measures and developing its food-delivery division, which has now become a major source of revenue. In the fourth quarter, Uber’s ride-hailing service showed signs of recovery, while its food delivery segment continued to grow.
Uber’s delivery revenue increased by 6%, while the ride-share business saw a 34% surge in revenue.
Furthermore, the company experienced growth in its membership platform, Uber One, with approximately 19 million members across 25 countries. These members accounted for around 30% of the company’s mobility and delivery gross bookings, representing a significant year-over-year increase.
For the fourth quarter, Uber reported earnings of $1.43 billion, or 66 cents per share, surpassing Wall Street estimates. Analysts had predicted earnings of only 15 cents per share, according to Zacks Investment Research. In the same period the previous year, Uber earned $595 million, or 29 cents per share.
Total revenue for the year amounted to $9.94 billion, surpassing projections of $9.75 billion. Gross bookings also rose by 22% to $37.6 billion compared to the previous year.
Uber’s CEO, Dara Khosrowshahi, expressed optimism about the company’s performance, stating that their audiences were larger and more engaged than ever. He revealed that the platform powered an average of nearly 26 million daily trips in the previous year.
In a strategic move, Uber recently announced the closure of its alcohol delivery app, Drizly, by the end of March. The decision allows the company to focus on its core Uber Eats strategy, which aims to provide consumers with seamless access to a wide range of goods and services through a single app.
The news of Uber’s financial success led to a surge in its stock price, reaching an all-time high of $71.90 early on Wednesday. The company’s performance reflects its ability to adapt and thrive amidst challenging market conditions, as well as its efforts to diversify its offerings beyond traditional ride-hailing services.