Uber Sets Profit Record As Lyft And DoorDash Keep Losing Money

Uber turned a profit last year for the first time in its five-year history as a public company, the ride-hailing giant revealed in its Wednesday morning earnings report, as Uber widens the distance between it and long-time rivals Lyft and DoorDash.

KEY FACTS

Uber raked in $1.9 billion in profit last year, a remarkable recovery from 2022’s $9.1 billion loss, registering record revenues of $37.3 billion thanks to $19.8 billion in its core ride-hailing unit and $12.2 billion from Uber Eats.

The company’s fourth-quarter results and guidance were similarly strong: Its $9.9 billion in sales and $0.66 profit per share topped analyst forecasts and set quarterly records for the top and bottom line, while its 2024 first-quarter projections for $37 billion to $38.5 billion in gross bookings and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.26 billion to $1.34 billion topped expectations.

Though the $1.3 billion midpoint of this guidance would make Q1 2024 Uber’s best-ever quarter by EBITDA, that would mark Uber’s weakest quarter-over-quarter earnings growth since 2021.

Shares of Uber dipped 2% to $68 in morning trading, but remain up more than 15% year-to-date and about 100% over the last 12 months.

SURPRISING FACT

This was the 10th consecutive quarter that Uber topped the high end of its earnings guidance, according to JPMorgan analyst Doug Anmuth.

KEY BACKGROUND

Uber began trading in 2019 via a much-hyped initial public offering, first scoring a $100 billion valuation in 2021. But Wall Street quickly turned on Uber and other cash-bleeding businesses as macroeconomic conditions shifted, and Uber’s cash losses mounted to a whopping $9 billion from 2019 to 2021. Uber’s market capitalization dipped as low as about $40 billion in 2022, but sat at a robust $140 billion Wednesday as the company finally got in the black, finally silencing skeptics about Uber’s ability to ever turn a profit. Shares of Uber hit an all-time high of nearly $71 on Tuesday.

CONTRA

The last few months have been far less kind to Uber’s biggest foes. Lyft, Uber’s top competitor in ride hailing, and DoorDash, Uber’s top rival in food delivery, have flailed on the stock market as Uber surged. Lyft’s $5 billion market value is about 75% below its peak of over $20 billion set in 2021 and DoorDash’s $45 billion valuation is about 45% below its 2021 high of over $80 billion. Lyft reported a more than $300 million net loss and DoorDash a more than $400 million loss for 2023’s first three quarters, far worse than Uber’s $458 million profit.

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