Uber posts record operating profit of $1.06 billion in Q3

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Uber posts record operating profit of $1.06 billion in Q3
31 Oct 2024


Uber Technologies has posted a record operating profit of $1.06 billion for the third quarter ending September 30, beating expectations.

The major milestone comes even as the company struggled with weaker-than-expected ride bookings and a modest outlook for the holiday season.

The firm's gross bookings, including ride hails, delivery orders, and driver and merchant earnings (excluding tips), stood at $41 billion for Q3 - slightly below Uber's own guidance range midpoint and Wall Street's forecast of $41.2 billion.


Q4 forecast and market response
Market reaction


For the ongoing quarter, Uber forecasts bookings between $42.75 billion and $44.25 billion, with the midpoint slightly below analysts' estimates of $43.7 billion.

The company's outlook range midpoint for fourth-quarter adjusted EBITDA also fell marginally short of expectations.

Following the announcements, Uber shares fell 6% in early trading while shares of its smaller rideshare competitor, Lyft Inc., also fell around 2%.


Expansion and diversification strategy
Growth initiatives


Uber has been aggressively investing in new areas within its ride-hailing and delivery businesses, both at home and abroad.

The company has added more modes of transport, including taxis, carpools, and shuttles to airports, on its platform.

It is also expanding services into suburbs around the world, reaching new customer segments with teen accounts.

New Uber Eats merchants like H Mart, Michaels, and JD Sports have also expanded the list of deliverable items beyond restaurant orders.


Future growth prospects and investor confidence
Strategic outlook


Uber CEO Dara Khosrowshahi emphasized on "huge opportunities to increase consumer penetration," from expansion into less dense markets to signs that fast, on-demand services are becoming a habit for more.

CFO Prashanth Mahendra-Rajah was confident about the company's performance, saying it "should give investors confidence in our ability to deliver on our 2026 commitments."

The firm has also found success this year with its Uber One program by providing discounts to college students in the US and Canada.


Uber One program and advertising business see substantial growth


Business expansion


The Uber One program has witnessed a massive surge in subscribers, with membership numbers jumping nearly 70% from a year ago to over 25 million.

Reportedly, these members spend over three times as much as non-members every month.

Uber's nascent advertising business also saw massive growth, with a nearly 80% year-over-year jump contributing to the adjusted earnings beat this quarter.