$Uber(UBER)$ $Invesco QQQ Trust(QQQ)$
Uber announced impressive results for the fourth quarter of 2022, boasting a record-breaking performance in mobility and exceeding Wallstreet’s expectations in terms of EBITDA!
4Q Earnings summary
Uber recorded $30.7 billion in gross bookings (GB), a year-over-year increase of 26% on a constant currency basis. This is a slightly slower growth compared to the 32% growth seen in the previous quarter, but nonetheless largely in line with expectations and at the higher end of the company's guidance of $30-$31 billion.
Record Mobility Gross Bookings!
Mobility came in at $14.9 billion, representing a 37% year-over-year increase in gross bookings on a constant currency basis. Mobility Monthly Active Platform Consumers (MPAC) exceeding 100 million (17% y/y) and trips up 24% y/y. The number of trips per MAPC increased to 5.4 per month, compared to 5 at the end of 2021. Additionally, Uber saw all-time highs in active mobility drivers and noted that its new upfront pricing display has had strong traction. This trend has continued into January 2023. This growth has helped the company solidify Uber position in the Mobility market globally, particularly in the United States where its position is now at its highest point in six years.
Uber's alternative mobility portfolio (such as reserve, shared rides, micro-mobility, car rentals, and car-sharing) also saw strong growth, contributing $6B of annualized GBs, or approximately 10% of total mobility GBs.
Delivery: Steady Pom Pi Pi amid macro challenges
Delivery reached $14.3 billion, growing steadily at 14% year-over-year on a constant currency basis. Despite facing macroeconomic challenges, Uber's Delivery segment has remained resilient and even accelerated slightly from its growth in the previous quarter. The company has also improved its position in the Delivery market in many of its major markets.
Uber is starting to reap the benefits of its scale across markets and will continue to increase its market share compared to smaller, less established players, especially given that its One service has 12 million members and accounts for 40% of Delivery gross bookings in the US.
Disciplined Cost Control
4Q EBITDA of $665 million exceeded the high end of its guidance ($600-$630 million) due to stronger than expected margins in both Mobility (6.8%) and Delivery (1.7%). Uber has demonstrated a strong commitment to cost control, which contributed to the positive EBITDA results!
Strong 1Q23 guidance
Uber has guided that its first quarter gross bookings to be between $31B-$32B, which is a 20% to 24% increase year-over-year, slightly below consensus estimate. However, Uber's guidance for first quarter adjusted EBITDA of $660M-$700M is approximately 10% higher than the consensus estimates of $616M. Additionally, Uber is expected to achieve its first quarterly GAAP operating profitability in 2023, outpacing other on-demand players!
Final thoughts
Uber’s strong year-over-year growth, high profitability in Mobility, improvement in Delivery, and focus on profits and free cash flow evident in the numbers are all positive signs for investors. Overall, I find these strong results and positive outlook make Uber shine like a diamond amid the Tech Winter downcycle!
As usual, I am only sharing the company's result and my thoughts about it. Please do not take it as trading advice and do your carefuldue diligence before investing.
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