Uber (UBER, Financial) reported mixed first-quarter 2025 results, exceeding EPS and adjusted EBITDA expectations but slightly missing on Gross Bookings. The shortfall in Gross Bookings was primarily due to Mobility's growth underperforming at +20% in constant currency. Despite this, disciplined cost management and improved operating leverage boosted profitability. Uber's Q2 guidance for Gross Bookings ($45.75-$47.25 billion) and adjusted EBITDA ($2.02-$2.12 billion) indicates substantial year-over-year growth but aligns with expectations, leading to investor disappointment after a 30% stock surge last month.
- Mobility Gross Bookings growth remains stable at 16-20% (cc) over the past four quarters, driven by strong demand in urban markets, particularly in the U.S. and Europe. Delivery Gross Bookings grew 19% (cc) in Q1, following 18% and 17% growth in Q4 and Q3, respectively. A 14% increase in Monthly Active Platform Users (MAPCs) and Uber Eats advertising expansion supported this growth. However, competition from DoorDash (DASH, Financial) is impacting growth.
- Uber's profitability is improving, with adjusted EBITDA rising 35% year-over-year to $1.9 billion. This growth is supported by Mobility's high incremental margins (around 40%) and better Delivery unit economics. Adjusted EBITDA per trip improved by 15% year-over-year. Cost efficiencies, such as optimized driver incentives and reduced corporate overhead, are further enhancing margins and profits.
- Future investments in robotaxis, estimated at $200-$300 million annually through 2027, may slightly impact EBITDA growth. However, Uber's partnership-driven robotaxi strategy avoids the massive R&D costs faced by competitors like Tesla (TSLA, Financial). Collaborations with Alphabet's (GOOG, Financial) Waymo and Cruise are set to expand autonomous rides in Austin and Phoenix and integrate driverless vehicles by 2026, positioning Uber for robust long-term growth.
Uber's mixed Q1 results and in-line Q2 guidance disappointed investors expecting a more optimistic outlook after the stock's recent rise. Nevertheless, Uber’s robotaxi strategy, supported by partnerships with Waymo, Cruise, and BYD, presents a promising growth opportunity, potentially unlocking significant value by 2027-2028, contingent on successful execution and regulatory compliance.
