Uber's Q1 revenue grows 14% as shares drop 6%

Uber Technologies reported a 14% increase in first-quarter revenue to US$11.53 billion, which missed analysts’ expectations of US$11.62 billion, according to data from LSEG.

Following the announcement, the company’s shares fell over 6% in premarket trading.

Despite the revenue shortfall, Uber anticipates gross bookings for the current quarter to be between US$45.75 billion and US$47.25 billion, slightly above Wall Street estimates of US$45.83 billion.

The company credits its performance to consistent demand in ride-hailing and food delivery services. This demand has been bolstered by rising business travel and stricter return-to-office policies.

In the first quarter, Uber’s ride-hailing division experienced a 15% revenue increase, while its delivery segment grew by 18%.

However, its freight division reported a 2% decline in sales. The company also indicated a potential 1.5% currency-related impact on gross bookings for the second quarter. The Mobility segment is expected to face a 3% impact due to a stronger US dollar.

For the second quarter, Uber projects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between US$2.02 billion and US$2.12 billion. This is close to analysts’ estimates of $2.04 billion.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Diversification strategy shows mixed sectoral growth amid industry maturation

Uber’s latest results highlight the company’s uneven growth across its diversified business segments, with delivery growing faster than its core ride-hailing business.

The 18% jump in delivery revenue outpaced the 15% growth in ride-hailing, while freight declined by 2%, revealing how different business units are responding to market conditions.

This divergence reflects broader patterns seen since Uber Eats began contributing significantly to gross bookings, representing 10% of bookings with $1.2 billion in Q2 2018 alone 1.

The stronger performance in food delivery suggests Uber’s multi-service strategy is providing important balance as the ride-hailing market shows signs of maturation in established markets.

Uber’s diversification approach stands in contrast to Lyft’s more focused business model, potentially explaining why Uber’s stock has soared 42% this year while Lyft has remained flat.