Uber Jumps as Ride-Hailing Returns, Food Business Makes Profit

Uber stock (NYSE:UBER) traded 5.7% higher in premarket Thursday after the ride-hailing company reported its second operating profit for a quarter while its food delivery business delivered its maiden profit at a basic operating level.

The company reported the most active users in its history at a time when Covid-related disruptions led rival Lyft (NASDAQ:LYFT) to report a quarterly drop in ridership. Monthly active platform consumers reached 118 million, up 27% year-on-year, a metric also helped by higher number of airports ramping up operations after the pandemic. Airport rides are among the most profitable routes for Uber.

After some impact on the business in late December, CEO Dara Khosrowshahi said mobility is starting to bounce back with gross bookings up 25% month-on-month in the most recent week. However, the company’s forecasts for the current quarter were below market expectations, seeing revenue only at $26 billion rather than $27.5 billion, and adjusted EBITDA around $115 million, rather than the $151 million consensus.

Gross bookings in the fourth quarter grew 51% year-over-year to nearly $26 billion, split into over $11 billion from mobility and more than $13 billion from delivery. Mobility gross bookings approached pre-pandemic levels, the company said. The company also has a freight business where revenue topped $1 billion in the fourth quarter.

Trips during the quarter grew 23% to 1.8 billion, or around 19 million trips per day, compared to 18 million trips daily in the third quarter.

Revenue in the key mobility business jumped 55% to $2.3 billion. Higher volumes offset fatter driver incentives and helped deliver a better EBITDA margin on adjusted basis.

Delivery revenue rose 78% to $2.4 billion. The company cut back on incentives in the business, that along with higher volumes, helped it report its first adjusted operating profit.

Total revenue grew 83% to $5.8 billion.

Net income in the quarter was $892 million, reflecting one-off unrealized gains from stakes in Grab Holdings (NASDAQ:GRAB) and self-driving company Aurora Innovation (NASDAQ:AUR), both of which have fallen sharply since the end of the last quarter.