Uber beats revenue targets on freight surge despite core ride-hailing slump

Uber generated $14.77 billion in revenue during the third quarter, a figure that surpassed analyst projections. This top-line growth was driven primarily by the freight division, where sales jumped 34% to $1.76 billion. The freight unit exceeded the StreetAccount consensus estimate of $1.49 billion, offsetting weaker performance in the company's other major segments.

The overall revenue increase represented a 10% rise from the $13.47 billion recorded in the same period last year. However, profitability took a sharp turn. Uber reported net income of $512 million, down 92% from the prior year. The previous year's figure had been inflated by a $4.9 billion benefit from a tax valuation release. Earnings per share came in at 25 cents, well below the 96 cents expected by analysts.

The core ride-hailing business, which serves as the company's primary mobility arm, saw revenue decline by 2% to $7.52 billion. This result missed the average estimate of $7.71 billion. The food delivery segment grew 23% to $5.49 billion, though it still trailed the $5.51 billion consensus forecast. Total bookings landed at $59.82 billion, roughly in line with the $59.83 billion average estimate.

CEO Dara Khosrowshahi attributed the softness in the mobility segment to external pressures in international markets. In prepared remarks, he stated that elevated fuel prices and tighter driver availability weighed on supply growth in several regions abroad. Uber is making targeted investments to strengthen driver supply in those areas.

The company is expanding its use of automated vehicles. It expects to have around 700 on its platform by the end of this year. This includes adding Amazon's Zoox and Motional robotaxis in Las Vegas this quarter. By the end of 2027, Uber plans to have over 2,000 automated vehicles available, split evenly between the United States and international markets.

Delivery operations are also growing through acquisitions of Delivery Hero in Germany and ezCater in the United States. Khosrowshahi noted that a recently expanded partnership with Costco in the U.S. is tracking ahead of expectations. The retailer is now one of Uber's top merchants in terms of gross bookings.

For the upcoming fourth quarter, Uber projects overall bookings of $64.5 billion at the mid-point of its forecast. This figure aligns with the average StreetAccount estimate of $64.26 billion.