Uber Announces Massive $20 Billion Stock Buyback Program

Global ride-hailing and food delivery giant Uber announced a $20 billion stock buyback plan on Wednesday and forecast that its third-quarter gross bookings would exceed Wall Street expectations.  

Data shows Uber's Q2 revenue reached $12.7 billion, up 18% year-over-year, while gross bookings grew 17% to $46.8 billion. Total trips increased by 18% to 3.3 billion. The company expects Q3 gross bookings to be between $48.25 billion and $49.75 billion, surpassing analysts' estimates of $47.3 billion.  

In Q2, ride-hailing bookings came in at $23.8 billion, slightly below market expectations of $23.9 billion. However, its food delivery business performed strongly, with increased order frequency in the U.S., Australia, Canada, and Mexico.

Despite the strong earnings report, Uber's stock experienced significant pre-market volatility, initially plunging 6% before rebounding to a 2% gain. Investors are concerned about whether the company can sustain its high-growth trajectory as its North American market shows signs of peaking.  

Uber CEO Dara Khosrowshahi stated that the platform has onboarded numerous grocery and retail merchants and completed the acquisition of Turkish delivery app Trendyol Go at the end of Q2, which will help boost its business in Turkey.  

Uber revealed that its $9.99/month "Uber One" membership surged 60% year-over-year to 36 million in June, accounting for over one-third of total bookings.  

These high-value users are crucial for Uber, as they typically use both ride-hailing and food delivery services, generating more than three times the profit of single-service users.  

To accelerate membership growth, Uber launched a week-long promotional campaign in May, offering discounts across ride-hailing, food delivery, and grocery services, which resulted in the addition of 500,000 new members in just one week.  

Both Uber and its rival, Lyft, face investor pressure to prove they can maintain growth even as the North American ride-hailing market becomes increasingly saturated.  

Amid the hype around robotaxi concepts, Uber has opted for a capital-light expansion model by partnering with over 20 autonomous driving companies—including Lucid, Waymo, and Baidu—rather than developing its own technology like Waymo.  

The newly authorized $20 billion buyback, combined with the $7 billion plan announced earlier in 2024, brings Uber’s total repurchases for the year to $27 billion, underscoring management’s confidence in its cash flow and stock price.