Uber Hammered on Gross Bookings Miss

Uber’s third-quarter earnings report painted a mixed picture, reflecting both areas of operational success and potential challenges. While the company exceeded expectations for earnings per share and revenue, underlying growth metrics, particularly Gross Bookings, fell short of investor and analyst forecasts, bringing fresh concerns about the durability of Uber’s growth trajectory.

In Q3, Uber recorded a revenue increase to $11.19 billion, modestly outpacing projections. However, the company’s Gross Bookings, a core measure of demand, reached $41.0 billion, falling slightly below expectations and growing 20 percent on a constant currency basis—a marginal slowdown from 21 percent last quarter.

While this deceleration may appear slight, the trend direction combined with guidance for Q4 Gross Bookings growth at an anticipated midpoint of 18 percent year-over-year is creating apprehension about the consistency of Uber’s demand trajectory.

Much of the spotlight has fallen on Uber’s Mobility segment, which contributed 51 percent of total Gross Bookings for Q3. Within this segment, bookings growth decelerated to 24 percent, down from 27 percent in Q2.

The Delivery segment showed more resilience, maintaining a steady 17 percent growth, but a slowdown in Mobility is especially concerning for investors given its significant share of total bookings. This trend has also impacted Lyft, a direct competitor, as its stock dipped in response to Uber’s report, with Lyft’s own earnings announcement due next week.

Despite these concerns, Uber’s report held a few bright spots, particularly in terms of profitability. The adjusted EBITDA margin expanded by one percentage point to reach 4.1 percent, supported by an impressive 80 percent year-over-year increase in Uber’s high-margin advertising business.

For Q4, Uber’s guidance suggests that its adjusted EBITDA margin will rise to 4.2 percent, indicating incremental progress in operating efficiency even as the top-line growth moderates.

CEO Dara Khosrowshahi also emphasized the potential for further expansion, particularly within the U.S., where he noted that nearly half of the population resides in areas lacking reliable on-demand transportation options. By targeting suburban markets and optimizing pricing strategies for longer distances, Uber aims to tap into this under-served market, extending its growth runway.

In sum, Uber’s third-quarter results underline the resilience of its core businesses, yet the softness in Gross Bookings relative to expectations is shifting growth projections slightly downward. As Uber navigates an environment of tightening macroeconomic conditions, the market is closely watching to see if the company’s strategic initiatives can maintain momentum in the quarters ahead.