Shares of Uber Technologies Inc. climbed more than 5% today after the company posted better-than-expected financial results for its fourth quarter ended Dec. 31.

Uber’s revenue grew 49% year-over-year, to $8.6 billion, more than the $8.49 million that analysts polled by Refinitiv had expected. The company’s adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, of $665 million also topped expectations. The consensus analyst estimate forecasted adjusted EBITDA of $620 million.

“We ended 2022 with our strongest quarter ever, with robust demand and record margins,” said Uber Chief Executive Officer Dara Khosrowshahi. “Our global scale and unique platform advantages position us well to accelerate this momentum into 2023.”

Uber’s fourth-quarter momentum was driven in significant part by its mobility business. The business generated revenue of $4.1 billion in the quarter after growing 82% year-over-year. Gross bookings, a metric that measures the total value of customer transactions made through Uber’s ride-hailing app, reached $14.9 billion.

Multiple factors contributed to the growth of Uber’s mobility business. Consumers took 2.1 billion trips during the last three months of 2022, 19% more than the same time a year earlier. Additionally, the installed base of Uber’s ride-hailing app grew 11% and now includes 131 million monthly active users.

To support the continued growth of its mobility business, Uber in late 2021 launched a membership program called Uber One. It enables subscribers to access discounts and other benefits in exchange for a fixed monthly fee. During the fourth quarter, the Uber One user base nearly doubled year-over-year to about 12 million members. 

Uber’s top line also benefited from the continued growth of its food delivery business. The unit’s sales increased 21% year-over-year, to $2.9 billion. 

Uber’s freight business, which helps companies such as retailers book delivery trucks, generated revenue of $1.5 billion after achieving 43% year-over-year growth. The business also provides supply chain monitoring software. Its software portfolio is based partly on technology from Transplace Inc., a logistics management provider that Uber acquired in 2021 for $2.25 billion.

Uber’s nascent advertising unit also contributed to its better-than-expected quarterly results. The unit, which launched in October, provides a service that can deliver ads to passengers during ride-hailing trips. Uber disclosed today that the service’s annualized revenue run rate exceeded $500 million in the fourth quarter. 

“In 2022, we significantly exceeded our profitability outlook, with an incremental margin of 10%,” said Uber Chief Financial Officer Nelson Chai. “Our outlook for a gross bookings and adjusted EBITDA step-up in Q1 builds on that progress, and sets us up for yet another record year.”

Uber expects to grow gross bookings by up to 24% in the current quarter, to between $31 billion and $32 billion. The company’s guidance projects adjusted EBITDA of $660 million to $700 million. 

Photo: Uber