Uber released its Q4 2022 earnings report, revealing impressive growth in its core ride-hailing business with its “strongest quarter ever.” The company's Gross Bookings for the year reached $115 billion, an increase of 33% compared to last year's results.
While total bookings in the mobility sector jumped to $14.9 billion from $11.3 billion, gross bookings in the delivery business increased to $14.3 billion from $13.4 billion in the December quarter, and Gross freight bookings increased 42% to $1.5 billion.
The company reported a net income of $595 million for the quarter, of which unrealized gains on equity investments accounted for $756 million of the net profit.
Despite the pandemic's impact on the company's operations in 2020, Uber's Q4 results indicate a strong recovery in the industry. The company's CEO, Dara Khosrowshahi, expressed his optimism for the future in a press release, saying,
"We ended 2022 with our strongest quarter ever, with robust demand and record margins, “Our global scale and unique platform advantages position us well to accelerate this momentum into 2023.”
Dara Khosrowshahi also stated that the company anticipates an increase in the frequency of orders and trips because its efforts to recruit more drivers to its platform have produced a very healthy supply, noting that the business is eroding market share from rivals in both ride-sharing and deliveries.
Even though the company's Freight service unit had a difficult quarter due to anticipated headwinds, the company's advertising initiatives are progressing, exceeding a $500 million annual revenue run rate and an advertising base of more than 80% YoY to more than 315,000 small and large businesses. The CEO predicted that it would likely result in $1 billion in revenue for the business this year. According to the CFO, the company’s Ad business continues to perform better than set benchmarks.
In a prepared statement, Nelson Chai the CFO of Uber revealed that the company's growing profit margin resulted from its drive for innovation and capital allocation to high-growth business models where they have more substantial leverage. He said,
Our capital allocation approach prioritizes investments in attractive markets where we are positioned to win, with a focus on initiatives that strengthen our platform. These initiatives support our expanding profit margins by lowering our customer acquisition costs and increasing the lifetime value of consumers and earners
The ride-hailing giant recently rolled out new features, which included Upfront Fares and Upfront Destination, while on the call with analysts and Investors, the CEO said this is the company’s largest release ever and attributed the reduction in cancellations and a higher percentage of fulfillment rates to this new features.
The delivery business unit of the company also contributed to its strong earnings. In the statement, the company’s CEO said,
“Our Delivery business continued to show resilience, growing at a healthy rate while meaningfully expanding profitability and improving our category position in a majority of our large markets.”
On a constant-currency basis, the growth of delivery gross bookings picked up a little from Q3 and increased to 14% YoY overall, with balanced growth in the US & Canada (+14% YoY) and the rest of the globe (+15% YoY). The CEO added that the number of delivery trips, MAPCs, and orders all remained at or very close to all-time highs.
With the ongoing vaccination efforts and the gradual easing of pandemic-related restrictions, the company is optimistic about the future and believes it is well-positioned to capture demand for its services. The company’s executives stated that they anticipate adjusted to range from $660 million to $700 million for the first quarter of 2023 and gross bookings to increase by 20% to 24% year over year on a constant currency basis.
