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Ride sharing and on demand delivery service Uber (NYSE: UBER) reported results in line with analysts' expectations in Q1 CY2024, with revenue up 14.8% year on year to $10.13 billion. It made a GAAP loss of $0.32 per share, down from its loss of $0.08 per share in the same quarter last year.
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Uber (UBER) Q1 CY2024 Highlights:
- Revenue: $10.13 billion vs analyst estimates of $10.09 billion (small beat)
- Bookings: $37.7 billion at the midpoint vs analyst estimates of $38.0 billion (0.8% miss)
- EPS: -$0.32 vs analyst estimates of $0.22 (-$0.54 miss)
- Q2 2024 bookings guidance: $39.5 billion at the midpoint vs analyst estimates of $40.1 billion (1.5% miss)
- Gross Margin (GAAP): 39.1%, up from 33.1% in the same quarter last year
- Free Cash Flow of $1.36 billion, up 77% from the previous quarter
- Monthly Active Platform Consumers: 149 million, up 19 million year on year
- Market Capitalization: $146.6 billion
Born out of a winter night thought: "What if you could request a ride from your phone?" Uber (NYSE: UBER) operates a global network of on demand services, most prominently ride hailing and food delivery, and freight.
Gig EconomyThe iPhone changed the world, ushering in the era of the “always-on” internet and “on-demand” services - anything someone could want is just a few taps away. Likewise, the gig economy sprang up in a similar fashion, with a proliferation of tech-enabled freelance labor marketplaces, which work hand and hand with many on demand services. Individuals can now work on demand too. What began with tech enabled platforms that aggregated riders and drivers has expanded over the past decade to include food delivery, groceries, and now even a plumber or graphic designer are all just a few taps away.
Sales GrowthUber's revenue growth over the last three years has been exceptional, averaging 59% annually. This quarter, Uber reported mediocre 14.8% year-on-year revenue growth, in line with analysts' expectations.
Ahead of the earnings results, analysts were projecting sales to grow 17.1% over the next 12 months.
Usage Growth As a gig economy marketplace, Uber generates revenue growth by expanding the number of services on its platform (e.g. rides, deliveries, freelance jobs) and raising the commission fee from each service provided.
Over the last two years, Uber's users, a key performance metric for the company, grew 14.3% annually to 149 million. This is solid growth for a consumer internet company.
In Q1, Uber added 19 million users, translating into 14.6% year-on-year growth.
Revenue Per UserAverage revenue per user (ARPU) is a critical metric to track for consumer internet businesses like Uber because it measures how much the company earns in transaction fees from each user. This number also informs us about Uber's take rate, which represents its pricing leverage over the ecosystem, or "cut" from each transaction.
Uber's ARPU growth has been exceptional over the last two years, averaging 21.2%. The company's ability to increase prices while growing its users demonstrates its platform's value, as its users are spending significantly more than last year. This quarter, ARPU grew 0.2% year on year to $67.99 per user.
Key Takeaways from Uber's Q1 ResultsIt was great to see Uber increase its number of users this quarter. On the other hand, it missed on bookings and revenue growth regrettably stalled. Looking ahead, bookings guidance for next quarter was below expectations. Zooming out, we think this was a tough quarter, showing that topline performance is worse than Wall Street is modeling. The stock is down 7.6% after reporting, trading at $65.1 per share.