Uber Technologies Inc (NYSE:UBER, ETR:UT8) shares fell 6.6% on Tuesday morning after the ride-hailing and delivery giant signaled softer profit margins as it ramps up investment in growth initiatives, despite putting up stronger-than-expected third-quarter results.
Revenue rose 16% to $13.47 billion, topping Wall Street estimates of $13.27 billion, while earnings per share surged to $1.20 from $0.69 expected.
Adjusted EBITDA jumped 33% year over year to $2.26 billion, and gross bookings climbed 21% to $49.74 billion, ahead of expectations.
“Uber’s growth kicked into high gear this quarter — one of the largest trip-volume increases in our history,” said CEO Dara Khosrowshahi. “We’re leaning into AI, local commerce, and lifelong customer relationships.”
The company logged 3.5 billion trips in the quarter, up 22% from a year ago, with monthly active platform consumers increasing 17% to 189 million. Free cash flow came in at $2.2 billion, while operating income reached $1.1 billion.
Uber forecast fourth-quarter gross bookings between $52.25 billion and $53.75 billion, slightly above analyst expectations, and adjusted EBITDA of $2.41 billion to $2.51 billion, roughly in line with consensus.
Segment results showed steady growth across the board. Mobility gross bookings rose 20% to $25.1 billion, with adjusted EBITDA up 21% to $2.04 billion. Delivery remained a key growth engine, with gross bookings up 25% to $23.3 billion and adjusted EBITDA up 47% to $921 million. Freight revenue was flat year over year at about $1.3 billion.
Jefferies analysts said the results marked “another beat and raise,” reinforcing confidence in Uber’s ability to sustain mid-teens bookings growth and more than 20% EBITDA growth through 2027.
However, they noted a “slight moderation” in incremental profit margins.
“Incremental EBITDA margin contracted by roughly 150 basis points quarter over quarter,” Jefferies wrote, adding that investors were likely looking for margins to remain in the high single digits.
Uber said it expects to add roughly $30 billion in incremental gross bookings this year, driven by expanding engagement and international growth.
Despite the strong operational metrics, investors appeared concerned about the company’s lower incremental margins and the potential impact of affordability initiatives and market competition, pushing shares lower in early trading.