Uber's stock falls as record demand for rides fails to deliver the profit investors expected

By William Gavin and Tomi Kilgore

CEO Dara Khosrowshahi suggests worries about robotaxi competition are overblown, saying AV introductions from Waymo and Tesla are actually a 'growth driver'

Uber's stock dropped toward a 10-month low Wednesday as a quarterly profit miss offset record user results.

Shares of Uber Technologies sank toward a 10-month low on Wednesday after the ride-hailing and food-delivery service missed fourth-quarter profit expectations and provided a downbeat outlook.

The disappointing earnings came despite revenue rising above forecasts and another record quarter for monthly users and trips completed.

Net income dropped to $296 million from $6.88 billion a year ago, while adjusted earnings per share, which excludes nonrecurring items such as revaluations of Uber's (UBER) equity investments, rose to 71 cents from 56 cents. That missed the average analyst EPS estimate compiled by FactSet of 79 cents.

The company said it expects first-quarter adjusted EPS of 65 cents to 72 cents, with that entire range coming in below the FactSet consensus of 75 cents.

Uber's stock dropped 5% in recent morning trading, marking the sixth straight quarter in which shares traded lower after earnings.

The stock had already tumbled 22.1% from its Oct. 6, 2025, record close of $100.10 through Tuesday, amid worries about the growing threat from robotaxi services from Tesla (TSLA) and Alphabet's (GOOGL) Waymo.

Uber CEO Dara Khosrowshahi sees things differently, however.

Khosrowshahi looked to dispel those worries, saying on a call with investors that the introduction of autonomous-vehicle offerings from Waymo, Tesla and others is actually an "overall growth driver" for the markets where Uber operates, such as Atlanta. On a revenue basis, he added, AVs are a "net positive for the ecosystem in terms of margins."

Uber has spent heavily on AVs, seeing itself as potentially the biggest facilitator of robotaxi trips around the world by 2029 through its partnerships with at least two dozen companies. It plans to launch services in at least 15 cities by the end of this year.

Khosrowshahi said that Uber will have a "healthy" financing system, likening its business model to Marriott International's (MAR) franchise model under which it licenses its brand to hotel owners.

"You will see the same thing in the future on fleets. We're very, very early on that path, but we're quite confident we're going to get there," Khosrowshahi said.

Concerns over the profit miss and AV rivals appear to have overshadowed an otherwise strong fourth-quarter performance for Uber.

Revenue grew 20.1% to $14.37 billion, topping the FactSet revenue consensus of $14.32 billion, as gross bookings jumped 22.5% to $54.14 billion to surpass expectations of $53.14 billion.

For the first quarter, the company expects gross bookings of $52 billion to $53.5 billion, above the FactSet consensus of $51.39 billion.

Ride-hailing was still the biggest part of Uber's business, as revenue for the latest quarter increased 18.7% to $8.2 billion and made up 57.1% of total revenue. Revenue for the freight business was little changed at $1.27 billion. But delivery was the fastest-growing business, as revenue surged 30% to $4.89 billion.

There are a few reasons for that, according to Khosrowshahi, who pointed to Uber's push to offer a wider selection of products and expand to new markets.

Uber has also been growing "significantly faster" in less dense areas, and more people are paying for Uber One, a membership program that offers discounts, Khosrowshahi said. Almost 50% of Uber's overall gross bookings come from the more than 46 million people who subscribe to Uber's membership program, according to the company.

That is "going to position us to continue to grow top line at very healthy rates and increase our margins at the same time," Khosrowshahi said on the call, according to a transcript.

Monthly active platform customers increased 18.1% to a record 202 million, above expectations for 198.3 million, and the number of trips climbed 22.3% to a record 3.75 billion, while analysts were modeling 3.71 billion.

Meanwhile, Uber's finance chief, Prashanth Mahendra-Rajah, announced Wednesday that he will leave the company on Feb. 16 for a new opportunity.

He will be succeeded by Balaji Krishnamurthy, who has served in a variety of executive roles at Uber, including vice president of strategic finance and investor relations. The incoming CFO is also on the board of Waabi, a driverless-truck company that recently raised $1 billion and plans to deploy its robotaxis on Uber's platform.

-William Gavin -Tomi Kilgore

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02-04-26 1100ET