Uber Stock: Why Shares Dropped Despite Crushing Earnings Estimates

TLDR

• Uber reported Q3 EPS of $1.20, crushing analyst estimates of $0.69, with revenue rising 20% to $13.47 billion
• The company’s Uber One membership program is driving higher cross-platform usage, with multi-service users spending three times more than single-service customers
• Delivery segment sales jumped 29% in Q3, outpacing the 20% growth in mobility revenue as demand for food and grocery delivery increased
• Uber forecasts Q4 gross bookings of $52.25-$53.75 billion, slightly above expectations, but adjusted EBITDA guidance of $2.41-$2.51 billion fell short of the $2.48 billion consensus
• Shares dropped over 2% in premarket trading despite the strong Q3 results, as investors focused on the weaker-than-expected earnings guidance for the current quarter

Uber reported third-quarter results that sailed past Wall Street’s expectations. But the stock still took a hit in early trading.

The ride-hailing company posted earnings per share of $1.20, nearly doubling analyst estimates of $0.69. Revenue climbed 20% year-over-year to $13.47 billion, beating the $13.28 billion consensus.

Gross bookings reached $49.74 billion in the quarter ended September 30. Analysts had expected $48.73 billion.

The company processed 3.5 billion trips during the quarter. That’s a 22% jump from the same period last year.

Uber Technologies, Inc., UBER

Adjusted EBITDA rose 33% to $2.3 billion. The margin improved to 4.5% of gross bookings, up from 4.1% a year earlier.

CEO Dara Khosrowshahi pointed to the return of students and stricter office mandates as key drivers. These factors boosted urban commutes during the quarter.

But the real story is what’s happening with Uber One. The membership program is changing how customers interact with the platform.

Membership Program Drives Cross-Platform Usage

Uber One members are booking more food and grocery deliveries. This is expanding the company’s reach beyond its core ride-hailing business.

The delivery segment posted 29% sales growth in the July-September quarter. That outpaced the 20% increase in mobility revenue.

The freight division saw flat growth during the same period.

Khosrowshahi shared some eye-opening numbers about customer behavior. Users who tap into multiple Uber services show 35% higher retention rates.

These multi-service customers spend three times more than single-service users. Yet only about 20% of active users in markets with both rides and delivery use them together.

Top-performing countries are already exceeding that 20% threshold. The company sees room for growth in other markets.

Monthly active platform consumers grew 17% year-over-year. Trips per consumer rose 4% during the quarter.

Q4 Guidance Disappoints Investors

Uber forecast fourth-quarter gross bookings between $52.25 billion and $53.75 billion. The midpoint sits above the analyst consensus of $52 billion.

But the adjusted EBITDA projection missed expectations. The company expects $2.41 billion to $2.51 billion for the current quarter.

Analysts were looking for $2.48 billion. The midpoint of Uber’s range falls short of that mark.

Shares dropped more than 2% in premarket trading Tuesday. The decline came despite the strong third-quarter performance.

The stock had gained about 65% year-to-date before the earnings release. That rally reflected confidence in Uber’s market position.

The company plans to shift its reporting approach next year. Starting with Q1 2026 guidance, Uber will replace adjusted EBITDA forecasts with adjusted profit projections.

The CEO highlighted investments in customer relationships and local commerce strategy. He also pointed to AI and autonomous vehicle technology as future growth drivers.

Uber is entering the holiday season with momentum in its delivery business. The Q4 forecast suggests management expects that trend to continue through year-end.

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