Uber (NYSE:UBER) Delivers Impressive Q4, Stock Soars

Jabin Bastian /
2022/02/09 4:14 pm EST

Ride sharing and on demand delivery service Uber (NYSE: UBER) announced better-than-expected results in the Q4 FY2021 quarter, with revenue up 159% year on year to $5.77 billion. Uber made a GAAP profit of $879 million, improving on its loss of $962 million, in the same quarter last year. The company will provide guidance in its earnings call.

Is now the time to buy Uber? Access our full analysis of the earnings results here, it's free.

Uber (UBER) Q4 FY2021 Highlights:

  • Revenue: $5.77 billion vs analyst estimates of $5.35 billion (7.85% beat)
  • EPS (GAAP): $0.44
  • Free cash flow was negative $187 million, down from positive free cash flow of $524 million in previous quarter
  • Gross Margin (GAAP): 46.2%, down from 61.2% same quarter last year
  • Monthly Active Platform Consumers: 118 million, up 25 million year on year
  • ARPU: $48.96

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.

The 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 Growth

Uber's revenue growth over the last three years has been strong, averaging 25.3% annually. Uber's revenue took a hit when the pandemic first hit, but it has since rebounded strongly, as you can see below.

Uber Total Revenue

This quarter, Uber beat analyst estimates and reported a very impressive 159% year on year revenue growth.

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Usage Growth

As a gig economy marketplace, Uber generates revenue growth by a combination of the volume of services users order and how much commission it earns.

Over the last two years the number of Uber's paying users, a key usage metric for the company, grew 9.51% annually to 118 million users. This is a decent growth for a consumer internet company and it shows that customers are coming back after the pandemic.

Uber Monthly Active Platform Consumers

In Q4 the company added 25 million paying users, translating to a 26.8% growth year on year.

Key Takeaways from Uber's Q4 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Uber’s balance sheet, but we note that with a market capitalization of $74.3 billion and more than $4.29 billion in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the exceptional user growth Uber delivered this quarter. And we were also excited to see that it outperformed Wall St’s revenue expectations. Zooming out, we think this was a fantastic quarter that should have shareholders cheering. The company is up 6.84% on the results and currently trades at $42.92 per share.

Uber may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.