Uber Q4 2025

Uber Technologies (UBER) fourth-quarter and full-year 2025 results were a mixed bag. One one hand they, delivered a record-breaking performance that saw the company accelerate across nearly every key metric but on the other, the record was a bit shy of estimates and guidance was a bit soft as well. Due to that, the market reaction was negative, impacted by earnings, the departure of a key executive and technical changes to guidance.

Earnings Performance vs. Expectations

Uber’s Q4 was a story of top-line acceleration. Gross Bookings reached $54.1 billion, representing a 22% year-over-year (YoY) increase, which came in above the high end of the company’s own guidance range. This was the second consecutive quarter of accelerating growth.

Key Financial Highlights

• Trips: 3.75 billion in the quarter (+22% YoY), starting to approach a 15 billion annual run-rate in trips.
• Revenue: $14.4 billion (+20% YoY) and right on top of analyst expectations.
• Adjusted EBITDA: Record $2.5 billion (+35% YoY), with a margin of 4.6% of Gross Bookings.
• Non-GAAP EPS: $0.71, beating the prior year’s $0.56 but below the $0.79 the market expected.
• Free Cash Flow (FCF): Record $2.8 billion for the quarter. For the full year 2025, Uber generated a massive $9.8 billion in FCF, a 42% increase from 2024.

The company effectively achieved its winner-take-most status in the gig economy, scaling its user base to 202 million monthly active platform consumers.

Guidance and Market Reaction: Why the Stock Softened

While the results were objectively strong albeit trailing expectations in certain metrics, the stock faced pressure following the release. Several factors contributed to the lukewarm immediate reaction:

The CFO Transition

The first headwind was the announcement that CFO Prashanth Mahendra-Rajah would step down effective February 16, 2026. While Uber moved quickly to appoint Balaji Krishnamurthy (formerly VP of Finance) as the successor, executive turnover, especially a CFO leaving for a new opportunity during a period of high growth, often creates short-term uncertainty for investors.

UK Accounting Headwinds

Uber revealed a mandatory shift in its UK business model. Starting January 2026, following a tax law ruling, the company will transition to an agency model outside of London. This will reclassify driver payments as contra-revenue, which is expected to reduce reported Mobility revenue margin by 350 basis points in 2026. While this has zero impact on profitability, headline revenue numbers will appear lower, which can spook algorithms and casual observers.

Q1 2026 Outlook

Uber provided Q1 guidance that, while healthy, reflected a slight sequential deceleration in growth rates compared to the red-hot Q4:

• Gross Bookings: $52.0B – $53.5B (17%–21% growth). That might mean that the analyst expectations of 19% growth on the revenue side might not be met.
• Non-GAAP EPS: $0.65 – $0.72 which is below the $0.73 the market expected.
• Adjusted EBITDA: $2.37B – $2.47B versus expectations of $2.46B.

Overall, the outlook is fine and shows solid growth but the market was expecting more sending the stock down post earnings report.

The Barbell Strategy: What’s Going Well

Uber’s CEO, Dara Khosrowshahi, described their current strategy as a barbell, balancing growth at both the high and low ends of the market.

Winning Segments

• Mobility: U.S. growth accelerated for the second straight quarter. Additionally, the company is seeing massive success in non-UberX products like Uber Moto and Uber Black, both of which grew trips by ~40% in 2025.
• Delivery: Surpassed a $100 billion annual run-rate for the first time. Grocery and Retail (G&R) are accelerating, with U.S. Retail Gross Bookings up 300% over the Black Friday weekend.
• Advertising: This has become a high-margin juggernaut, generating over $2 billion in annualized revenue (+50% YoY). Advertising now represents 2% of Delivery Gross Bookings.
• Uber One: The membership program hit 46 million members, with these users now accounting for 35% of U.S. Mobility bookings.

Areas of Concern

• The Long Tail Challenge: While top cities are profitable, Uber is investing heavily to capture the long tail of smaller towns and suburbs. These areas require different supply dynamics and can be more expensive spots to acquire customers.
• Equity Volatility: Uber’s GAAP net income remains swingy due to its large equity stakes in companies like Didi and Grab. A $1.6 billion net pre-tax headwind from revaluations hit the GAAP bottom line this quarter.

Preparing for the Autonomous Future

A massive portion of the prepared remarks was dedicated to debunking misconceptions about Autonomous Vehicles (AVs). Uber is positioning itself as the essential facilitator of an AV future rather than a victim of it.

The Hybrid Network Advantage

Uber argued that fixed-supply networks (companies that only own AVs) cannot handle the extreme peaks and troughs of rideshare demand. Uber’s hybrid model, using human drivers to handle demand spikes and AVs for base load supply, achieved 30% higher vehicle utilization in Austin and Atlanta compared to 1P (first-party) AV deployments in other markets. The fact that Uber is a verb sets them up well for a future world where people are looking for a ride and don’t really care to download another first party app to book a specific car.

The 2026/2029 Roadmap

• By the end of 2026, Uber expects to facilitate AV trips in 15 cities globally.
• By 2029, the company intends to be the largest facilitator of AV trips in the world.
• Strategic Partnerships: They are working with Waymo, NVIDIA (for data collection), Waabi (25,000 robotaxis committed), AVRide and Lucid to ensure they have the hardware and software needed to dominate the space.

Management Q&A: Key Analyst Topics

The conference call featured analysts from Goldman Sachs, Morgan Stanley, and JPMorgan focusing on three main pillars:

• U.S. Acceleration: Analysts questioned why the U.S. market is accelerating at such a large scale. Management pointed to stable pricing (lower insurance costs are finally providing leverage) and the Reserve product bringing in more suburban users.
• AV Competitive Threats: When asked about Tesla or Waymo going 1P (direct-to-consumer), Dara Khosrowshahi reiterated that utilization is the game in AVs. A vehicle on Uber is busier and thus more profitable for the owner than a vehicle on a stand-alone app. That is the case right now but it’s all about building scale. If those 1st party apps can build scale then Uber could be in trouble as long term an AV with no driver costs might be cheaper than what Uber currently provides.
• Advertising Runway: Incoming CFO Balaji Krishnamurthy noted that the 2% penetration in Delivery is just the beginning. As they move into sponsored items in grocery and retail, the ceiling for ad revenue is much higher than previously forecasted.

Valuation: Is the Stock a Buy?

Uber ended 2025 with an impressive $9.8 billion in annual Free Cash Flow.

The Bull Case

With a $20 billion share repurchase program underway (having already exhausted its first $7 billion program), Uber is aggressively returning capital. The company is trading at a roughly 6.5% FCF yield based on 25 actuals and is expected to grow free cash flow by around 10% next year. For a company growing Gross Bookings at 20%+ and EBITDA at 35%, this is a compelling valuation for a marquee platform.

The Bear Case

The AV overhang remains. Investors are still nervous that a single tech giant (like Tesla or Waymo) could eventually cut Uber out of the loop. Additionally, the change in CFO and the UK tax headwinds provide just enough uncertainty to keep the stock from breaking out to all-time highs immediately.

Verdict

Uber has finally flipped the switch to be a free-cash-flow machine. The 2025 results prove that Uber can grow profitably even at massive scale. At current prices, UBER remains a Buy for long-term investors who believe in the management’s argument that they are the inevitable platform for the autonomous future. The recent price dip following the CFO news is likely a gift for those looking to build a position in a generational tech compounder. This is a company that could be be generating $20B in free cash flow by 2030 its current growth trajectory trading at a $150B market cap.

The slight misses aren’t a huge issue in my mind but a sign that management is investing in top-line growth by driving more aggressive pricing for user acquisition/retention. However, this will need to be watched closely to see if any of the new 1st party AV players are having a longer term impact on bottom line growth.

I don’t currently own UBER but will be looking at it closely and if the current market correction continues and Uber drops into the low 60s where it traded within the last 52 weeks, it’d be a buy for me for sure.

Disclaimer: I may be long other stocks mentioned in this article in the near future. This article is for informational purposes only and does not constitute financial advice. Investors should perform their own due diligence or consult with a financial advisor before making any investment decisions.