Uber 2Q25 Earnings Comment: Huge Share Buyback Plan
TradingKey - Uber released its earnings for the second quarter of the fiscal 2025 on August 6th before the bell.
- 2Q25 Earnings per share: $0.63 vs $0.63 estimate (+34% y/y)
- 2Q25 Revenue: $12.65bn vs $12.47bn estimate (+18% y/y)
Surprisingly (or not), the stock finished the trading day flat, as all the metrics, largely in line with the expectations, did not trigger much emotion from investors.
The expectations of growth in number of customers and gross booking value were largely met, demonstrating the consumer resilience amid the recent economic slowdown. Even the delivery business is growing quite well at 25% but this is because in general food delivery industry is in earlier stages than ride-hailing.
The margin expansion is also worth mentioning, as the OPM stands at 11.5% vs. 7.4% last year, demonstrating an improvement in the operational efficiency.
Another notable point is the very generous buyback program - $20 billion – this is almost three times bigger than the recent buyback program and it represents nearly 11% of the current market cap.
As for the hottest topic, autonomous vehicles, they mentioned that Uber will maintain its current approach – focus on asset-light model and forging more partnerships with robotaxi firms (Waymo, Lucid, Nuro, Baidu and Momenta). It appears that the current status quo of the company in this growing field is probably the most optimal one. By being asset-light, Uber avoids any risk of overspending on capex, at the same time as the robotaxi competition intensifies, Uber will be the partner of choice to whomever dominates the market. Finally, the CEO Khosrowshahi mentioned that there is a long way until robotaxis reach the scale and the safety standards for mass usage.
Conclusion
A lot of the information from the Q2 earnings was already priced by the market, however with a valuation of 16x PE for a strong cash-generating business and exposure to a $1 trillion opportunity in robotaxi is quite attractive, to say the least.
TradingKey - Uber will release its earnings for the second quarter of the fiscal 2025 on August 6th before the bell.
- 2Q25 Earnings per share: $0.63 estimate vs. 2Q24 actual of $0.47 (+34% y/y)
- 2Q25 Revenue: $12.47bn estimate vs. 2Q24 actual of $10.70bn (+17% y/y)
Operating Performance
Uber’s operating performance will be in the spotlight, especially when it comes to the metrics related to monthly users, number of trips, and gross bookings. The monthly consumers are expected to grow around 14-15% driven primarily by overseas markets. Also, the gross bookings are expected to be even at a higher growth, 16-20% due to Uber’s ability to upsell their users. These metrics are even more important than the financial metrics such as revenue or EPS, as they demonstrate the durability of the company’s business model in the long run. What is more important for Uber, however, is not the Q2 results but the outlook for Q3.
Industry Dynamics
Uber continues to be in intense competition with Lyft for the US mobility market, as well as DoorDash within the food delivery. Thus, we would like to see if there are any changes in the competitive dynamics there. Also, mobility remains very dependent on regulations, either when it comes to taxi licenses or to drivers’ compensation, making the company’s stock prone to changes in the legal framework.
Robotaxis
Anything with regard to robotaxis and autonomous vehicles will be closely observed by the public. One of the major drivers of the solid UBER stock performance is the ability of the company to partner with the growing robotaxi companies providing their vast platform and data. Thus, any future partnerships, any expansion projects towards new geographies or even cost implications will be a centerpiece of the coming earnings
Conclusion
Regardless of the results, the long-term outlook remains optimistic, with just 15x PE, dominant market share in mobility and a vast opportunity within autonomous vehicles, Uber remains a strong investment story.
