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Uber (UBER) delivered mixed 1Q25 results, surpassing EPS and adjusted EBITDA expectations, but falling just short on Gross Bookings, contributing to the stock's weakness today. Disciplined cost management and enhanced operating leverage drove the upside profitability, while the shortfall in Gross Bookings was mainly attributable to Mobility's growth slightly underperforming expectations at +20% in constant currency. Furthermore, although UBER's 2Q25 Gross Bookings guidance of $45.75-$47.25 bln and adjusted EBITDA forecast of $2.02-$2.12 bln both indicate significant yr/yr growth, the outlook was largely just in-line with expectations. Following the stock's 30% move higher over the past month, the market may have been looking for a more bullish projection.

• Mobility Gross Bookings growth continues to be stable, ranging from 16-20% (cc) over the past four quarters, reflecting resilient demand in urban markets, particularly in the U.S. and Europe. Likewise, Delivery Gross Bookings have shown consistent, albeit slower growth, coming in at 19% (cc) in Q1, preceded by growth of 18% and 17% in Q4 and Q3, respectively. A healthy 14% rise in Monthly Active Platform Users (MAPCs) in Q1, combined with the expansion of Uber Eats advertising, supported Delivery's growth. However, fierce competitive pressures, especially from DoorDash (DASH), is tempering growth.
• UBER's profitability is on an upward trajectory with adjusted EBITDA increasing by 35% yr/yr to $1.9 bln, bolstered by Mobility's high incremental margins (approximately 40%) and Delivery's improving unit economics. Adjusted EBITDA per trip, which includes both rides and deliveries, improved by 15% yr/yr, highlighting UBER's improving unit economics. Cost efficiencies, including optimized driver incentives and reduced corporate overhead costs, are further supporting margin and profit expansion.
• Looking down the road, investments in robotaxis -- projected at $200-$300 mln annually through 2027 -- may modestly temper EBITDA growth, but UBER's partnership-driven robotaxi strategy will avoid the hefty multi-billion R&D investments borne by competitors like Tesla (TSLA). Additionally, UBER's partnerships, including its multi-year deal with Alphabet's (GOOG) Waymo to expand autonomous rides in Austin and Phoenix, and its collaboration with Cruise for driverless vehicle integration by 2026, positions the company for long-term strong growth.

UBER's mixed Q1 results, coupled with underwhelming Q2 guidance that was merely in-line with expectations, disappointed investors who were looking for a more robust outlook in the wake of the stock's recent surge higher. UBER’s robotaxi strategy, bolstered by partnerships with Waymo, Cruise, and BYD, offers a compelling growth catalyst, potentially unlocking significant value by 2027–2028, provided execution and regulatory challenges are navigated successfully.