Uber issues mixed outlook as it names robotaxi bull as new CFO

By Natalie Lung, Bloomberg

Uber Technologies Inc. issued a mixed forecast and promoted an outspoken driverless-vehicle bull to be its new chief financial officer, signaling further investment in a closely watched area of the ride-hailing company’s business.

The executive, Balaji Krishnamurthy, has been with Uber for more than six years and is currently vice president of strategic finance and investor relations. He will replace current CFO Prashanth Mahendra-Rajah, who is leaving for another opportunity after less than three years at the company, according to a regulatory filing published Wednesday. The outgoing CFO will step down from his post on Feb. 16 and stay on as a senior finance adviser through July 1, the filing said.

The rideshare giant has invested hundreds of millions of dollars in autonomous technology partners and agreed to purchase fleets of robotaxis, which it plans to eventually launch at scale on its popular ride-hailing platform. It is betting that its experience operating a profitable rideshare marketplace positions it to be a key player in a growing and increasingly crowded autonomous-vehicle ecosystem.

The management change was announced alongside Uber’s quarterly results, in which the firm provided disappointing earnings guidance for the current period even as it hinted at strong demand.

Adjusted earnings per share — a metric Uber began reporting this year — is expected to be in the range of 65 cents to 72 cents in the current period, missing the average Bloomberg-compiled analyst estimate of 77 cents. The mid-point of its forecast for adjusted earnings before interest, taxes, depreciation and amortization also fell short. Shares of Uber fell by as much as 6.8% after markets opened in New York.

However, the company gave a rosy forecast for total gross bookings, citing robust growth in the US. The closely watched metric — which includes ride hails, delivery orders and driver and merchant earnings but not tips — will be $52 billion to $53.5 billion for the current period, which is more than Wall Street was projecting.

In particular, the company expects US trip and gross bookings growth to accelerate further in 2026, Chief Executive Officer Dara Khosrowshahi said in prepared remarks. Lower insurance costs, strong driver-supply dynamics and the introduction of new products added up to a “healthier pricing environment,” he said.

“These factors leave us well positioned to deliver another year of both healthy top-line growth and strong margin expansion,” he added.

In the fourth quarter, total gross bookings grew 22% to $54.1 billion, topping average analyst estimates. That was thanks to various new product initiatives it released during the quarter, with loyal members of its paid Uber One subscription contributing to more transactions, the company said.

It also launched a premium, scheduled rides option at ski destinations, capitalizing on the holiday travel season. It also added more affordable options, including expanding cheaper shuttle rides to all major New York airports.

The delivery business similarly saw strong gains during the holiday period, posting record Black Friday sales. It added more non-restaurant merchants and offered more regular discounts in an effort to lure customers away from competitors like DoorDash and Instacart.

Wedbush analysts said that while the results were solid, the company offered a mixed first-quarter guidance. “We remain cautious as we weigh the eventual impact of AV disruption on established ridesharing networks as the industry evolves,” they wrote.

Uber’s report will set expectations for the broader ride-hailing and food-delivery industries, as concerns remain about the state of the US consumer. Rideshare peer Lyft Inc. and delivery rivals DoorDash Inc. and Instacart are scheduled to report results over the next two weeks.

Robotaxi Rollout

Uber has made commercializing driverless cars one of its six areas of strategic focus over the last year. It expects to make robotaxis available alongside manned rides in 15 markets by the end of this year, Khosrowshahi said on the earnings call.

On Wednesday, the company named several previously unannounced launch markets, including Houston, Hong Kong, Madrid and Zurich, which a spokesperson said will operate with the help of existing robotaxi partners.

In his first public remarks as the incoming CFO, Krishnamurthy on an earnings call reassured investors that Uber’s healthy free cash-flow generation gives the company “a lot of room to make investments” in advancing its autonomous-vehicle, or AV, strategy and any M&A opportunities as they come along. That still leaves Uber with a significant amount of cash that it can return to shareholders, he said.

“This is not a tradeoff for us,” Krishnamurthy said. “We’re able to do all of these things in parallel.”

Krishnamurthy has been known to champion Uber’s driverless strategy on social media, often defending the company’s autonomous-vehicle plans against investors who are bearish on its ability to compete with rivals such as Waymo and Tesla Inc.

In its earnings presentation and prepared executive remarks, Uber also dedicated substantial sections to respond to five of what it calls “misconceptions” among Wall Street bears about how autonomous-vehicle technology will affect Uber.

It reiterated its position that robotaxis can spur growth for the entire ride-hailing industry, and that it’s not a zero-sum game in the company’s view. Austin and Atlanta, where Waymo robotaxis are available on the Uber app, saw faster trips growth compared to its top 20 cities, Uber said.

Without naming Waymo, Uber pointed to limitations of the Alphabet Inc.-owned company — which is both a rival and partner to the ridesharing giant. For instance, a large portion of Uber’s US trips and profits will be “unaddressable” by driverless cars for the foreseeable future, it said, especially in tightly regulated cities like New York City, Boston and Chicago where policy reforms will take “several more years at minimum.”

Robotaxi operators also do not serve less affluent areas like Oakland and parts of the East Bay in San Francisco, Uber said. (Waymo only recently received approvals to conduct testing in the East Bay, years after it launched in the tech hubs of downtown San Francisco and South Bay).

Uber also hailed its human drivers’ ability to quickly meet demand in times of infrastructure and weather disruptions, particularly when Waymo cars froze in traffic during the San Francisco power outage last December. During the recent winter storms, the company said it removed autonomous vehicles from its platform at the request of its partners in Austin, Atlanta and Dallas (Waymo and Avride), without affecting customer experience.

Andrew Rocco, a stock strategist at Zacks Investment Research, said after the earnings release that the company has managed to quell fears about the potential disruption from robotaxi competitors.

“Currently, Uber is not being disrupted but instead being used as a tool to reach scale by robotaxi manufacturers,” Rocco wrote. “As long as the trend continues, the stock will continue to perform well. However, any signs of disruption in the coming quarters, and the stock could suffer drawdowns.”

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