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Uber stock dropped more than 5% in premarket trading on Wednesday after the ride-hailing giant delivered a weaker-than-expected profit outlook, unsettling investors despite signs of strong demand on its platform.

Uber Stock Falls After Uber Earnings Miss and Weak Profit Forecast

Uber Technologies said it expects first-quarter adjusted earnings per share of 65 cents to 72 cents, falling short of expectations of 76 cents and the company also missed fourth-quarter estimates, posting adjusted EPS of 71 cents versus forecasts of 79 cents, as per a report.

Higher Tax Rates Weigh on Uber Profit Expectations

The cautious outlook was largely driven by higher taxes and Uber’s continued push into more affordable ride options. The company said it expects its adjusted effective tax rate to range between 22% and 25% this year, as per a Reuters report.

Uber noted that, "Our ETR reflects our business with operations across 70+ countries, which results in a tax profile comparable to large US multinationals with significant global operating presence," as quoted by Reuters.

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Uber Trips Jump 22% in Fourth Quarter

At the same time, Uber highlighted strong user activity. Trips rose 22% in the fourth quarter as more riders chose shared rides and other lower-cost mobility products.

The company has previously said it is intentionally slowing the pace of margin expansion after proving its business can generate profits at scale, with investments in affordability aimed at boosting bookings even if they pressure margins in the near term.

Uber Gross Bookings Forecast Tops Market Estimates

Despite the profit miss, demand indicators were solid. Uber expects first-quarter gross bookings of $52.0 billion to $53.5 billion, above market estimates of $51.16 billion, as per LSEG data. Both mobility and delivery segments grew in the fourth quarter, with delivery gross bookings rising faster than mobility, reflecting strong demand in convenience services that typically carry lower margins.

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Uber CEO Says Pricing Improvements to Support US Growth

CEO Dara Khosrowshahi said improving pricing conditions and lower insurance costs should help support faster growth and margin expansion in the US this year, as per the Reuters report.

Uber Announces CFO Change Amid Earnings Pressure

Uber also announced a leadership change in its finance team. Chief Financial Officer Prashanth Mahendra-Rajah, who has held the role since November 2023, will step down, with Balaji Krishnamurthy, a former Goldman Sachs executive who joined Uber in 2019, set to take over.

UK Accounting Change to Hit Reported Margins in 2026

In addition, Uber said a change in how it accounts for parts of its UK business starting in January will reduce reported mobility revenue margin by about 350 basis points in the first quarter and in 2026, though it will not affect underlying profitability.

Uber Positions for Autonomous Ride Services With Waymo, Lucid

While Uber said it is positioning itself to play a central role as autonomous ride services scale, partnering with companies including Alphabet’s Waymo and Lucid to integrate robotaxis alongside human drivers.

FAQs

Why did Uber stock fall today?
Uber shares dropped after the company forecast first-quarter earnings below expectations.

What is Uber’s Q1 earnings outlook?
Uber expects adjusted EPS of 65 to 72 cents, below analyst estimates of 76 cents.