What happened
Shares of Uber Technologies (UBER 2.74%) climbed 7.6% on Tuesday after the ridesharing titan raised its financial guidance.
So what
For the first quarter, Uber now projects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will land in the $130 million to $150 million range. That's up from its previous forecast of $100 million to $130 million.
Notably, Uber disclosed in a filing that it was seeing positive trends in both its core ride-hailing business and its fast-growing food-delivery operation. The company said that for its mobility segment, February gross bookings -- essentially, the dollar value of transactions processed on its platform -- were 95% of the February 2019 (pre-pandemic) figure.
Image source: Getty Images.
Better still, the annualized run rate of Uber's delivery gross bookings hit an all-time high in February.
"Our mobility business is bouncing back from Omicron much faster than we expected," CEO Dara Khosrowshahi said. "Whether for travel, commuting, or going out at night, we're seeing healthy and growing demand across all use cases, highlighting just how eager consumers are to get moving again."
Now what
Despite the guidance boost, investors should note that Uber faces some serious challenges. The pandemic and the ongoing labor shortage have made it more difficult for the company to find enough drivers to meet the rising demand for ride-hailing and delivery services.
Additionally, soaring gasoline prices are reducing drivers' net earnings -- so much so that many are beginning to question whether driving for Uber is worth it.
Uber is working to help its drivers reduce costs, but it's unclear if it will have to sacrifice some of its own profitability to entice more of them to remain on its platform.
