Uber has announced an inaugural $7bn (£5.6bn) share buyback programme after the ride-hailer reported its first ever annual operating profit last week.
It comes following tech giant Meta announcing a first dividend for investors in early February and Airbnb widening its own repurchase scheme.
Prashanth Mahendra-Rajah, Uber chief financial officer, said the “first-ever share repurchase program is a vote of confidence in the company’s strong financial momentum.”
“We will be thoughtful as it relates to the pace of our buyback, beginning with actions that partially offset stock-based compensation, and working towards a consistent reduction in share count.”
After years and billions worth of losses, the ride-hailing giant has consistently reported an operating profit in its results this year.
Uber’s chief executive said last week that 2023 was an “inflection point” for the company.
Uber is forecasting gross bookings growth in the mid to high teens in the next three years, with adjusted core profit growth in the high 30s to 40 per cent. It expects free cash flow as a portion of adjusted EBITDA to be 90 per cent or higher annually.
It marks a stark contrast to rival Lyft. An error in its San Francisco-based competitor’s results falsely exagerrated its outlook for margin growth in 2024 by 10 times, prompting shares to soar over 60 per cent as investors piled in.
But after Lyft admitted its mistake, the stock crashed down to earth, wiping around $2bn off the company’s market value.