Uber's Earnings Miss Highlights 'Show Me' Story on Margin Durability and AV Execution

What happened

Uber reported strong Q4 2025 results with 22% gross bookings growth and 35% Adjusted EBITDA growth, but EPS missed expectations, underscoring persistent earnings volatility. A Seeking Alpha article remains bullish, emphasizing Uber's hybrid autonomous vehicle (AV) strategy that claims 30% higher AV utilization and superior economics. However, DeepValue's analysis reveals that profitability optics are noisy, with margins pressured by rising insurance and incentive costs, despite solid cash generation from $10.1 billion in operating cash flow. The market narrative has shifted to focus on earnings durability under scrutiny and robotaxi disintermediation risks, as AV competitors like Waymo scale rapidly with 400,000+ weekly rides. Investors are now watching whether Uber can maintain EBITDA margin above 4.6% while accelerating AV partnership deployments to defend its platform position.

Implication

Near-term, Uber's stock will be sensitive to Q1 2026 guidance delivery, particularly on EBITDA margin versus gross bookings, as misses could trigger multiple compression. Failure to control variable costs like insurance per mile and incentives may erode operating leverage, undermining the cash-generative story despite strong demand growth. The AV strategy's execution is critical; if partners bypass Uber or deployments lag behind competitors, disintermediation risk could compress take rates and valuations. Cash flow supports buybacks, but rising debt and upcoming convertible notes require disciplined capital allocation to avoid financial engineering concerns. Overall, while growth remains robust, the investment case hinges on proving margin durability and securing a defensible role in the evolving AV ecosystem.

Thesis delta

The DeepValue thesis already centers on Uber's cash generation and margin durability, with AV partnerships as a long-term catalyst. The new article reinforces AV optimism but does not shift the thesis; instead, it highlights increased market scrutiny on near-term execution, emphasizing that investor patience depends on visible progress in maintaining margins and scaling AV deployments. Thus, the delta is minimal but underscores a heightened need for Uber to demonstrate consistent profitability and AV traction to sustain the bullish narrative.