 "Uber")
Uber Technologies Inc. will buy back as much as $7 billion in shares, announcing its first plan to return capital to shareholders after achieving operating profit and consistent positive free cash flow in 2023.
The repurchase plan “is a vote of confidence in the company’s strong financial momentum,” Chief Financial Officer Prashanth Mahendra-Rajah said in a statement. “We will be thoughtful as it relates to the pace of our buyback, beginning with actions that partially offset stock-based compensation, and working toward a consistent reduction in share count.”
The stock jumped about 4.6% in premarket trading in New York. It has more than doubled over the past 12 months.
The capital allocation plan marks another milestone of financial health for the San Francisco-based rideshare and delivery company after it has reined in costs while expanding its businesses in recent years.
Last week, Uber said it achieved its first full year of profitability since its founding more than 14 years ago. And in December, it was added into the benchmark S&P 500 Index. The company also said it is on a “very clear path” to an investment-grade credit rating. The stock more than doubled in 2023 and has gained 12% this year, closing at $68.99 Tuesday in New York.
Uber also provided a three-year outlook of gross bookings growth at a percentage in the mid-to-high teens. Adjusted earnings before interest, taxes, depreciation and amortization is projected to increase by a compound annual percentage rate in the high 30s to 40.
The company is scheduled to discuss its financial outlook Wednesday at an investor update beginning at 8 a.m. New York time.
