+35% Gain on UBER: The Ride Continues + Our Top Holding's Earnings Breakdown
Breaking down two critical earnings reports that tell very different stories
We're sharing part of this analysis for free to demonstrate the value you can expect as a paid Schwar Capital subscriber.
Two of our most significant positions just reported earnings, with dramatically different headline numbers but equally important implications for our portfolio. Let's dive into what these results tell us about our investment theses and where we go from here.
UBER: Our December Thesis Comes to Life
When we pitched Uber at $60.73 back in December 2024, we identified a highly asymmetric opportunity.
Five months and a ~35% gain later, Uber's Q1 earnings report has delivered exactly what we predicted: explosive growth in trips, revenue, and most importantly, free cash flow.
You can see our investment thesis here:
![[FREE] UBER Investment Thesis Statement](https://substackcdn.com/image/fetch/w_140,h_140,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc93e528a-5f1f-4d8e-8347-947b0a251a62_4200x3000.png)
The Headline Numbers: Growth + Profitability
Uber's Q1 results tell a compelling story that validates our original thesis:
Trips up 18% YoY to 3.0 billion
Gross Bookings grew 14% YoY (18% constant currency) to $42.8 billion
Revenue increased 14% YoY (17% constant currency) to $11.5 billion
Income from operations reached $1.2 billion, up $1.1 billion YoY
Free cash flow soared 66% YoY to $2.3 billion (annualizing to $9.2B)
These aren't just good numbers - they're exceptional for a company of Uber's size and market position.
Segment Analysis: Strength Across the Board
Looking deeper at segment performance reveals why Uber's business model is proving so resilient:
Mobility (Rides)
Gross Bookings up 13% YoY (20% constant currency) to $21.2 billion
Revenue up 15% YoY to $6.5 billion
Segment Adjusted EBITDA up 19% YoY to $1.75 billion
The core rides business continues to demonstrate pricing power and growing demand, even as it faces currency headwinds. The 20% constant currency growth rate is particularly impressive for a business of this scale.
Delivery
Gross Bookings up 15% YoY (18% constant currency) to $20.4 billion
Revenue up 18% YoY to $3.8 billion
Segment Adjusted EBITDA up 45% YoY to $763 million
Remember when critics claimed Uber Eats would never be profitable? The delivery segment is now generating substantial adjusted EBITDA with 45% year-over-year growth in profitability.
Freight
The only weak spot with Gross Bookings down 2% YoY to $1.26 billion
Segment Adjusted EBITDA loss improved to ($7) million from ($21) million YoY
While still experiencing challenges, even the Freight segment is moving in the right direction with significantly reduced losses.
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The Cash Flow Machine We Predicted
The most compelling part of this earnings report is the validation of our December investment thesis.
We predicted Uber would transform from a growth-at-all-costs company to a free cash flow powerhouse, and that's exactly what's happened:
Operating cash flow reached $2.3 billion, up 64% YoY
Free cash flow of $2.3 billion, up 66% YoY
Repurchased $1.8 billion of common stock during the quarter
Uber is now generating enough cash to fund growth initiatives, return capital to shareholders, and build financial flexibility - all simultaneously.
Management Guidance
Uber's guidance for Q2 2025 points to continued strong performance:
Gross Bookings expected between $45.75 billion and $47.25 billion (16% to 20% YoY growth on constant currency)
Adjusted EBITDA guidance of $2.02 billion to $2.12 billion (29% to 35% YoY growth)
This guidance comes despite an anticipated 1.5 percentage point currency headwind to total reported growth.
Our Take on UBER's Q1
The Q1 earnings report validates our investment thesis and reinforces our conviction in Uber as a long-term holding. The company is executing well across all key metrics: growth remains robust despite scale, margins are expanding, free cash flow is accelerating, and capital allocation is disciplined.
While the stock has appreciated ~35% since our December pitch at $60.73, we believe there's still upside based on the company's trajectory. Although the asymmetry isn't as large as when we first pitched the company, the combination of double-digit growth and expanding free cash flow margins creates a decent risk-reward at the current price.
Paid subscribers will see how we play the stock going forward.
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