Uber Technologies Inc. (NYSE:UBER)

The financial performance, as measured by economic profit, demonstrates a significant shift over the five-year period. Initially, the company experienced substantial economic losses, which gradually diminished before transitioning to positive economic profit. This evolution is closely tied to changes in net operating profit after taxes, cost of capital, and invested capital.

Net Operating Profit After Taxes (NOPAT)

NOPAT exhibited a dramatic improvement throughout the period. Beginning with a loss of US$819 million in 2021, it declined sharply to a loss of US$9,117 million in 2022. A substantial turnaround occurred in 2023, with NOPAT becoming positive at US$2,401 million. This positive trend continued, reaching US$3,752 million in 2024 and further increasing to US$5,152 million in 2025. This indicates a strengthening of core operational profitability.

Cost of Capital

The cost of capital remained relatively stable, fluctuating between 17.75% and 19.01% over the five years. It increased from 17.75% in 2021 to 17.89% in 2022, peaked at 19.01% in 2023, and then decreased to 18.99% in 2024 and 18.68% in 2025. These changes, while present, were less pronounced than the shifts observed in NOPAT.

Invested Capital

Invested capital generally decreased from US$16,078 million in 2021 to US$14,934 million in 2024. A slight increase was observed in 2025, with invested capital reaching US$15,770 million. This suggests a potential shift in capital allocation strategies or operational efficiency improvements requiring less capital.

Economic Profit

Economic profit mirrored the trend in NOPAT. Significant losses were recorded in 2021 (US$-3,673 million) and 2022 (US$-12,040 million). The loss narrowed considerably in 2023 to US$-578 million, before becoming positive in 2024 (US$916 million) and continuing to grow to US$2,207 million in 2025. The transition from negative to positive economic profit signifies that the company is now generating returns exceeding its cost of capital.

In summary, the company’s economic performance improved substantially over the period, driven primarily by a significant increase in NOPAT. While the cost of capital experienced minor fluctuations, the overall trend in economic profit demonstrates a successful transition towards value creation.

Net income attributable to Uber Technologies, Inc. and Net Operating Profit After Taxes (NOPAT) demonstrate significant fluctuations over the five-year period. Both metrics experienced substantial losses initially, followed by a period of increasing profitability.

Net Income Trend

Net income attributable to Uber Technologies, Inc. began with a loss of US$496 million in 2021. This loss expanded dramatically to US$9,141 million in 2022. A substantial improvement occurred in 2023, with net income turning positive at US$1,887 million. Further growth was observed in 2024 and 2025, reaching US$9,856 million and US$10,053 million, respectively. The trend indicates a recovery from significant losses to consistent profitability.

NOPAT Trend

NOPAT mirrored the trend observed in net income. In 2021, NOPAT registered a loss of US$819 million. This loss increased to US$9,117 million in 2022. Similar to net income, NOPAT became positive in 2023, reaching US$2,401 million. Continued growth was evident in subsequent years, with NOPAT increasing to US$3,752 million in 2024 and US$5,152 million in 2025. The pattern suggests a strengthening of operational profitability over time.

Relationship between Net Income and NOPAT

While both metrics move in the same direction, NOPAT consistently exceeds the absolute value of net income in the loss years (2021 and 2022). This suggests that non-operating items, such as interest expense or gains/losses on investments, significantly impacted net income during those periods. As profitability improves, the difference between NOPAT and net income narrows, indicating a greater contribution from core operations to overall profitability.

Growth Rates

The growth rate from 2022 to 2023 for both NOPAT and net income is substantial, representing a significant turnaround. The growth continues, albeit at a slower pace, from 2023 to 2025. This suggests that the initial recovery was particularly strong, followed by more moderate, sustained growth.

The provision for (benefit from) income taxes exhibits significant volatility over the observed period. Initially, a benefit was recognized in 2021 and 2022, followed by a substantial tax expense in 2023 and particularly in 2024, before decreasing in 2025, though remaining a significant expense. In contrast, cash operating taxes demonstrate a more stable, albeit modestly fluctuating, pattern.

Provision for (benefit from) income taxes

A benefit of US$492 million was recorded in 2021, decreasing to a benefit of US$181 million in 2022. This shifted dramatically to an expense of US$213 million in 2023. The largest change occurred between 2023 and 2024, with the expense increasing to US$5,758 million. While still an expense, this decreased to US$4,346 million in 2025. This volatility suggests potential changes in deferred tax assets/liabilities, tax loss carryforwards utilized, or changes in applicable tax rates.

Cash operating taxes

Cash operating taxes increased from US$319 million in 2021 to US$375 million in 2022, representing a moderate increase. A slight decrease to US$242 million was observed in 2023, followed by a further increase to US$250 million in 2024. The final year, 2025, shows a more substantial increase to US$391 million. This pattern indicates a generally increasing tax outflow related to operations, though with some year-to-year variation.

The divergence between the provision for income taxes and cash operating taxes is notable. The significant fluctuations in the provision for income taxes, particularly the large expense in 2024, are not fully reflected in the cash operating taxes paid. This difference could be attributable to timing differences between book and tax accounting, non-cash tax expenses, or the utilization of tax credits. Further investigation into the components of the provision for income taxes is warranted to understand the drivers of this disparity.

Relationship between Provision and Cash Taxes

In 2021 and 2022, the provision for income taxes was a benefit, while cash taxes were an outflow. This suggests the company was receiving tax refunds exceeding current taxable income. From 2023 onwards, the provision and cash taxes both generally represent outflows, but the magnitude differs significantly, especially in 2024. The substantial difference in 2024 indicates a large non-cash tax expense or a significant adjustment to deferred tax assets or liabilities.

The reported invested capital exhibited a fluctuating pattern over the five-year period. Total reported debt & leases generally increased, while total stockholders’ equity experienced significant volatility. These movements collectively influenced the overall invested capital position.

Invested Capital Trend

Invested capital initially increased from US$16,078 million in 2021 to US$16,340 million in 2022, representing a modest growth of approximately 1.6%. A subsequent decline was observed in 2023, falling to US$15,670 million. This downward trend continued into 2024, with invested capital reaching US$14,934 million, the lowest value within the observed period. A slight recovery occurred in 2025, with invested capital rising to US$15,770 million.

Debt & Leases

Total reported debt & leases demonstrated a generally increasing trend, moving from US$11,366 million in 2021 to US$12,302 million in 2025. However, this increase was not linear. A minor decrease was noted between 2023 and 2024, from US$11,702 million to US$11,436 million, before resuming an upward trajectory.

Stockholders’ Equity

Total stockholders’ equity experienced substantial fluctuations. A significant decrease occurred between 2021 and 2022, dropping from US$14,458 million to US$7,340 million. This was followed by a recovery in 2023, reaching US$11,249 million. Further substantial growth was observed in 2024 and 2025, with equity increasing to US$21,558 million and US$27,041 million respectively. This indicates a considerable strengthening of the equity position in the latter part of the period.

The interplay between debt & leases and stockholders’ equity significantly shaped the invested capital. The substantial increase in stockholders’ equity in 2024 and 2025 partially offset the continued growth in debt, contributing to the modest recovery in invested capital observed in 2025.

The economic spread ratio demonstrates a significant improvement over the observed period. Initially negative and substantial, the ratio transitions to positive values, indicating a growing ability to generate returns exceeding the cost of capital.

Economic Spread Ratio Trend

In 2021, the economic spread ratio was -22.85%. This indicates that returns generated from invested capital were considerably lower than the cost of that capital. The ratio deteriorated markedly in 2022, reaching -73.68%, signifying a substantial shortfall in return on investment. A considerable improvement is then observed in 2023, with the ratio moving to -3.69%, suggesting a narrowing gap between returns and the cost of capital. By 2024, the ratio had become positive at 6.14%, indicating that returns exceeded the cost of capital. This positive trend continued into 2025, with the economic spread ratio reaching 13.99%, representing a substantial increase in value creation.

The progression of the economic spread ratio aligns with the trend in economic profit. The negative economic profit values in 2021, 2022, and 2023 correspond with the negative spread ratios, while the positive economic profit in 2024 and 2025 is reflected in the positive and increasing spread ratios.

Invested Capital Relationship

Invested capital experienced a slight increase from 2021 to 2022, followed by a decrease in 2023 and 2024. A modest increase is then seen in 2025. Despite these fluctuations in invested capital, the substantial improvement in the economic spread ratio suggests that the efficiency with which capital is deployed has increased significantly, rather than simply being driven by changes in the capital base.

The observed trend suggests a strengthening of the company’s financial performance and an increasing ability to generate value for its investors. The shift from negative to positive economic spread ratios is a positive indicator of improved profitability and efficient capital allocation.

The economic profit margin demonstrates a significant improvement over the observed period. Initially negative and substantial, the margin transitions to positive values, indicating increasing value creation for stakeholders. This progression is closely tied to the evolution of economic profit and revenue.

Economic Profit Margin Trend

In 2021, the economic profit margin stood at -21.04%. This represents a considerable shortfall in generating returns exceeding the cost of capital. The margin deteriorated further in 2022, reaching -37.77%, signifying a widening gap between returns and capital costs. A substantial shift occurs in 2023, with the margin improving to -1.55%, indicating a narrowing of the loss. The trend continues positively, with the margin turning positive in 2024 at 2.08%, and further strengthening to 4.24% in 2025. This indicates a growing ability to generate economic profit.

Relationship to Economic Profit

The economic profit margin’s trajectory mirrors the changes in economic profit. The large negative economic profit values in 2021 and 2022 directly contribute to the deeply negative margins observed in those years. As economic profit moves towards profitability, beginning in 2023, the margin correspondingly improves. The positive economic profit reported in 2024 and 2025 directly drives the positive economic profit margins for those periods.

Relationship to Revenue

Revenue consistently increased throughout the period, from US$17,455 million in 2021 to US$52,017 million in 2025. However, revenue growth alone did not guarantee improved economic profitability. The substantial increase in revenue between 2021 and 2022 did not prevent a worsening of the economic profit margin. The positive shift in the margin only becomes apparent when economic profit begins to improve, suggesting that controlling costs and generating returns above the cost of capital are crucial alongside revenue expansion.

The observed trend suggests a successful transition towards improved financial performance and value creation. Continued monitoring of both economic profit and revenue will be essential to sustain this positive momentum.