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Uber Technologies Upgraded To BBB by S&P
March 14, 2025
Uber Technologies was upgraded to BBB from BBB- by S&P, citing strong financial performance in 2024 and improving credit metrics. Uber’s gross bookings grew 21% to $163bn, and EBITDA increased 60% YoY to $6.5bn. Adjusted free operating cashflows (FOCF) reached $4.4bn or about 62% FOCF to debt, meaningfully exceeding previous forecasts by S&P. EBITDA growth is expected at 30-37% for 1Q2025. S&P also cited Uber’s sound financial policies justifying the upgrade, such as Uber’s gross leverage target of 2x which is considered moderate. S&P has also forecasted leverage to continue improving to below 1x from about 1.3x. S&P is optimistic about Uber’s forecasted growth, as Uber intends to target strategic investments in its core rideshare and delivery businesses. Besides, S&P cited that Uber’s liquidity was ‘exceptional’. Uber maintains significant liquidity sources, including $5.9bn of unrestricted cash and $1.1bn of unrestricted short-term investments. However, the rating agency is aware of technological risks, as the adverse effect of potentially disruptive autonomous technologies. Uber was upgraded two notches by Moody’s last year.
Uber’s dollar bonds were trading stable with its 7.5% 2027s at 101.5, yielding 6.84%.
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