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Uber Bets on Loyalty Program to Drive Growth, Unveils $20 Billion Buyback Plan

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Uber (UBER.N) announced a $20 billion stock buyback program and raised its third-quarter gross bookings forecast above Wall Street expectations on Wednesday, fueled by strong adoption of its paid loyalty program, Uber One.

The $9.99-per-month Uber One membership surged 60% year-on-year in June to over 36 million members, who now account for more than one-third of Uber’s bookings. These loyal users are especially valuable as they engage with both ride-hailing and delivery services, generating over three times the profit compared to single-service users.

To boost Uber One sign-ups, the company hosted a week-long promotional event in May offering discounts across rides, food delivery, and groceries, adding half a million new members during that period. Uber’s stock has soared 48% so far this year, though it dipped about 1% in early trading following the announcement.

Uber expects third-quarter gross bookings—the total dollar value of transactions—to range between $48.25 billion and $49.75 billion, beating analyst estimates of $47.3 billion. This follows an 18.2% year-on-year increase in second-quarter gross bookings, driven by 24.6% growth in delivery and 18.8% in mobility services.

The company also reported a rise in net income to 63 cents per share in Q2 from 47 cents a year earlier, matching expectations. Adjusted core profit for the current quarter is forecast between $2.19 billion and $2.29 billion, above analyst consensus.

Uber is leveraging subscription products like the $2.99 monthly “Price Lock Pass,” which offers fixed pricing on select routes, to encourage habitual weekday commuting, now available in over 10 U.S. and Brazilian cities.

Looking ahead, Uber is expanding in autonomous vehicle technology through over 20 partnerships, including recent deals with EV maker Lucid and startup Nuro, despite not owning its own robotaxi technology.

This latest buyback authorization supplements a previously approved $7 billion program from early 2024.

Workday Shares Drop as Lukewarm Subscription Forecast Signals Caution in Tech Budgets

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Workday Inc. saw its shares fall by 5% in extended trading Thursday after forecasting second-quarter subscription revenue that merely met Wall Street expectations, signaling caution amid weakened client spending and ongoing economic uncertainty in the enterprise software market.

The California-based human capital and financial management software provider projected Q2 subscription revenue of $2.16 billion, aligning with analysts’ consensus but doing little to boost investor confidence. The company also reiterated its full-year guidance of $8.8 billion in subscription revenue for fiscal 2026.

“We remain focused on executing in this uncertain environment,” said CFO Zane Rowe.

Despite this cautious outlook, Workday reported solid Q1 results:

  • Total revenue: $2.24 billion (vs. $2.22 billion expected)

  • Subscription revenue: $2.06 billion (slightly above $2.05 billion consensus)

  • Adjusted EPS: $2.23 per share (beating $2.01 estimate)

In tandem with its earnings release, the company announced a new $1 billion share repurchase program, a move often intended to reassure investors amid stock volatility.

Competitive Landscape and Federal Setback

Workday competes against enterprise giants like Oracle and SAP, both of which boast larger back-office software businesses. Analysts note that increased competition in the HR and finance software market may pressure pricing and margins in the coming quarters.

Adding to its recent headwinds, Workday was stripped of a federal HR platform contract earlier this month by the U.S. Office of Personnel Management. The decision followed criticism that the award process did not seek competitive bids. The canceled contract had been connected to efforts from within the Elon Musk-backed campaign to restructure federal workforce management, which could further dampen Workday’s growth in the public sector.

Analyst Outlook

While the company continues to grow and outperform near-term expectations, its muted forecast reflects broader macroeconomic concerns and signals that even resilient SaaS firms are not immune to tightening tech budgets. Analysts expect Workday to maintain its position among top enterprise software providers but caution that client spending softness and lost contracts may limit upside in the short term.