Uber Technologies (NYSE: UBER) operates an app that provides a platform for users to hail rides and order food delivery. The company also provides courier and freight services. The pandemic and subsequent digitalization push have led to a surge in demand for Uber’s services as more people go online to use its services.

This boom has helped the business to more than double its revenue from $17.5 billion in 2021 to $37.3 billion in 2023. The company went from an adjusted net loss of $3.3 billion in 2021 to an adjusted net profit of $73 million in 2023, demonstrating the strong operating leverage it enjoys in tandem with increased scale. Cash flow also improved tremendously over this period, going from a free cash outflow of $743 million in 2021 to an inflow of $3.4 billion by 2023.

Uber’s recent 2024 third-quarter results demonstrated promising operational highlights. Monthly active platform users rose 13% year over year to 161 million. The number of ride-hailing trips increased by 17% to 2.9 billion, bringing in gross bookings of $41 billion, up 16%.

Financial results for the first nine months of 2024 showed continued improvement in profitability and free cash flow. Revenue rose 17% year over year to $32 billion with an adjusted net income of $1.7 billion. Free cash flow doubled from $2.6 billion to $5.2 billion.

It’s still early days for the platform as management believes there is still room for significant growth. Higher penetration rates should help to increase gross bookings in countries such as India and the U.K. for its Mobility segment. Specific segments such as airports show great potential, with Uber making up less than 10% of global airport trips in a $10 billion business.

The company also believes it can grow significantly in large countries such as Spain, Argentina, Japan, and Germany where its name is not yet synonymous with ride-hailing.

Its Delivery segment will use a membership program to drive engagement and increase delivery gross bookings. Uber is working on a grocery and retail product through its app that can help it expand its uses and categories to capture a wider breadth of consumers.

These initiatives can help to drive multi-year growth for the business, and investors can keep the faith that Uber can continue to improve its bottom line and cash flow.

Airbnb (NASDAQ: ABNB) operates a platform that helps to connect accommodation providers and renters who are booking short or long stays. The company has seen healthy growth over the years as more people use its platform to book holiday stays.

With more people using its platform, Airbnb also attracts more accommodation listings in a virtuous cycle, creating a network effect that makes its ecosystem more valuable. Revenue increased from $6 billion in 2021 to $9.9 billion in 2023 with the company going from a net loss of $352 million in 2021 to a net profit of $4.8 billion in 2023.

Airbnb has no major capital expenditures, so its free cash flow tracks its operating cash flow, which improved from $2.3 billion in 2021 to $3.9 billion in 2023.

The company followed up with a strong performance for the first nine months of 2024. Nights and experiences booked rose 8.9% year over year to 380.5 million while gross booking value increased by 11.1% to $64.2 billion.

Revenue rose in tandem with the higher level of transactions, increasing by 12% year over year to $8.6 billion. Operating income improved by 5.4% to $2.1 billion while profit before tax climbed 9% to $2.7 billion. Net profit for the period was distorted by a $2.7 billion tax credit recognized by the business in the previous corresponding period. Free cash flow continued to climb, going from $3.8 billion to $4.1 billion.

Airbnb has embarked on several initiatives to continue growing. With over 8 million listings on its platform, the company is focused on making hosting easier, to attract and retain new hosts.

Continuous improvements are also being introduced on its platform to make the app more personalized, and the winter 2024 release alone contained 50 such upgrades. Airbnb also plans to penetrate markets where it has little or no presence as part of its global expansion strategy.

The company’s initial public offering prospectus listed an estimated total addressable market of $3.4 trillion using 2019’s figures. That number should surely have grown further in the years after the pandemic, which translates to attractive growth opportunities for the company as it rides on the wave of travel and tourism around the world.

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Royston Yang has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, PayPal, Roblox, Shopify, and Uber Technologies. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short December 2024 $70 calls on PayPal. The Motley Fool has a disclosure policy.

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