Uber is to buy back as much as $7 billion (€6.5 billion) in shares to return capital to shareholders after reporting its first full year of operating profit and consistent positive free cash flow in 2023.

The repurchase plan “is a vote of confidence in the company’s strong financial momentum,” chief financial officer Prashanth Mahendra-Rajah said in a statement on Wednesday.

“We will be thoughtful as it relates to the pace of our buyback, beginning with actions that partially offset stock-based compensation, and working toward a consistent reduction in share count.”

The stock jumped as much as 11 per cent in New York, its biggest gain since last May. It had more than doubled over the past 12 months through the close of trading Tuesday.

Uber is the latest of a handful of tech companies announcing plans to boost returns to shareholders. Earlier this month Meta announced plans to buy back an additional $50 billion in shares and issue its first-ever quarterly dividend, while Airbnb expanded its buyback program by $6 billion on Tuesday.

The capital allocation plan marks another milestone of financial health for Uber after it racked up $30 billion in accumulated deficits over years of freewheeling spending as it sought to gain market share and push into new markets.

But last week, chief executive Dara Khosrowshahi said 2023 was an “inflection point” and signaled he would return capital to shareholders. The San Francisco-based ride sharing and delivery company reported its first full year of profit as a public company and projected continued growth in 2024. – Bloomberg