Uber Reports First Quarterly Operating Profit
Uber Technologies has announced that it achieved its first-ever quarterly operating profit, causing shares to rise on Tuesday. Additionally, the company provided third-quarter guidance that exceeded expectations.
In the second quarter, Uber reported earnings of 18 cents per share, a significant improvement compared to a per-share loss of $1.33 during the same period last year. Revenue also saw growth, increasing to $9.23 billion from $8.07 billion in the previous year.
Analysts had anticipated adjusted earnings of 16 cents per share on revenue of $9.34 billion, according to a FactSet poll.
According to CEO Dara Khosrowshahi, this outstanding quarter can be attributed to robust demand, new growth initiatives, and continued cost discipline. Uber experienced a 22% increase in trips and achieved a GAAP operating profit for the first time in its history.
Having transitioned from burning through billions in cash, Uber is now focused on attaining its first annual profit since its 2019 listing. The company has made substantial gains in market share while effectively managing costs through strategies such as maintaining a stable headcount and reducing spending on driver incentives. These measures have come at the expense of rival Lyft (LYFT).
Shares in Uber rose 3.3% in premarket trading, reaching $51.08. This year, the stock price has doubled, reflecting increasing optimism among Wall Street analysts regarding Uber's future prospects. Conversely, Lyft shares experienced a 1% decline.
Uber Reports $33.6 Billion in Gross Bookings for Q3
Uber has announced that its gross bookings for the third quarter reached $33.6 billion, representing an 18% increase from the previous year on a constant currency basis. This growth can be attributed to the company's ride-hailing, or Mobility, segment, which saw a 28% surge in gross bookings, reaching $16.7 billion. Meanwhile, delivery gross bookings also experienced a solid increase of 14%, reaching $15.6 billion.
For the upcoming third quarter, Uber projects gross bookings to be between $34 billion and $35.0 billion, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) ranging from $975 million to $1.03 billion. According to FactSet analysts, previous forecasts estimated gross bookings of $34.1 billion and EBITDA of $927 million for the third quarter.
Wedbush analyst Daniel Ives expressed confidence in Uber's performance, stating, "With another strong quarter of healthy growth and cost discipline, we believe Uber's path to $5 billion+ adj. EBITDA in 2024E and significant positive free cash flow is becoming increasingly clear."
In a separate announcement, Uber revealed that Chief Financial Officer Nelson Chai will be leaving the company effective January 5. A search for his replacement is currently underway.
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