Uber Technologies (NYSE:UBER) experienced a 1% rise in premarket trading today, despite missing revenue expectations in the second quarter. Nonetheless, the company achieved two significant financial milestones during the quarter and offered an optimistic outlook, which helped offset the revenue miss.
Highlights of the Second Quarter:
Uber reported sales of $9.23 billion for the quarter ending on June 30th, slightly below the anticipated $9.33 billion. Despite this, the revenue still showed a promising 14% year-over-year increase, resulting in a net income of $394 million, or 18 cents per share. This marked a substantial improvement from the net loss of $2.6 billion, or $1.33 per share, during the same period in 2022. The consensus EPS estimate by Refinitiv was a loss of 1 cent. Adjusted EBITDA also saw an impressive 152% year-over-year growth, reaching $916 million. Gross bookings reached $33.6 billion, showing a 16% increase compared to the previous year.
Uber’s CEO, Dara Khosrowshahi, acknowledged the quarter’s achievements, emphasizing that it was the first time the company’s free cash flow exceeded $1 billion and the first quarter in which Uber achieved a GAAP operating profit. Khosrowshahi attributed these milestones to disciplined execution, a record audience, and strong user engagement.
Segments:
In terms of revenue contribution, Mobility was the highest with $4.89 billion, followed by Delivery at $3.06 billion and Freight at $1.28 billion. While the Freight business contracted compared to the previous year’s quarter, with $1.83 billion in revenue, this was mainly due to consumers prioritizing spending on services over shipping. Mobility gross bookings, however, saw a remarkable 25% year-over-year increase, reaching $16.73 billion, and Delivery bookings increased by 12% year-over-year, totaling $15.60 billion. Uber also saw its monthly active platform consumer base expand by 12% year-over-year, reaching 137 million.
Optimistic Third Quarter Guidance:
Uber’s third-quarter guidance surpassed expectations, with expected gross bookings between $34 billion to $35 billion and adjusted EBITDA between $975 million to $1.025 billion, both exceeding StreetAccount’s estimates.
CFO Transition:
Nelson Chai, who has been serving as CFO since 2018, is set to leave the company in January 2024. The search for his successor is currently underway.
In conclusion, Uber emerged from the pandemic stronger and more efficient, exemplified by its achievement of an operating profit – a long-awaited milestone for the company.