Uber wants to be ‘profitable for every quarter going forward’ after a strong Q2

August 01, 2023 09:57 AM PDT | By Invezz

Uber wants to be ‘profitable for every quarter going forward’ after a strong Q2 — Image source: Invezz

Why is Uber stock down today?

The stock is responding primarily to revenue that came in shy of Street estimates.

Much of that weakness was related to the freight business that tanked 30% on a year-over-year basis as consumers continued to prioritise services over goods in the recently concluded quarter. But CEO Dara Khosrowshahi said today on CNBC’s “Squawk Box”:

Service keeps getting better. Audience grew year-on-year, frequency of use, buyers active grew. Combine that with cost discipline – the stock will take care of itself.

He doesn’t see rival Lyft Inc as a meaningful threat either.

Uber issues upbeat third-quarter guidance

On the plus side, though, Uber now forecasts about a billion-dollar in adjusted EBITDA and up to $35 billion of gross bookings in Q3, as per the earnings press release.

Analysts, in comparison, had called for $927 million and $34.1 billion respectively. According to the Chief Executive:

We tend to under promise and over deliver. Everything came together this quarter. We plan to be profitable for every quarter going forward.

Wall Street currently has a consensus “buy” rating on Uber stock.

Notable figures in Uber’s Q2 earnings report

Net income printed at $394 million or 18 cents a share
Had $2.6 billion of net loss ($1.33 per share) a year ago
Revenue went up 14.5% year-on-year to $9.23 billion
Consensus was a cent of loss on $9.34 billion in revenue

Despite the sell-off today, Uber shares are still up a whopping 80% year-to-date. CEO Khosrowshahi added:

The stock is now reflecting a view that this can be a scale platform on the internet that can be very profitable. We have mobility, delivery all on one platform. So, we’ve got a competitive advantage.

Uber’s vision for the future

Uber Technologies surpassed the $1.0 billion market in terms of free cash flow in its second quarter. Khosrowshahi also told CNBC today:

The 3.0 version for Uber looks like … you’re an operating system for everyday life in a city. We become more of a utility, a service that you can’t deal without.

In Q2, Uber noted a 14% and a 38% annualised growth in its delivery and mobility businesses, respectively. Its bookings climbed to $33.6 billion – roughly in line with expectations.

Separately, Uber Technologies Inc said Nelson Chai – its Chief Financial Officer will step down on January 5^th. Search for a replacement has already begun.

The post Uber wants to be ‘profitable for every quarter going forward’ after a strong Q2 appeared first on Invezz.

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