Uber Technologies (NYSE: UBER) reports first-ever quarterly profit, but growth worries weigh heavily on investors; stock dips over 6%.
Uber Technologies’ (UBER) shares plunged over 6% on Tuesday as the concerns over slowing growth overshadowed the transportation company’s historic first-ever quarterly operating profit.
Uber’s second-quarter results seemed impressive as it easily beat estimates, with gross bookings surging by 16% to $33.6 billion. The revenue also witnessed a 14% increase, amounting to $9.23 billion (or 17% on a constant-currency basis). However, the revenue figure missed the estimated target of $9.3 billion by a slight margin.
Both mobility and delivery segments showed robust growth during the quarter, with mobility gross bookings surging by 25% to $16.7 billion and delivery gross bookings climbing by 12% to $15.6 billion.
Uber’s adjusted EBITDA also soared by 152% to $916 million, indicating a significant improvement in profitability. Moreover, the company’s free cash flow tripled to $1.14 billion.
On a GAAP basis, Uber reported an operating profit of $326 million, a significant turnaround from the operating loss of $713 million in the previous period. The company also delighted investors with better-than-expected GAAP earnings per share of $0.18, beating the consensus of a $0.01 loss per share.
Uber’s CFO, Nelson Chai, lauded the company’s progress in Q2, stating, “The unique power of the Uber platform and the team’s relentless focus on profitable growth was on full display in Q2, with record profitability and over $1 billion of quarterly free cash flow. I’m incredibly proud of the progress we’ve made, and Uber is well positioned to drive tremendous value for shareholders in the coming years.”
Uber forecasted gross bookings of $34 billion to $35 billion and adjusted EBITDA of $975 million to $1.025 billion for the third quarter. The gross bookings guidance represented an 18.5% increase from the same quarter last year but just 3% on a sequential basis, which seemed to lead to doubts about its growth potential.
Market analysts suggest that the recent sell-off may be partly attributed to the stock’s remarkable gains earlier in the year, with Uber’s shares nearly doubling leading up to today’s report. Investors seem to believe that the company improved performance has already been adequately priced into the stock.