Uber Q2 Earnings: Reports its first profit since inception; Weak revenue forecasts pull Uber shares lower
Uber Technologies, the ride-hailing giant reported its first-ever operating profit in the second quarter of 2023. The company generated $326 million in operating profit, on revenue of $9.23 billion. This was a sharp turnaround from the previous year, when Uber lost $713 million.
Uber Q2 Earnings: Historical Share Price Performance
|1 month||1 year||5 year|
(As on 1st Aug)
The share price fell by nearly 6% even after making its first-ever profit. This can be attributed to increasing competition from other ride-hailing and delivery companies, such as Lyft, DoorDash, and Instacart. This competition could put pressure on Uber's margins in the future. Even the company's earnings report missed analyst expectations, with revenue coming in below estimates.
Uber Q2 Earnings: What factors contributed to Uber's first profit?
First, the company's ride-hailing business has been growing steadily. In the second quarter, Uber's rides gross bookings grew 16% year-over-year (YoY) to $33.6 billion and the Monthly Active Platform Consumers (MAPCs) rose to 12% YoY to 137 million users. Trips during the quarter grew 22% YoY to 2.3 billion, or approximately 25 million trips per day on average.
|Monthly Active Platform Consumers||122 million||137 million||12%|
|Trips||1.8 billion||2.28 billion||22%|
|Gross Booking||$29.1 billion||$33.6 billion||16%|
|Revenue||$8.1 billion||$9.2 billion||14%|
|Net Profit||($713 million)||$326 million||-|
Second, Uber's delivery business has also been growing rapidly. In the second quarter, Uber's delivery revenue rose 14% YoY to 15.6 billion. Delivery Gross Bookings grew 14% YoY on a constant currency basis. On a sequential basis, Delivery Gross Bookings grew 4% QoQ. Moreover, the Take Rate of 19.6% grew 20 bps YoY.
Third, Uber's food delivery business, Uber Eats, has been a major driver of growth for the company in recent years. In the second quarter, Uber Eats' revenue grew 37% YoY. Additionally, the company entered into a new global agreement with Domino’s in July, which allows US customers to order Domino’s products through the Uber Eats and Postmates apps.
Furthermore, Uber has been able to reduce its costs in recent quarters. This is due to a number of factors, including the layoffs of employees, the consolidation of its operations, and a reduction in administrative expenses by 42.3% YoY.
Uber Q2 Earnings: How is Uber performing in different parts of the globe?
Changes in the business model in different parts of the world have benefited the transportation conglomerate company. Here’s a revenue breakdown by geographical region:
|United States and Canada||$4.9 billion||$5.1 billion||4%|
|Latin America||$481 million||$627 million||30%|
|Europe, Middle East and Africa||$1.8 billion||$2.4 billion||31%|
|Asia Pacific||$810 million||$1.1 billion||31%|
Uber Q2 2023: What does Uber's first profit mean for the future of the company?
Overall, Uber's first profit is a positive sign for the company's future. The company's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is positive for the first time at $916 million, up $552 million YoY. However, there are still some challenges that Uber will need to overcome in order to become a truly profitable business.
Uber Q2 2023: Earnings Outlook for the Upcoming Quarter
For Q3 2023, the company anticipates:
- Gross Bookings of $34.0 billion to $35.0 billion
- Adjusted EBITDA of $975 million to $1.025 billion
This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.