Uber appears to have defied inflationary woes this quarter, with the ride-hailing giant posting positive quarterly cash flow for the first time.
The US firm smashed analyst expectations of $263.2m for generated free cash flow, posting $382m in the second quarter.
“Last quarter I challenged our team to meet our profitability commitments even faster than planned—and they delivered,” said Uber CEO Dara Khosrowshahi in a statement.
Adjusted EBITDA hit $364m, again beating estimates of $257.89m, while Uber’s revenues climbed $983m as a result of “business model changes” in the UK, which meant drivers are now “workers” and total gross bookings in the country could now be counted as revenue.
It means total gross bookings in the country are counted as revenue. In most other markets, Uber counts only its cut from each fare as revenue.
The number of drivers and delivery persons also climbed 31 per cent to an all-time high, hitting nearly five million. This was matched by 122m people using the platform monthly, exceeding the 120.5m analysts had guessed.
“That’s right: more people are earning on Uber today than before the pandemic,” Khosrowshahi said.
On driver shortages that have been seen across the capital, a Uber spokesperson told City A.M. that new worker protections for drivers, as well as higher earnings, has led to more than 10,000 new drivers signing up with Uber in recent months. They said the company would continue to grow the driver base in London.
Research director at think-tank The Entrepreneurs Network Sam Dumitriu said he was “unsurprised” by the tech firm’s stellar results, praising the company’s previous prioritisation of growth over profitability.
He told City A.M. that this move was a “good bet” for Uber when interest rates were low, and the strategy was now coming good as we head into inflationary periods.
“The fundamental mobility business is pretty straightforward and sensible, so it makes sense it would get to that profitability.”
The buoyancy of the model can also be felt across the ride-hailing sector, with Lyft’s shares also climbing over ten per cent yesterday following the update.
Uber CFO Nelson Chai said we are in a “new phase for Uber”.
Uber forecast an even higher third-quarter operating profits and anticipates bookings of $29bn to $30.0bn.
Uber chief financial officer Nelson Chai said: “This marks a new phase for Uber, self-funding future growth with disciplined capital allocation, while maximizing long-term returns for shareholders.”
Uber shares are up nearly five per cent in early morning trading after a rocky year to date, where shares had dropped around 40 per cent.