Uber Technologies (UBER) shares surged Tuesday after the ride-sharing and delivery firm posted a narrower-than-expected first-quarter loss and said improving cash flows could allow it to return capital to investors over the coming months.
Uber said revenue for the three months ended in March rose 29% from a year earlier to $8.82 billion, narrowly topping Wall Street forecasts of an $8.72 billion tally, as gross bookings rose 19% to $31.4 billion. Rides revenue rose 72% to $4.33 billion, Uber said, while delivery rose 23% to $3.09 billion.
Record cash flows, however, might be the standout figure from Tuesday's earnings release: operating cash flows of $606 million and an all-time best in free cash flow of $549 million -- an increase of nearly $600 million from the year-earlier period.
Uber CFO: Mulling Buyback, Payout
Both tallies, in fact, were strong enough for Chief Financial Officer Nelson Chai to suggest that Uber, which has been operating at a loss since it was founded in 2009 and posted its first quarterly profit only last May, could consider buying back some of its shares, or even paying a dividend, as its business growth advances.
"Over the next few quarters, we will evaluate returning excess capital to shareholders as our cash flows ramp, and with any potential further monetization of our equity stakes over the long term," Chai told investors in Uber's quarterly letter to shareholders.
"We believe that our approach will position us to have the lowest cost of capital relative to our competitors, serving as a significant competitive advantage and allowing us to continue to grow our scale and platform advantages over the long run."
Uber shares were marked 6.6% higher in early trading, against a 0.4% decline for the S&P 500, to change hands at $34.98 each. That move would extend the stock's year-to-date advance to around 43%.
Uber CEO: 'Robust Outlook for Q2'
Uber's adjusted earnings for the quarter were $761 million, the highest on record, while its basic loss per share narrowed to 8 cents from the year-earlier loss of $3.03 per share.
Looking into the three months ending in June, Uber said it estimated adjusted earnings of between $800 million and $850 million, topping the Refinitv forecast of around $750 million, with gross bookings pegged between $33 billion and $34 billion.
"Our robust outlook for Q2 extends our track record of delivering strong growth and profitability," said CEO Dara Khosrowshahi.
"As the operating environment adjusts to a period of tighter capital availability and higher interest rates, we are well positioned to improve our competitive position across our key markets."
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