Uber stock surged Tuesday after the ride-hailing and food-delivery company reported second-quarter earnings that exceeded expectations after a surprise first-quarter loss. Revenue grew 16% year-over-year, the fastest pace in five quarters.
Uber said that it earned 47 cents per share on sales of $10.7 billion for the June-ending quarter. On average, analysts projected the San Francisco-based company would post earnings of 31 cents per share on revenue of $10.6 billion, according to FactSet. For the same period a year earlier, Uber earned 18 cents per share on sales of $9.2 billion.
Chief Executive Dara Khosrowshahi highlighted that Uber's total trip grew 21% year-over-year, to 2.77 billion for the quarter. "The Uber consumer has never been stronger," he said in a news release. "More people are using the platform, and more frequently, than ever before."
Khosrowshahi, meanwhile, told analysts that Uber is in a good position to partner with autonomous-vehicle companies. His comments were likely aimed at investor concerns that companies like Tesla could launch their own ride-hailing services using their AVs.
On the stock market today, Uber stock gained 10.9% to close at 64.87. U.S. ride-hailing rival Lyft bounced 4% after skidding Monday to a nine-month low intraday. Lyft reports earnings tomorrow morning.
Uber Overcomes 'Noise' At Start Of Quarter
Uber also topped analyst expectations for two closely watched metrics. Gross bookings grew 19% year-over-year to $40 billion, ahead of analyst forecasts of $39.6 billion. Bookings include fares charged, as well as food deliveries and other services.
Meanwhile, Uber's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.57 billion topped estimates of $1.5 billion for the quarter.
"Uber drove strong second-quarter results, with all key metrics coming at least in line with Street expectations in the quarter, despite noise entering the second-quarter reporting period surrounding potential consumer weakness," William Blair analyst Ralph Schackart told clients early Tuesday.
For the current quarter, Uber said it expects gross bookings of $40.25 billion and $41.75 billion. The midpoint of the range is slightly lower than analysts' prior projections of $41.18 billion in booking for the September quarter, according to FactSet.
However, the company did offer better-than-expected estimates for its adjusted earnings in the current quarter. Uber projected EBITDA between $1.58 billion and $1.68 billion for the third quarter, with a midpoint just ahead of analysts' $1.63 billion forecast.
"The beat on adjusted EBITDA in the second quarter, and guidance being set modestly above Street expectations at the midpoint, demonstrates Uber's continued ability to drive not only top-line growth but strong profitability results," William Blair's Schackart added in the client note. He holds a positive outperform call on Uber stock.
Ad Business Growing
The news release from Uber highlighted its growing advertising segment. The company said its annual run-rate for advertising-related revenue exceeded $1 billion for the quarter.
Meanwhile, more people are using the Uber app overall, whether for rides or food delivery. Monthly active platform consumers grew 14% year-over-year to 156 million, Uber said.
Ride-related revenue grew 25% for Uber to $6.1 billion, significantly faster than food delivery's 8% growth to $3.3 billion in sales.
Uber 'Uniquely Positioned' For Autonomous Driving
Both Uber and Lyft shares have already been under pressure this year by concerns about Tesla launching a robotaxi service. Investors fear that Tesla's plan to launch its own app could give both Uber and Lyft a deep-pocketed new rival. However, Tesla delayed an event focused on its robotaxi vision from August to October and it is not clear how close any such project is to reality.
Still, Khosrowshahi addressed the concerns directly in remarks to analysts following Tuesday morning's report.
"Put simply, Uber is uniquely positioned to offer tremendous value for AV players looking to deploy their technology at scale," Khosrowshahi told analysts. "While the operation of a ride-hail network may seem simple, our technology obscures a huge amount of complexity."
Uber has an existing partnership with Google's Waymo self-driving car company, among others. Khosrowshahi said the company expects to announced additional AV-related partnerships soon.
"Uber can provide enormous demand without AV players needing to invest capital towards acquiring customers or building the marketplace tech that delivers reliability at the standard that consumers have come to expect," Khosrowshahi said.
Piper Sandler analyst Thomas Champion told clients that Uber "immediately addressed both the autonomous threat and consumer health (concerns), with the former being years away and the latter impact not seen."
Uber Stock: Down 5% In 2024 Prior To Report
Uber stock fell 1% in Monday trading, sliding intraday to its lowest levels since last November. Prior to the Q2 report, Uber shares were ahead 29% from 12 months earlier but down 5% year-to-date. The stock has slumped amid the robotaxi concerns and growing fears of a U.S. recession.
Coming into the report, Uber stock had an IBD Composite Rating of 42 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Uber stock's Relative Strength Rating score was 45 out of a best-possible 99. The score puts Uber's 12-month performance in the bottom half of all stocks tracked by IBD.
