Uber Stock Sees Significant Jump After Great Earnings Report

Uber Technologies (NYSE: UBER), the ride-hailing giant, released its second-quarter earnings report yesterday, bringing some good news to the depressed stock. The company's share price increased by 18.90% after the earnings release and is 2.22% higher today. The company's share price was down roughly 44% year-to-date before its earnings release, which has reduced its losses substantially. 

What were the key points from Uber's earnings release?

The company's total gross bookings of $29.1 billion surpassed the analyst consensus of $28.8 billion. These bookings were split between gross mobility bookings of $13.4 billion, up 55% from the previous year, and gross delivery bookings of $13.9 billion, up 7% year-over-year (YoY). During the pandemic, Uber's delivery business saw tremendous growth, while its mobility segment saw massive declines due to lockdowns. The mobility segment is experiencing a revival as the world continues to open up. 

Uber's total revenue came in at $8.07 billion, or a 105% YoY increase. This is 9.5% higher than the analyst consensus of $7.37 billion for the quarter. The rise in revenue was due to changes in Uber's UK mobility business model, which reclassified drivers as workers, meaning total gross bookings must be recorded as revenue. The company also attributes its revenue increase to the acquisition of Transplace by Uber Freight at the end of 2021. 

This quarter was the first time Uber has recorded a positive cash flow for an entire accounting quarter. The company announced that it generated a free cash flow of $382 million after burning through $25 billion since its founding 13 years ago. This free cash flow is over double the analyst consensus of $109 million. This proves that the company can be profitable, as investors abandon loss-making stocks with the end of quantitative easing. 

Uber recorded a net loss of $2.6 billion during the quarter. However, roughly $1.7 billion of this loss was due to poorly performing investments. These include its shares in self-driving vehicle company Aurora (NASDAQ: AUR), Singapore-based app Grab (NASDAQ: GRAB), and Indian delivery app Zomato (NSE: ZOMATO). CFO Nelson Chai said Uber's income would "see swings from quarter to quarter due to the large size of equity stakes on our balance sheet".

How did Uber's second-quarter results affect its share price?

Uber's positive results saw its share price jump by almost 19% by the end of trading yesterday. This was predominantly due to the company recording better than expected revenue and positive free cash flow for the first time. The news of positive cash made up for the disappointing net loss, which was mostly recorded on paper. This has raised investor confidence in the company's ability to become self-sustaining and efficiently allocate capital to improve its profitability in the future.