Uber makes first profit after $31.5 billion in losses – 8/1/2023 – Market

Uber posted its first operating profit on Tuesday due to better cost control, marking a turning point after years of heavy spending in an expensive race to growth.

The ride-hailing company’s much-anticipated financial milestone came after it racked up a total of $31.5 billion in operating losses since 2014, the first year it disclosed details of its finances.

The company had already undergone one of the most ambitious global expansions undertaken by a tech startup, using mountains of cheap capital to subsidize travel and capture market share.

Uber has reported after-tax earnings for several previous quarters, though only thanks to gains on disposals or revaluations of its equity investments.

By contrast, in the second quarter of this year, it reported $326 million in pre-tax earnings from its operations, a turnaround from the $713 million operating loss it suffered a year earlier.

Uber also released a stronger-than-expected forecast for the current quarter. She predicted that earnings before interest, taxes, depreciation and amortization would reach $975 million to $1.025 billion, compared with a Wall Street estimate of $915 million. Its demand forecast of $34 billion to $35 billion was above the $33.9 billion forecast by analysts.

Chief Executive Dara Khosrowshahi said the company’s move to profitability, as well as its quarterly free cash flow of more than $1 billion, reflects “disciplined execution, record viewership and strong engagement.”

He added that the “strictness on costs” left the San Francisco-based group “well positioned to sustain strong incremental profit generation.”

The results show how Uber has proven to be more resilient to high inflation and economic uncertainty compared to its rivals.

Lyft, which will report second-quarter results next month, said earlier this year it would cut its fares, having lost market share to Uber since the start of the coronavirus pandemic.

Uber said on Tuesday that its second-quarter revenue grew 14% to $9.23 billion, slightly less than Wall Street expected, although the company kept its total cost growth at just 1%. .

Along with unrealized gains on investments, Uber posted a profit of $394 million for the quarter, or $0.18 per share, compared with a loss of $2.6 billion a year earlier. Analysts had expected a loss of $0.01 per share for the period.