Uber Technologies (UBER) experienced a 5.2% decline in its stock value, attributed to concerns about slowing growth despite the company’s achievement of its first-ever quarterly operating profit. In the second quarter, Uber surpassed expectations as gross bookings rose by 16% to $33.6 billion, and revenue increased by 14% to $9.23 billion. However, revenue missed estimates by a narrow margin of $0.07 billion.
Both mobility and delivery segments performed well during this period, with mobility gross bookings rising by 25% to $16.7 billion and delivery gross bookings increasing by 12% to $15.6 billion. Adjusted EBITDA also witnessed significant growth, surging by 152% to $916 million, and free cash flow tripled to $1.14 billion.
Uber reported an operating profit of $326 million on a GAAP basis, a considerable improvement from the previous year’s operating loss of $713 million. It also surpassed expectations with GAAP earnings per share of $0.18, compared to the consensus of a $0.01 loss per share.
Despite the impressive financial performance, concerns arose about Uber’s future growth potential, as the company’s third-quarter guidance projected gross bookings of $34 billion to $35 billion, representing only a 3% sequential increase. This led to doubts about the company’s ability to sustain high growth rates. Additionally, the stock had already experienced significant gains throughout the year, roughly doubling its value before the quarterly report, causing some investors to question whether the improved performance was adequately reflected in the stock price.
Going forward, Uber’s focus will be on delivering increased profitability to maintain investor confidence, especially if revenue growth remains in the teens.
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