Uber
The stock price reaction is similar to what we are seeing in other tech companies as investors seem to have priced in near-term weakness and are focusing on an improving outlook. Uber's beat on the top-line also provides insight that travel demand continues to be strong and not exactly consistent with the prevailing recession narrative.
Inside the Numbers
In Q2, Uber reported a $1.33 in earnings per share which badly missed analysts' estimates as the company took a $1.7 billion writedown on its investments in Aurora, Grab, and Zomato. Even accounting for this, the company lost $900 million in the quarter.
On an EBITDA basis, Uber generated $364 million which was well above its previous forecast of $255 million. Gross bookings were up 33% to reach $29.1 billion which was in line with its Q1 forecast.
Uber's mobility division has gross bookings of $13.4 billion, a 57% increase from last year. In contrast, Uber's delivery division generated $13.9 billion, a 12% increase from last year.
Mobility continues to outpace deliveries in terms of revenue generation - another sign that the economy is returning to normal. Mobility had $3.55 billion in revenue, while delivery had $2.7 billion in revenue. Freight continues to grow with $1.83 billion in revenue.
The adverse economic conditions have benefitted Uber in that drivers are returning to the platform as it noted an acceleration in new driver sign-ups and activity. New driver sign-ups increased by 76% compared to last year. In Q2, the company had 1.87 billion trips, a 9% increase from last quarter and 24% up from last year.
As a result, wait times have significantly declined with rides at all-time highs in many major markets. The company also continues to adopt new driver-friendly policies like letting them choose what trips they want to take and see their earnings before they accept a trip.
It also issued a better-than-expected forecast for Q3. The company expects gross bookings between $29 billion and $30 billion and adjusted EBITDA of $440 million to $470 million.
