Shares of Uber Technologies (UBER 1.72%) were moving lower as better-than-expected revenue in its first quarter wasn't enough to offset pessimism around the ridesharing industry, especially after rival Lyft (LYFT 12.02%) plunged on a disappointing second-quarter outlook.
While Uber even rescheduled its earnings release from this afternoon to this morning to counteract the sell-off coming from Lyft, that wasn't enough to change the market's mind.
At 12:12 p.m. ET, Uber stock was down 9.1%, while Lyft had plunged 31.9% at the same time.
Uber continued to recover from the depths of the pandemic in the first quarter with gross bookings up 35% to $26.4 billion and 58% growth in the mobility business, the segment that had been hit hardest in the pandemic, to $10.7 billion.
Revenue in the quarter jumped 136% to $6.85 billion, boosted by Uber Freight's acquisition of Transplace and a change in UK Mobility's business model. That result easily beat estimates at $6.13 billion.
On the bottom line, the company posted adjusted EBITDA of $168 million, up from a loss of $359 million in the quarter a year ago, and it narrowed its free cash flow loss from $682 million to $47 million, showing it's taking meaningful steps toward profitability. Adjusting for a $5.5 billion mark-to-market loss on investments, it finished in line with analyst estimates of a per-share loss of $0.24.
CEO Dara Khosrowshahi said, "Our results demonstrate just how much progress we've made navigating out of the pandemic and how the power of our platform is differentiating our business performance. In April, mobility gross bookings exceeded 2019 levels across all regions and use cases."
Looking ahead to the second quarter, Uber sees gross bookings of $28.5 billion to $29.5 billion, representing 32% growth, essentially in line with its growth rate in the first quarter. On the bottom line, it expects adjusted EBITDA of $240 million to $270 million, a significant improvement from both the first quarter and Q2 2021, when it lost adjusted EBITDA of $509 million.
The sell-off is surprising given the solid results, but the market seems skeptical about the recovery in ride-hailing even as the company says results topped pre-pandemic levels in all segments and regions. Uber is also still spending heavily on share-based compensation, which is weighing on GAAP results. It seems the market still needs to be persuaded that the transportation stock can be a sustainably profitable company.