What happened
Shares of Uber Technologies (UBER 2.36%) were moving higher today after the ridesharing giant posted strong growth and a significant improvement in profitability in its first-quarter earnings report.
As of 10:29 a.m. ET, the transportation stock is up 6.9%.
Image source: Uber Technologies.
So what
Uber continues to rebound from the depths of the pandemic and also likely benefited from comparisons with the quarter a year ago, when the omicron variant of COVID-19 peaked across much of the world.
In the first quarter, gross bookings rose 19%, or 22% in constant currency, to $31.4 billion, which was split evenly between mobility and delivery bookings. That drove revenue up 29%, or 33% in constant currency, to $8.82 billion, beating estimates at $8.72 billion.
Uber experienced broad-based growth, with monthly active customers up 13% to 130 million while trips in the quarter rose 24% to 2.12 billion. The company also delivered a long-awaited improvement in the bottom line as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $168 million to $761 million; free cash flow came in at $549 million, up from a loss of $49 million in the quarter a year ago, and on a GAAP basis, the company approached breakeven with a loss of $157 million, or $0.08 per share, which topped estimates by a penny.
CEO Dara Khosrowshahi said, "We significantly accelerated Q1 trip growth to 24% from 19% last quarter, with mobility trip growth of 32%, as a result of improved earner and consumer engagement. Looking ahead, we are focused on extending our product, scale, and platform advantages to sustain market-leading top- and bottom-line growth beyond 2023."
Now what
Uber forecast expanding profitability in the second quarter as well, calling for gross bookings of $33 billion to $34 billion, representing 15% growth at the midpoint, and adjusted EBITDA of $800 million to $850 million, up from $364 million in Q2 2022.
With solid top-line growth and increasing profitability, Uber is finally starting to fulfill the vision it presented when it went public in 2019, and it's also grabbing market share from rival Lyft, which just announced another round of layoffs.
If Uber's profitability continues to move higher, the stock should keep gaining.
