Uber reports positive cash flow for the first time

Uber recorded its first-ever positive cash flow quarter, having spent $25 billion since its inception 13 years ago in its race to rapid global expansion.

The loss-making Silicon Valley group, which has relied on heavily subsidized rides to disrupt the global taxi industry, said it generated free cash flow of $382 million in the three months leading up to the end of June.

That’s significantly higher than the $109 million that analysts had predicted, according to data from S&P Capital IQ. Free cash flow is defined as operating cash flow minus capital expenditures.

“This marks a new phase for Uber, which is self-funding its future growth with disciplined capital allocation, while maximizing long-term returns for shareholders,” said Nelson Chai, the company’s chief financial officer.

Uber’s stock price jumped nearly 10% in premarket trading.

The company said earlier this year it would limit spending to meet the goal of achieving positive free cash flow by the end of 2022.

That included slashing driver incentives and slowing corporate hiring — one of many companies making hiring easier in response to falling tech stock values.

The company still reported a quarterly net loss of $2.6 billion, of which $1.7 billion was attributable to underperforming investments, including its shares in standalone Aurora, the Singapore-based app Grab and Indian delivery app Zomato.

Chai said Uber’s revenue “would experience fluctuations from quarter to quarter due to the large size of the holdings on our balance sheet.”

“While we intend to monetize some of our holdings when the time is right, we have sufficient cash to give us the flexibility to maintain all of these positions, with the goal of maximizing value for Uber and our shareholders,” said he declared.

The net loss was worse than Wall Street estimates, but Uber’s earnings far exceeded analysts’ expectations on other measures.

Overall revenue was $8.1 billion, up 105% year-over-year as the company benefited from the re-emergence of people post-pandemic. Analysts expected $7.37 billion.

There were 1.87 billion trips made on the platform in the second quarter, up 24% year on year. The number of active users of Uber’s apps rose to 122 million globally, up 6% from the previous quarter.

Revenue from the “mobility” ride-sharing business rose 120% year-on-year, while revenue from the company’s delivery arm, Uber Eats, rose 37% to $2.69 billion .

Uber’s revenue benefited from a $983 million increase due to business model changes in the UK related to the reclassification of drivers as “workers”. This means that the total gross bookings in the country are considered revenue. In most other markets, Uber only counts its discount on each fare as revenue.

Overall adjusted earnings before interest, taxes, depreciation and amortization — Uber’s preferred measure of the profitability of its core businesses — was $364 million for the quarter, compared with a loss of $509 million in 2021. The measure removes some expenses and one-time expenses. costs, such as discontinued operations and payments made to help drivers during the pandemic.

Revenue from the company’s fledgling freight arm, which handles long-haul trucking, hit $1.8 billion, boosted by its recent $2.25 billion acquisition of Transplace, a shipping technology group. In June, Uber announced a partnership with Alphabet-owned Waymo to pilot self-driving trucking “at scale.”