Uber Grows Revenue By 16% To $10.7bn Amid Weakening US Economy
Uber has reported that it has not yet observed a significant impact on consumer spending from the weakening US economy.
The San Francisco-based company stated on Tuesday that demand for food deliveries remains “healthy.”
Uber’s Chief Executive, Dara Khosrowshahi, noted that the average number of trips booked by its 156 million monthly active users during the three months ending June 30 reached a record high.
According to a report by the Financial Times seen by THE WHISTLER, Uber’s revenue grew by 16 per cent year-over-year to $10.7bn, slightly exceeding analyst forecasts of $10.6bn.
This growth was driven by increased sales in both its ride-hailing and food delivery businesses. Net income for the second quarter was $1bn, significantly surpassing market expectations of $659.5m.
“The Uber consumer has never been stronger,” said Khosrowshahi.
“Uber’s delivery segment had recorded healthy order growth in the US during the quarter, and while there have been some concerns about consumer spend on restaurants and delivery, we are not seeing any impact today”, he added.
His comments come a day after fears about a weakening US economy plunged global markets into turmoil, with tech companies among the worst hit.
Shares in Uber, which have gained almost a third over the past 12 months, rose more than 5 per cent in pre-market trading on Tuesday.
Net income, which rose 158 per cent year on year, was boosted by a $333m revaluation of Uber’s stakes in other groups, including self-driving car company Aurora. Uber’s operating profit was $796m, just below expectations for $799.8m.
Looking ahead, Uber said it expected its adjusted earnings before interest, tax, depreciation and amortisation — its preferred profit measure — to be between $1.58bn and $1.68bn in the current period, with the midpoint ahead of analyst expectations of $1.62bn.
Gig economy companies, including Uber and its US rivals Lyft and DoorDash, have come under pressure from investors to demonstrate that they can deliver lasting profits while growing their businesses, following an era of furious spending by the groups and years of deep losses.
Last year marked Uber’s first full year of operating profitability, a milestone that the company said was an “inflection point”. Chief financial officer Prashanth Mahendra-Rajah said on Tuesday that Uber’s “top priority” was investing in growth, including via potential acquisitions.
Resilient consumer demand in the latest quarter had been helped by Uber’s efforts to make its delivery offerings more affordable, including through merchant promotions on the platform and lower average delivery fees, it said. Improving economies of scale had also driven down Uber’s costs and boosted profitability.
A growing ads business helped boost Uber’s profitability, with the high-margin unit now at an annual “revenue run rate” of more than $1bn, Uber said.
The total value of Uber’s ride-hailing, delivery and freight bookings rose 19 per cent year on year to $40bn, a slight slowdown from the 20 per cent growth reported in the previous quarter and the 22 per cent in the period before that.
Stripping out the impact of currency moves, that combined total for the current quarter would increase by between 18 and 23 per cent, in line with the long-term guidance Uber gave at its February investor day.
As part of its growth plan, the company has been pushing into new markets, including grocery delivery and the deployment of self-driving vehicles on its ride-hailing app through partnerships with companies including Waymo.
Uber’s growing grocery and retail delivery business had “a clear path to ebitda profitability”, said the company on Tuesday.
Initial results from its partnership with Instacart, which will allow the grocery delivery group’s US users to order from restaurants listed on Uber Eats, were “encouraging”, the company said.
