As Uber Technologies Inc UBER approaches its fiscal third-quarter earnings report, all eyes are on whether the company can maintain its growth trajectory following a strong performance in the second quarter.
Uber reported a 16% revenue increase year-over-year in the second quarter, reaching $10.7 billion and surpassing analyst expectations of $10.57 billion. Additionally, its GAAP EPS of 47 cents significantly outperformed the 31-cent consensus estimate.
What To Know: Breaking down the second quarter by segments, Mobility remained the cornerstone of Uber's revenue, accounting for $6.13 billion, a 25% increase year-over-year.
The Delivery segment also saw growth, reaching $3.29 billion, an 8% rise, while Freight revenue held steady at $1.27 billion.
These core segments contributed to a total Gross Bookings increase of 19%, reaching $39.95 billion, slightly above the consensus of $39.7 billion.
Uber's third-quarter outlook projects Gross Bookings between $40.25 billion and $41.75 billion, marking potential sequential growth. The company's Adjusted EBITDA is expected to be in the range of $1.58 billion to $1.68 billion, showing confidence in its ability to sustain profitability.
Analysts currently expect Uber's third-quarter revenue to reach $10.93 billion, with EPS of 35 cents. Given that Uber's second-quarter adjusted EBITDA margin improved to 3.9% of Gross Bookings (up from 2.7% the previous year), third-quarter guidance suggests continued efficiency gains, largely driven by Uber's Mobility segment.
The platform's workforce grew as well, with 7.4 million monthly active drivers and couriers, driven by rising demand across the platform. CEO Dara Khosrowshahi noted that Uber's growth in these areas aligns with its strategy of improving driver earnings, which hit a record $17.9 billion in the second quarter.
What Else: Investor focus in the third quarter will likely center on Uber's ability to sustain or improve these margins as the company faces macroeconomic pressures, including increased competition in Mobility and Delivery.
CEO Dara Khosrowshahi has pointed to the strength of Uber's consumer base and operational partnerships, particularly in autonomous vehicles, as strategic drivers moving forward. These initiatives may help Uber diversify its service offerings while deepening consumer engagement, a key focus as it navigates the evolving mobility landscape.
Financially, Uber is well-positioned with a strong cash base. The company held $6.3 billion in unrestricted cash and equivalents at the end of the second quarter and reported a robust free cash flow of $1.7 billion, indicating solid liquidity and operational strength.
Uber's capital position has enabled the company to invest strategically in technology and partnerships, with the goal of improving platform efficiency and expanding its competitive moat.
As Uber heads into its third-quarter earnings report, investors will watch closely to see if the company can exceed its projected Gross Bookings and Adjusted EBITDA figures.
How To Buy UBER Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Uber Technologies’ case, it is in the Industrials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
According to data from Benzinga Pro, UBER has a 52-week high of $87.00 and a 52-week low of $42.01.
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