Uber Turns Cash Flow Positive for the First Time in Bumper Quarter

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(Reuters) – Uber Technologies Inc reported positive quarterly cash flow for the first time ever on Tuesday and forecast third-quarter operating profit above estimates, as more people rely on its services for transport and ordering in food.

The company’s stock surged 15% to $28.2 and helped push shares of Lyft Inc by 11% and DoorDash by 4%.

Uber generated free cash flow of $382 million in the second quarter, topping analysts’ expectations of $263.2 million, as trips exceeded levels seen before the pandemic, boosted by office reopenings and a surge in travel demand.

“We have a very strong flow of new drivers who are signing up, coming on to earn,” Chief Executive Officer Dara Khosrowshahi said, adding that more than 70% of new drivers opted to join Uber to manage a hit from inflation and rising costs of living.

At its delivery business, which includes Uber Eats, growth slowed from the prior quarter but the company expects ordering in to become a habit for consumers.

Growth at Uber’s rideshare business surges: https://graphics.reuters.com/UBER-RESULTS/jnvwengayvw/chart.png

“These results are particularly impressive given the growing list of macro and micro concerns weighing on Uber and Lyft,” MKM Partners analyst Rohit Kulkarni said.

Lyft is scheduled to report results on Thursday.

Uber’s net loss was $2.6 billion, largely hurt by investments in companies such as India’s Zomato. It is likely to sell its stake in the Indian food-delivery firm on Wednesday, a source told Reuters.

It now expects adjusted EBITDA of $440 million-$470 million, also above estimates of $383.95 million.

(Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva)

Copyright 2022 Thomson Reuters.

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