Despite losing $509 million, Uber Technologies Inc UBER topped top and bottom-line estimates for its second quarter, confirming it is well on its way to reaching EBITDA profitability by the end of the year.
Revenue amounted to $3.93 billion, exceeding Refinitiv estimate of $3.75 billion. Uber delivered an unexpected net income of $1.1 billion due to unrealized gains of $1.4 billion in DiDi Global Inc DIDI and $471 million in Aurora Innovation, as operating loss amounted to $1.19 billion.
Net income translated to earnings per share of 58 cents, well above the expected loss of 51 cents.
Uber reaffirmed it is on track to reach profitability on an adjusted EBITDA basis by the end of the year despite delivering a loss of $509 million, which is significant improvement from last year's $328 million. Heavy spending to bring drivers back to the road is to blame for this larger-than-expected loss despite more than doubled revenue as demand is rebounding. From June to July alone, Uber added 30% more drivers in the U.S.
Its biggest US competitor, Lyft Inc LYFT also topped top and bottom Wall Street estimates, but more importantly, it reported its first quarterly adjusted EBITDA profit amounting to $23.8 million, a quarter earlier than expected. Both ride-hailing companies made the increasingly popular decision demanding employees who want to return to the office to be vaccinated. Although they are strongly encouraging drivers to get the shot, they are not mandating vaccines for delivery drivers as they are spending hundreds of millions of dollars to keep them classified as independent contractors.
The Food Delivery Segment Is Still Going Strong
UberEats has been the company's strongest asset that helped it overcome the Covid-19 storm as approximately 111 million Americans are estimated to have used food delivery apps last year, almost doubling from 66 million only half a decade ago, with DoorDash DASH, Uber Technologies' Uber Eats, and JustEatTakeaway GRUB holding a combined market share of 85%. Interestingly, this segment it is still doing well despite restrictions being lifted across the globe.
In Uber's case, its food delivery segment continued to outperform its core ride-hailing business as it brought on $1.96 billion to the table, easily topping $1.62 billion.
The Delta Variant Is Keeping Everyone On Their Toes
With its lagging profitability and the growing headwinds created by the delta variant of COVID-19 casting a shadow over the end the of the pandemic, shares of fell about 4% in pre-market trading last Thursday.
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