Uber reports 20% top-line quarterly growth, generates $2.2 bn free cash

Uber on Tuesday reported quarterly revenue growth of 20 per cent year-on-year to $13.5 billion to generate $2.2 billion in free cash flow.

In the quarter ending September, Uber’s trips grew 22 per cent year-over-year and gross bookings grew 21 per cent year-over-year, the company said in a release.

Uber’s income from operations in the July-September quarter was $1.1 billion and adjusted EBITDA of $2.3 billion, up 33 per cent year-over-year.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. The metric is used to evaluate a company’s operating performance without factoring in external issues like financing decisions, accounting practices, or taxation.

Such a gap between operating income and adjusted EBITDA ($1.2 billion) suggests that Uber has significant non-cash expenses. The 33 per cent increase in adjusted EBITDA is a positive sign of improving operational efficiency or revenue growth.

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Generally, analysts look at adjusted EBITDA to assess a company’s financial health and performance.

Even as these numbers look good, Uber’s share fell the most in 11 months as these figures were lower than expected.

Analysts were expecting $1.62 billion in operating income, according to Bloomberg-compiled data.

The worse-than-expected performance was partially due to undisclosed legal and regulatory matters, Bloomberg quoted Chief Financial Officer Prashanth Mahendra-Rajah as saying.

Income from operations grew 5 per cent year-on-year to $1.1 billion.

‘One of the largest growth periods’

The July-September quarter marked “one of the largest trip-volume increases in the company’s history”, according to Dara Khosrowshahi, the CEO of Uber.

“We’re building on that momentum by investing in lifelong customer relationships, leaning into our local commerce strategy, and harnessing the transformative potential of AI and autonomy,” said Khosrowshahi in the release.

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Trips during the quarter grew 22 per cent year-over-year to 3.5 billion, driven by monthly active platform consumers (MAPCs) growth of 17 per cent year-on-year and monthly Trips per MAPC growth of 4 per cent year-on-year, the company said.

For years, Uber was a cash drain, but it has started making money in recent years after adjusting business practices and diversifying into non-ride categories.