Uber reported on their Q2 2023 financial results. The report with a profit (!) and strong guidance (but a revenue miss) sent the stock prices up in the pre-market trading but then down at the beginning of the day.
I see that some news outlets have changed headlines to explain what is going on (first saying that the stock went up despite the revenue miss and then that it went down despite the profits). I have no idea how to explain the market behavior, but I’ve listened to the earnings call and made my notes as a usually do. I share them below.
Uber, The One and Only
TLDR; Uber delivered almost $400 in net income and – for the first time – had shown a quarterly free cash flow of over $1B. It continues to expand its use cases around mobility and delivery and leverage machine learning algorithms for its products. It also goes after enterprise customers for its ADs.
Uber stopped mentioning the difficult economic climate.
In several previous calls, here and there we could hear about challenging financial times for consumers. On today’s call, the topic did not come up neither in the prepared remarks nor in the questions.
Uber works to tailor AD product to enterprises.
As Dara Khosrowshahi explained, currently the vast majority of the Uber advertisers are SMBs bidding on their positions in the marketplace. However, he pointed out that the company is also interested in enterprise customers and is working now to build AD tools for them. Those tools would allow to target a more precise audience as well as scheduling ads for certain times of day when those enterprise customers know they want to drive more demand.
Uber delivers your order with a cherry on top.
The company is experimenting with a new delivery product called Add-ons. The idea is simple: when consumer orders from a certain restaurant and along the courier route there are businesses that this consumer is likely to order from, the app will offer add-ons. Dara shared that he himself was offered an ice cream from a local shop as an add-on to his other delivery.
Uber wants to be your One and Only.
The company continues to scale Uber One, its cross-platform subscription program. While the product is being rolled out into more markets, it also gains new features along the way. For example, Uber Cash – is a cashback that subscribers receive from eligible rides. This cash they can then spend on other services within the platform.
Overall, looks very impressive and there is a lot ahead in terms of product evolution and market expansion, and further penetration.