Despite *takes a deep breath* sky-high gas prices, surging wait times, multiple lawsuits, and a general tech sector downturn *exhales* Uber’s most recent earnings report drove past analyst expectations like they were a passenger standing at the wrong pick-up spot.
What happened: Uber reported positive cash flow for the first time in its history, achieving a long-standing promise to investors after raking in a record revenue over the last quarter. The company’s shares, down 31% from the start of the year, soared ~18% on the news.
- While the company is still not profitable, strong cash flow marks how much money flows in and is essential to things like covering operations and repaying investors.
Why it’s happening: There are two big reasons. First, Uber employees were given marching orders to cut costs by slowing hiring and marketing efforts to focus on attaining profitability. Second, more drivers and riders than ever are using the service.
- Uber now has a record 122 million monthly, employs a record five million drivers (some looking to make extra cash as the cost of living rises), revenues from Uber Eats increased, and its new freight shipping arm brought in US$1.8 billion.
Why it matters: Like many high-growth tech companies, Uber has been on a long road to profitability, but tighter economic conditions are pushing uber to get there faster. Now that it can smell dollar signs, it could signal that the days of growth via easy VC money are over.