In its first 14 years of existence, the question around Uber (UBER) was always: when will it be profitable, if ever? The Silicon Valley company’s affordable, gig economy-based ride-sharing service crushed the traditional taxi business around the world, but winning market share came at the cost of logging billions of losses every fiscal quarter for years—until now. Today (August 1), Uber posted its first-ever quarterly profit for the three months that ended June 30, marking a key milestone for the company and its CEO Dara Khosrowshahi, who joined the company in 2017 tasked with turning it around in the aftermath of ousted founder and former CEO Travis Kalanick.
In the April-June quarter, Uber posted a net profit of $394 million, or $0.18 per share, reversing a quarterly loss of $2.6 billion a year earlier. Analysts were expecting a quarterly loss of $18 million. Revenue came at $9.23 billion, slightly below analyst estimates but was up 14 percent from a year ago.
Uber was able to cut costs during the past quarter, thanks to layoffs and technical improvements in operational efficiency. The company has cut hundreds of positions, roughly 3 percent of its total staff, this year so far. It has also become better at combining delivery orders and reducing errors, the company said.
Demand for Uber’s core ride-hailing and food delivery business remained strong. The number of rides in North America surpassed pre-pandemic levels for the first time in the second quarter. Gross bookings, the total value of transactions booked through Uber apps, grew 16 percent year-over-year to $33.6 billion in the quarter. CEO Khosrowshahi believes Uber has reached its inflection point and expects every quarter from now on to be profitable.
“Everything came together this quarter. The team executed really well. We plan to be profitable every quarter going forward,” he told CNBC today. Khosrowshahi, 54, joined Uber in August 2017 from travel booking site Expedia, replacing founder Kalanick. He has steered the company through many challenges from regulatory compliance to corporate culture to driver relations.
Moving forward, Khosrowshahi envisions Uber to be “an operating system for everyday life in a city” that’s able to connect “every single vehicle and driver available to take you to any place in your local city,” he told CNBC, adding that Uber will utilize machine learning and artificial intelligence to achieve that goal.
In other news, Uber said today its CFO Nelson Chai will step down in January 2024. The company has begun searching for his replacement.
Chai joined Uber as CFO in 2018 from the banking and insurance industries. He led several major deals, including Uber’s initial public offering in 2019 and its acquisition of food delivery app Postmates in 2020.
Uber’s share price has barely risen since the company went public in 2019 at a valuation of $90 billion. The stock price jumped 4 percent in today’s pre-hour trading on the earnings numbers but fell more than 5 percent in mid-day trading, reflecting some investors’ worry on the second quarterly’s revenue miss.