Ride sharing and on demand delivery service Uber (NYSE: NYSE:UBER) missed analysts' expectations in Q3 FY2023, with revenue up 11.4% year on year to $9.3 billion. Turning to EPS, Uber made a GAAP profit of $0.10 per share, improving from its loss of $0.61 per share in the same quarter last year.
Is now the time to buy Uber? Find out by reading the original article on StockStory.
Uber (UBER) Q3 FY2023 Highlights:
- Revenue: $9.3 billion vs analyst estimates of $9.5 billion (2.6% miss, although Gross Bookings beat)
- EPS: $0.10 vs analyst expectations of $0.12 (16.1% miss)
- Free Cash Flow of $905 million, down 20.6% from the previous quarter (beat vs. expectations of $830 million)
- Gross Margin (GAAP): 39.5%, up from 30.6% in the same quarter last year
- Monthly Active Platform Consumers: 142 million, up 18 million year on year (slight miss)
Born out of a winter night thought: "What if you could request a ride from your phone?" Uber (NYSE: UBER) operates a global network of on demand services, most prominently ride hailing and food delivery, and freight.
Gig EconomyThe iPhone changed the world, ushering in the era of the “always-on” internet and “on-demand” services - anything someone could want is just a few taps away. Likewise, the gig economy sprang up in a similar fashion, with a proliferation of tech-enabled freelance labor marketplaces, which work hand and hand with many on demand services. Individuals can now work on demand too. What began with tech enabled platforms that aggregated riders and drivers has expanded over the past decade to include food delivery, groceries, and now even a plumber or graphic designer are all just a few taps away.
Sales GrowthUber's revenue growth over the last three years has been exceptional, averaging 56.3% annually. This quarter, Uber reported mediocre 11.4% year-on-year revenue growth, missing Wall Street's expectations.
Ahead of the earnings results, analysts covering the company were projecting sales to grow 17.5% over the next 12 months.
Usage Growth As a gig economy marketplace, Uber generates revenue growth by expanding the number of services on its platform (e.g. rides, deliveries, freelance jobs) and raising the commission fee from each service provided.
Over the last two years, Uber's users, a key performance metric for the company, grew 15.5% annually to 142 million. This is solid growth for a consumer internet company.
In Q3, Uber added 18 million users, translating into 14.5% year-on-year growth.
Key Takeaways from Uber's Q3 Results Sporting a market capitalization of $98.4 billion, more than $4.4 billion in cash on hand, and positive free cash flow over the last 12 months, we believe that Uber is attractively positioned to invest in growth.
It was great to see Uber's strong user growth this quarter, and we were glad that Gross Bookings beat expectations. Additional positives include beats on the adjusted EBITDA and free cash flow lines. On the other hand, Monthly Active Platform Customers missed slightly and revenue also missed analysts' expectations. Overall, the results were mixed but with no major surprises. The stock is flat after reporting and currently trades at $48.05 per share.
The author has no position in any of the stocks mentioned in this report.
