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Uber Technologies Inc. reported its first-ever operating profit, but the shares slid as Wall Street questioned whether the company can maintain the pace of growth in its ride-hailing and delivery business.
Uber posted a second-quarter operating profit according to generally accepted accounting principles of $326 million and free-cash-flow of $1.14 billion.
Total revenue jumped 14% to $9.2 billion during the period, narrowly missing the $9.3 billion analysts were expecting. It was the slowest rate of growth since the first quarter of 2021.
The shares, which had doubled this year, dropped 5.1% to $46.97 in New York Tuesday morning.
"The market doesn’t believe Uber can keep top-line growth at these levels,” said Bloomberg Intelligence analyst Mandeep Singh.
The results have raised the bar for Uber going forward. Uber’s business has remained largely unscathed from elevated inflation rates as customers are still willing to pay a premium for the convenience of hailing a ride and getting food delivered to their door.
Trips in the US and Canada have recovered to pre-pandemic levels, while delivery demand hit an all-time high, despite increased costs for food.
After struggling with a driver shortage that caused fares and wait times to increase, Uber said the number of active drivers were up 33% in the second quarter compared with last year. The number of trips taken increased 26% from a year earlier to a record high.
