Uber surges 16% after strong ride-hailing demand in the 2nd quarter helps it inch closer to profitability

• Uber stock jumped 16% after the ride-hailing app delivered better-than-expected revenue in its second-quarter earnings report.
• Strong demand for rides helped drive Uber's free cash flow to positive territory for the first time ever.
• "Last quarter I challenged our team to meet our profitability commitments even faster than planned—and they delivered," Uber CEO Dara Khosrowshahi said.

Uber stock soared as much as 16% on Tuesday after the ride-hailing company delivered strong second-quarter revenue that surged past analyst estimates.

Strong demand for rides helped inch the company closer to profitability, and allowed the company to report its first quarter ever of positive free cash flow.

Here were the key numbers:

Revenue: $8.07 billion, versus analyst estimates of $7.4 billion
Earnings per share: -$1.33, versus analyst estimates of -$0.27
Trips: 1.87 billion, up 24% year-over-year

Revenue for Uber more than doubled year-over-year, and the company's gross bookings reached an all-time high of $29.1 billion as consumers continued to order takeout food and take trips despite the ongoing rise of inflation.

The company said 122 million people used its platform on a monthly basis, which was ahead of analyst estimates of 120.5 million. The company expects the strength to continue into the third-quarter, estimating that it will book between $440 million to $470 million in adjusted EBITDA.

With a focus on reaching profitability, Uber delivered second-quarter adjusted EBITDA of $364 million, and $382 million in free cash flow.

"Last quarter I challenged our team to meet our profitability commitments even faster than planned—and they delivered," Uber CEO Dara Khosrowshahi said. "Importantly, they delivered balanced growth... all on a platform that's larger than ever, with the number of consumers and earners using Uber now both at all-time highs."

"We became a free cash flow generator in Q2, as we continued to scale our asset-light platform, and we will continue to build on that momentum," said Nelson Chai, CFO. "This marks a new phase for Uber, self-funding future growth with disciplined capital allocation, while maximizing long-term returns for shareholders."

Driving Uber's net loss of $2.6 billion in the second-quarter was mostly due to its equity investments in other ride-hailing and delivery app companies outside of the US. The company recorded big unrealized losses in its investments in Grab Holdings, Aurora Innovation and Zomato.

Despite Tuesday's gain, Uber stock is down 34% year-to-date, and is down 57% from its record high reached in 2021.