Uber (NYSE:UBER) Q1: Strong Sales

Jabin Bastian /
2022/05/04 7:17 am EDT

Ride sharing and on demand delivery service Uber (NYSE: UBER) reported Q1 FY2022 results that beat analyst expectations, with revenue up 136% year on year to $6.85 billion. Uber made a GAAP loss of $5.93 billion (partly due to unrealized losses related to the revaluation of stakes in Grab, Aurora, and Didi), down on its loss of $122 million, in the same quarter last year.

Is now the time to buy Uber? Access our full analysis of the earnings results here, it's free.

Uber (UBER) Q1 FY2022 Highlights:

  • Revenue: $6.85 billion vs analyst estimates of $6.1 billion (12.3% beat)
  • EPS (GAAP): -$3.04
  • Free cash flow was negative $47 million, compared to negative free cash flow of $187 million in previous quarter
  • Gross Margin (GAAP): 41.2%, up from 26.5% same quarter last year
  • Monthly Active Platform Consumers: 115 million, up 12 million year on year

“Our results demonstrate just how much progress we’ve made navigating out of the pandemic and how the power of our platform is differentiating our business performance,” said Dara Khosrowshahi, CEO.

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.

The 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 Growth

Uber's revenue growth over the last three years has been very strong, averaging 31.2% annually. Uber's revenue took a hit when the pandemic first hit, but it has since rebounded strongly, as you can see below.

Uber Total Revenue

This quarter, Uber beat analyst estimates and reported a very impressive 136% year on year revenue growth.

Ahead of the earnings results the analysts covering the company were estimating sales to grow 40% over the next twelve months.

There are others doing even better than Uber. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. You can find it on our platform for free.

Usage Growth

As a gig economy marketplace, Uber generates revenue growth by a combination of the volume of services users order and how much commission it earns.

Over the last two years the number of Uber's paying users, a key usage metric for the company, grew 9.62% annually to 115 million users. This is decent growth for a consumer internet company.

Uber Monthly Active Platform Consumers

In Q1 the company added 12 million paying users, translating to a 11.6% growth year on year.

Key Takeaways from Uber's Q1 Results

With a market capitalization of $57.6 billion, more than $4.18 billion in cash and the fact it is operating close to free cash flow break-even the company is in a strong financial position to invest in growth.

We were impressed by how strongly Uber outperformed analysts’ revenue expectations this quarter. And we were also excited to see the really strong revenue growth. Zooming out, we think this was a fantastic quarter that should have shareholders cheering. But the market was likely expecting more and the company is flat on the results and currently trades at $28.67 per share.

Uber may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.