On Tuesday morning, Uber Technologies ( UBER) released its first-quarter results. For the three-month period ended March 31, UBER posted a GAAP loss per share of $0.08 on revenue of $8.823B.
The top-line and bottom-line numbers both beat Wall Street's expectations as the revenue print showed year-over-year growth of 29%, or 33% in constant currency. The loss per share compares very well to the per-share loss of $3.04 that UBER posted for the year-ago period.
Investors should make note that UBER incurred stock-based compensation of $470M for the quarter, but like a real company, records these expenses as ordinary, not making silly adjustments in order to simply post an artificially positive-looking earnings number.
Gross bookings increased 19% year over year, or 22% in constant currency. Adjusted EBITDA margin as a percentage of gross booking was 2.4%, up from 0.6% for the year-ago comparison. Monthly active platform consumers reached 130M (+13%) driven by continued improvement in consumer activity for the company's mobility offerings. Trips on the platform grew 24% year over year to 2.1B.
Taken from the press release, CEO Dara Khosrowshahi stated: "Looking ahead, we are focused on extending our product, scale and platform advantages to sustain market-leading top and bottom-line growth beyond 2023." CFO Nelson Chai added: "We delivered record profitability and free cash flow in Q1, and we are poised to expand profitability again in Q2."
Segment Performance
-- Mobility posted gross bookings of $14.981B (+40%, +43% in constant currency), while generating revenue of $4.33B (+72%, +78% in cc), and producing adjusted EBITDA of $1.06B (+72%).
-- Delivery posted gross bookings of $15.026B (+8%, +12% in cc), while generating revenue of $3.093B (+23%, +29% in cc), and producing adjusted EBITDA of $288M (up from $30M).
-- Freight posted gross bookings of $1.401B (-23%, -23% in cc), while generating revenue of $1.4B (-23%, -23% in cc), and producing adjusted EBITDA of $23M (up from $2M).
Geographic Performance
U.S. and Canada generated revenue of $5.132B, up 12%.
EMEA generated revenue of $2.094B, up 86%.
APAC generated revenue of $1.032B, up 41%.
Latin America generated revenue of $565M, up 31%.
Guidance
For the current quarter, UBER anticipates gross bookings of $33B to $34B, and adjusted EBITDA of $800M to $850M.
Fundamentals
For the first quarter, operating cash flow improved to $606M from just $15M a year ago. Capital expenditures were down small to $57M, bringing free cash flow up to a positive $549M. UBER does not pay a dividend to shareholders or repurchase common stock for the company treasury.
Turning to the balance sheet, UBER ended the period with a cash position of $4.166B, or $5.063B when including restricted cash. This puts its current assets at $9.196B. Current liabilities add up to $8.683B, leaving the company with a current ratio of 1.06, which I don't love, but does pass muster.
Total assets amount to $32.451B, including $9.951B in goodwill and other intangibles. At almost 31% of total assets, this is not a problem yet, but it is something for investors to keep their eyes on. Total liabilities less equity comes to $23.779B, including $9.257B in long-term debt. I'd like to see the cash position catch up to the long-term debt-load, but that will not fail this balance sheet. UBER gets a passing grade.
My Thoughts
Three things strike me.
1. Almost every time I hear CEO Dara Khosrowshahi on TV, he impresses me in some way.
2. UBER has become the undisputed "best in class" player in the ride-sharing, local delivery space.
3. UBER's results appear to be getting consistently better. This is a real company now, and they have been for a while. I am just not sure that the driver/courier vs. employee debate is over for good, but if it is, this company is on its way (opinion).
The stock has gone into a basing period of consolidation since apexing early in February. Tuesday's morning's pop has put some life into both the stock's Relative Strength reading and daily Moving Average Convergence Divergence (MACD).
Though the shares found staunch support at their 200-day simple moving average (SMA), which is bullish, they have now "gapped" up on consecutive days, while retaking their 21-day exponential average (EMA) and 50-day EMA in the process. What I am trying to say is that I would rather buy UBER shares on a retest of one of those three lines than on the second straight big "up" day for the name. That said, I definitely think that UBER is now investable.
In short, I would rather write (sell) July 21 UBER $32.50 puts for roughly $1.30 than pay $35 outright for the stock Tuesday morning.
If the shares never come back in, the investor pockets the premium sold. Should the investor end up eating the shares in July, at least said investor will run with a net basis closer to $31.20 than $35.
