Uber Technologies Inc. reported better-than-expected net income, boosted by record ridership volumes, offering evidence the ride-hailing giant is officially moving beyond its cash-burning startup past and making progress on its profitability goals. 

The company generated net income of US$394 million in the second quarter, far surpassing the loss of US$49.2 million analysts were expecting, thanks in large part to unrealized gains in equity investments. The company also generated its first-ever operating profit according to generally accepted accounting principles, of US$326 million, and recorded free-cash-flow of US$1.14 billion. The shares rose about 3.7 per cent in premarket trading in New York.

“Both of these milestones were achieved through a combination of disciplined execution, record audience, and strong engagement,” Chief Executive Officer Dara Khosrowshahi said in prepared remarks. He added that the company was “well-positioned to sustain strong, incremental profit generation.”

Uber projected gross bookings of US$34 billion to US$35 billion in the current quarter and adjusted earnings before interest, tax, depreciation and amortization of US$975 million to US$1 billion, both beating analysts' forecasts.

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The company also announced that Chief Financial Officer Nelson Chai is stepping down effective Jan. 5, marking one of the most high-profile departures since the company went public in 2019.  A search for his replacement is underway. 

“When I joined the company in 2018, Dara asked me to lead the financial transformation of the company,” Chai said in a statement. “As you can see from our Q2 results, that transformation has occurred. I am very proud of the great work we have all accomplished and thank Dara for his partnership.”

Chai's pending departure comes as Uber is maturing into a broader and more stable company. 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. After struggling with a driver shortage that caused fares and wait times to increase, Uber has managed to get its driver supply above pre-pandemic levels  — it was up 33 per cent in the second quarter compared with last year. Uber has focused on adding new features and products to the app including a teen rides program, the ability to book group and guest rides, video gift messaging and a boat service. 

The number of trips, which jumped 26 per cent in the quarter, gross bookings and active drivers in the mobility unit all hit record highs, the company said.

San Francisco-based Uber shares have doubled in the last year, a stark divergence in performance from Lyft Inc., which has struggled to fully recover from the effects of Covid-19. Unlike Uber, Lyft only operates in North America and doesn't have a food-delivery unit. Earlier this year, Uber's crosstown rival installed a new chief executive officer and lowered prices to stem market share losses to Uber. Uber accounted for 74 per cent of the US consumer ride-share sales at the end of June, while Lyft had 26 per cent, according to Bloomberg Second Measure.

When the pandemic crushed demand for rides, Uber's decision to focus on Uber Eats helped it gain a foothold in the meal delivery sector which has continued to grow, even as indoor dining has resumed. Uber Eats generated US$3.06 billion in revenue, slightly below Wall Street's estimates, but better-than-expected adjusted Ebitda of US$329 million as the unit benefitted from advertising. Customers seem to have been undeterred by higher prices for food, with delivery frequency at an all-time high of four monthly orders per eater, up eight per cent from a year earlier.

Total revenue jumped 14 per cent to US$9.2 billion during the period, the company said in a statement Tuesday. That narrowly missed the US$9.3 billion analysts were expecting, according to data compiled by Bloomberg. 

Uber generated US$33.6 billion in gross bookings, which include ride hailing, food delivery and freight. That was up 16 per cent from a year earlier and beat the US$33.5 billion Wall Street had forecast.