Uber Revenue Lifts Travel ETFs | ETF Trends

Uber Technologies Inc. (NYSE: UBER) shares surged Tuesday, lifting travel and transportation sector-related exchange, after the ride-sharing provider’s second-quarter revenue beat expectations with business on the rise despite elevated costs.

On Tuesday, the ETFMG Travel Tech ETF (AWAY) advanced 2.1% and the iShares Transportation Average ETF (IYT) was 0.7% lower.

Meanwhile, Uber shares jumped 18.9% on Tuesday, UBER makes up 4.9% of AWAY’s underlying portfolio and 3.9% of IYT.

“Last quarter I challenged our team to meet our profitability commitments even faster than planned — and they delivered,” Dara Khosrowshahi, Uber CEO, said in a note. “Importantly, they delivered balanced growth: Gross Bookings up 36& to a $116 billion run-rate, adjusted EBITDA significantly above our guidance, and $382 million in free cash flow, all on a platform that’s larger than ever, with the number of consumers and earners using Uber now both at all-time highs.”

While the mobility service provider announced a loss of $2.6 for the second quarter, the company revealed second quarter revenue expanded by 105% year-over-year to $8.1 billion. Gross bookings for the quarter were up 33% year-over-year with mobility bookings 55% higher and delivery businesses rising 7%.

“Driver engagement reached another post-pandemic high in Q2, and we saw an acceleration in both active and new driver growth in the quarter,” Khosrowshahi said. “Against the backdrop of elevated gas prices globally, this is a resounding endorsement of the value drivers continue to see in Uber. Consequently, in July, surge and wait times are near their lowest levels in a year in several markets, including the U.S., and our Mobility category position is at or near a multi-year high in the U.S., Canada, Brazil, and Australia.”

More importantly, investors focused on the fact that Uber saw a positive cash flow for the first time, generating $382 million in free cash flow.

“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,” Nelson Chai, CFO, said in a note. “This marks a new phase for Uber, self-funding future growth with disciplined capital allocation while maximizing long-term returns for shareholders.”

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