In some big news for the rideshare giant, Uber on Tuesday revised its Q3 2021 outlook and now expects earnings before interest, taxes, depreciation and amortization to be positive as early as this quarter. Shares of the company’s stock ended the day up about 11.5% on the news.
In an SEC filing, Uber (NYSE: UBER) said that it now expects EBITDA for the current quarter to come in somewhere between a $25 million deficit and a $25 million profit, a raise from the company’s original projection of a loss of $100 million. If Uber’s EBITDA lands on the positive end of that outlook, it would also mark the first quarter of profitability for the company, following its rideshare rival Lyft (NASDAQ: LYFT), which reported EBITDA profitability back in Q2.
Uber also expects gross bookings to land between $22.8 billion and $23.2 billion for the third quarter, a slight narrowing of the $22 billion to $24 billion range it announced on its Q2 earnings call. Last quarter, the company’s gross bookings totaled $21.5 billion, buoyed by its food delivery segment. That’s the second consecutive quarter that it’s reported an all-time high in gross bookings.
“I think the really great thing about Uber is the flexibility of the model,” said CEO Dara Khosrowshahi on CNBC Tuesday morning. “Here we are, still in somewhat of a pandemic, and our gross bookings levels are 35% to 40% above the IPO. We are very clearly on the path to profitability.”
Not even Khosrowshahi was expecting profitability to come this soon. With a full-blown pandemic hitting the globe less than a year after Uber went public, the company has had to contend with a severe driver shortage, and it was feeling the impact early on – for Q2 and Q3 2020, the first two fully pandemic-impacted quarters, Uber’s gross bookings declined significantly. But by Q4, gross bookings began to rise again, and the company’s fortunes began to turn.
“Early on, we identified our need to bring on more drivers to the platform,” Khosrowshahi said on CNBC. “In the second quarter, we really leaned into supply, especially in the U.S., to reinvigorate our driver base and grow our driver base in the U.S. And we’re seeing that now – the benefits of that early investment – in Q3.”
Uber is still on the heels of Lyft, which reported EBITDA profitability last quarter, also ahead of schedule. While rideshare’s viability as a moneymaker has long been called into question, it looks like the answers are beginning to present themselves in the affirmative.