It's been a recurring topic of conversation whether Uber would ever reach this milestone. The S&P 500 requires members of the index to be profitable in the latest quarter and over the past year, which Uber achieved for the first time in Q3.
Uber reported net income of $221 million on $9.29 billion in revenue in the third quarter, and in the past four quarters altogether it generated over $1 billion in profit.
> It took a $756 million pre-tax (non-cash) net benefit of unrealized gains related to reevaluating its equity investments. It means their stake in other companies had seen an appreciation in value, which the Company didn't sell or take profits as in unrealized gains and doesn't account for taxes as in pre-tax.
> The Company gained nothing and remains a bagholder in its equity investments, including DiDi, Aurora, Grab Holdings Inc. (NASDAQ: GRAB), and Zomato stakes.
Uber is turning into a financial company like other transportation giants (Delta, AA). Maybe for the best, as I think everyone understands that self driving Uber is a pipedream.
and in the past four quarters altogether it generated over $1 billion in profit.
Yup...that's why the stock has done so well despite the insistence or chorus by the media since 2010 of how Uber is going to go bankrupt or burning cash. It's like Tesla in this regard--years of losses on capital expenditures--followed by huge and sudden profit as the initial capital outlay pays off massively.
The media from 2009 to 2018: "Uber will go bankrupt; it's losing too much money"
and here is Uber a decade later , and the stock keeps going up. Uber is highly cash flow positive on operations, to the tune of $600 million from its most recent earnings report or also comparable to Tesla in 2021, which the experts in the media were certain would be an impossibly. During Covid it initiated to a successful delivery business, Uber Eats.
I think this shows how the financial media can be disregarded as a useful source of investment advice or insight. The VCs and other investors who keep investing in uber despite losses were right, as , similar to Amazon, they knew the losses were temporary and to build the outlay/infrastructure of Uber's business.
> I think this shows how the financial media can be disregarded
to be fair, the actual financial analysts have been very bullish on uber for a long time. the stock has been overweight or buy for most of its public history, at least by my recollection (I own a chunk of stock so i've been paying some attention).
it's on forums like this though, where folks are inserting their desire for uber to fail because they don't like the company or the (former) executives or whatever, that I hear the bankruptcy drum being beaten.
If this were surprise news maybe, but this is the type of news that is priced in slowly over time and somewhat expected. Basically when sophisticated people bought uber a year ago one of the drivers of a higher price was the assumption it might be included in the S&P500.
A lot of things in finance and markets are self fulfilling prophecies like this, for example just look at the fed. They are the classic example of expectations > action.
There’s still a jump proportional to how unexpected it was by the market as the bets are settled, so to speak. Until it’s announced, there’s some contingency that thinks it won’t happen and is putting downward pressure on the stock. Eyeballing the small jump here hints that it was a small contingency.
I wish there would be a way to just buy sp500 minus a list of firms, so I could invest in a diversified way without going into Uber and friends (or any other firms that make profits on paper without the cash flow to back it)
> firms that make profits on paper without the cash flow to back it
Uber is cash-flow positive [1].
Due to stock-based compensation, many profitable tech firms hit this metric before GAAP. Put another way, if you owned the entire business, you could sustainably extract those profits.
Fractional shares would work, if you don't want the expense and unreliability of shorting.
Simplest thing would be to find an actively-managed mutual fund that focuses on what you want. (Warning: What you want is probably to lose money compared to the rest of the market.)
Be careful. The indexers might hear this and reassure you that the S&P is only optimal with Uber included at exactly the date it did and the fund will fail otherwise.
Most trading APIs are fairly simple, TD for example is very easy to use and very accessible. IBKR is a bit weirder in both protocol and access, but, works very well.
Uber will continue to grow in profatbility. As the platform matures and continues to grow in revenue, the overhead development cost will actually decline, not just as a percentage but as an absolute number as well.
Furthermore, Lyft being borderline bankrupt helps Uber take more advantage of the most profitable and largest market.
Mature in a sense that Uber has invested billions in operations to get deals with cities & airports, developer legal expertise globally, and has technology that allows them to operate globally.
Saying Uber is "just an app" isn't a strong argument. It overlooks the marketplace dynamics that in themselves are a huge moat. You can also say "Instagram" is just an app.. But good luck trying to recreate that level of success.
It's similar to Tesla in this regard--a decade of losses from 2010-2020 and then -boom--huge cashflow once the infrastructure outlay and customer base acquisition pays off. 'Smart money' was right all along to keep buying the dips. Uber is a play on not only on transportation, but also Ai, logistics, delivery, etc. It's like Amazon in this regard.
Ok, so I'm not very educated in the stock market. Could someone help get this straight? Uber raised like 20 billion privately + 8 on their IPO. After 14 years now they have made their first profits - 1 billion in the last 4 quarters. This just doesn't sound good to me?
Readit News
Uber reported net income of $221 million on $9.29 billion in revenue in the third quarter, and in the past four quarters altogether it generated over $1 billion in profit.
> The Company gained nothing and remains a bagholder in its equity investments, including DiDi, Aurora, Grab Holdings Inc. (NASDAQ: GRAB), and Zomato stakes.
Uber is turning into a financial company like other transportation giants (Delta, AA). Maybe for the best, as I think everyone understands that self driving Uber is a pipedream.
If you want unfuckable metrics, look at cash flow. Uber's operations are cash-flow positive [1].
[1] https://s23.q4cdn.com/407969754/files/doc_earnings/2023/q3/e...
Notably, this quarters $221 million in profit was not driven by unrealized gains.
Yup...that's why the stock has done so well despite the insistence or chorus by the media since 2010 of how Uber is going to go bankrupt or burning cash. It's like Tesla in this regard--years of losses on capital expenditures--followed by huge and sudden profit as the initial capital outlay pays off massively.
Apparently Uber had an effective tax rate of -22%(?) in the last quarter.
No idea if it's a mistake or not.
Does that mean the government is giving them 22% of their revenue?
How and why?
and here is Uber a decade later , and the stock keeps going up. Uber is highly cash flow positive on operations, to the tune of $600 million from its most recent earnings report or also comparable to Tesla in 2021, which the experts in the media were certain would be an impossibly. During Covid it initiated to a successful delivery business, Uber Eats.
I think this shows how the financial media can be disregarded as a useful source of investment advice or insight. The VCs and other investors who keep investing in uber despite losses were right, as , similar to Amazon, they knew the losses were temporary and to build the outlay/infrastructure of Uber's business.
to be fair, the actual financial analysts have been very bullish on uber for a long time. the stock has been overweight or buy for most of its public history, at least by my recollection (I own a chunk of stock so i've been paying some attention).
it's on forums like this though, where folks are inserting their desire for uber to fail because they don't like the company or the (former) executives or whatever, that I hear the bankruptcy drum being beaten.
A lot of things in finance and markets are self fulfilling prophecies like this, for example just look at the fed. They are the classic example of expectations > action.
Uber is cash-flow positive [1].
Due to stock-based compensation, many profitable tech firms hit this metric before GAAP. Put another way, if you owned the entire business, you could sustainably extract those profits.
[1] https://s23.q4cdn.com/407969754/files/doc_earnings/2023/q3/e...
Simplest thing would be to find an actively-managed mutual fund that focuses on what you want. (Warning: What you want is probably to lose money compared to the rest of the market.)
You can pretty trivially DIY that.
(Disclosure: The CEO is an acquaintance, but I have no financial interest.)
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Furthermore, Lyft being borderline bankrupt helps Uber take more advantage of the most profitable and largest market.
I can absolutely see this happening for transit companies like Waymo that are still in the maturation process of developing novel infrastructure.
Saying Uber is "just an app" isn't a strong argument. It overlooks the marketplace dynamics that in themselves are a huge moat. You can also say "Instagram" is just an app.. But good luck trying to recreate that level of success.
All it takes is a new app to offer better commissions for drivers and riders. I am not so sure that Uber has a very sticky customer base
Alaska Air Group, Sealed Air Corp, and SolarEdge are out.