Ride-hailing giant Uber Technologies Inc (NYSE: UBER) has released its financial results for the second quarter of 2023. The results included a surprise; Uber reported its first-ever quarterly operating profit.

Uber reported $326mn in pre-tax earnings from its operations, compared to a $713mn loss in the same quarter of 2022. This represents the first time Uber is reporting profits from its actual business and not gains on its equity investments.

Speaking of equity gains, Uber reported a $394mn net income in this quarter, primarily from $386mn in unrealized appreciation of its stock holdings in other companies. Uber holds significant stakes in China’s Didi and Singapore’s Grab after selling its business in the relevant countries to these competitors. Uber also holds shares in Aurora Innovation (NASDAQ: AUR), an autonomous driving company, after selling its self-driving division to the company in 2020.

• Uber’s revenue in this year’s second quarter was $9.2bn, 17% up from the same period last year. Gross bookings grew 18% to $33.6bn over the same period, half in rides and the other in food deliveries.

Despite Uber’s surprising operating profit, its shares dipped nearly 6% on Tuesday after posting revenue that missed analyst expectations. According to Refinitiv, analysts forecasted $9.33bn in revenue, but Uber posted $9.23bn, or $100mn less.

Uber has accumulated $31.5bn in operating losses since 2014, the first year it disclosed its finances to the public. The company racked up significant losses as it expanded rapidly across the globe, battling competitors by offering services at below cost.

Fierce expansion occurred under co-founder Travis Kalanick, who stepped down in 2017 after several scandals. He was replaced by current chief executive Dara Khosrowshahi, who took a more conservative expansion approach. Khowsrowshahi sold Uber’s autonomous driving division to focus on ride-hailing and food deliveries. He also sold Uber’s Southeast Asian business to local rival Grab, mimicking an earlier sale of Uber’s Chinese business to local rival Didi under Kalanick’s leadership.

• Khosrowshahi can be proud of steering Uber towards a long-awaited landmark of operational profitability. He said Uber’s profitability reflected “disciplined execution, record audience and strong engagement” and that “rigour around costs” has made the company “well positioned to sustain strong incremental profit generation”.

• Uber closed Tuesday at $46.65 per share, giving it a market capitalization of $94bn.

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