Uber Technologies Inc. today reported that it reached a significant profitability milestone in the second quarter, but lower-than-expected sales sent the company’s shares tumbling.

The ride-hailing giant’s stock is currently down more than 6%.

Uber closed the quarter ended June 30 with a net income of $394 million when measured using generally accepted accounting principles. That amounts to earnings of $0.18 per share, well above the one cent loss that analysts polled by Refinitiv were expecting. A year earlier, Uber posted a hefty $2.6 billion net loss.

The company’s surprise second quarter profit was partly the result of a $386 million boost from “revaluations of Uber’s equity investments.” Over the years, Uber has made equity investments in several major tech firms including India-based food delivery giant Zomato and Aurora Innovation Inc., which develops self-driving trucks. Aurora raised $820 million in a stock sale last month. 

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, also grew significantly during the second quarter. The company reported that its adjusted EBITDA reached $916 million after jumping 152% from a year earlier. 

Uber’s revenue growth, in turn, didn’t set any records during the second quarter. The company’s sales climbed 14% year-over-year, to $9.23 billion, which is $30 million less than what the Refinitv consensus estimate projected.

That revenue growth was driven by a 16% increase in gross bookings. The metric tracks the total value of the trips, food orders and other services purchased through the company’s platform.

Uber’s largest division, its mobility unit, accounted for about half of the $33.6 billion in gross bookings the company logged during the second quarter. The mobility unit’s year-over-year gross bookings growth eclipsed that of Uber as a whole by 9%. That strong financial performance is a reflection of increased demand: Uber users took 2.3 billion trips during the second quarter, 22% more than a year earlier.

The company’s second-largest business is its food delivery unit. The unit generated gross bookings of $15.6 billion, which represents a 12% year-over-year increase. Uber’s third largest division, its freight business, experienced a 30% year-over-year revenue decline that left it with sales of $1.3 billion at the end of the second quarter.

The company today also shared an update about its nascent advertising business. The business enables brands to promote their merchandise tablets installed in Uber drivers’ cars and the Uber app. The company detailed that its advertising services now operate at a $650 million revenue run rate.

“Robust demand, new growth initiatives, and continued cost discipline resulted in an excellent quarter, with trips up 22% and a GAAP operating profit, for the first time in Uber’s history,” said Chief Executive Officer Dara Khosrowshahi.

Whereas Uber’s second-quarter revenue fell short of the consensus estimate, its gross bookings forecast for the current quarter was ahead of expectations. The company is projecting gross bookings of between $34 billion and $35 billion for the three months ended Sept. 30. Its adjusted EBITDA guidance of $975 million to $1.02 billion likewise topped analyst projections.

In the long term, Uber plans to sustain its earnings momentum by adding more autonomous vehicles to its transportation network. During the second quarter, it inked a partnership with startup Serve Robotics Inc. to deploy up to 2,000 delivery robots. Uber also signed a multiyear deal with Waymo to make the Alphabet Inc. unit’s autonomous vehicles accessible through its ride-hailing app. 

Photo: Uber