The gap between two growth rates
Second-quarter gross bookings rose 24 per cent to 58.0 billion dollars and revenue rose 12 per cent to 14.2 billion dollars; on a constant-currency basis the rates are 22 per cent and 11 per cent. Mobility bookings were 29.0 billion dollars and delivery bookings 27.5 billion dollars. Even with currency stripped out, revenue grows at roughly half the pace of bookings.[1]
Volume alone does not explain the gap. Monthly active platform consumers rose 16 per cent to 208 million and trips rose 18 per cent to 3.9 billion, so bookings grew faster than trips. The disclosed figures do not show line by line how the share of a booking recorded as revenue has changed. What the public inputs support is narrower: in this quarter bookings growth stayed above both trip growth and revenue growth.[1]
Which line is producing the profit?
Income from operations was 1.9 billion dollars, adjusted EBITDA 2.8 billion dollars and free cash flow also 2.8 billion dollars. Chief financial officer Balaji Krishnamurthy said trailing twelve-month free cash flow passed the 10 billion dollars mark for the first time. Cash landing at the same level as the adjusted profit measure gives a rare handle on how far the adjustments moved cash conversion this quarter.[1]
The real test is in the guidance. For the third quarter the company guides bookings of 58.25-60.25 billion dollars, adjusted EBITDA of 2.86-2.96 billion dollars and adjusted earnings per share of 0.84-0.88 dollars. The constant-currency bookings growth implied is 18 per cent to 22 per cent, a range that meets the top of this quarter's 22 per cent or falls below it. The entire adjusted EBITDA range, by contrast, sits above the 2.8 billion dollars reported this quarter. The assumption the guidance carries is plain: profit is meant to come from running the existing volume more cheaply. Testing it needs only one observation, whether adjusted EBITDA reaches 2.86 billion dollars in the third quarter while bookings growth lands at the bottom of the range.[1]