Uber announces a $20 billion buyback along with its earnings beat

Uber announced a $20 billion share repurchase in its second-quarter earnings report, plus a better-than-expected revenue. 

CFO Prashanth Mahendra-Rajah said in a release that the $20 billion buyback underscores Uber’s “confidence in the business, following yet another quarter of strong top and bottom-line performance.”

The ride hailing company reported before the bell Wednesday an earnings per share of $0.63 on a revenue of $12.65 billion, up 18% year-over-year. Zacks Research had expected the company to post an EPS of $0.62 on a $12.46 billion revenue. And analysts polled by FactSet expected a revenue of $12.47 billion, according to Barron’s. 

Uber posted a free cash flow of $2.5 billion last quarter. 

 “Our trailing twelve month free cash flow hit a new all-time high of $8.5 billion and we remain committed to driving durable, profitable growth,” Mahendra-Rajah added. 

In an earnings call, Mahendra-Rajah said that as Uber begins to generate “meaningful cash flow,” giving that cash back to shareholders is a “key priority” for the company.  

“We’ve already executed over 60% of our authorization from last spring when it was originally authorized,” the CFO noted. “So today’s $20 billion is in addition to the roughly $3 billion that is yet to be executed.”

Last February, Uber had announced a $7 billion buyback. This was the first time the company had approved a share repurchase. 

“Think of it as $23 billion to execute over the next couple of periods here,” he said, noting this represents about 12% of Uber’s market cap and is a “reflection of how great we feel about the cash flow generation that’s in front of us.” 

“If you look at our history now, we’ve been allocating around 50% of our free cash flow to buybacks,” Mahendra-Rajah said.

Uber's stock has fallen about 2% since its earnings were posted, but is still up nearly 40% this year.