Serve Robotics(NASDAQ: SERV) stock is seeing explosive gains Wednesday. The company's share price was up 25.1% at 10:30 a.m. ET, according to data from S&P Global Market Intelligence. The stock had been up as much as 39.2% earlier in the day's trading.
After the market closed yesterday, Serve Robotics published its second-quarter results. While there wasn't anything shocking in the company's financial performance for the quarter, it looks like the business is carrying out a healthy increase in activity. Even better, Serve followed up its Q2 report by announcing a major new partnership with Uber and Shake Shack.
Serve's robotic delivery network continues to ramp up
Serve Robotics specializes in last-mile-delivery vehicles and was spun off from Uber earlier this year. The company had its initial public offering (IPO) in April and subsequently saw its price soar after it was revealed that Nvidia owned a small stake in the business.
Serve recorded a loss of roughly $9 million on revenue of approximately $470,000 in the first quarter. Roughly $300,000 of the company's Q2 sales came from a software services deal the company had in place with Magna International -- a leading automotive parts supplier. While that deal has mostly been completed, and Serve is not expecting additional software revenue from that source in Q3, the actual delivery business could grow quickly.
The company closed out Q2 with 48 average daily active robots, an 85% year-over-year increase and a 23% increase from the previous quarter. Thanks to the increased number of delivery robots and increased activity per unit, the average total number of hours its robots were able to accept offers and perform deliveries rose 106% year over year to 385 hours per day. That's still a pretty small operational footprint, but it seems activity is poised to increase dramatically in the not-too-distant future.
Serve lands a big deal with Shake Shack
In a press release published this morning, Serve Robotics announced that it had entered into a new delivery partnership with Shake Shack through Uber Eats. Serve will be rolling out 250 new delivery robots in the Los Angeles area by the end of Q1 2025, and some of these will be put to work delivering orders for the burger chain.
Through its partnership with Uber Eats, Serve expects to have 2,000 delivery robots deployed by the end of 2025. The robotics specialist estimates that full engagement for the fleet will wind up generating between $60 million and $80 million annually.
Serve Robotics stock is now up more than 450% over the last month. On the other hand, the company's share price is still down roughly 49% from the high that followed its public debut earlier this year.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool recommends Magna International. The Motley Fool has a disclosure policy.
