Uber on Tuesday said its ad business had achieved a net revenue annual run rate of $1 billion, hitting precisely on schedule the goal it set two years prior.

Uber launched its ads division in 2022 and sells a range of formats, from ads that appear on the Uber and Uber Eats apps, within emails, on cartops, and displayed on in-car tablets.

Ads have become a new high-margin growth area for an array of businesses, from supermarkets, to dating apps, and online marketplaces. Uber's pitch to advertisers is its first-party data on millions of users and an array of formats, from static shopping ads to video.

It's playing in a highly competitive landscape, duking it out for media budgets alongside market leaders Meta, Google, and Amazon, with their billions of users and tried-and-tested adtech.

Paul Wright, head of international at Uber Ads, told Business Insider the company is exploring ways it can help advertisers get more tactical about the context of a user's trip — such as whether they're heading to a restaurant, airport, or event.

"We know they're going to a Taylor Swift concert because we know their destination is Wembley Arena. That contextual element there is really powerful because I think a lot of location-based marketing up to now on digital has been a little bit of a guess," Wright said in an interview.

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Wright declined to provide a new revenue target, but said there are several other key areas where Uber Ads is targeting its next pockets of growth, such as providing advertisers with tools to measure consumers' attention. It's also testing a format called "Playable Ads" that allow users to play advertiser games to unlock promotions.

"A lot of retail media platforms are great at the transactional elements but they don't necessarily have brand opportunities in the same way. One of the unique things about our platform is the ability to do both effectively in a non-cluttered environment," Wright said.

Uber Ads is also looking to third-party partnerships to spur its growth. As of earlier this year, advertisers could buy Journey Ads in the Uber Rides app via platforms like The Trade Desk, Yahoo DSP, and Google's Display & Video 360. In June, it announced a partnership with T-Mobile to roll out Uber's in-car JourneyTV to more than 50,000 vehicles in the US this year.

Uber on Tuesday reported a 16% increase in revenue year-on-year to $10.7 billion in the quarter ended June 30, beating Wall Street estimates. Its shares rose 6% in pre-market trading.

Last month, Tom Champion, a senior research analyst at investment bank Piper Sandler, described Uber as a "sleeping giant" and was bullish on the prospects for Uber Ads because of its two-sided marketplace and its scale relative to other apps in the gig economy space.

Piper Sandler raised its price target for Uber's stock to $88 from $86. Uber stock was trading at $62 at the time of writing.