Uber beats earnings expectations and predicts a profit in 2021
Uber Technologies Inc. posted better-than-expected financial results for its third quarter Monday, issuing a bold statement from Chief Executive Officer Dara Khosrowshahi that the company may be finally profitable by 2021.
In the quarter ended Sept. 30, Uber posted a net loss of $1.2 billion, or 68 cents per share, a lower loss than the 81 cents predicted by Wall Street analysts. The figure was a huge turnaround from the record $5.2 billion loss Uber reported in the second quarter. The net loss included stock-based compensation of $401 million, meaning that Uber’s overall operating loss, excluding stock payouts was lower yet.
Gross bookings in the quarter came in at $16.5 billion, up $3.7 billion or 29% over the same quarter in 2018, while the company’s adjusted loss before interest, taxes, depreciation and amortization was $585 million, a $71 million improvement versus a year ago.
Monthly active platform consumers, Uber’s metric to describe its users, came in at 103 million, up 26% year-over-year and up from 99 million in the second quarter. Rides for the quarter totaled 1.7 billion.
“Our results this quarter decisively demonstrate the growing profitability of our Rides segment,” CEO Dara Khosrowshahi said in a statement. “Revenue growth and take rates in our Eats business also accelerated nicely.”
In an investor call following the release, Khosrowshahi said that “we know there is the expectation of profitability and we expect to deliver for 2021.”
Rides, Uber’s core ride-hailing business, still dominates the company with revenue of $12.5 billion in the quarter, up 20% year-over-year, but Uber Eats continues to be a standout performer. Eats revenue came in at $3.7 billion in the quarter, up 73% from a year ago.
Uber’s biggest improvement came from its Freight business, a service Uber launched in 2017 with revenue from the division coming in at $223 million, up 81% over a year ago. Other bets, which includes Uber’s e-scooter sharing and e-bike sharing businesses, reported revenue of $30 million.
Uber estimated that it now expects an adjusted loss of $2.8 billion to $2.9 billion for the full year., an improvement of $250 million over previous estimates.
The stronger-than-expected results followed a quarter of change for Uber, including corporate restructuring and staff layoffs. The company laid off 435 staff — 170 people from its product team and 265 people from its engineering team Sept. 10 — followed by 350 more employees Oct. 15. Uber had laid off 400 people from its marketing department July 29.
Uber continued to push into new industry segments and services in the quarter, including the launch of Uber Money, a service that offers financial services to Uber drivers, and Uber Works, a labor hiring app that matches temporary workers with employers. The company also started to offer Uber Pet in selected U.S. markets, a ride-hailing service that allows users to ride with their pets in the vehicle.
Despite beating expectations, investors hammered the company in after-hours trading, with Uber stock down 5.5% to $29.37. The reason is possibly in the fine print: Uber’s stock lockup is set to expire this week, resulting in a likely flood of employees attempting to sell their shares.
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