Uber Reports Quarterly Loss of Over $1 Billion in Latest Quarter

Ride hailing giant Uber reported its third quarter financial results this week that beat estimates in earnings and revenue.

Shares were falling as much as 5% however, after Wall Street learned that the company’s quarterly loss had topped $1 billion.

For the third quarter, Uber reported a loss per share of 68 cents. This was better than the 81 cnet loss that analysts expected according to Refinitiv.

Revenue at $3.81 billion was also ahead of the $3.69 billion that was expected per Refinitiv.

Looking ahead, the company is expecting adjusted net revenue to accelerate in Q4. For full year 2019, the company has guided adjusted EBITDA loss of $2.8 billion to $2.9 billion.

In an optimistic note, the company’s CEO Khosrowshahi said the company is targeting 2021 for profitability.
“We know there is the expectation of profitability, and we expect to deliver for 2021,” Khosrowshahi said.

He said, “The focus really is to drive lower rates based on the best technology out there rather than driving the growth through discounting.”

According to the CEO, efficiency and profitability are now priorities, while rapid growth was the focus in the past.
“It was absolutely the right set of priorities for the time,” he said. “Our priorities are changing.”

He said on the earnings call, “I’m pleased about our continued progress toward unlocking value from our platform and fulfilling our vision of becoming the operating system for consumers everyday lives in cities around the world.”

He added, “First, I’ll discuss our Rides business, which reached two very significant milestones in Q3: we achieved $1 billion in weekly gross bookings; and we generated Rides Adjusted EBITDA of $631 million, up 52% year-on-year. Importantly, Rides Adjusted EBITDA now more than covers our corporate overhead, which consists of $623 million in corporate G&A and platform R&D spend. We continue to be the Rides leader in every region in which we operate, growing or maintaining category position in our most important markets, including the US, LATAM and the UK, while significantly improving our Rides Adjusted EBITDA margins from 17.8% of ANR in Q3 2018 to 22% in this quarter.”

“Moving forward, we expect to drive continued top line and margin growth by investing in our marketplace, doubling down on our premium product offerings, as well as continued financial discipline. For example, investment in our Enterprise Product has driven Uber for business growth exceeding 70%, while the expansion of our premium comfort product more than 150 cities globally has been a win for riders and drivers. Additionally, we made meaningful progress on a number of our high-priority markets such as Germany, Japan and Argentina. Our teams are confident that they can drive strong top and bottom line growth over the next several years.”

“Second, our Eats business continues to expand globally with gross bookings growing 77% and ANR growing 109% year-on-year on a constant currency basis. As a result of continued improvement in our Take Rate, which grew to 10.7% from 9% this quarter last year. Our strategy for Eats is simple; invest aggressively into markets where we’re confident we can establish or defend a number one or number two position over the next 18 months. We believe that the scale and strength of our global brand, our planned expansion into new local commerce categories like grocery and the power of our platform to cross promote and drive loyalty within our product lines all afford us superior acquisition and per transaction economics compared to monoline local players.”

Disclaimer: We have no position in Uber Technologies Inc. (NYSE: UBER) and have not been compensated for this article.