Uber said it expected to turn its first ever quarterly profit, before deducting for interest, tax and depreciation, in the final quarter of this year.
The company had previously said it expected to achieve adjusted ebitda for the 2021 full year and reiterated that goal in a call with investors on Thursday.
“We recognise the significant work remaining to get to this milestone and our teams are focused on executing on our plan,” said Nelson Chai, chief financial officer.
The news sent Uber’s share price up about 5 per cent in after-hours trading, continuing a rally in which the group’s stock rose roughly 40 per cent since its November low of $26 per share. It stood at $38.90 in after-market trading on Thursday — still short of its $45 issue price last May.
“Rome was not built in a day and neither will the Uber growth story,” said Dan Ives, an analyst with Wedbush. “We view these results and the company’s guidance as key swing factors in now finally moving shares higher.”
The improved outlook follows a stronger than expected fourth quarter 2019, when a surge in bookings helped Uber continue to narrow its losses, exceeding Wall Street’s lowered expectations.
The net loss of $1.1bn for the December quarter — which included $243m in stock compensation — compared with analysts’ forecasts of a loss of $1.2bn, according to S&P Capital IQ. Revenue totalled $4.1bn, which was in line with expectations.
The improvement came after a $4bn increase in gross bookings year-on-year, up 28 per cent, helped by the addition of 20m more active monthly users globally.
Its Eats food delivery business increased gross bookings 71 per cent, but continued to be a drag on income. Uber blamed “investments in several key markets” for blowing out the Eats losses to $461m on an adjusted ebitda basis, on revenue of $734m, against a $278m loss in the same period the year before.
The results did not reflect the January sale of its Eats business in India to rival Zomato in exchange for a 10 per cent stake. That deal was part of an effort by Uber to cut its losses in markets where it sees no potential to be the number one or two player, and its wider effort to trim losses since its stock market flotation last year.
“We recognise that the era of growth at all costs is over,” said chief executive Dara Khosrowshahi in a statement accompanying the earnings.
“In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution, and the unrivalled scale of our global platform.”
Under Uber’s preferred metric of adjusted ebitda, the company showed quarterly losses of $615m, larger than in the third quarter of 2019 but 25 per cent narrower than the year before, and healthier than analysts’ forecasts of a $696m loss.
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February 07, 2020 at 05:38AM
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