Uber Reports $1.2 Billion Loss in Q3, CEO Says the Company Will Be Profitable by 2021

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【Summary】Ride-hailing giant Uber Technologies Inc. reported a net loss of over $1 billion in the third quarter. While its not as bad as last quarter’s loss of $5.2 billion​, the company is still a long way from reaching profitability.

FutureCar Staff    Nov 04, 2019 3:45 PM PT
Uber Reports $1.2 Billion Loss in Q3, CEO Says the Company Will Be Profitable by 2021
A sign outside of Uber's headquarters in San Francisco (AP Photo: Eric Risberg).

Uber disclosed its third quarter earning today reported another big loss. The ride-hailing giant reported a net loss of $1.2 billion in the quarter. While its not as bad as last quarter's loss of $5.2 billion, the company is still a long way from reaching profitability. While gross revenue continues to grow, Uber combined losses in the last three quarters surpassed $7 billion.

The Q3 loss includes $401 million in stock-based compensation. Uber's stock fell around 4% in after hours trading.

Uber reported a loss of 68 cents per share on revenue of $3.8 billion, with growth accelerating to 30% year-over-year. 

Gross bookings grew $3.7 billion year-over-year to $16.5 billion, representing 29% year-over-year growth. The ride-hailing company's revenue growth accelerated to 30% year-over-year from 14% in the second quarter of 2019.

"Our results this quarter decisively demonstrate the growing profitability of our Rides segment," said Uber CEO Dara Khosrowshahi in a statement. "Rides Adjusted EBITDA is up 52% year-over-year and now more than covers our corporate overhead."

In an interview with CNBC's Deirdre Bosa Monday, Khosrowshahi said the company is targeting adjusted EBITDA profitability in 2021.

"We know there is the expectation of profitability, and we expect to deliver for 2021," Khosrowshahi said.

Uber raised guidance for its full year 2019, saying it expects adjusted net revenue to accelerate in the fourth quarter. The company expects an adjusted EBITDA loss of $2.8 billion to $2.9 billion for the year. 

During the third quarter, Uber made a number of leadership and organizational changes, including reorganizing its operations and financial reporting into five segments. The five segments are Rides, Eats, Freight, Other Bets, which includes electric scooter and dockless bikes, Advanced Technologies Group ("ATG") and Other Technology Programs. Uber ATG is developing Uber's self-driving technology.

Going forward, Uber is providing Gross Bookings, Revenue, Adjusted Net Revenue, and Adjusted EBITDA for each segment and will no longer show Core Platform metrics as a result of the reorganization.

Uber fell short of estimates for gross bookings across its services, reporting $16.47 billion compared to estimates of $16.7 billion, according to Refinitiv. 

Uber reported 103 million Monthly Active Platform Customers (MPACs), or the number of unique customers who completed a ride or received a meal delivery on the platform at least once a month on average over the quarter. Analysts expected MPACs to reach 104 million.

CNBC reports The company's take rate, calculated as the adjusted net revenue as a percentage of gross bookings, topped analyst estimates of 20.2%, coming in at 21.5%.

Uber biggest growth is in it on-demand food delivery service Uber Eats. Revenue for Uber Eats, was up 64% year over year, reaching $645 million. Last quarter, revenue for the segment came in at $595 million. 

Uber Freight, its logistics and trucking division, grew 78% year over year, coming to $218 million for the quarter. Uber's core segment of ride-hailing grew 19% year over year to $2.90 billion. 

Uber reported $38 million in revenue for its "Other Bets" segment compared to $3 million in the same quarter last year. Revenue for ATG and Other Technology Programs was $17 million, according to the release.

Uber has unrestricted cash and cash equivalents of $12.7 billion, the company reported, up $0.9 billion from the second quarter of 2019. The company said it secured more cash through selling $1.2 billion of senior unsecured notes and closing a $1 billion investment in ATG.

Uber redesigned its app in September giving customers access to its services from a single platform. Users now can view Rides, Eats, Lime electric scooters, and future offerings side-by-side in the app. The updated Uber app is currently testing in hundreds of U.S. and international cities.

Uber became the second ride hailing company to go public last spring following its chief-rival Lyft. The company priced its shares at $45 for the IPO and its been below that ever since, only briefly reaching an all time high of $47.08. The company's stock closed today at $31.08, roughly 30% below its IPO price.

resource from: CNBC

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