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Earnings Results: Uber revenue rises across ride-hailing and delivery, but losses also increase

Uber Technologies Inc. said Thursday that third-quarter revenue grew in both of its major businesses across all regions as COVID-19 restrictions eased, but losses also more than doubled.

Uber
UBER,
-0.98%

shares initially fell more than 2% after hours, after declining about 1% in the regular session to close at $45.27, but were up slightly as of 5:30 pm. Eastern. 

The company said its gross bookings climbed 57% year over year to $23.1 billion, shy of analysts’ expectation of $23.3 billion. Trips also grew, up 39% year over year to 1.64 billion, short of analysts’ expectation of 1.69 billion. Driver supply, which has been affected by the coronavirus pandemic, rose 60% year over year.

“This is especially important as Mobility reignites,” Chief Executive Dara Khosrowshahi said in a news release. “Mobility Gross Bookings are up 18 percent over just the last two months and this Halloween weekend surpassed 2019 levels.”

On the company’s earnings call, the CEO said that because U.S. driver supply has improved, surge pricing has fallen by nearly half and wait times are now below five minutes.

Taken all together, plus what he pointed to as the sustainability of the Uber Eats business even as the economy reopens, and “it was a great quarter,” Khosrowshahi said. “It should put to rest questions about whether the unit economics of this business works.”

Uber’s total revenue rose to $4.85 billion from $2.81 billion in the year-ago quarter, with its ride-hailing, delivery and freight businesses all bringing in more revenue. Analysts surveyed by FactSet had forecast revenue of $4.42 billion.

The company reported a third-quarter net loss of $2.42 billion, or $1.28 a share, compared with $1.09 billion, or 62 cents a share, in the year-ago period. It attributed $2 billion of that loss to a charge because of a loss from its investment in Chinese ride-hailing company Didi Global Inc.
DIDI,
-1.44%
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which was actually a $3.2 billion loss but offset by gains in other investments. Uber claimed a quarterly profit three months ago, mostly on the strength of early gains for its Didi stake.

But Uber Chief Financial Officer Nelson Chai said on the earnings call that the company delivered on its promise to turn adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) before the end of the year. That figure was $8 million, compared with an adjusted Ebitda loss of $625 million in the year-ago period.

Analysts had forecast an adjusted loss of $665 million, or 33 cents a share, and adjusted Ebitda loss of $38 million.

For the fourth quarter, Uber expects adjusted Ebitda of $25 million to $75 million, compared with analysts’ expectation of adjusted Ebitda of $104 million.

Chai said on the call that the company expects to “taper” driver incentives in the United States in the fourth quarter, but will “lean in” elsewhere where driver supply needs a boost, such as India and Australia.

As for how regulatory issues are affecting the company, Chai said worker classification in the U.K. — where Uber has been ordered to offer increased benefits to drivers — and food-delivery fee caps were a $150 million “drag” on third-quarter Ebitda.

Uber stock has fallen more than 11% year to date, but is up almost 8% in the past year. By comparison, the S&P 500 index
SPX,
+0.42%

has risen more than 24% so far this year, and is up 33% over the past 52 weeks.

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