Uber posts first adjusted quarterly profit but issues weak forecast

Ride-share company reports adjusted earnings of $8m before interest, tax and other expenses in the three months to end of September

Trips on Uber’s platform grew 8.6 per cent quarterly and 39 per cent on an annual basis to more than 1.6 billion in the third quarter. AP

Uber posted its first profitable quarter on an adjusted basis since its launch in March 2009, driven by a recovery in its ride-hailing and delivery businesses in the July-September period, but its projected gross bookings fell below analyst estimates.

The company reported adjusted earnings of $8 million before interest, tax and other expenses in the three months to the end of September. This is compared to a loss of $625m in the prior year period and $509m in the quarter that ended on June 30.

“While we recognise it is just a step, reaching total-company adjusted Ebitda [earnings before interest, taxes, depreciation and amortisation] profitability is an important milestone for Uber,” the company’s chief financial officer, Nelson Chai, said.

“Not only did our mobility business recover to pre-Covid margins this quarter, our core restaurant delivery business was profitable on an adjusted Ebitda basis for the first time as well, bringing the full delivery segment close to breakeven,” said Mr Chai.

However, a huge drop in the value of Uber’s stake in Chinese ride-hailing company Didi caused a $2.4 billion net loss in the quarter.

This was primarily due to an unrealised loss of $3.2bn related to the revaluation of Uber’s Didi equity investment, the company said. It added that some of the loss was partially offset by its stakes in other companies such as Zomato, Aurora and Joby.

The net loss also included $281m in stock-based compensation expense. The company’s loss more than doubled compared to the same period last year, when it suffered a loss of $1.08bn.

The California-based company’s sales during the quarter soared 72 per cent on an annualised basis to more than $4.8bn, surpassing analysts' estimate of $4.4bn.

The company’s gross bookings surged 57 per cent year-on-year to 23.1bn in the third quarter — $1.2bn, or more than 5.4 per cent, up on a quarterly basis.

Delivery gross bookings increased 50 per cent during the period to $12.8bn and mobility bookings surged 67 per cent to $9.9bn.

Uber said its mobility gross bookings grew strongly in the US, Canada, Europe, the Middle East and Africa but a decline was reported in Australia and New Zealand due to Covid-induced lockdowns.

In its future guidance, the company expects gross bookings of $25bn to $26bn with an adjusted Ebitda of $25m to $75m, below Wall Street expectations.

Uber said its drivers and couriers earned $8.6bn in the third quarter.

Its active US mobility drivers in the third quarter were up about 60 per cent year-on-year and improved through October, with 10 consecutive weeks of driver growth since the end of August.

“Our early and decisive investments in driver growth are still paying dividends, with drivers steadily returning to the platform, leading to further improvement in the consumer experience,” Uber’s chief executive Dara Khosrowshahi said.

“This is especially important as mobility reignites … mobility gross bookings are up 18 per cent over just the last two months and this Halloween weekend surpassed [the] 2019 levels,” added Mr Khosrowshahi.

The company said unrestricted cash and cash equivalents were at $6.5bn as of September 30.

​​​​​​​​​​​​​​​​​​​​​​​​Revenue in the US and Canada jumped almost 66 per cent yearly to about $2.6bn in the past quarter. It grew 29 per cent in Latin America to $390m and 80 per cent in Europe, the Middle East and Africa to $1.06bn.

It also increased about 131 per cent to $743m in the Asia-Pacific region.

Trips on Uber’s platform increased 8.6 per cent quarterly and 39 per cent on an annual basis to more than 1.6 billion in the third quarter.

The monthly active platform consumers reached 109 million, jumping 8 per cent quarterly and 40 per cent annually.