Uber posts $5.2bn loss as IPO costs hit earnings
Uber disappointed investors with second-quarter results that showed a big hit from costs related to its initial public offering, even as the ride-hailing giant said competitive pressures in the lossmaking industry were easing.
Its net loss ballooned to $5.2bn from $878m a year ago, in line with Wall Street’s estimates, according to S&P Global Market Intelligence. Revenue rose 14 per cent to $3.2bn, missing analysts’ expectations of $3.4bn. That was a slowdown from the 20 per cent growth rate of the first quarter.
The company said both top and bottom line figures reflected the impact of its stock market flotation in May, which raised $8bn.
The company listed at $45 per share and has only briefly traded above that level. In after-hours trading following the results, the stock dropped as much as 13 per cent to $37.39 before rebounding somewhat. It had risen more than 8 per cent during Thursday’s official trading session, reflecting comments from rival Lyft on Wednesday that said competition between ride-hailing firms was easing.
During the quarter, Uber recorded $3.9bn in stock-based compensation expenses related to the IPO. Excluding those costs, its loss was $1.3bn, wider than $878m a year ago.
Revenue was impacted by a $298m award given to drivers in connection with the IPO, because Uber calculates its revenue as the difference between what it takes in from passengers and what it pays out to drivers and, in its food delivery business, restaurants. Excluding the award and currency effects, Uber’s adjusted net revenue increased 26 per cent from a year ago.
Chief executive Dara Khosrowshahi said the company was benefiting from “a competitive environment that is starting to rationalise” — referring to an easing in the price wars that have long kept Uber and its rivals in the red.
Both Uber and Lyft spend heavily to subsidise fares and attract drivers, but their businesses have come under increasing pressure to show a path to profitability since both companies went public earlier this year. Lyft said on Wednesday that it had raised prices in late June.
Mr Khosrowshahi pointed to Uber’s core platform contribution margin — which the company uses to assess the underlying performance of its ride-hailing and food delivery services — rebounding 8 per cent in the second quarter from a negative 4.5 per cent in the first quarter. It was below the 14.7 per cent level reached a year ago, however.
“We think that 2019 will be our peak investment year. We think in 2020, 2021 you will see losses coming down,” he told reporters.
Gross bookings rose 31 per cent from a year ago to $15.8bn. The number of monthly active consumers rose 30 per cent to 99m and the number of trips rose 35 per cent to 1.7bn.