Uber loses more than $1 billion in third quarter
Uber is still reporting steep losses but its revenue growth is showing some promise.
On Monday, the ride-hailing company reported it lost $1.16 billion during the third quarter including $401 million in stock-based compensation expenses related to its public offering in May. During the same period last year, Uber lost $986 million. In the second quarter, it reported a staggering loss of $5.2 billion, about $3.9 billion of which was related to IPO expenses.
The company’s stock fell about 4% in after-hours trading.
On a conference call with analysts to discuss the results, CEO Dara Khosrowshahi said the company is focused on achieving adjusted EBITDA profitability, or profitability excluding certain costs, in 2021. “We’ve got a road-map ahead of us,” he said.
Since going public in May, Uber has struggled to win over investors who are concerned about the company’s history of steep losses and slowing growth. As the company faces pressure to clean up its finances following its lackluster Wall Street debut, there has been some restructuring within its corporate operations. The company has gone through two rounds of layoffs since its IPO, with the most recent round in September impacting 435 positions on its product and engineering teams.
“This company grew very fast — and in the early years, the most important factor was speed to market. … There wasn’t a lot of focus on ‘how do you make sure you work efficiently?'” Khosrowshahi said, noting that it was “absolutely the right set of priorities” at the time. “Our priorities are changing,” he added.
There are some bright spots: Uber posted revenue of $3.8 billion during the quarter, a 30% increase from a year earlier. Revenue growth was just 12% in the second quarter compared to the year prior.
Khosrowshahi said the company is “seeing more predictability around our rides business, although there are competitive flare ups. The teams are just executing better. Competition is a way of life,” he said, noting that he likes “where our margins are headed in that environment.”
Uber’s newer business lines are growing the fastest. Sales from its meal delivery service Uber Eats were up 64% from a year earlier. Revenue from Uber Freight leapt 78%. Revenue in its “Other Bets” category, which includes its dockless bikes and e-scooter business, reached $38 million in the third quarter, up from just $3 million a year ago.