Uber reports huge loss for Q2, stock gets pummeled
Uber reported a net loss of more than $5 billion for the second quarter, which caused the ride-hailing company’s shares to drop considerably as it missed analyst expectations.
Lora Kolodny had the news for CNBC:
It was a miss on both top and bottom lines for Uber. Net losses for the ride-hailing company soared to $5.24 billion, largely owing to stock based compensation.
Here’s how the numbers stacked up otherwise versus analysts’ expectations (according to consensus estimates compiled by Refinitiv):
- Loss per share: $4.72, versus $3.12 expected
- Revenue: $3.17 billion versus $3.36 billion expected
“We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. I think our break even is something that we can push the company to break even if we really wanted to frankly,” said CEO Dara Khosrowshahi in a conversation with CNBC’s Deirdre Bosa. “No doubt in my mind that the business will eventually be a break even and profitable business.”
Excluding stock-based compensation, Uber’s losses were around $1.3 billion, roughly 30% worse than in the preceding quarter.
Kate Clark provided context for TechCrunch:
Uber’s had a rough few months since making the leap to the public markets after its overly ambitious private market valuation failed to sway Wall Street.
Uber, in an attempt to slash costs and make operations more efficient, recently announced it was laying off one-third of its 1,200-person marketing department.
News of Uber’s piling losses comes one day after its key U.S. competitor, Lyft, beat on revenue with $867 million for the quarter on net losses of $644 million. That’s up from $505 million in revenue in Q2 2018 on losses of $179 million. Lyft closed up 3% Thursday at $62 per share. The company’s stock sunk in after-hours trading Wednesday, however, after it announced the IPO lockup period would end more than a month early.
As for Uber Eats, the company says its “monthly active platform consumers,” or MAPCs, grew 140% YoY. The company now works with 320,000 restaurants. As for revenue, that’s grown 72%, to $595 million.
Aarian Marshall from Wired compared Uber’s results to those of its arch-rival, Lyft and noted what conclusions this led to:
THE DAYS OF cheap ride-hailing may be ending. Uber and Lyft reported quarterly financial results this week and indicated that their cutthroat competition to woo riders with coupons and other gambits is easing.
Lyft officials told investors they had raised prices on routes in some cities in June, and touted the company’s upcoming pricing algorithms, which they hinted might be able to more precisely predict what riders might be willing to pay for a ride. Lyft said those pricing changes would boost revenue per rider by next quarter.
Uber CEO Dara Khosrowshahi said that his company’s rivalry with the other big San Francisco-based ride-hailing company had cooled—for now. “We and Lyft are big-time competitors here and have been for some period of time, but for now we’re seeing generally, category positions that are stable,” he told investors Thursday. “We are focused on improving profitability in this market.”
Good thing, too, because the ride-hail companies—which have recently made entrees into bikes, scooters, self-drivingvehicles, transit agency partnerships, and for Uber, on-demand delivery, in bids to become the app kings of transportation—are still losing plenty of money.