Uber rations dropped as much as 12% after the company delivered disappointing second-quarter results on Thursday, before settling down nearly 4%.
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 be indebted to to stock based compensation.
Here’s how the numbers stacked up otherwise versus analysts’ expectations (according to consensus appraisals compiled by Refinitiv):
- Loss per share: $4.72, versus $3.12 expected
- Revenue: $3.17 billion versus $3.36 billion count oned
“We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. I remember 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 dialogue with CNBC’s Deirdre Bosa. “No doubt in my mind that the business will eventually be a break unbroken and profitable business.”
Excluding stock-based compensation, Uber’s losses were around $1.3 billion, roughly 30% worse than in the former quarter.
While Uber helped establish ride-hailing in markets all over the world, over the past decade, the troop has been investing in and operating myriad “on-demand” businesses including food delivery, bike-sharing and a freight service that marriages shippers with carriers who can haul their goods.
Uber’s core ride-hailing business generated $12.19 billion in corpulent bookings during the second-quarter of 2019, beating analysts’ estimate of $12.11 billion in gross bookings. But the newer, Uber Break breads business generated $3.39 billion in gross bookings falling short of analysts’ expectations of $3.51 billion in flagrant bookings.
Khosrowshahi said in the call with CNBC, “The Eats business is still a business that transmits very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world. With the feed-bags business there’s a lot of capital chasing a lot of growth and we’re the leader on a global basis. So, I don’t expect that business to be profitable in the next year or year after frankly.”
In fresh weeks, Uber cut approximately 400 jobs from its marketing team.
The company boasted over 30 million riders in 2018. In July, the Uber tenets reached over 100 million “Monthly Active Platform Consumers” for the first time, the company reported on Thursday.
Until now, Uber has been working to keep riders, and drivers, loyal to its app with membership offerings and loyalty rewards, while warring formidable competitors including Lyft in North America, and Grab and Didi in Asia.
Uber previously recorded a $1 billion disappointment on $3.1 billion in revenue in its first report as a public company in May 2019.
Now, Uber must convince investors that, eye CEO Dara Khosrowshahi’s leadership, it is on a path to profitability with a realistic long-term plan for generating returns for investors. That’s no submissive feat since Uber, like other ride-hailing providers, has long subsidized its rides.
Uber priced its IPO parts at $45 in its market debut, and shares closed on Wednesday ahead of the second-quarter update at $39.15, trending higher after hours after its chief U.S. competition, Lyft, reported lower than expected losses, higher than expected revenue, and gave a rosier prospect for the rest of 2019.
—Paayal Zaveri contributed to this report.
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