Revenues at Uber rose by more than expected during its third quarter, with its main rides division generating enough money to cover the company’s key costs, even as it expands into other areas like food delivery.
Overall revenue rose 30 per cent from a year ago to $3.8bn, ahead of estimates at $3.4bn, according to a Bloomberg survey.
However the group produced an adjusted ebitda loss of $585m, which is 28 per cent greater than a year ago as it expanded Uber Eats and other new businesses. It also reported a net loss of $1.2bn for the three months to the end of September, which includes $401m in stock-based compensation expenses.
The company pointed to how revenue in its “Rides” business — which accounted of 76 per cent, or $2.9bn of revenue — rose almost one-fifth from a year ago.
On an adjusted ebitda basis, earnings from the primary unit were up 52 per cent from a year ago to $631m, which “decisively demonstrate the growing profitability” of the business, said chief executive Dara Khosrowshahi.
The $631m, he added, “more than covers our corporate overhead”.
The metric underscores a key difference between Uber and rival Lyft. Whereas rival Lyft is focused on mobility alone, Uber now has five segments comprising rides, eats, freight, self-driving car technology and “other bets” — which includes electric bikes and scooters, its temporary work app UberWorks and more.
Lyft is hoping for adjusted ebitda to turn positive by late 2021, leaving it lagging its larger rival on this metric. However all of Uber’s divisions, save for Rides, produced a loss, reflecting that its expansion beyond mobility is a long-term play that could test investors’ patience.
Uber Eats, the second largest division — accounting for 17 per cent of revenue — produced an adjusted Ebitda loss of $316m.
Uber Freight produced a $81m loss, Other Bets a $72m loss, and the self-driving division a $124m loss. Corporate and administrative costs widened to $623m.
Finance head Nelson Chai said adjusted net revenue group should “accelerate again” in the current quarter as Uber focuses on “financial discipline.” He said “we are improving our full year Adjusted ebitda guidance by $250m to a loss of $2.8-2.9bn.
Shares were down 4.5 per cent in after-hours trading on Monday.
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