Uber loses US$1 billion in quarter, hitting forecast, as revenue rises 20per cent
SAN FRANCISCO/BENGALURU: Uber Technologies Inc reported a US$1 billion loss in its first quarterly report as a public company on Thursday, despite a 20 percent rise in revenue, posting results in line with its forecasts but underscoring the challenges the ride-hailing service faces to become profitable one day.
Revenue of US$3.1 billion matched the high end of the range Uber forecast for the quarter and the loss of US$1.0 billion compared with the company’s forecast of US$1.0 billion to US$1.11 billion. Uber Chief Financial Officer Nelson Chai said the company had begun to see “less aggressive pricing” by rivals.
With its share price trading more than 10 percent below its IPO price of US$45, Chief Executive Dara Khosrowshahi will have to convince investors Uber can turn a profit, given its reliance on rider incentives and competition in all parts of its business, from ride hailing to food delivery to freight.
The results indicate the newly public company was able to hit its own financial targets, likely to offer some assurance to investors.
Costs went up 35 percent in the quarter, as the company spent heavily in the run-up to its IPO earlier this month. Gross bookings, a measure of total value of rides before driver costs and other expenses, rose 34 percent from a year ago to US$14.6 billion. Bookings were up 3.4 percent from the previous quarter, showing the difficulty of recruiting new riders in saturated markets.
Uber was the biggest of a group of Silicon Valley startups that have gone public this year against the backdrop of a global stock market sell-off sparked by renewed trade tensions between the United States and China. Uber also faces increased regulation in several countries and fights with its drivers over wages.
Revenue was up from the previous quarter, and the net loss deepened from US$865 million in the fourth quarter. CFO Chai said the company was prepared to keep spending: “We will not hesitate to invest to defend our market position globally.”
Uber said its monthly active users rose to 93 million globally, from 91 million at the end of the fourth quarter.
A net loss was US$1.01 billion, or US$2.26 per share, in the first quarter ended March 31 compared with net income of US$3.75 billion, or US$1.84 per share, a year earlier, when results were helped by its sale of operations to Grab and Yandex.
Uber previously said it expected first-quarter revenue in the range of US$3.04 billion to US$3.1 billion while seven analysts polled by Refinitiv IBES on average expected revenue of US$3.04 billion.
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(Reporting by Alexandria Sage in San Francisco and Arjun Panchadar in Bengaluru; Editing by Lisa Shumaker)