The fallout from Uber’s “train wreck” IPO continued Thursday, as the ride-sharing service posted its second quarter earnings. And as it turns out: They were even worse than expected. The company report revealed Uber faced both its slowest period of revenue growth and largest-ever loss during the second quarter, sending shares of Uber stock down as much as 12 percent in after hours trading.
Uber’s Q2 earnings fell below analyst expectations, posting a $4.72 loss per share and $3.17 billion in revenue. (Per CNBC, the expected estimates were $3.12 per share and $3.36 billion, respectively.) The company’s posted $5.2 billion loss marked the biggest loss since Uber’s financial disclosures began in 2017, and even excluding the $3.9 billion the company paid in stock-based compensation, the remaining $1.3 billion is still nearly double Uber’s $878 million loss in Q2 2018. Uber CEO Dara Khosrowshahi remained optimistic about the discouraging numbers, however, saying in an interview with CNBC, “We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. … No doubt in my mind that the business will eventually be a break even and profitable business.”
The disappointing earnings report came just one day after Lyft, Uber’s biggest competitor in the ride-sharing space, raised their stock prices after posting markedly more encouraging second quarter earnings. The Uber rival earned $867 million in revenue, a 72% increase over last year, and a loss per share of 68 cents, beating an expected $809 million in revenue and $1.74 per share loss. Though Uber has been competing heavily with Lyft for ride-share customers—resulting in ride-sharing revenue growth of only two percent since Q2 2018—the company’s diversification through Uber Eats proved to be a boon for Uber, with that revenue increasing by 72% over the same period. Uber Eats’ $3.39 billion revenue in gross bookings, however, still didn’t quite live up to the $3.51 billion analysts had projected. “The Eats business is still a business that carries very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world,” Khosrowshahi told CNBC, though he added he doesn’t “expect that business to be profitable in the next year or year after, frankly.”
Source: Vanity Fair Hive