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Nearing a Highly Anticipated IPO, Uber Reports Nearly $1B in Losses For Q3
FinTech, Financial Services
Uber self-reported nearly $1 billion in losses for the third quarter – as well as slowing growth – which will no doubt be heavily scrutinized as the ride-hailing company prepares for its heavily anticipated initial public offering in 2019.
Uber’s losses increased 32 percent quarter over quarter to $939 million on a pro forma basis. However, the company was anticipating increased losses as it ramps up investments in services outside of its core ride-hailing business, including Uber Eats, freight, bikes and scooters, as CNBC notes.
Here are other key Q3 numbers for Uber, via CNBC:
- Q3 revenue was $2.95 billion, up 38 percent quarter over quarter.
- Gross bookings (the amount collected before payouts to drivers) was $12.7 billion, up 34 percent year over year.
- Adjusted EBITDA loss for Q3 was $527 million, down 13 percent year over year, but up 24 percent from Q2.
- Gross cash on hand dipped to $6.55 billion, down from $7.3 billion at the end of Q2.
TechCrunch‘s Megan Rose Dickey notes that Uber CEO Dara Khosrowshahi has said that by the end of the decade he “envisions its core ride-hailing business accounting for less than 50 percent of Uber’s overall business,” and is instead projecting “businesses like Eats, scooters, bikes and freight to contribute to be more of Uber’s business, which requires Uber to invest heavily in those businesses.”
It makes sense then that Uber is now reporting quarterly numbers on these auxiliary businesses, as CNBC reports.
The company also broke out some figures for Uber Eats to the press for the first time, saying it accounted for $2.1 billion in gross bookings in Q3. That’s an increase of 150 percent from the same quarter a year ago, Uber says.
Uber is rapidly expanding its food delivery business and is investing in new mobility offerings, such as bikes and e-scooters. Last month Uber announced it would expand its food delivery business to cover 70 percent of the U.S. population. CEO Dara Khosrowshahi told CNBC at the time that Uber Eats growth ultimately drives growth back to Uber’s ride-hailing business.
“As we look ahead to an I.P.O. and beyond, we are investing in future growth across our platform, including in food, freight, electric bikes and scooters, and high-potential markets in India and the Middle East where we continue to solidify our leadership position,” Nelson Chai, Uber’s chief financial officer, said in a statement.
It’s also important to note that it’s not uncommon for companies to report losses even as they move toward an IPO. Unfortunately, it’s also not been uncommon lately for shares of high-flying tech companies to plunge after they go public, as investors grow increasingly worried about those mounting losses.
Photo: Getty iStock