Uber surprised investors with a first-quarter loss and a second-quarter gross bookings forecast that fell below Wall Street’s expectations, causing the shares of the ride-share and food delivery giant to drop 6% before trading commenced.
The report hints at a potential slowdown in Uber’s growth following a robust 2023, during which it dominated the U.S. ride-share and delivery sectors and achieved its first annual profit.
Uber reported a net loss of $654 million, attributed to legal charges, provisions, and fair valuation adjustments of certain company investments. Analysts had anticipated a net profit of $503.1 million.
Additionally, Uber fell short of market expectations for quarterly gross bookings, a crucial metric indicating the total value of transactions on its platform.
CFO Prashanth Mahendra-Rajah cited softer ride-share demand in Latin America and the impact of certain holidays shifting into the first quarter as contributing factors.
Thomas Monteiro, senior analyst at Investing.com, expressed surprise at the extent of the deceleration in spending, noting slower-than-expected economic activity in the US and ongoing consumer pressures.
In contrast, Uber’s smaller rival Lyft posted better-than-expected results and a bullish second-quarter forecast, citing increased industry-wide ride-share demand.
Lyft, operating primarily in the United States and parts of Canada, has been striving to gain market share from Uber under the leadership of CEO David Risher.
Uber, operating in approximately 70 countries and offering various services, including freight booking, maintained a 72% share in the U.S. ride-hailing market in the March quarter, up from 68% two years ago.
For the second quarter, Uber expects gross bookings in the range of $38.75 billion to $40.25 billion, falling short of estimates of $40.04 billion.
In the quarter ended March 31, gross bookings totaled $37.65 billion, slightly below the expected $37.92 billion. Revenue increased by 15% to $10.13 billion, narrowly surpassing the estimated $10.11 billion. On an adjusted basis, Uber reported a loss of 32 cents per share, contrasting with expectations of a 23-cent profit.
Click here to read Uber’s Official Report
Highlights
Trips grew 21% year-over-year; MAPCs and monthly trips per MAPC grew 15% and 6% year-over-year, respectively
Gross Bookings grew 20% year-over-year and 21% year-over-year on a constant currency basis
Income from operations of $172 million; Adjusted EBITDA of $1.4 billion, up 82% year-over-year
Revenue grew 15% YoY to $10.1 billion, or 15% on a constant currency basis. Combined Mobility and Delivery revenue grew 19% YoY to $8.8 billion, or 19% on a constant currency basis. Business model changes negatively impacted total revenue YoY growth by 8 percentage points.
Operating cash flow of $1.4 billion; Free cash flow of $1.4 billion
Unrestricted cash, cash equivalents, and short-term investments were $5.8 billion at the end of the first quarter.
