Uber posts $5.2 billion quarterly loss and disappoints on sales

Ride-hailing company Uber failed to assure investors of its growth potential or that it can turn a profit anytime soon. The company reported second-quarter adjusted sales that fell short of estimates and posted a net loss of $5.24 billion, by far the largest ever for the business. Most of that loss was attributed to stock-based compensation associated with the initial public offering in May, a routine expense for newly public companies. The adjusted loss - a more commonly used metric for ride-hailing companies, which excludes interest, tax and other expenses - more than doubled to $656 million but wasn’t as large as the $979.1m analysts expected. What really raised concerns, though, was Uber’s disappointing sales growth. Adjusted revenue in the second quarter increased 12 per cent from a year earlier, the slowest rate in the company’s history. The San Francisco-based company generated $2.87bn in adjusted revenue for the second quarter, below the estimates of $3.05bn. Uber hasn’t even been public for three months, but investors are wondering how long it can keep growing. Chief executive of the company, Dara Khosrowshahi suggested the business had a broader problem last week, when the company said it would cut about 400 employees in marketing. On a call with reporters on Thursday, Mr Khosrowshahi acknowledged those concerns, while defending the business as one with “growth rates that companies at our scale would kill for”. He emphasised the signs of growth potential. Gross bookings, a number used to track customer demand, rose 31 per cent to $15.76bn. Uber expects to maintain that growth rate for the year, forecasting $65bn to $67bn in gross bookings. On Wednesday, US-based company Lyft reported losses and revenue figures that both exceeded estimates and boosted its annual forecast. Lyft, which operates the number two ride-hailing app in the US, indicated that the price war with Uber is abating and that the company expects to lose less this year than in 2018, which was welcome news to investors. Both stocks saw a bump as a result, but much of Uber’s gains were wiped out after it reported results. Mr Khosrowshahi confirmed that the battle for market share is easing. “We are definitely seeing the competitive environment improve,” he said. Still, Uber forecasts an adjusted loss of $3bn to $3.2bn this year. “We think that 2019 will be our peak investment year,” Mr Khosrowshahi said. “In 2020, 2021, you’ll see losses come down.”

Uber posts $5.2 billion quarterly loss and disappoints on sales

Ride-hailing firm forecasts an adjusted loss of up to $3.2bn this year