Uber Technologies reported earnings for the third quarter of 2022 Tuesday before the bell, turning in strong revenue despite taking an overall loss for the quarter.
The mobility, delivery and freight giant recorded a $1.2 billion net loss in Q3, about half of which the company attributed to a $512 million net headwind related to reevaluations of its equity investments, which include stakes in Aurora, Grab and Zomato.
However, the firm also posted all-time high adjusted earnings before income, taxes, depreciation and amortization of $516 million, up from just $8 million a year prior as drivers and demand returned to the platform.
That figure was buoyed by 72% revenue growth year over year (y/y). Uber’s revenue hit $8.3 billion in Q3, with mobility revenue growing 73% y/y and delivery revenue rising 24% y/y.
Uber stock (NYSE: UBER) popped 12% in premarket trading Tuesday as the company narrowed its net loss from the previous quarter.
“Strong demand for our offerings, better marketplace efficiency, and our asset-light platform helped to deliver Adjusted EBITDA well above our guidance, even as foreign exchange and inflationary headwinds impact all global businesses,” said Uber CFO Nelson Chai in a statement. “We remain focused on excellent execution and disciplined cost management to deliver on our growth and profitability commitments for the coming years.”
Trips and gross bookings were both up on a yearly and quarterly basis as demand continues to rebound from early pandemic levels. Drivers completed 1.95 billion trips during Q3, up from 1.87 billion last quarter. And gross bookings rose to over $29 billion, with the mobility and delivery segments turning in identical figures of $13.68 million.
About 124 million people used Uber monthly during the quarter, an increase of 14% y/y and 2% over Q2, backing up the idea that demand is still on the rise.
“Our global scale and unique platform advantages are working together to drive more profitable growth, with Gross Bookings growth of 32% and record Adjusted EBITDA of $516 million,” said Uber CEO Dara Khosrowshahi in a statement. “Even as the macroeconomic environment remains uncertain, Uber’s core business is stronger than ever.”
Delivery continues to lag
As was the case in the first two quarters of 2022, Uber’s delivery segment again lagged behind mobility in Q3.
It recorded lower revenue growth — and less revenue outright — than the firm’s mobility business. Delivery also had an adjusted EBITDA of about $181 million compared to nearly $900 million for mobility. The two segments posted identical gross bookings figures, but mobility saw significantly higher growth in trips.
However, Khosrowshahi was bullish on the business’ prospects for the rest of the year.
“We have been looking very closely for any signs … and right now, frankly, we’re not seeing any signs of consumer weakness,” he said on the company’s Q3 earnings call Tuesday morning. “The delivery business, as you saw, accelerated a bit in Q2, and the frequency of ordering for monthly active platform customers (MAPCs) remains consistent.”
Supporting Khosrowshahi’s position is continued growth in MAPCs, basket sizes and active merchants, which rose by 3%, 4% and 11% on an annual basis, respectively.
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The Uber CEO also said that about 10% of the platform’s delivery customers are using grocery delivery services, signaling some momentum for one of the company’s core new verticals.
“We are now at an all-time high in terms of the number of merchants on the platform,” Khosrowshahi noted, with about 811,000 restaurants, convenience stores and other businesses currently active. “We’re adding new eaters and we’re adding new merchants, which is really driving the growth of the business.”
Drivers are also driving that growth — according to Khosrowshahi, driver churn is down around 20% y/y, while driver engagement, which measures the number of trips per driver, was up 15%. Both numbers are on par with 2019 levels.
“We leaned into driver supply, so while driver incentives are easing, they continue to remain at high levels,” he told investors.
Even federal and state-level actors targeting the reclassification of gig workers from independent contractors to full-time employees don’t scare Khosrowshahi. In fact, he spun the situation into a positive for the firm.
“It effectively returns us to the framework during Obama’s presidency, which was a framework where we grew significantly,” he said. “So when we look at the rulemaking, we think it will provide for stability going forward.”
Still, he doubled down on keeping Uber’s workers classified as independent contractors while providing some of the benefits of full-time employment.
All told, Uber believes it is on track to hit its 2024 adjusted EBITDA target of $5 billion. CFO Chai told investors that the company feels confident in reaching that milestone on time.
Click for more Modern Shipper articles by Jack Daleo.
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