Uber Technologies Inc. (NYSE: UBER) second quarter 2019 report probably won’t receive the accolades garnered by its ride-hailing competitor, Lyft (NYSE: LYFT).
Uber’s second quarter as a public company saw a loss of $5.2 billion (closer to $1 billion excluding stock-based compensation and one-time driver awards), or $4.72 per share, which was much worse than the $2.01 per share loss reported a year ago and the wide range of consensus estimates calling for a loss of slightly more than $3 per share.
Uber Freight
The results of Uber Freight, a digital freight matching marketplace, roll up through the company’s Other Bets division. Other Bets revenue increased 175 percent year-over-year to $195 million with gross bookings coming in at $182 million, 153 percent higher year-over-year. However, Other Bets lost $122 million in the period, much more than last year’s $28 million loss and higher than the first quarter 2019 loss of $71 million.
In an interview with CNBC, Uber’s Chief Executive Officer Dara Khosrowshahi addressed the recent weakness seen in trucking markets. “The freight industry hit a soft pocket in the first quarter and second quarter of the year. We went in and adjusted to that soft pocket to sell much more aggressively into accounts and if you look at the growth for Uber Freight now, the growth rates are exciting and we remain bullish. It is going to take a couple of years, but this is a multi-billion dollar industry and we think we have got kind of the best solution with the best tech and a great brand. And we think we can succeed there very much so.”
The company states that Other Bets revenue primarily consists of Uber Freight. Other Bets generated $373 million in 2018 revenue with a $152 million loss for the year.
“Uber Freight added new shipping customers across the enterprise, middle market, and small- and medium-sized business segments. Our platform for shippers targets the underserved long tail of small shippers with an automated self-serve tool that helped drive 10X year-over-year revenue on the platform,” stated the press release.
Consolidated results
Total revenue was up 14 percent year-over-year at $3.17 billion, well short of the consensus estimate of $3.36 billion. Gross bookings increased 31 percent year-over-year to $15.8 billion. Uber also announced that active users surpassed 100 million in July. Monthly active platform consumers increased 30 percent in the quarter to 99 million.
“Our platform strategy continues to deliver strong results, with Trips up 35 percent and Gross Bookings up 37 percent in constant currency, compared to the second quarter of last year. In July, the Uber platform reached over 100 million Monthly Active Platform Consumers for the first time, as we become a more and more integral part of everyday life in cities around the world,” said Khosrowshahi.
On a consolidated basis, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was a loss of $656 million, more than twice the second quarter 2018 loss, but roughly $200 million better than the first quarter 2019 result. The company now expects an adjusted EBITDA loss of $3.2 billion to $3 billion in 2019.
In comparison, Lyft saw a sizable revenue outperformance and trimmed its operating loss expectations moving forward when it reported second quarter financial results on August 7. Given the better than expected second quarter 2019 revenue result, Lyft said that the peak for operating losses was likely behind them.
Shares of UBER are off roughly 7 percent on the news. The stock remains under its initial public offering price of $45 per share.
