The EBITDA numbers at Uber Freight continue to climb, boosted by the $2.25 billion acquisition of Transplace that closed in the fourth quarter, with other indicators getting stronger as well.
Uber Freight moved closer in the fourth quarter of 2021 to positive earnings before interest, taxes, depreciation and amortization as measured by EBITDA relative to gross bookings. That ratio was a negative 2.3% in the fourth quarter, up 10.8 percentage points from the fourth quarter of 2020.
A year ago, Uber Freight (NYSE: UBER) could have been simply defined as a digital brokerage company. But now, the Transplace acquisition by Uber Freight brings together the transportation management systems of Transplace utilized by shippers with the network of carriers using the Uber Freight load matching and brokerage technology, and Uber Freight is far from a straight digital brokerage play. The Transplace acquisition was seen as a marriage of upstream and downstream systems.
On an outright basis, fourth-quarter EBITDA at Uber Freight including Transplace rose to negative $25 million from negative $41 million a year ago.
The improvement in the EBITDA metric was not only because of Transplace. In its earnings statement, Uber said the fourth-quarter organic Freight revenue grew 27% year on year to $396 million.
Total Uber Freight revenue for the quarter including Transplace passed a milestone, coming in at just over $1 billion, up from $313 million for full-year 2020.
Nelson Chai, Uber’s CFO, said on the company’s earnings call that the parent company expected Uber Freight to generate positive adjusted EBITDA in 2022. And while Chai put specific estimates on the EBITDA/gross bookings ratio for its Mobility and Delivery segments in 2022, he did not do so for Freight beyond the projection of a positive ratio.
His comments were published in a transcript of the call supplied by SeekingAlpha.
Uber’s first-quarter 2022 earnings will be the first three-month period in which Transplace will contribute to the entire period. Chai said Uber expects Transplace to gain an additional $600 million in revenue sequentially from the fourth quarter. The Transplace acquisition closed Nov. 12, so revenue and EBITDA figures would not include a full three months of performance.
When Uber Freight announced its acquisition of TransPlace in July, specific revenue figures for TransPlace were not disclosed. But Uber did say at the time that Transplace had a 15% compound annual revenue growth rate since 2017. EBITDA at Transplace had grown to an annual run rate of more than $100 million in the first quarter of 2021 — the most recent full quarter at the time the deal was announced — up from $54 million for full-year 2017.
The fourth quarter was eventful for Uber Freight, not just for the Transplace closing but also for new investment of $550 million.
In the prepared statement that accompanied the earnings report, Uber said Uber Freight onboarded 18 new enterprise customers in the fourth quarter, up sequentially from the 14 onboarded customers in the third quarter.
Transplace signed 19 new transportation management deals in the fourth quarter, the company said, “with momentum continuing into 2022.”
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