Uber Freight’s second-quarter earnings before interest, taxes, depreciation and amortization, the key financial metric at the digital brokerage, recorded a large decline from a year ago but improved sequentially.
Even with the addition of Transplace, Uber Freight has now had three consecutive quarters of negative EBITDA after three consecutive quarters of barely positive EBITDA.
EBITDA for the second quarter was negative $14 million, down from positive $5 million in the corresponding quarter a year earlier. But EBITDA in the first quarter was negative $23 million, so the second quarter marked an improvement over the first.
Fourth-quarter 2022 EBITDA was negative $8 million.
More striking in Uber Freight’s earnings is the steady decline of its revenue. All the figures provided by Uber Freight since the beginning of 2022 have included the results of the legacy Transplace business, a shipper-focused TMS.
Uber Freight revenue peaked post-Transplace at $1.832 billion in the second quarter of last year. It now has declined four consecutive quarters, with revenue coming in at $1.279 billion in the second quarter of this year.
In prepared remarks released alongside the earnings, CEO Dara Khosrowshahi noted the “headwinds” of the soft market, “a trend we expect to continue in the near term.”
Among the operational highlights cited by Khosrowshahi, Uber Freight has increased its operations in Mexico “to support different cross-border points as we have seen nearshoring to Mexico rapidly gaining traction among shippers.”
The improved sequential EBITDA, even on the back of a drop in revenue, was due to what Khosrowshahi called “rigorous cost management.” He also cited the cutback in staff implemented in July, when up to 50 staff members from the legacy brokerage division were laid off.
“Looking past the near-term headwinds, we are confident that Freight’s technology, shipper platform, and marketplace flywheel will drive a long-term cost advantage and profitable growth over time,” Khosrowshahi said, the “flywheel” reference having been used by Uber Freight previously to describe the reach of the Uber Freight network. Earlier references to it occurred before the acquisition of Transplace.
There was no discussion of Uber Freight on the company’s conference call with analysts.
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Freight Dude
So Uber Freight has effectively managed to make Transplace consistently unprofitable after spending $2 billion on them while these executives line their pockets with bonus money.
Gotta love this business plan.
ThagearJammer
Failing to mention the importance of partner carriers no longer in business because these freight tech companies are a big race to the bottom. Bankrupting your capacity. Reducing volume and eroding revenue. The high price for acquiring transplace. Yikes
Freight Zippy
3Pl’s have destroyed the industry. Carriers need to end working with brokers & 3Pl’s
LTL carriers have the power to end those relationships and exist before 3PL put every carrier out of business.
Truckload carriers need to end the cycle of using brokers for business. A broker typically earn more profit on a load than the carrier actually doing the work.
That must end..