Uber announces its first profitable quarter since its inception more than a decade ago
The California-based company reported $8 million in adjusted profits before interest, taxes, depreciation, and amortisation for the quarter ended September 30, excluding one-time expenses such as stock-based compensation.
Uber declared its first profitable quarter on an adjusted basis since its inception more than a decade ago on Thursday, with its two most crucial areas, ride-hailing and food delivery, both turning the corner. Company officials assuaged investor fears about a driver shortage by assuring analysts that its spending on incentives to attract drivers back on the road following the epidemic was mainly behind. However, a large drop in the value of its Didi stake resulted in a $2.4 billion (almost Rs. 17,853 crores) net loss in the third quarter, and Wall Street saw Uber's fourth-quarter forecast as gloomy. After-hours trading saw a bounce in the price of the stock.
The California-based company reported $8 million in adjusted profits before interest, taxes, depreciation, and amortisation for the quarter ended September 30, excluding one-time expenses such as stock-based compensation.This compares to a loss of $625 million (around Rs. 4,649 crores) on the same basis a year earlier. Uber expects an adjusted profit of $25 million (approximately Rs. 185 crores) to $75 million (roughly Rs. 557 crores) in the fourth quarter of 2021. According to Refinitiv statistics, analysts projected $114 million (approximately Rs. 847 crores).
Despite the adjusted profit, Uber's earnings report was a letdown after smaller US rival Lyft reported its second consecutive quarterly adjusted profit of $67.3 million on Tuesday. Uber and Lyft have yet to become profitable on a net basis, and the businesses refuse to speculate on when that could happen. According to IBES statistics from Refinitiv, Uber's real-world revenue increased 72 per cent to $4.8 billion (approximately Rs. 35,701 crores), above the average analyst forecast of $4.4 billion (about Rs. 32,723 crores).
Uber's delivery division, which includes restaurant meals and retail deliveries, emerged as the company's backbone throughout the pandemic. Delivery revenue increased steadily in the third quarter, indicating that the company's rider expansion did not come at the expense of its Uber Eats subsidiary. Uber reported that the company's core restaurant delivery business, which accounts for around 96 per cent of gross delivery bookings, became profitable on an adjusted EBITDA basis for the first time in the third quarter. Consumers travelled in higher numbers in the third quarter, and Uber's driver and courier base has expanded by over 640,000 individuals since January, the company said. The corporation spent more than $250 million (about Rs. 1,858 crores) to entice drivers to return following the epidemic. Among the most profitable routes in the sector, it has improved in recent weeks but has trailed behind all ride categories, remaining roughly 33% below pre-pandemic levels.