Uber Technologies, Inc. (NYSE: UBER) reported its second quarter financial results after the closing bell on Thursday. The ride hailing service company reported larger-than-expected losses, causing shares to plunge by 11%.
For the second quarter, Uber reported earnings loss of USD 4.72 per share on revenue of USD 3.17 Billion. Refinitiv analysts expected earnings loss of USD 3.12 per share on revenue of USD 3.36 Billion.
Uber’s net loss per share increased by 135% year-over-year. Net loss attributable to Uber rose from USD 878 Million a year ago to USD 5.23 Billion in the second quarter. On top of the widening losses, Uber reported a marginally 14% increase in revenue year-over-year.
Chief Executive Officer Dara Khosrowshahi explicitly mentioned during Uber’s initial public offering back in May that the Company will continue to operate on net losses for the long term.
“We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. I think our break even is something that we can push the company to break even if we really wanted to frankly,” said Khosrowshahi in a conversation with CNBC’s Deirdre Bosa. “No doubt in my mind that the business will eventually be a break even and profitable business.”
Gross bookings grew by 31% to USD 15.75 Billion, primarily driven by the increase in monthly user and trips. Monthly active platform consumers rose by 30% to 99 million, while trips increased by 35% to 1.67 billion.
Gross bookings is mainly derived from Uber’s ride hailing platform service, which generated USD 12.19 in gross bookings during the quarter. Analysts expected grossing bookings of USD 12.11 Billion. Uber Eats accounted for USD 3.39 Billion for the overall gross bookings. Uber Eats fell short of analysts’ estimates of USD 3.51 Billion.
Khosrowshahi said in the call with CNBC, “The Eats business is still a business that carries very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world. With the eats business there’s a lot of capital chasing a lot of growth and we’re the leader on a global basis. So, I don’t expect that business to be profitable in the next year or year after frankly.”
Uber listed its shares at USD 45 per share on its market rebut. As of Friday morning, Uber shares opened at USD 39.56, falling well below its IPO value.