Mobility Recovering, Outlook Better
On a more positive note, Uber posted a significantly narrowed net loss in Q1 compared to analysts’ estimates, but a business sales miss dragged the stock lower.
The rideshare and delivery company reported a net loss of $0.06 per share, compared to the expected loss of $0.54 per share, largely thanks to the $1.6 billion sale of its self-driving business ATG. Business revenue came in at $2.9 billion, which is well below the $3.29 billion consensus.
“Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings. We will continue to innovate and find new ways to deepen engagement with our customers, as the only global platform that helps you go wherever you need and get whatever you want,” said Dara Khosrowshahi, CEO of the company.
Uber and its peers led a difficult battle last year following the COVID-19 outbreak that resulted in heavy travel restrictions and a plunge in demand for mobility services. However, the pandemic pushed business sales of Uber Eats through the roof amid exploding demand for food delivery services. The company pointed out that Uber Eats continues to compensate for declines in its core rideshare unit.
In the past few months, rideshare companies have reported on witnessed recovery as a result of the vaccination program and the easing of restrictions. Uber reiterated its target to return to profitability on an adjusted EBITDA basis by the end of 2021.
Uber’s adjusted EBITDA loss stood at $359 million, marking a $95 million improvement compared to the prior quarter. The San Francisco, California-based company said it expects its mobility rate to drop roughly 20% in Q2.
“For the remainder of the year, I would remind you that delivery gross bookings year-over-year comparisons will become tougher as we continue to face significant forecasting uncertainty in predicting post-reopening consumer behavior,” Uber CFO Nelson Chai told analysts on a call.
The company’s mobility unit generated $6.77 billion from gross bookings, declining 38% from the year-ago period, while Uber Eats nabbed $12.46 billion, up 166% compared to Q1 2020.
Uber Eats also outshone its rideshare segment in terms of business sales, garnering $1.7 billion compared to $853 million a year ago. Revenue in the Uber Eats business rose 28% quarter over quarter.
Uber recently struck a business partnership with the digital delivery service company Gopuff in an effort to bring more convenience store and grocery offerings. Khosrowshahi said rideshare trends are starting to recover in certain markets and added he believes that recovery will continue to gain momentum.
Uber is currently facing a challenge as it needs more drivers, with the company reporting 3.5 million drivers and couriers in the latest quarter, up 4% quarter over quarter but still down 22% compared to the year-ago period.
The number of trips on its platform remained relatively flat compared to the previous quarter, and down 13% from last year.
Uber reported a massive improvement in net losses in Q1 2021 on the back of the $1.6 billion sale of its self-driving business ATG. However, shares of Uber fell after the company missed on revenue expectations, despite another stellar quarter from its delivery business Uber Eats.
About the Author
An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.