Uber’s Earnings – Is It On The Right Track?

Uber released its first quarterly earnings as a publicly traded company. Let’s take a look how they did.

First of all, I have to say that reading Uber’s earnings isn’t a straightforward task. They make it incredibly confusing and complex. For instance, there are multiple variables concerning the company’s money-generating ability such as Bookings, Revenue, Core Platform Adjusted Net Revenue, Adjusted Net Revenue. I wish they could make it easier for the audience to absorb the information.

The company lost more than $1bn in the first quarter mainly due to bigger cost of revenue and S&M expense

Source: Uber

Bookings, revenue and net revenue increased, but at a much slower clip than Q1 2018

Source: Uber
Source: Uber
Source: Uber

Monthly trips per user are stagnant while contribution margin is negative

Source: Uber
Source: Uber

Uber Eats revenue grew by 89%, but Uber tripled the driver incentives for the segment

Source: Uber
Source: Uber

In terms of segments, Vehicle Solutions and Latin America market performed poorly compared to Q1 2018

Source: Uber

Ride-sharing’s revenue grew while incentives contracted; which is good news

Source: Uber

Thoughts

Uber seems to be a story of contradiction. While the CEO claimed that “Sometimes simplicity is a beautiful thing”, the business, by no means, is presented in a simple fashion. It’s complex and the terms used by the executives don’t necessarily facilitate easy understanding.

Uber CEO also said “Our job is to grow fast at scale and more efficiently for a long, long time.” Bookings, users and all metrics increased indeed. Yet, as presented above, they grew at a slower clip than one year ago. The tripled incentives used to fuel growth in Uber Eats aren’t exactly evidence for the efficiency he mentioned, and neither is the S&M expense.

The company lost $1bn and the business model doesn’t seem to change much. Also, I don’t believe in the short term feasibility of autonomous vehicles’ impact on Uber. It’s unclear how the company can tackle the profitability question. On the earnings call, Dara mentioned competing on brand and products instead of pricing with competitors. Well, whether that plan comes into beings still remains to be seen.