It is tempting to assume that the ride-hailing model is going the way of moribund businesses, especially in the wake of Lyft’s well-publicized layoffs and executive turnover. But Uber’s earnings results for the first quarter partially dispel those concerns.
Uber not only beat analysts’ expectations across the board, it also demonstrated that its financial footing is growing firmer: Its multipart business model is going well now that its food delivery business, which supported its ride-hailing efforts during the pandemic, is handing the growth baton back to the company’s original enterprise.
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In the first quarter, Uber’s revenue of $8.82 billion topped analysts’ expectations by about $100 million, which is significant. The company’s GAAP loss was also narrower than expected ($0.08 in per-share loss compared to the average analyst estimate of a $0.09 per share loss), while its adjusted profits came in better than the street reckoned ($761 million in adjusted EBITDA compared to the estimate of $678.6 million). Shares of the company spiked following the announcement and are up 8.9% at $35.68.
Against the backdrop of Lyft’s struggles and tepid growth at major tech companies, this morning, we’re digging into Uber’s results, looking at the good, the less-good and the curious. Our goal is to understand the company’s recent performance, and we’ll close with a note on Uber’s profitability-growth trade-off as it exists today, and what that can tell us about investor sentiment today.
That last bit is key for startups looking to raise more capital, so read closely. To work!
Highlights and lowlights
Uber saw its gross bookings rise 19% to $31.4 billion in the first quarter from a year earlier (bookings rose 22% after adjusting for currency fluctuations, but we’re sticking to flat figures for the rest of this post). The company’s revenue rose 29%, bolstered by a change in how Uber handles its U.K.-based accounts.
Uber’s gross bookings are derived from its two major businesses, ride-hailing and food delivery (more data here):