Uber (UBER) reported better than expected sales for its fiscal fourth quarter and a narrower than expected quarterly loss as the newly public company continued to grow its core businesses and lower its costs.
Here were the main metrics from the report, compared to consensus estimates compiled by Bloomberg:
Gross bookings: $18.13 billion vs. $18.3 billion expected
Adjusted net revenue: $3.74 billion vs. $3.7 billion expected
Loss per share: 64 vs. 65 cents expected
Adjusted EBITDA loss: $615 million vs. $712.9 million expected
The company also unexpectedly pulled forward its target date to hit profitability by a year. During a call with investors on Thursday, Uber said it expected to be profitable on an adjusted EBITDA basis by the fourth quarter of 2020, versus previous guidance for profitability by the end of 2021.
Shares of Uber rose 4.6% to $38.70 each as of 4:49 p.m. ET, cutting some gains after rising 10% during late trading. Shares of peer ride-hailing company Lyft also jumped 4% after Uber’s revised profit guidance.
Top-line growth remained resilient during the last three months of 2019. Gross bookings, which includes the total value of ride-hailing and food delivery orders placed on the app, grew 28% over last year during the last quarter. This comprised a 20% rise in Rides gross bookings and 73% increase in Eats gross bookings, about matching the prior quarter’s pace of gains in its food delivery business.
Uber also made strides in cutting down overall costs during the fourth quarter, with its adjusted loss totaling $613 million versus the $817 million loss in the year-ago quarter, including interest, tax and other expenses.
“We recognize that the era of growth at all costs is over,” Uber CEO Dara Khosrowshahi said in a statement. “In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution, and the unrivaled scale of our global platform.”
Peeling away all the impact of its Eats, Freight, Other Bets and Advanced Technology Group segments, Uber’s Rides segmented adjusted EBITDA was already positive on a standalone basis in the fourth quarter. UberX trips, which are typically pricier for customers and higher margin for the company than its shared-rides services, grew 26% in the fourth quarter, about matching the pace of growth from the third quarter.
But other areas of the business have weighed on the company’s bottom line, including Eats. The business is a higher-growth but smaller piece of the overall company, and one that has generated high costs in Uber’s quest to snap up market share in the food delivery space.
For the full-year 2019, close to 45% of Uber Eats’s revenue was spent on its incentive and referral programs to try and lure and retain customers.
But to keep costs in this part of the business reasonable, the company has been exiting its Eats operations from markets where it has not already become a top player. Uber sold its Eats business in India to Zomato last month, and discontinued its Eats operations in South Korea late last year.
Since going public last May, Uber’s shares have wallowed well below their $45 initial public offering price as analysts largely remained cautious on the profitability prospects of the ride-hailing industry as a whole. For the year to date, however, shares were up about 25% through Thursday’s close.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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