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Uber posts $1.8B loss in Q2, deliveries skyrocket

Yahoo Finance's Alexis Christoforous, Brian Sozzi, and Emily McCormick break down the earnings reports for Uber and Booking Holdings.

Video Transcript

ALEXIS CHRISTOFOROUS: A tale of two businesses at Uber today. Its ridesharing business took an incredible hit because of COVID-19, but its Uber Eats service, up more than 100%. We've got Emily McCormick on this one this morning. Hi, Emily.

EMILY MCCORMICK: Good morning, Alexis. And a couple of firsts that we saw yesterday in Uber second quarter earnings results. This was the first time that the company posted a year over year decline in revenue after years of growth. Now we did see that adjusted net revenue was down 33% over last year to $1.9 billion. That did beat expectations for $1.8 billion. It did post a wider than expected loss per share. So still seeing unprofitability here for Uber.

Now also the first time that we saw food delivery overtaking mobility in both gross bookings and in sales. We saw that ride-hailing business post gross bookings down 75% to just over $3 billion. Delivery, on the other hand, saw gross bookings up by more than double, up 106% to nearly $7 billion. That was double over last year.

Now taking a look at some of the headlines that we saw from the earnings call yesterday, we had CEO Dara Khosrowshahi saying that the food delivery business is now as big as the ride-hailing business had been in 2017 for Uber. It's a testament to the quick growth that we're seeing on that side of the business, although it is still unprofitable for the company. Now Khosrowshahi he did say food delivery can and will be profitable, although he didn't give a timeline on when that will actually be achieved. Now Uber did reaffirm yesterday that it expects to hit company-wide adjusted EBITDA profitability in 2021.

And then taking a look at some updates on the ride-hailing side of business, of course, that being hit by the pandemic and a lack of travel demand. Khosrowshahi said that the US is lagging. Ride demand is down as much as 85% in some top markets, including San Francisco and Los Angeles. While internationally, Hong Kong, for example, has at times, topped its pre-pandemic levels on the ride-hailing side. Now we do see shares of Uber selling off in premarket trading. Lyft shares also falling in sympathy, and adding to those year to date declines for Lyft, although Uber is still up for the year to date. Alexis.

ALEXIS CHRISTOFOROUS: All right. Also want to get in the online travel agency Booking Holdings feeling the full impact of this pandemic, Emily.

EMILY MCCORMICK: Absolutely. And we did see an adjusted loss per share of $10.81, though that was narrower than the loss of $11.36 that had been expected. Now revenue also beat on the top line, but still down 84% over last year to $630 million. Now we had CEO Glenn Fogel giving some details on the shape of recovery in Bookings' business in yesterday's earnings call.

He said quote, "we witnessed the greatest negative impact from the virus in April, as newly booked room nights in that month declined by 85% year over year. After April, room night trends have steadily improved with newly booked room nights in July declining about 35% year over year." Now that notion that Booking Holdings has perhaps seen the worst of the pandemic, that that is behind them, is sending shares higher. We do have those up just under 4% in premarket trading.

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