Uber posts first profitable quarter, Airbnb posts highest revenue in history

Yahoo Finance’s Brian Sozzi and Emily McCormick discuss the market action for Uber, Airbnb, and Pinterest after the companies all reported earnings.

Video Transcript

BRIAN SOZZI: Emily, we've been talking about Peloton all morning long. But let's start on Uber. The company reported after the bell yesterday. The stock initially went down. I did not think that was the right move for two reasons. One, they just posted their first adjusted EBITDA-profitable quarter. In plain English, Uber managed to achieve operating profits, on an adjusted basis, for the first time in their history. Hat tip to Uber there. I have been very critical of this company because they've been posting big eye-popping losses.

But you've got to glimpse, Emily, what happens when you cut out a lot of dead weight and a lot of stuff you don't need inside a company. You can drive those profits.

Also guiding to 25 million to 75 million in adjusted EBITDA profits for the fourth quarter. You're seeing the stock now, I think, with the appropriate reaction to these numbers.

EMILY MCCORMICK: Yeah. It does seem like Wall Street is coming around to these numbers. And as you mentioned, that fourth quarter adjusted EBITDA outlook for as much as 75 million still a little bit late compared to what Wall Street was looking for at 98.1 million. But again, still posting its first quarter of adjusted EBITDA profitability in its latest quarter.

Now, one of the areas that I think is always really interesting to watch with Uber has been that relative split between gross bookings for mobility or that core ride hailing business and the share of the gross bookings that are coming from delivery, like Uber Eats. And for this last reported quarter, I want to highlight that mobility bookings were up 67% to reach $9.9 billion. And that comprised 43% of total gross bookings during the quarter.

Now, in the same quarter of last year, we saw mobility bookings were at 5.9 billion, or 40% of overall bookings. So we are seeing that, of course, more profitable ride hailing part of the business taking up a greater share of overall gross bookings. That's something that also helped contribute to this profitability here, even though on just an absolute basis, we are seeing the dollar value of gross bookings for delivery still outpacing that of ride hailing. So that really does speak to this shift in consumer trends that we've been seeing over the course of the pandemic, people staying at home and ordering their food to be delivered to them through Uber Eats and other platforms like it, but at least seeing a little bit of a pickup here in terms of those ride hailing gross bookings.

BRIAN SOZZI: Now, a good point, Emily. Now, two little earnings call nuggets, I should say. I love my earnings call nuggets. One, Uber saying they have seen 10 consecutive weeks of active driver growth in the US. This is jobs report day in America here. So good to see Uber managing to get drivers back on the platform here and have them driving.

And then secondarily, noting the prices in the US are up 20% year over year, Emily. I don't know if you've taken an Uber lately, but I have. And the prices have been high. Bottom line is they just need more drivers in the system to help alleviate these price pressures. But for now, it looks like we're going to have to deal with those higher prices if you are an Uber consumer.

And then you have a Bird. Bird right there, ringing that opening bell on Wall Street on this jobs report Friday. Bird, of course, going public here, electric scooter company. Have seen a big pickup in demand as mobility has increased. We talked to the founder, Travis Vander Zen in a good bit. They are in fact, going public.

Switching gears here though, no pun intended, Emily, Airbnb, a good quarter from them. And what caught my attention, another lodging player telling analysts that they are seeing a significant pickup in pent-up demand into the holiday season.

EMILY MCCORMICK: Absolutely, Brian. And I think with Airbnb too, this is a company that of course, had been hit by the pandemic, as had other lodging firms, of course especially on the international side here. But what Airbnb has that a lot of the traditional hotel players, like a Hilton or a Marriott haven't been able to benefit from, has been, of course, the consumer trend towards longer-term stays as they've been working from home, booking more nights so that they can stay in one place for longer, and then of course, the fact that a lot of customers have been looking for rentals that don't have that same kind of public common spaces, like a hotel lobby, during the pandemic. And of course, that risk of infection here.

But taking a look at these results for the third quarter, revenue up 67% over last year to $2.2 billion. And again, that gross booking value up 49% over last year to 11.9 billion. Now, of course, those year on year increases are really getting a big boost here from those easy comparisons to the pandemic-impacted levels of last year. But it is encouraging to see a continued pick up here and some upbeat commentary when it comes to booking trends for next year, Brian.

BRIAN SOZZI: Yeah. And some, I would say, upbeat quotes or comments from Airbnb's Brian Chesky on the call saying, quote, within one week of President Biden announcing that they would open that international travel, saying, we saw a 44% spike in nights booked for stays crossing borders coming into the US on Airbnb for stays on November 9 and later, very interesting.

Chesky going on to say, quote, "What we are seeing kind of across the board is evidence of pent-up demand here." So the market liking what Chesky had to say on his earnings call last night. And the stock up about 7% out of the chute here.

Emily, we also have to touch on Pinterest here. Pinterest top of mind here following that, what appears to be, scuttled deal with PayPal a couple of weeks ago. But coming out here again and calling out pressured monthly active users.

EMILY MCCORMICK: That's right. So this was actually a second straight quarter where we've seen Pinterest report a sequential decline in their monthly active users. Those are down by 10 million on a quarter over quarter basis to come in at 444 million. And during the prior quarter, which was for the April through June period, we'd seen Pinterest post its first drop in its user base in three years.

So that really does speak to this trend towards the social media companies at large, where as people are going out, as they are able to meet up in person more often, they're shifting away from actually going onto these social media platforms. And for Pinterest specifically, this also means that people have been looking on Pinterest boards less frequently, not necessarily looking for ideas and inspiration for how to redecorate and revamp their work from home and home office spaces now that they're starting to go back to work in-person as well here, Brian.

But I think in terms of the stock reaction to this report, even though, of course, we did get a little bit of volatility in the after hours session, we're seeing that continue here. This was still quite a bit better than feared, especially on the advertising revenue side of the equation when we had these disappointing results from peer companies like Snap just earlier this earnings season.

BRIAN SOZZI: Well, not everybody's off the Pinterest platform there, Emily. Our producer Val is on this thing daily. She remains very much a daily active user and an MAU, a monthly active user.

But let's mention Peloton here, as we get ready to go into break. The stock has been replaced as the top trending ticker on Yahoo Finance by Pfizer, which is benefiting from some good news on the COVID drug front. But Peloton now the number two trending ticker on our platform. Stock is crashing. And I will say it's a crash. It's crashing 33% here after a very disappointing quarter, very disappointing outlook. And I would say a very disappointing earnings call from the team over at Peloton.