Uber Technologies Inc (NYSE:UBER) stock rose 2.56% (As on May 9, 11:25:07 AM UTC-4, Source: Google Finance) after the company reported an unexpected loss, weighed down by costs from the ride-hailing company’s decade-long battle with global regulators. The company has reported a net attributable loss of $654 million, up from $157 million a year ago and a $1.4 billion profit in the fourth quarter of last year. The loss reflected $721 million of net unrealized losses related to the revaluation of equity investments. Gross bookings in the first quarter rose 20% year-over-year to $37.70 billion, with the Mobility taxi arm increasing 25% to $18.70 billion and delivery climbing 18% to $17.70 billion. On an underlying adjusted EBITDA basis, the company reported a record profit of $1.40 billion, marking 82% growth beating analysts’ forecasts of $1.3bn. This growth is attributed to an expanded user base and increased trip frequency, with Monthly Active Platform Consumers (MAPCs) growing by 15% to 149 million and trips increasing by 21% to 2.6 billion.
Further, the company attributed the shortfall to “discrete legal and regulatory reserve changes and settlements”, though the company said it was “resolving several legacy matters”. The legal costs included Uber agreeing to pay $178mn to settle a class-action lawsuit brought by taxi drivers in Australia. However, the quarter still compared favourably with a $262mn operating loss reported for the first three months of 2023. Uber and its rivals are grappling with increasing global regulatory headwinds, particularly over driver and delivery worker pay. Under a challenge filed in the UK this month, Uber is facing a multimillion-pound lawsuit from more than 10,000 black cab drivers in London.
The company had reported the adjusted revenue growth of 15 percent to $10.10 billion in the first quarter of FY 24, beating the analysts’ estimates for revenue of $10 billion.
Meanwhile, Uber unveiled a partnership with Instacart, which will allow the grocery delivery group’s US users to order from restaurants listed on Uber Eats. The ride-hailing company hopes the move will help it to compete with rival DoorDash in suburban locations across America. Uber said further growth would come in part from a widening array of services, such as the grocery delivery segment that it aims to expand.
Looking forward to Q2, Uber anticipates gross bookings between $38.75 billion and $40.25 billion, representing an 18-23% increase on last year, with adjusted EBITDA of $1.45-1.53 billion, which would be growth of 58% to 67%.