The company released its first earnings report since going public.
On Thursday, Uber released its first earnings report since going public earlier this month. In many ways, the earnings report was no surprise to investors and had little effect on the company’s shares.
But investors were encouraged by a conference call with company executives later that day. While Uber’s stock is hanging around $41, the company’s shares still haven’t reached its $45 IPO price.
Uber’s Good Q1 News
During the first quarter, Uber lost over $1 billion and brought in $3.1 billion in revenue. That may sound like a lot, but it’s actually about what investors expected. And Uber made significant gains in several areas.
Gross Bookings
Over 75% of the company’s earnings come from its ride-sharing business so investors look for signs that this part of the company is growing. During the first quarter, gross bookings increased by 41%, and the company averages 17 million rides per day.
Uber Eats
Uber Eats remains a strong point. This part of the company’s business is growing much faster than its ride-sharing segment. During the first quarter, revenue from Uber Eats increased by 89%, going from $289 million to $536 million.
Uber Eats accounts for 17% of the company’s revenue — it remains a strong asset for the company going forward. Some analysts believe that Uber’s strong brand recognition gives Uber Eats an advantage over competitors like DoorDash and Grubhub.
Ongoing Price Wars
Uber’s rival Lyft is also losing money, struggling since its IPO. During a conference call with investors, CEO Dara Khosrowshahi indicated that the price war with Lyft seemed to be settling down.
According to Khosrowshahi, competition between the two companies seems to be more focused on branding and customer service going into the second quarter.
Final Thoughts
Uber still faces an uphill battle: It needs to be profitable and decrease some of the heavy losses it continues to incur. And Uber already stated that 2019 will likely be its “peak loss year.”
During the call with investors, Uber’s CFO gave a very limited earnings forecast, skirting specific metrics the company is trying to meet.
But investors are encouraged by signs that the pricing wars with Lyft are calming down. This could indicate that Uber could begin to compete with Lyft based on brand recognition and customer service, rather than just spending more money.
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