Uber reported his second quarter earnings Thursday, and buried in the blizzard of suboptimal numbers is a staggering figure that illustrates how much the company changed during the COVID-19 pandemic.
Uber the delivery business - better known as Uber Eats - is now larger than its original and base division, based on adjusted net sales. Now, the adequate net earnings only tell a piece of this evolving Uber story. Revenue or loss in the case of Uber's delivery activities is also important.
However, looking at the change from the past year, and particularly in the past two quarters, it is clear that Uber's strategy has changed. And all eyes are on delivery.
Before digging deeper, let's run a brief summary.
The net loss reported by Uber was $ 1.78 billion in the second quarter of 2020, down from a net loss of $ 5.24 billion the previous year. The company went public last year, resulting in various one-off and non-cash costs. The net loss of the company resulted in a loss of $ 1.02 per share. This was enough to beat analysts' expectations of a deficit of $ 0.86 per share.
Uber lost profitability in the quarter, but exceeded front line expectations, posting $ 2.18 billion higher than expected by investors.
The transition to delivery
There are three main ways to evaluate the company's various activities, of which only two are on a material scale with respect to Uber's operating results, namely Mobility (ride-ride) and Delivery (Uber Eats) . Here's how the pair built up in the second quarter of 2020:
- Gross delivery bookings: $ 6.96 billion
- Gross bookings for mobility: $ 3.05 billion
Here's how the results of gross bookings turned into adequate net revenue:
- Adjusted net revenue on delivery: $ 885 million
- Net revenue adjusted for mobility: $ 793 million
And how these revenue results turned into adequate profits and adequate losses:
- Adjusted EBITDA for delivery: - $ 232 million
- Mobility adjusted EBITDA: $ 50 million
As you can see, Uber's food delivery sector is making far more gross dollars in transaction volume. However, since Uber has a better withdrawal rate (the part of the gross expenditure that is retained as revenue) with the ride-hiling than Uber Eats, the two had much closer adequate net revenue numbers. Here too, Delivery has beaten mobility.
When it came to an adjusted profit, Uber's traditional ride-hailing core business generated the top result, generating a positive adjusted EBITDA, while the delivery lost money using the same profit calculation method.
In the first quarter of 2020, mobility generated more gross bookings, adequate net revenue and adjusted EBITDA than delivery. In the second quarter, due to COVID-19 and its consequent economic impacts, two of the three numbers jumped. It is unclear how quickly the numbers could change in the future if the hail race market recovers further. Today's earnings request made it clear that Uber is more concerned with bringing you food than with taking you to the airport, and that's a big change for the American company.
To be clear, the ride-ride doesn't go anywhere. It is the twofold goal of delivery and greeting on the flight on which Uber counts to overcome this bad patch of the pandemic COVID-19 and to strengthen its earning potential in more stable times.
"It has become apparent that we have extremely valuable coverage for our two main businesses, which is a key advantage in any recovery scenario," said Uber CEO Dara Khosrowshahi on Thursday. "When travel restrictions increase, we know the rebound of mobility travel. If the restrictions persist or need to be restored, our delivery business will compensate. "
Graphic context
For fun, here are the relevant sections of Uber's Q2 investor slides.
Here are the company's mobility numbers:
And here are his delivery results:
Good number!
