Uber reveals first-quarter losses of $2.9 billion as the coronavirus pandemic cripples ride-hailing
- Uber on Thursday said it lost $2.9 billion during the first three months of 2020 as the coronavirus sent ride-hailing volumes plummeting.
- The quarterly losses were greater than most investors had expected, while topping their revenue projections.
- Shares fell slightly in after-hours trading following the release.
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Uber on Thursday revealed a first-quarter financial loss of $2.9 billion that was wider than Wall Street had expected, sending shares down about 4% in after-hours trading.
Here are the important numbers:
- Revenue: $3.54 billion versus an expected $3.02 billion
- Adjusted net income: $-2.9 billion versus an expected $-1.153 billion
- Adjusted losses per share: $1.70 versus an expected $0.75 per share
The coronavirus has pummeled ride-hailing requests since March as much of the world was hit with shelter-in-place orders. Uber has relied heavily on Uber Eats to make up for the losses, and the company said it saw a 52% increase in gross bookings for the delivery segment to $4.68 billion.
"While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario," CEO Dara Khosrowshahi said in a press release. "Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up."
In addition to the revenue downturn, Uber previously warned in April that it expects an impairment charge from declines in investments due to the global impact of the outbreak, precipitating the largest quarterly loss in three periods. It also walked back financial forecasts that predicted profitability, at least by one measure, in 2020.
To cut costs, the company announced in May it would lay off 3,700 employees, roughly 14% of its total workforce. Uber also said it folded its bikes and scooters business into Lime, in which it invested $85 million on Thursday.
Now, investors will be looking for insight into the rebound.
"Uber and Lyft face Herculean-like challenges looking ahead as the new reality will likely change the business models of these companies (and competitors) for the foreseeable future," Daniel Ives, an analyst at Wedbush, said in a note to clients this week. "Even in food delivery while consumer demand is there, competition is driving meaningful pressure on profitability."
Lyft, which has seen a similar downturn and has also announced layoffs, announced first-quarter results on Wednesday that largely impressed investors, with shares of the company screaming more than 20% higher on the news.
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