Uber posted a loss of over $1 billion in its first quarter as a public company, well above last year’s reported operating loss of $478 million. The news, though colossal, is in line with expectations. The ride-share giant, founded in 2009, also confirmed Wall Street’s qualms about slowing growth. The company offered investors no inkling of when it may begin to turn a profit, if ever. Though, CEO Dara Khosrowshahi reportedly told German newspaper, Handelsblatt, earlier this week, that the company may be profitable within the next year or two.
In spite of all the gloomy news, and confirmation of the company’s bottom line deficit, the stock price for Uber was up 2.5 percent on Thursday in after-hours trading, reaching $40.80, as Khosrowshahi conveyed confidence in an earnings call. Uber’s costs increased 35 percent in the first quarter, due to promotions and discounts that it offered. The San Francisco-based company had its IPO, towards the end of April, at the price of $45 per share. Its shares are currently roughly 12 percent lower despite Khosrowshahi’s efforts to enlighten investors with his vision of Uber as the dominant force in all forms of transportation.
As reported by the NY Post, the company’s Chief Executive asked investors not to grow wary with the stock’s poor performance and its unimpressive public debut, saying the company will become increasingly efficient as it continues its expansion. “It is ultimately just one moment in a much larger journey,” said Khosrowshahi, adding: “Our teams are very, very motivated to prove Uber’s value to our shareholders.”
As far as revenue goes, Uber beat Wall Street expectations of $3.04 billion, posting $3.1 billion in revenue, in a 20 percent leap over last year’s figures. Also, Uber boasted that its global monthly active users rose from 91 million at the end of the last quarter, up to 93 million. Uber’s overall ride-share “bookings”, or total fares paid by riders, were up 34% in the first quarter, reaching $14.65 billion.
In other upbeat results, the company said it is seeing a decline in competition from “the other player,” referring of course to its chief rival Lyft, stating that it has “started to see signs of less aggressive pricing.” Lyft, which had its IPO in March, is currently trading at nearly 30 percent below its IPO price. During extended trading on Thursday, after Uber’s announcement, share prices for Lyft edged upward 2.3 percent, reaching $56.10.
