In the quarter ended 31March 2020, Uber revenues rose 14% to $3.5 billion. sounds great. But the Uber bucket still leaks.
Operating expenses, despite cost cuts and the series of layoffs, jumped by 16% to $4.8 billion. And there were “other expenses” of $1.8 billion and interest expenses of $118 million, a tax benefit, and a couple of other things. And the net loss tripled to $2.94 billion.
In Q1 2019, its last pre-IPO quarter, Uber lost $1 billion on $3.1 billion in revenues, according to its earnings report today. In Q1 2020, it lost $3 billion on $3.5 billion in revenues. This is not a very positive trend especially as leadership was committed to profitability . There are few if any impacts from Covid as Uber has exited Asian markets and is barely present in Italy.
CEO Dara Khosrowshahi told analysts that Uber is trying to cut fixed costs by $1 billion, including marketing expenses, capital expenditures, and the layoffs announced this week – though the problem is that Uber has been announcing cost cuts and layoffs for a year, and costs just keep rising.
“Reaching profitability as soon as possible remains a strategic priority for us,” he said.
But this “profitability” isn’t profitability. It’s “Adjusted EBITDA,” Uber’s own homemade creature, which, according to Uber, is net income (loss), minus…
- income (loss) from discontinued operations net of income taxes
- net income (loss) attributable to non-controlling interests, net of tax
- provision for (benefit from) income taxes
- income (loss) from equity method investment, net of tax
- interest expense
- other income (expense), net
- depreciation and amortization
- stock-based compensation expense
- certain legal, tax, and regulatory reserve changes and settlements
- goodwill and asset impairments/loss on sale of assets
- acquisition and financing related expenses
- restructuring charges
- other items not indicative of ongoing operating performance, including COVID-19 response initiatives related to payments for financial assistance to Drivers personally impacted by COVID-19 and the cost of personal protective equipment distributed to Drivers.
And even under this fanciful metric of “Adjusted EBITDA,” Uber still lost $612 million. In other words, those 13 items above that were excluded from its loss amounted to $2.3 billion.
Investors have subsidized Uber users by $19 billion so far, and they will continue to have to subsidise it because there is no sign that there will ever be real and significant annual profitably under GAAP.
In further news Uber shares increased 15% on this appalling news!