Uber reports $5.2 bn loss in Q2 as growth falls

Traders work on the floor at the New York Stock Exchange in New York U.S. REUTERS  Brendan McDermid

Traders work on the floor at the New York Stock Exchange in New York U.S. REUTERS Brendan McDermid

Aside from stock-based compensation, Uber's losses were around $1.3 billion, which was approximately 30% worse than in the preceding quarter. Excluding that one-time expense, it lost $1.3 billion, or almost twice the $878 million loss of a year earlier.

"There's the meme [going] around, which is, can Uber ever be profitable?"

CEO Dara Khosrowshahi said he sees strong prospects for the recently made-public company to begin turning a profit. "I've certainly heard that meme, along with others".

"Our platform strategy continues to deliver strong results, with trips up 35% and gross bookings up 37% in constant currency, compared to the second quarter of a year ago", Khosrowshahi said.

But even as it invests aggressively, Uber's revenue growth continues to slow. The underlying results look "solid."Overall, comes away from results "incrementally more positive" on Uber given improving competitive dynamics, with take rates on track to rise and with losses lessening".

But Uber's revenue jumped 31%, to $15.76 billion in the second quarter of 2019 from $12 billion in 2018. Uber Eats accounted for Dollars 3.39 Billion for the overall gross bookings.

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"The Uber Freight platform for shippers targets the underserved long tail of small shippers with an automated self-serve tool that helped drive 10 times year-over-year revenue on the platform", the company said.

None of the Wall Street brokerages who cover the stock changed their recommendation on Uber, and the fall was nearly equivalent to the 8% surge in the company's shares after Lyft's numbers on Thursday.

Since going public in May, however, Uber - like Lyft - has struggled to win over investors. "We want to make sure that the kind of growth we have is healthy growth". With that much cash in the bank, Uber can continue at its current burn rate for more than two years.

Both Uber and Lyft remain below their respective IPO prices.

Results show good top and bottom-line momentum, reasons to be bullish on Uber's opportunity to become the "next mobile utility."Profitability is coming through faster than expected with gross margins better across the board and recent marketing restructuring likely to lead to more efficient spending".

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