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Uber Freight EBITDA continues to fall; revenue drops 23% from year ago

Transplace acquisition has not helped company attain profitability

Uber Freight's EBITDA continued to slide in the first quarter. (Photo: FreightWaves).

(This article has been revised from the original, adding comments from the Uber conference call).

Digital brokerage Uber Freight showed it was not immune to the downturn in the freight market, with the company again posting negative adjusted earnings before interest, taxes, depreciation and amortization, as the Transplace acquisition from late 2021 was still unable to pull all of Uber Freight to consistent profitability by that key EBITDA measure.

On the conference call with analysts that followed the company’s earnings release, CFO Nelson Chai said that Uber Freight is “really something we still believe in.”

Whether Uber Freight fits in the larger Uber Technologies is not a question that ever seems to go away. It gained new momentum in the past quarter with a report from Bloomberg that said the parent company was considering its options with Uber Freight and whether to sell the brokerage operation or divest it through an initial public offering. 

The third quarter of 2021 was the final one in which Transplace financials were not part of the Uber Freight earnings report. The segment of the larger Uber (NYSE: UBER) parent posted adjusted EBITDA that quarter of negative $35 million in the earnings report released Tuesday.. (Adjusted EBITDA is a non-GAAP measure but generally is considered more indicative of a company’s financial performance.)

Since then, the EBITDA figures sequentially have gone negative $25 million, positive $2 million, positive $5 million, positive $1 million, negative $8 million and in the first quarter of 2023, negative $23 million.

The combination of Transplace and Uber Freight brought together two companies on different sides of the freight divide. Uber Freight has its network of carriers that use its digital brokerage capabilities; Transplace operates transportation management systems primarily for shippers. The $2.25 billion acquisition closed in the fourth quarter of 2021. 

In the third quarter of 2021, Uber Freight, without the impact of Transplace, posted revenue of $402 million. Its peak revenue since then was in the second quarter of 2022, when Uber Freight reported revenue of $1.83 billion. That was up from the $1.82 billion posted in the first quarter of 2022.

By the fourth quarter of 2022, revenue was down to $1.54 billion. In the first quarter of this year, revenue was $1.4 billion, down 23% from a year earlier.

On the earnings call, Chai echoed executives who across the range of earnings calls have all cited the weak freight market. “@e are at a macro low in terms of the cycle,” Chai said, according to a transcript of the call. “And so what happened was a lot of supply entered the market broadly. And a lot of the supply chain challenges that came during COVID have arrested. So, right now, you’re seeing a very oversupplied market.”

Chai also said the team led by Uber Freight president Lior Ron “continues to make progress in terms of digitizing a very analog business.”

The prepared statement releasing Uber’s earnings did not mention any other developments in the quarter, except its partnership with WattEV to deploy electric trucks in California, with pallet management company CHEP as the shipper involved in the trial. 

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.