It’s official –– Uber has turned in a profitable quarter for the first time since becoming a publicly traded company in 2019.
The company’s Q3 earnings release revealed an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) profit of $8 million, a narrow margin but enough to get Uber over the hump and into the realm of profitability.
Uber (NYSE: UBER) also beat the consensus analyst estimates for revenue during a quarter when the company’s gross bookings reached an all-time high.
“While we recognize it’s just a step, reaching total-company adjusted-EBITDA profitability is an important milestone for Uber,” said Uber CFO Nelson Chai.
Uber’s stock is down about 3% in post-market trading on Thursday despite the positive news, with Wall Street reacting slightly negatively because of its stake in Didi. Uber’s net loss for Q3 2021 was $2.4 billion, a 123% increase over Q3 2020 owing largely to its partial ownership of the struggling Chinese company.
Revenue for the ride-hailing giant came in at $4.8 billion, up 28% quarter-over-quarter and 72% year-over-year, beating the consensus analyst estimate of $4.41 billion. Mobility revenue grew 62% over Q3 2020, and delivery revenue was nearly double that of the same stretch last year.
Earnings per share came in at minus $1.28 per diluted share, below the analyst consensus estimate of negative $0.33.
Uber also saw an increase in trip volume for its mobility and delivery segments, with total trips up 39% year-over-year to 1.64 billion, or about 18 million per day. Total gross bookings were $23.1 billion, a company record and a year-over-year jump of 57%.
All in all, it was a productive quarter for Uber, which raised its Q3 guidance in September in anticipation of its first adjusted-EBITDA-positive three month stretch. As it turns out, those estimates were right.
“Not only did our Mobility business recover to pre-COVID margins this quarter,” Chai said, “our core restaurant delivery business was profitable on an adjusted-EBITDA basis for the first time as well, bringing the full delivery segment close to breakeven.”
Uber’s delivery arm, Uber Eats, finally leapfrogged its rideshare segment in 2020 to become the company’s largest revenue driver, and that hasn’t changed in 2021. For Q3, delivery accounted for $2.2 million in revenue and $12.8 billion in gross bookings, both increases over 2020’s numbers.
Uber’s delivery segment continued to grow despite unrest from state lawmakers and its own driver base, each of which have pushed back against Uber Eats’s practices. Lawmakers in New York City, for example, have enacted permanent caps on the commission Uber Eats and other third-party delivery apps can charge restaurants.
The segment posted an adjusted-EBITDA loss of $12 million, a major improvement of $149 million quarter-over-quarter and $171 million year-over-year. According to the company, drivers returning to the Uber Eats fleet was a major catalyst for those gains.
“Our early and decisive investments in driver growth are still paying dividends, with drivers steadily returning to the platform, leading to further improvement in the consumer experience,” said CEO Dara Khosrowshahi.
Last quarter, Uber’s shipping arm, Uber Freight, continued its trend of strong positive revenue figures after its $2.25 billion July acquisition of Transplace, and this quarter was no different. Uber Freight revenue came in at $402 million, a 15.5% jump quarter-over-quarter and a 40% increase year-over-year.
Adjusted-EBITDA losses for the freight segment were $35 million compared to losses of $73 million in Q3 2020, a 52% boost year-over-year.
Last month, Uber Freight completed construction on its Chicago headquarters and appointed Google and Motorola veteran Val Marchevsky as the company’s first head of logistics tech. More recently, the Uber subsidiary partnered with Marqeta and Branch last week on a deal that will bring fast payments and carrier-first financial services to the transportation industry.
Uber Freight also made some product adjustments, introducing digital lane clustering to increase load volumes and a web-based carrier scorecard that will give carriers the ability to view real-time performance indicators that are tracked against the company’s quality standards.
The segment onboarded 91 new enterprise and mid-market brands as of Q3, and it was awarded “best service” honors from LG and Target.
After Q2 2021’s solid numbers, Wall Street analysts slapped a $3.5 billion valuation on Uber Freight. That estimate was before its acquisition of Transplace and is likely to rise after another solid quarter from the freight segment.