Born out of a crisis moment in technology over a decade ago, Uber Technologies, Inc. accounts for many miles driven globally on a daily basis. The American multinational ride-hailing company provides a wide range of services to facilitate commuting.
A tech-savvy forum, Uber amalgamates global network, technology operational excellence and product expertise to enable movement from point A to point B, while developing and operating proprietary technology applications.
Uber began with a simple “Tap a button, get a ride” strategy and over time, the Company has introduced features of ridesharing, carpooling, meal delivery, freight, electric bikes, self-driving cars and even urban aviation!
The Company has been on the forefront of revolutionising personal mobility (Ridesharing) and has been leveraging its platform to redefine the vast logistics and meal delivery industries.
Ever since the market leader of commuting services announced on 9 January 2020 that it would be announcing its fourth quarter and full year 2019 financial results on 6 February 2020, industry enthusiasts and investors have been eyeing the release, which is finally here!
Uber’s Q419 and FY19 Results- Financial Front
Fueled by the substantial growth in its ride-hailing and food delivery business, Uber’s revenue was up by 37% in the three months to 31 December 2019 (Q419). Almost three-quarters of the reported revenue came from Uber’s ride-hailing service solely, which is available in over 700 cities worldwide.
Below are the highlights of the Q419 results-
- Gross Bookings grew by $4 billion $18.1 billion on a year-over-year basis, up by 28% year-over-year
- Rides Adjusted EBITDA delivered a $742 million profit and 24.3% margin as a percentage of Rides revenue
- Unrestricted cash, cash equivalents and short-term investments amounted to $11.3 billion
- However, net loss attributable to Uber widened to $US1.1 billion (from a loss of $US887 million a year earlier)
Let us now look at the FY19 highlights-
- Total trips were reported at 6,904 million for the year ending 31 December 2019
- Adjusted Net Revenue amounted to $12,897, up by 25% on the prior year
- Rides Adjusted EBITDA was $2,071, up by 34% on the prior year
CEO Dara Khosrowshahi believes that the Company has had a transformational 2019 with significant progress keeping Uber on its path to profitability.How has Uber performed on the Operational Front?
Interestingly, in Q419, the Airport business outgrew overall Rides and the Company now serves more than 650 airports globally.
The brand strength was catalysed primarily by Rideshare (Uber app), which was the most downloaded app globally in 2019 and Food Delivery (Uber Eats), which was top ranked as the most innovative brand and great consumer experience rankings, by both WPP and Kantar in the US.
Moreover, the Company was successful in adding 20 million MAPCs (the total number of exclusive customers finishing a New Mobility ride/ Ridesharing/ getting an Uber Eats meal at least once in a particular month, which is averaged over each month in the particular quarter) year-over-year to reach 111 million, while cross platform users grew 68%.
Uber also launched Uber Comfort in Latin America and EMEA after the success of the US launch. This was instrumental in driving 54% year-over-year growth in the Company’s premium Rides offerings globally.
Coming to markets, key new markets continued to grow rapidly, few being Argentina, Germany, South Korea, Spain and Japan.
Another new addition on the operation front was the US Safety Report, the first comprehensive publication of its kind that shared details on Uber’s safety progress and related data.
Moreover, the Eats subscriptions continued the expansion spree across the U.S. cities (apart from California), Taiwan and South Africa- its first international markets to launch this product. Similarly, the Freight segment has also continued to expand its offering to carriers.
Recent Developments at Uber
The Company has been doing media rounds as its divested India Eats business, Zomato acquired Uber’s food delivery business in India. This is in line with Uber’s strategy to focus on markets where it foresees a leading position.
Besides India, Uber completed the Careem acquisition after receiving the approval of the transaction in Saudi Arabia, the UAE, Egypt and Jordan.
Uber has also Introduced new product features in California to strengthen the independence of drivers and delivery individuals.
A Bright Outlook After the Big Results?
The Company has already moved forward by a year its target to achieve profitability on an adjusted basis, as its prior target for turning a profit was expected in 2021. Consequently, Mr Khosrowshahi is gratified by Uber’s progress.
This has given Uber the confidence to challenge its teams and further accelerate the EBITDA profitability target from FY21 to Q420.
Besides this, the Company notified that it will continue to roll out its PIN product in 2020, which has been well-received by riders and by airports.
Stock Performance- Gained over 5% on Extended Trading Session
The Uber stock (NYSE:UBER) build onto investor sentiment positively and settled higher at USD 37.09 on 6 February 2020. Mr. Khosrowshahi stated that the business world is witnessing times wherein investors demand not merely growth, but significant profitable growth.
In this regard, Uber remains perfectly positioned to win at the back of continual innovation, exceptional execution, and the unmatched scale of its global platform, which continues to lead markets.
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