Uber just released it’s second-quarter earnings report this past Thursday and aside from the lack-luster numbers which are apparent at first, there are more intriguing stats lurking behind those.
Uber Eats, which is Uber’s food delivery service has boasted exceptional growth during the CVOID-19 pandemic. While no-one can accurately predict the future, it’s safe to say that Uber should’ve expect the huge spike in numbers for their food delivery service during this nationwide pandemic as more and more people have been ordering delivery due to lockdown restrictions on restaurants.
The huge increase in numbers for Uber Eats during this period is based on adjusted revenue. By looking at Uber’s past two quarterly earnings report, it’s clear that the business is putting it’s primary focus on the food delivery aspect of it’s operations for obvious reasons.
What caused the change
The global coronavirus pandemic that has swept the nation has caused many business and companies to shut down indefinitely. Uber is one of the few companies much like Amazon who’s infrastructure was already kind of set-up to handle an issue like the COVID-19 outbreak.
Just for context, Uber reported a net loss of about $1.78 billion in the second quarter, which is actually less than the net loss earnings reported last year around the same time which was about $5.24 billion. It’s important to remember that Uber only went public as of last year, which resulted in a lot of “hype buying” of their shares.
As it relates to investors, the net loss in value that Uber experienced calculates out to about $1.02 per share. That number beat many stock analysts predictions which were set at about $0.86 per share. While Uber missed out on a lot of profit earning potential this quarter, it did manage to achieve revenue greater than $2.18 billion which is what many investors predicted.
Even though Uber eats is starting to contend with Uber’s main ride-hailing business, Uber itself has much better profit retention than the prior. This is something company heads at Uber will have to figure out as the COVID-19 pandemic continues to grow around the world especially in the U.S.
What to expect
While the net revenue for Uber Eats outshines Uber’s main business sector for now, analysts predict it won’t be for long. Prior to the pandemic, Uber Eats was a relatively small portion of the company’s entire revenue. Now with accessibility to critical services being limited, Uber Eats is becoming a lot of people’s primary way of getting food delivered to their home.
One interesting thing to note is that when looking at the adjust profit numbers, Uber’s main ride hailing business sector still outshined Uber Eats. Ride-Hailing and food delivery sort of go hand in hand, especially when looking at the core business model of Uber itself.
Uber CEO Dara Khosrowshahi said the following on Thursday: “It’s become clear that we have a hugely valuable hedge across our two core businesses that is a critical advantage in any recovery scenario.”