Uber adjusts third-quarter forecast in light of increased gross bookings
Uber said Tuesday that it could hit one measure of profitability in the third quarter, earlier than expected, as the ride-hailing company saw gains in its delivery and mobility businesses. The ride-hailing service told regulators in a filing this morning that it anticipated an increase in gross bookings and stronger adjusted EBITDA in the quarter than it had forecasted for shareholders in its last investor presentation.
The company now anticipates gross bookings for the current quarter to land between $22.8 billion and $23.2 billion, up from an initially promised $22 billion to $24 billion range. The company's forecasted adjusted EBITDA, an accommodating method of calculating profit, was also raised to between -$25 million and $25 million in the quarter ending September 30, and improvement from the company's previous anticipation of a result merely better than a loss of $100 million."
They say that crisis breeds opportunity and that's certainly been true of Uber during the last 18 months," CEO Dara Khosrowshahi said in a statement.
Uber is now on track to adjusted EBITDA breakeven in quarter three, CFO Nelson Chai said - an achievement that may seem odd to those unfamiliar with the economics of ride-hailing, which is characterized by perilous unprofitability.
As TechCrunch's Alex Wilhelm explains for Extra Crunch, adjusted EBITDA" is a way of calculating profit before interest, taxes, depreciation and other costs. Consider, for example, that Uber lost $6.77 billion in 2020 (admittedly an improvement from its previous yearly loss of $8.51 billion). But under adjusted EBIDTA accounting, those numbers dropped to losses of $2.73 billion and $2.53 billion, respectively.
Uber did not provide a full picture of its financials for the third quarter in its recent 8-K filing - that will come when the company reports its performance after the conclusion of Q3. However, it looks like the company may reach positive adjusted EBITDA by the fourth quarter, meeting a long-held promise to investors.
The ride-hailing giant further noted that its fourth quarter adjusted EBITDA is projected to land between $0 and $100 million, compared to the previously anticipated, and more generic, expectation of merely adjusted EBITDA profitability." Uber cautioned that significant forecasting uncertainty" may cause it to provide an updated forecast.
Still, for Uber the long march to adjusted profitability appears to finally be in sight. All it took was a global pandemic, layoffs and far-higher prices for the achievement to be managed.