Uber Lowers Q3 Forecast Amid Rising Gross Bookings

Uber Projects Earlier Profitability

Uber announced on Tuesday a potential achievement of profitability, measured by adjusted EBITDA, in the third quarter. This positive outlook arrives sooner than initially predicted by the ride-hailing company.

Growth in Key Business Areas

The company has experienced gains across both its delivery and mobility sectors. This growth prompted Uber to revise its projections in a recent filing with regulators.

Uber now expects gross bookings for the current quarter to fall between $22.8 billion and $23.2 billion. This represents an increase from the previously communicated range of $22 billion to $24 billion.

Adjusted EBITDA Forecast Improved

The forecasted adjusted EBITDA, a metric used to assess profitability, has also been adjusted upwards. Uber now anticipates a figure between -$25 million and $25 million for the quarter ending September 30.

This is a significant improvement compared to the earlier expectation of a result “better than a loss of $100 million.”

CEO Statement

“Crisis often creates opportunity, and this has undoubtedly been the case for Uber over the past 18 months,” stated CEO Dara Khosrowshahi.

Understanding Adjusted EBITDA

CFO Nelson Chai indicated that Uber is on track for adjusted EBITDA breakeven in the third quarter. This milestone is noteworthy given the historically challenging profitability of the ride-hailing industry.

As explained by Alex Wilhelm of TechCrunch, “adjusted EBITDA” calculates profit excluding interest, taxes, depreciation, and certain other expenses.

Historical Financial Performance

For instance, Uber reported a net loss of $6.77 billion in 2020. However, using adjusted EBITDA accounting, this loss was reduced to $2.73 billion.

In 2019, the net loss was $8.51 billion, which became $2.53 billion under adjusted EBITDA calculations.

Looking Ahead to Q4

While a complete financial picture for the third quarter will be released with the full Q3 report, early indicators suggest Uber may achieve positive adjusted EBITDA by the fourth quarter.

This would fulfill a long-standing commitment to investors.

Q4 Projections and Cautionary Note

Uber projects fourth quarter adjusted EBITDA to be between $0 and $100 million. This is an upgrade from the previous expectation of simply achieving “adjusted EBITDA profitability.”

The company cautioned that “significant forecasting uncertainty” could necessitate an updated forecast in the future.

Path to Profitability

Despite the challenges, Uber’s journey towards adjusted profitability appears to be nearing completion. This achievement was realized through a combination of factors, including a global pandemic, workforce reductions, and increased pricing.