By Tina Bellon and Akanksha Rana
(Reuters) – Uber Technologies Inc (N:) on Monday posted a wider third-quarter loss as costs soared at the ride-hailing company, sending shares down 4.4% in after-hours trading.
But the company promised it would be profitable by the end of 2021 as quarterly revenue beat expectations.
Uber Chief Executive Dara Khosrowshahi told journalists on a conference call that the company would achieve adjusted EBITDA profitability for the full year of 2021. The move follows a similar announcement by smaller ride-hailing competitor Lyft Inc (O:) on Wednesday.
But Uber at the same time is spending heavily to expand into new business areas and is offering vast promotions to gain market share.
Uber’s costs jumped about 33% to $4.92 billion in the latest quarter. Gross bookings, which include ride-hailing, mobility, food delivery and freight payments before costs and other expenses, rose 29.4% from a year earlier to $16.47 billion.
“Another quarter with more than a billion in losses, but I’m unsure why anyone would be surprised by that,” said Clement Thibault, analyst at investing.com. “Uber has done nothing but log losses so far,” he said, adding that the results “change neither the bull nor the bear thesis on the company.”
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Uber, known for its ride-hailing app available in more than 700 cities worldwide, has vastly diversified its business over the past years.
The company is building out its food delivery and long-haul trucking business, developing self-driving cars, offering banking services to its drivers and even planning commercial passenger drone shuttles by 2023.
Uber’s shares are expected to be further pressured on Wednesday, when a restriction on selling stock lifts. Some analysts expect more than 80% of the company’s outstanding shares will become eligible for sale.
Uber said its monthly active platform users rose to 103 million globally in the third quarter, from 82 million a year earlier, but fell short of analysts’ estimates of 105.5 million, according to IBES data from Refinitiv.
Total revenue rose nearly 30% to $3.81 billion, beating estimates of $3.69 billion.
Lyft’s results last week soothed some worries as the ride-hailing company posted better-than-expected third-quarter revenue and an improved outlook showed it was well on its way to profitability by the end of 2021.
Revenue from Uber’s ride-hailing business rose about 19% to $2.90 billion while sales from its Uber Eats segment rose 64%.
Net loss attributable to the company widened to $1.16 billion in the quarter ended Sept. 30, from $986 million a year earlier.
On a per-share basis, net loss attributable to stockholders narrowed to 68 cents from $2.21.
Uber was the biggest of a group of Silicon Valley startups that have gone public this year against the backdrop of a global stock market sell-off sparked by trade tensions between the United States and China. Uber also faces increased regulation in several countries and fights with its drivers over wages and working conditions.
The company’s shares were down 4.4% at $29.70 in after-hours trading.