Uber Technologies reported a $1 billion loss on Thursday as the ride-hailing service spendt heavily to build up its food delivery and freight businesses, sending revenues up 20% in its first quarterly report as a public company.
Revenue of $3.1 billion matched the high end of the range Uber forecast for the quarter and the loss of $1.0 billion compared with the company’s forecast of $1.0 billion to $1.11 billion.
Shares rose 2.6% following a conference call with executives in which Chief Executive Dara Khosrowshahi cited business improvements, such as fewer consumer promotions in the second quarter, but called 2019 an “investment year.”
Uber relies on rider incentives and competition in all parts of its business, from its core business of ride hailing to food delivery to freight.
“Our story is simple. We’re the global player,” Khosrowshahi told analysts on his first earnings call after the company’s IPO earlier this month. “Our job is to grow fast at scale and more efficiently for a long, long time.”
The results indicate the newly public company was able to hit its own financial targets, likely to offer some assurance to investors.
Costs went up 35% in the quarter, as the company spent heavily in the run-up to its IPO earlier this month. Gross bookings, a measure of total value of rides before driver costs and other expenses, rose 34% from a year ago to $14.6 billion. Bookings were up 3.4% from the previous quarter, showing the difficulty of recruiting new riders in saturated markets.
But Wedbush analyst Ygal Arounian said he was encouraged by improvements in take rates, and accelerating revenue growth. Uber’s take rate is the revenue pocketed by the company after subtracting driver or restaurant pay and incentives.
“We’re still a while away from profitability, but Uber is expecting strong signs of improvement across many of its key metrics and that is an important sign for investors.”