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Uber reports first quarter results that are confusing in design – Quartz



"Sometimes simplicity is a beautiful thing," said Uber CEO Dara Khosrowshahi on May 30 after an impossible complicated introduction to the company's first earnings call.

For the quarter ended March 31, 2019, the new public Uber reported a $ 1 billion loss. of 3.1 billion. USD in revenue. It said that 93 million people spent at least one of their services every month during the quarter and took a combined 1.6 billion trips, a category that includes for Uber rides in cars, bike rides and scooters and food supplies.

What to do about these results? Revenue increased by 20% from the same period in 201

8. The majority of this growth comes from the food supplier platform Uber Eats, which increased revenues by 89% from the same quarter last year. The number of trips booked at Uber and its monthly active users increased more than 30%.

Meanwhile, the net result was so much lower than the same time last year, the first and to date only quarter in which Uber reported a profit thanks to the sale of international operations – that the company described the year's transition as "not meaningful."

Should we even look at revenue and net profit, anyway? Uber also reports, and Uber calculates these adjusted figures, known in the industry terminology as non-GAAP financial measures (GAAP are "generally accepted accounting principles") by taking its original revenue figures and deducting certain incentives it pays to its independent contractor workforce. . Adjusted revenue is consistently lower than revenue.

1

"We define Adjusted Revenue as revenue less (i) excess Driver incentives and (ii) Driver referrals."

2

"We define Core Platform Adjusted Net Sales as Core Platform Revenue less (i) excess Driver Incentives and (ii) Driver Referrals."

What is "core platform", you ask? Why, one of Uber's two operating segments. It includes rides, eats and "second core platform", the latter being primarily Uber's "Vehicle Solutions" business. This "second core platform" should not be confused with "Other bets", which is Uber's second operating segment. "Other bets" mainly include the company's trucking business, Uber Freight, plus "new mobility" (electric bikes and scooters).

Got it? None? Confused? Yes me too. The market seemed as uncertain as what to do about it. Uber's stocks drifted upwards immediately after the company participated in the results, and then dipped. At the time the company wrapped up its investor call, the shares had settled around 2.5% after-sales, at just under $ 40. Uber closed regular trading on May 30 to $ 39.80, 11% below its $ 45 IPO price.

Few would ever describe quarterly reports as a fuzzy read, but uber is so complicated that you need a glossary to get through a single sentence (one is included on pages 10 and 11 of the company's 13-page earnings release). Reading Uber's results, your attention is constantly being diverted, from actual numbers to adjusted, from segment to sub-segment to sub-segment level turnover reconciliations (a really mouthful).

"While the canvas we're working on seems complex, our story is simple," Khosrowshahi said on the investor call. "We are the global player. We are the largest player in personal mobility."

Why does such a simple story require such a complicated financial report? Perhaps because there are some key elements of that story, Uber does not want investors to focus on. For example, Uber cannot have that investors pay too much attention to, and it pays off, of which the former ballooned to 291 million. USD on Eats in the last quarter, a 200% increase during the first quarter of 2018. The 89% boost in Eats revenue looks less impressive when you discover uber triple incentive payouts to achieve it.

3

"Excess Driver incentives refer to cumulative payments, including incentives, but excluding Driver referrals to a Driver that exceeds the cumulative revenue we recognize from a driver without future warranty for additional revenue."

4

"Driver referrals refer to payments that we make to existing drivers to refer new drivers to our platform."


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