By Preetika Rana
Uber Technologies Inc. said it would reach a measure of profitability a year sooner than it previously expected, as growth in ride hailing and food delivery boosted the company's top line in the fourth quarter.
Chief Executive Dara Khosrowshahi said he now sees the company profitable on an adjusted basis before interest, taxes, depreciation and amortization by the end of this year. Previously, he said the company hoped to reach that marker by the end of 2021.
"We plan to achieve this profitability target assuming only modest improvements in the current competitive environment, and without the assumption of any significant changes to our current portfolio of businesses," Mr. Khosrowshahi said Thursday in a conference call with analysts. He also said the new target assumes the regulatory environment won't change very much.
On that front, Uber has some work ahead. Its core ride-sharing business is under regulatory scrutiny in some of its most lucrative markets. In California, which accounts for about 9% of Uber's gross bookings, a so-called gig-economy law, known as AB5, may require the company to reclassify its drivers as employees which would raise costs significantly. In London, which contributes about 5% of its ride bookings, the company was stripped of its license to operate in November and is appealing the decision.
The company reported a loss of $615 million excluding interest, taxes, depreciation and amortization on an adjusted basis in the three months ended Dec. 31, narrower than the $817 million loss it booked in the year-earlier quarter and better than the average estimate of analysts polled by FactSet for a loss of $705 million.
The net loss for the period widened to $1.1 billion, bringing losses for the full year to $8.5 billion. Still, the loss was smaller than analysts' projected.
Revenue climbed 37% to $4.07 billion, fueled by rapid growth in new business offerings and premium rides to consumers. Gross bookings in the quarter surged 28% to $18.13 billion,
The company also spent a smaller percentage of revenue on marketing and discounts than in the quarter a year earlier.
"We recognize that the era of growth at all costs is over," Chief Executive Dara Khosrowshahi said.
Uber pulled out of food delivery in South Korea in September and sold its struggling Indian food-delivery unit last month. Together, those businesses accounted for more than a quarter of the adjusted Ebitda losses for Uber Eats in 2019, according to J.P. Morgan, and the exits are expected to lift the company's outlook this year.
"Our focus on disciplined capital allocation is part and parcel to achieving our financial goals, and the recent sale of our India Eats business further demonstrates that commitment," financial chief Nelson Chai said.
Uber's shares, up 38% over the past three months, climbed more than 4% in after-hours trading. They closed the regular session below their $45 initial-public-offering price at $37.09.
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