Uber lost another $ 1.1 billion in third quarter 2019, the company announced Monday. This was not a surprise: Uber lost about the same amount in the first quarter of 201
Still, the company claims that things are not as bad as the headline shows. To show why, Uber broke down revenue by business area, separating the core "rides" app from Uber Eats, Uber Freight and other operations.
Uber states that excluding certain non-operating expenses – mainly interest, depreciation and stock-based compensation – the "rides" app actually made a substantial profit of $ 631 million. That's enough to cover the company's most important operating expenses, the company said. But Uber's profitability was cut by losses in the other businesses – mainly a $ 316 million loss from Uber Eats.
Of course, interest rates, depreciation and stock-based compensation are real costs. The fact that Uber looks less profitable excludes them is not going to be very reassuring to Uber investors.
But the reason these numbers may eventually be good news for investors is that they suggest that Uber's core business may not be eternal money-wasting. If EBIDTA profitability continues to improve – EBIDTA profitability – it grew from $ 416 million last year to $ 631 million last quarter on an EBITDA basis – the company could eventually achieve profitability for honesty-to-goodness.  The growth in Uber's business with speed has slowed; it grew only 22% year-on-year in the third quarter. In contrast, Uber Eats increased sales by 77%. So while Eats lost money, it may be because the product is earlier in its growth phase than the core platform. As Eats matures, it may be profitable just like Uber's riding platform. At least that's the story Uber tells Wall Street.
However, Wall Street did not seem impressed with Monday's results. Uber's share price fell about 5% in afternoon trading. Its stock price is now down to $ 31, down about 30% from the $ 45 stock price.
For its part, Uber rival Lyft reported its own third-quarter results last week. Lyft reported a net loss of $ 463 million. That's less than Uber's loss, but it's a significant fraction of Lyft's $ 956 million in revenue. In fact, Uber's losses were greater than Lyft's third-quarter revenues.