Ride-hailing platform, Uber recorded its largest-ever quarterly loss of $5.2bn in the second quarter of 2019, the, while reporting revenues of $3.16bn.
According to Uber, majority of its second-quarter losses are a result of stock-based compensation expenses for employees following its May IPO. Stock compensation aside, Uber still lost $1.3 billion, up 30% from the first quarter.
Stock-based compensation is a kind of compensation given by companies to its employees in the form of equity shares if the company compensates the option holders totally in terms of additional shares, the paid-up capital increases on the Balance Sheet while there will be no impact on the Cash Flow Statement.
Dara Khosrowshah, Uber CEO said the company’s huge loss in the second quarter was a “once-in-a-lifetime” hit as it tries to steer it toward profitability, noting that he’s targeting 30percent revenue growth in the back half of the year, compared with net revenue growth of 26percent in the second quarter.
“I think we’ve got very good visibility into our own business as far as the business model and how we can tweak it and how we can drive more efficiency, we think we can not only survive, but we can really thrive in this business,” Khosrowshahi said.
Khosrowshahi allayed fears that Uber has lost its “founder mentality” after Travis Kalanick, resigned as CEO of the company in 2017.
The new CEO continues to face immense pressure from investors to get Uber on the path of profitability. He also addressed the stock’s lackluster performance since Uber’s IPO.
“We’ve got to do a better job as far as telling our story to the markets,” “Long term, the market will take care of itself, and I think that’s what we’re focused on right now,” Khosrowshahi said.
Uber’s competitor, Lyft, reported $867 million in quarterly revenue, beating expectations by about 7percent, while revenue per active rider was up to $39.77, a 22percent increase from the same period in 2018.
Lyft’s second-quarter loss was also wider than analysts had hoped, but the company said it had adjusted full-year forecasts and expected its 2019 adjusted loss would be less than its 2018 one, after previously warning losses could continue to escalate this year.
Uber had a turbulent few months since the IPO in May after its overly ambitious private market valuation failed to sway Wall Street.
Uber, in an attempt to slash costs and make operations more efficient, recently announced it was laying off one-third of its 1,200-person marketing department.
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