On the heels of settling its Waymo lawsuit, Uber has released its Q4 results to The Information. In brief, the ridesharing company is continuing its path of stemming losses in pursuit of profits.
According to The Information, by measures excluding “fixed costs like headquarter employees and R&D spending,” Uber’s ridesharing business, coupled with Uber Pool, have achieved profitability. In terms of gross revenue, the company pulled in near $11.1 billion in Q4 2017, an increase of nearly $1.4 billion over Q3 2017 and a near doubling over Q4 2016, which saw the company bring in $6.9 billion in revenue.
This is despite the fact that Uber lost, as noted in the report, an estimated 12 points of U.S. marketshare over the course of 2017 to Lyft. And as The Information duly considers, Uber has a far larger global foot print compared to its domestic rival, making it difficult to determine where exactly Uber is filling the gaps in lost U.S.-based revenue.
Despite reservations from Softbank, a recent investor in the ridesharing company, Uber CEO Dara Khosrowshahi intends to keep up Uber’s global expansion. How it will claw back its presence in the U.S. remains up in the air.
In the meantime, Uber and its executives continue to avoid focusing on GAAP net income. At this point in time, the avoidance of this metric may make sense. Presumably, Uber’s legal expenses will, over the next year, reduce—potentially giving us a clearer picture of how the company will look once it goes public.
Uber is also showing signs of cost discipline that weren’t as apparent in the company before. Compared to Q3 2017, “operations and support,” “sales and marketing,” and “research and development” collectively reduced spending by a total of $48 million in the fourth quarter. Prior to Q4, all these categories, excluding Q4 2016 due to a gap in reporting, were always growing expenses.
Overall, the companies cost discipline, coupled with shrinking losses in its GAAP net income, point to a firming up of its 2019 IPO ambitions. However, a large gap for Uber to bridge remains.
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