Uber thinks the company could actually turn in profit this quarter. The ride-hailing company recently disclosed that it may be profitable this quarter. This is the first time the company is making such a statement in its history. The news was disclosed in a new filing that was made with the US Securities and Exchange Commission.
Uber Thinks the Company Could Actually Turn In Profit This Quarter
The company has previously announced that it is expected to make a net loss of under $100 million. But now in a U-turn, the company believes that it could make an adjusted profit of almost $25 million. The company’s CFO, nelson Chai, in the filing said that “we believe uber is now tracking towards adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) breakeven in Q3, well ahead of our prior guidance.” The company also cautions that it could still lose up to $25 million in the worst-case scenario.
Generally, the way and means by which uber calculated its adjusted profits have been met with criticism. The company’s definition of EBITDA includes an unusual list of exclusions and therefore argues that the measure of the company’s overall profitability is not accurate notes Gizmodo. Shareholders of the company uber however were Ok with the stock closing up 11 percent on the updated forecast.
CEO of Uber, Dara Khosrowshahi, said: “they say that critics breed opportunity and that’s certainly been true of uber during the last 18 months.” She also added that the quarter could prove to be an “important milestone” for the brand and company.
Post-Pandemic Effects on Uber and the Bounce Back
This of course would be a very important milestone for the company and Khosrowshahi who became CEO in back 2017. She has commandeered the company through one of the hardest times in its history as the pandemic had a damning effect on its core ride-hailing business. The company reported that its ride-hailing business suffered an 80% drop and in the process contributing to a $2.9 billion quarterly loss for the company.
With the effect of the pandemic, the company laid off thousands of its employees and even sold off its self-driving car unit at the latter end of the previous year. With the ease of lockdowns all over the globe, the demand for ride-hailing businesses has received a boost and this resulted in the shortage of acute drivers early on this year. On the other hand uber foods, the food delivery business of the company boomed over the course of the pandemic although still unprofitable overall.
In the past, uber has posted a net profit, something that is rare due to one-time divestitures and investments reports the wall street journal. This could be the first time the ore operations of the company will be turning a net profit since it was founded. The financial times report from June reports that the total loss of uber since its founding in 2009 has measured over $22 billion.