With its initial public offering fast approaching, Uber Technologies Inc. today posted fourt- quarter results that show strong end-of-year momentum but indicate the company’s growth may be slowing.
The ride-hailing giant, which currently shares only limited earnings information, generated $3 billion in revenue during the last three months of 2018. That’s up 2 percent from the previous quarter and 25 percent over the same period in 2017. Uber made that $3 billion on gross bookings $14.2 billion, which in turn represents a 37 percent year-over-year gain as well as an all-time record.
The fact that the company managed to increase both revenues and bookings significantly is particularly notable in the context of its bottom line. Uber, which spends aggressively to support its expansion roadmap, narrowed adjusted losses to $768 million in the fourth quarter from $1.1 billion the prior year. However, when looking at 2018 as a whole, it appears the company’s efforts to lower operating expenses did cut into overall growth.
Uber closed 2018 with total revenues of $11.3 billion, a 43 percent year-over-year rise. That’s an impressive jump even by tech unicorn standards, but it still amounts to a significant drop from the 61 percent sales growth the ride-hailing giant recorded in 2017.
The company’s bottom line fared better. Total adjusted losses in 2018 added up to $1.8 billion, down 15 percent from 2017. On a net basis, that number falls to just $370 million on account of the boost from Uber’s exit of certain unprofitable international markets last year.
Yet even amid the effort to cut costs, the company continues to invest in loss-making businesses. Uber is developing autonomous vehicles, has entered the scooter market and competes in the food delivery segment as well with a service called Uber Eats. The company is already seeing some dividends on these bets: A tipster told Reuters that Uber Eats’ quarterly bookings have exceeded $2.5 billion.
Uber’s food delivery service and other emerging businesses will likely become even more important going forward given the growth slowdown in 2018. One of the factors weighing on Uber’s top line is the increased competition from ride-hailing rival Lyft Inc., which is likewise expected to go public this year.
Uber’s newer businesses are also coming under more pressure from rivals. Competing food delivery provider Postmates Inc. recently filed for an IPO, while scooter-sharing startup Bird Rides Inc. is reportedly in the process of raising a $300 million funding round.
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