Ride hailing giant Uber Technologies Inc. (NASDAQ:UBER) reported its biggest loss ever in the second quarter, falling short of analysts’ estimates and announcing a net loss of $5.24 billion U.S.
The company, which went public earlier this year in a lackluster initial public offering (IPO), blamed the massive loss on stock-based compensation associated with its IPO. The adjusted loss—a more commonly used metric for ride-hailing companies, which excludes interest, tax and other expenses—more than doubled to $656 million U.S., but it wasn’t as large as the $979.1 million U.S. that analysts had expected.
What really raised concerns, though, was Uber’s disappointing sales growth. Adjusted revenue in the second quarter increased 12% from a year earlier, the slowest rate in the company’s history. The San Francisco-based company generated $2.87 billion U.S. in adjusted revenue for the second quarter, below estimates of $3.05 billion U.S., according to data compiled by Bloomberg.
The stock slumped as much as 8.6% in pre-market trading in New York on Friday morning. Earlier in the week, fellow ride hailing company Lyft Inc. reported a loss and revenue figures that both exceeded estimates and boosted its annual forecast.
Lyft, which operates the number two ride-hailing app in the U.S., indicated that the price war with Uber is abating and that the company expects to lose less this year than in 2018, which was welcome news to investors. Both stocks saw a bump as a result, but much of Uber’s gains were wiped out after it reported its results.
Shares were way down from Thursday's close, $2.52, or 5.9%, in late Friday trading to $40.45.
