Uber Q4 FY2021 Earnings Preview: Key Insights and What to Expect

Emphasis on Uber's Gross Bookings Performance

Highlights to Watch

• Analysts forecast an EPS of -$0.32, improving from -$0.54 in Q4 FY2020.
• Gross bookings are projected to increase year-over-year, though at a moderated pace compared to recent quarters.
• Revenue is expected to grow strongly as Uber continues its rebound from the pandemic's effects.

Uber Technologies Inc. (UBER) is demonstrating notable recovery following the severe impact of the COVID-19 pandemic on its ride-hailing operations in 2020. That year, the company faced a $6.8 billion net loss amid a sharp revenue decline. However, Uber's delivery segment surged as demand for food and grocery deliveries soared during lockdowns, cushioning the overall impact. Currently, both revenue and gross bookings are experiencing significant growth across the company.

Investors eagerly await Uber's Q4 FY2021 earnings release on February 9, 2022, to gauge the speed of recovery. Since its high-profile public debut in May 2019, Uber has struggled to consistently post profits. For Q4, analysts expect another loss per share, though smaller than previous quarters. Revenue is anticipated to rise for the third consecutive quarter after several declines.

Another critical focus is Uber’s gross bookings, which represent the total dollar value generated by its combined ride-hailing, delivery, and freight services. Analysts predict gross bookings will increase for the fourth consecutive quarter, following a period of declines.

Uber's stock performance has lagged behind the broader market over the past year, showing significant volatility and underperformance. The shares yielded a total return of -36.7% over the last year, compared to the S&P 500’s 14.5% gain.

Uber’s Earnings Journey

In Q3 FY2021, Uber reported mixed results. The loss per share was over four times greater than analyst expectations, marking the largest loss since Q1 FY2020. However, revenue surpassed forecasts, increasing 72.2% year-over-year, marking the second consecutive quarter of revenue growth after four quarters of decline. The net loss was influenced by a $2.0 billion adverse impact from revaluation of equity investments, including a $3.2 billion unrealized loss on its stake in Didi, partially offset by gains from other investments.

Q2 FY2021 saw Uber beat earnings and revenue estimates, reporting its first positive EPS in at least 12 quarters, defying expectations of another loss. Revenue jumped 105.4% year-over-year, ending a four-quarter decline streak. Net income was bolstered by unrealized gains of $1.4 billion and $471 million from revaluations of investments in Didi and Aurora, respectively.

For Q4 FY2021, analysts anticipate another loss per share, though smaller than prior quarters, with revenue expected to rise 69.3% year-over-year, reflecting a slowdown but continued strong growth. For the full fiscal year 2021, Uber is projected to report its third consecutive annual loss per share, albeit reduced, alongside a 53.3% revenue increase, a sharp reversal from the previous year's 14.3% decline.

Source: Visible Alpha

Focusing on the Critical Metric: Gross Bookings

Investors will closely monitor Uber's gross bookings, which encompass the total dollar value—including taxes, tolls, and fees—generated by its ride-hailing, food and grocery delivery, and freight services. This metric offers a comprehensive view of Uber’s operational scale and correlates strongly with revenue, representing the portion of gross bookings retained by the company.

Growth in gross bookings decelerated from 44.7% in FY2018 to 30.5% in FY2019 on a yearly basis, with quarterly growth similarly slowing between Q4 FY2018 and Q4 FY2019. In Q1 FY2021, growth sharply dropped to 7.7% year-over-year from 34.5% the prior year, a nearly 27 percentage point decline. This modest growth soon turned negative during the subsequent three quarters amid pandemic-related lockdowns that curtailed ride-hailing demand, partially offset by increased food delivery orders. Gross bookings rebounded in FY2021 with year-over-year increases of 23.8% in Q1, 114.2% in Q2, and 56.8% in Q3. Analysts expect a 49.8% year-over-year rise in Q4 FY2021, marking a fourth consecutive quarter of growth.

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