The ridehailing giant posted overall revenue of $3.54 billion, slightly higher than consensus estimates of $3.5 billion, and a net loss of $2.9 billion. Uber (UBER) - Get Report shares were down immediately following the release but recovered to rise almost 7% to $33. Its overall GAAP loss for the quarter came in at $1.70 per share versus a consensus estimate for a loss of 84 cents per share.
“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” said Uber CEO Dara Khosrowshahi in a statement. “Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up. Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.”
Uber's GAAP revenue from Uber Eats grew 53% last quarter driven by increased demand for food delivery tied to the pandemic, while revenue from rides grew 2%.
The company is undertaking a number of cost-cutting measures to improve its financial position in light of the pandemic.
On Wednesday, the company said it was laying off 3,700 employees in recruiting and customer service positions, or 14% of its payroll staff, in response to the pandemic. CEO Dara Khosrowshahi will also forgo his annual salary. Uber expects to incur $20 million in costs related to severance and other termination benefits. It also recently exited several unprofitable Uber Eats markets.
Meanwhile, Uber is leading a $170 million round of investment in scooter rental business Lime.
Uber stock gained 10% on Thursday heading into earnings after rival Lyft reported better than expected earnings and after the deal for Lime was announced. Under terms of the deal, Lime will onboard Uber’s own electric bike and scooter division, Jump, and the companies will merge their apps.
Uber shares are roughly flat year to date.