The company pulled in $11.3 billion in revenue for 2018, up from $7.9 billion in 2017. Costs and expenses rose to $14.3 billion last year from $12.0 billion in 2017, but the increase in revenue meant operating losses fell from $4.1 billion to $3.0 billion YoY. Most line items were similar to previous years, adjusted for the company's larger growth rate, leading to a continued pattern of much higher expenses versus revenue. However, Uber managed to turn that aforementioned adjusted profit due to isolated "other income," which largely consisted of a $1.99 billion gain on previous investments and a $3.2 billion gain on divestiture.
This includes the company's sale in March of its Southeast Asia operations to Singapore-based competitor Grab, in exchange for a 30% stake in the rival; that stake dwindled to an estimated 23.2% as of December 31, according to Uber. While Uber quickly rose to success in the United States, it has had a far more difficult time in Southeast Asia, appearing well after its competitors and without sufficient understanding of the local transportation culture. For example, while Grab already had motorbikes for hire to lane-split through the region's notoriously bad traffic, Uber was still reportedly focused on full-size passenger cars, leading to a loss of market share as a result of its failure to realize the region's two-wheeled preference.
Had this other income not been included, Uber's adjusted EBITDA would have shown a loss of $1.8 billion for 2018, down from $2.6 billion in 2017.
As we gear up for Uber's debut on the NYSE, we took a look at some of the key facts, figures and takeaways from its S-1:
Uber's time as a private companyFounded: 2009
Total venture funding raised: $13.7 billion
Most recent round: $500 million from Toyota Motors at a $72 billion post-money valuation in September 2018
Reached unicorn status: 2013, with a $3.7 billion valuation after a $258 million Series C
Key S-1 figures2018 revenue: $11.3 billion, up from $7.9 billion in 2017 and $3.9 billion in 2016
2018 costs and expenses: $14.3 billion, up from $12.0 billion in 2017 and $6.9 billion in 2016
2018 adjusted EBITDA: -$1.8 billion, up from -$2.6 billion in 2017 and -$2.5 billion in 2016
Monthly active riders: 91 million as of December 2018, up from 68 million in 2017 and 45 million in 2016
Trips: 5.2 billion as of December 2018, up from 2.7 billion in 2017 and 1.8 billion in 2016
Stock talk: Uber vs. LyftWith all the similarities between the companies, public investors may be wondering which would be the better entry into a ridehailing investment. Both have questionable profit prospects, with Lyft outright unprofitable at the moment and Uber showing no sustained profit when the planets (and asset sales) are not aligned.
Currently, Uber appears to be more short-term trader-friendly, with Lyft being more long-term investor-friendly—for a variety of reasons.
Uber for the short termUber has the luxury of learning from Lyft's mistakes by adjusting its IPO terms ahead of time. Uber was valued at $72 billion in September following the $500 million round from Toyota and was said to be hoping for a $120 billion valuation for its IPO. That was adjusted downward on Wednesday, with the company now reportedly expecting 17% to 25% less, with a $90 billion to $100 billion valuation instead. (Coincidentally, this is roughly the same percentage range Lyft's stock has tumbled since its first day of trading.)
This perhaps suggests that, whereas Lyft was overpriced based on anticipated market reaction, Uber may be more properly priced, leading to less of a sharp movement. This could present opportunities for short-term traders to scalp on quick swing trades, options traders to buy or sell contracts with more predictability and less implied volatility, or for novice investors to stomach buying shares. After all, Lyft's public debut has so far only benefited two groups of people: short sellers, and existing private investors and founders. Most other long buyers are underwater at the moment.
Lyft for the long termAlthough its stock decisions took a greedier approach, leading to a dramatic price drop and uncertainty of any near-term bullish momentum, Lyft arguably presents a stronger long-term thesis due to its potential to grow overseas and enter new businesses. The company has a higher passenger growth rate than that of its larger rival, with Lyft having gone from 6.6 million active riders in 2016 to 18.6 million in 2018.
What's more, whereas Uber has a shoddy international success record, which led to the company succumbing to Grab in Southeast Asia, Lyft has yet to fully penetrate markets abroad. Further, Uber has experienced low margins in operating its non-ridehailing businesses, such as Uber Eats, causing a drag on its overall financials. As Lyft has yet to grow in both aspects, Uber's mistakes and misfortunes can provide a learning opportunity for Lyft to potentially achieve a more positive fate.
"An increasing proportion of Uber's growth over the past few quarters has come from auxiliary services beyond ridehailing—namely its rapidly growing Uber Eats business, which increased to 18% of bookings in 4Q 2018 from 11% in 4Q 2017," said Asad Hussain, emerging tech analyst at PitchBook. "This increasing mix of lower-margin food delivery business has had a negative impact on the company’s overall margin structure by diluting its take rate (net revenue over gross bookings), which averaged approximately 20% in 2018—well below Lyft's take rate of 27% over the same period."
Uber's challenges aheadAs Uber prepares to commence trading, which is expected to begin in May, its investor-friendly downward revision in pricing may help woo long-term bets on the company overcoming its expansion-related baggage and turning a real, sustainable profit from its daily operations. After all, Uber holds the title of being the elder statesmen compared to Lyft, and this seniority could be an asset when it comes to smartly bouncing off past mistakes.
If Uber were to improve margins for its non-ridehailing businesses, continue its international business outsourcing such as displayed in its Grab stake, or turn its legacy ridehailing business in the United States toward a sustainable profit, Uber could be the winner in its fierce IPO race with Lyft.