Uber hits profitability—for now—along rocky road to an IPO

May 23, 2018 View comments (2)
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Existing investors in Uber are in the process of selling shares worth up to $600 million in a secondary round that would value the ridehailing giant at $62 billion, per several reports. The company has also given several media outlets a look at its 1Q financial results, which include net revenue growth of 70% YoY, up to $2.5 billion.
 
Coatue Management, Altimeter and TPG Capital are reportedly participating in the secondary round. Uber employees with at least 1,000 shares are authorized to sell off part of their holdings in the transaction, although no single worker can shed more than $10 million in shares, per TechCrunch. Uber has previously raised more than $17 billion in a combination of debt and equity, plus an $8 billion stock sale to SoftBank in January.

As for its profitable quarter, it seems likely that much of the revenue jump came from the sale of Uber's Southeast Asian ridehailing arm to Grab and its Russian arm to Yandex, from which Uber brought in a combined paper gain of a reported $2.9 billion. Other financials Uber shared with media include gross bookings of nearly $11.3 billion, a 55% YoY increase, and an adjusted EBITDA loss of $304 million, a 49% decrease YoY.

Positive revenue is the first bit of good news for Uber in a while. It's been a tough road for since Susan Fowler's infamous blog post brought the company back down to earth and initiated its no good, very bad year. Even after founder Travis Kalanick was ousted as CEO and replaced by Dara Khosrowshahi, Uber investors sold a large chunk of shares at a considerably discounted valuation of $48 billion in a previous secondary deal, although at the same time the company raised new cash from SoftBank and other backers at a $69 billion valuation.

The company has also maintained its share of HR troubles, including public struggles to land a much-needed CFO ahead of a public offering that could reportedly occur as soon as 2019. The Wall Street Journal recently reported that Uber failed to secure VMware CFO Zane Rowe for the role. Additionally, the company has lost several high-ranking executive in recent months, including VP of global vehicle programs Sherif Marakby, head of communications Rachel Whetstone and VP of maps Brian McClendon.

And then there are Uber's autonomous vehicle woes. On Wednesday, the company announced the end of its self-driving car program in Arizona and laid off 300 test drivers in the aftermath of a crash involving one of Uber's self-driving cars that left a pedestrian dead. Uber is reportedly planning to invest heavily in its test-driving efforts in San Francisco instead, despite the fact that it failed to renew its permits to test autonomous cars in California earlier this year.
 

Related read: Uber's no good, very bad year

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