UBER Uber Just Reported a $5.9 Billion Loss - and Delivery Posted a Second Straight Profitable Quarter

The Worst Headline Number in Company History, on the Best Operating Quarter Yet

Uber's FY2021 10-K showed a net loss narrowing 93% for the year - but flagged that most of the improvement was non-operating, from divestiture and equity-stake gains rather than the business itself. This quarter is that same mechanism running fully in reverse: net loss attributable to Uber Technologies, Inc. was $(5,930) million, the largest quarterly loss in the company's public history, ahead of Q2 2019's $(5,236) million, versus $(108) million a year earlier. The driver isn't Uber's operations - it's a combined $5.6 billion pre-tax unrealized loss across all four of the public equity stakes tracked since the Q2 2021 post: $1.9 billion on Grab, $1.7 billion on Aurora, $1.4 billion on Didi, and $462 million on Zomato. All four companies had recently gone public (via IPO or SPAC merger) and all four got hit hard in a brutal first quarter for newly-listed growth and tech stocks - a market-wide repricing that had essentially nothing to do with how Uber's own platform performed.

Strip that out, and this was genuinely Uber's best operating quarter to date. Revenue grew 136% to $6,854 million. Adjusted EBITDA^» swung to a $168 million profit from a $(359) million loss a year earlier - the third consecutive quarter of positive Adjusted EBITDA, following $8 million in Q3 2021 (the first) and $86 million in Q4 2021. Delivery Adjusted EBITDA stayed positive for a second straight quarter, at $30 million, from a $(200) million loss a year earlier and after $25 million in Q4 2021, its first profitable quarter. Free cash flow improved to $(47) million from $(682) million, and net cash from operating activities turned positive again, at $15 million, after $(107) million in Q4 2021. Every operating metric covered here moved in the right direction this quarter - it's just overshadowed by the largest quarterly loss headline Uber has ever reported.

The Prescription

Uber should keep doing exactly what drove this quarter's real progress: Delivery holding positive Adjusted EBITDA for a second straight quarter ($30 million, after $25 million in Q4 2021, its first) is the single most important operating milestone in this filing, proof that the segment's years-long path to profitability (tracked since Q2 2020) has actually arrived, not just narrowed. Combined with Mobility's continued margin strength and operating cash flow turning positive again, the underlying platform is now generating real cash, which is the milestone that should anchor how the company is discussed - not the net loss headline.

What it should stop doing is holding onto minority stakes in newly-public companies (Grab, Aurora, Didi, Zomato) that Uber doesn't control and can't influence, while continuing to run their mark-to-market swings through its own income statement every quarter. This is now the fourth consecutive quarter (Q2 2021 gain, Q3 2021 Didi loss, FY2021 mixed, this quarter a combined $5.6 billion loss across all four stakes at once) where these holdings have been the single largest swing factor in Uber's reported GAAP results. Management itself flagged accelerating a sale of the remaining Yandex.Taxi stake following Russia's invasion of Ukraine (see Beyond the Usual below) - the same logic (reducing exposure to a stake Uber doesn't operationally control) should apply to the other three holdings once lock-ups and market conditions allow, rather than letting four other companies' stock prices keep determining the size of Uber's own quarterly headline.

Key Financial Metrics

Q1 2022 vs. Q1 2021 - consolidated, reported in USD

Metric	Q1 2022	Q1 2021	YoY
Revenue	$6,854M	$2,903M	+136%
Adjusted EBITDA»	$168M	$(359)M	swung to profit, third straight quarter
Loss from Operations	$(482)M	$(1,524)M	loss narrowed 68%
Net Loss attributable to Uber	$(5,930)M	$(108)M	largest quarterly loss in company history, driven entirely by a $5.6B unrealized loss across Grab, Aurora, Didi, and Zomato stakes
Free Cash Flow	$(47)M	$(682)M	narrowed 93%

Balance sheet: Dec 2021 vs. Mar 2022

Balance sheet metric	Mar 2022	Dec 2021	Change
Cash and Cash Equivalents	$4,184M	$4,295M	roughly flat
Total Assets	$32,812M	$38,774M	-15%
Total Liabilities	$22,994M	$23,425M	roughly flat
Long-term Debt, net of current	$9,273M	$9,276M	roughly flat
Goodwill	$8,435M	$8,420M	roughly flat

Total assets fell 15% to $32.81 billion, almost entirely explained by the equity-stake write-downs: the Investments line on the balance sheet fell from $11.81 billion to $6.25 billion in a single quarter, nearly matching the $5.6 billion combined mark-to-market loss. Liabilities and long-term debt held roughly flat, meaning the balance-sheet damage this quarter is concentrated entirely on the asset side, in holdings Uber doesn't operate.

Uber's $5.9 billion net loss this quarter is the largest in company history, but it says almost nothing about how the business performed - it is a market-wide markdown on four minority equity stakes Uber holds in companies it doesn't control (Grab, Aurora, Didi, Zomato), all hit by the same first-quarter-2022 growth-stock selloff. The number that actually reflects operating performance is Adjusted EBITDA, which turned positive for a third straight quarter, with Delivery posting its second straight profitable quarter and operating cash flow turning positive again.

Segment Results

Segment Adjusted EBITDA, Q1 2022 vs. Q1 2021

Segment	Adj. EBITDA Q1 2022	Adj. EBITDA Q1 2021	Change
Mobility	$618M	$298M	+107%
Delivery	$30M	$(200)M	second straight positive quarter
Freight	not separately broken out in this quarter's MD&A highlights table	—	—

Mobility more than doubled Adjusted EBITDA year-over-year to $618 million, continuing the margin recovery seen since the Q3 2021 post, which noted 18 of Uber's top 20 Mobility markets were already Adjusted EBITDA-profitable. Delivery's $30 million, up from $(200) million a year earlier, is the more structurally important number: this is a segment that lost $(1,372) million for full-year 2019 (per the FY2019 post), first crossed into profit in Q4 2021 ($25 million) and has now posted a second straight profit - the scale-driven margin story of more than two years finally landing.

Beyond the Usual

A $5.6 Billion Combined Markdown Across Four Public Equity Stakes Drove the Entire Net Loss

Uber recognized unrealized losses this quarter of $1.9 billion on its Grab investment, $1.7 billion on its Aurora investments, $1.4 billion on its Didi investment, and $462 million on its Zomato investment - a combined $5.6 billion pre-tax markdown, essentially the entire GAAP net loss for the quarter. All four are minority stakes in companies that went public relatively recently (Didi via June 2021 IPO, Aurora and Grab via 2021 SPAC mergers, Zomato via 2021 IPO) and all four are carried at fair value with quarterly changes flowing directly through Uber's own income statement. This is the fourth consecutive quarter this same mechanism has driven Uber's headline GAAP result in one direction or another (Didi gain in Q2 2021, Didi loss in Q3 2021, a net gain for FY2021) - this quarter is simply the case where all four moved the same direction at once, in a broad first-quarter-2022 selloff in newly-public growth stocks, none of it reflecting anything about Uber's own platform.

Uber Is Accelerating an Exit From Its Yandex.Taxi Stake Following Russia's Invasion of Ukraine

Uber disclosed that, in light of the conflict between Russia and Ukraine (which began in February 2022, during this quarter), it is "actively looking for opportunities to accelerate the sale of our remaining holdings in our Yandex.Taxi joint venture" - the same Russia/CIS joint venture whose delivery businesses (Yandex.Eats, Yandex.Lavka, Yandex.Delivery) Uber had already exited in Q4 2021 (see the FY2021 post). Uber also disclosed that members of its management team resigned from Yandex's board in response to the conflict. This continues, and accelerates, a full unwind of Uber's Russia/CIS exposure that had already been underway for unrelated commercial reasons before the war began.

Accrued Legal and Regulatory Liabilities Edged Down After Steady Growth

Uber's aggregate recorded liability for legal, regulatory, and non-income tax matters fell slightly to $2.1 billion as of March 31, 2022, from $2.2 billion at year-end 2021 - the second quarter-over-quarter decline in the periods shown (the reserve had grown from $1.8 billion at year-end 2020 to $2.3 billion by Q3 2021, then eased to $2.2 billion at year-end 2021). A single quarter's dip doesn't establish a new trend on its own, but it's worth tracking whether this continues or reverses in coming quarters.

Stock Price Since Last Quarter

Uber's stock declined steadily through the first quarter of 2022, continuing the trend from late 2021: from a December 31, 2021 close of $41.93, down to $37.40 in January, $36.03 in February, and $35.68 at the March 31, 2022 close - down roughly 15% for the quarter. The decline roughly tracks the same broad growth-stock repricing that hit Uber's own equity stakes in Grab, Aurora, Didi, and Zomato this quarter, suggesting the market was pricing similar risk into Uber's own multiple even as its underlying operating results (Adjusted EBITDA positive for a third straight quarter, Delivery's second straight profitable quarter) kept improving.

Target Valuation Range

Cheaper than its own recent history, too early to call against peers. Uber traded at roughly 4.2x EV/Revenue on TTM revenue at this quarter's close, down from ~5.8x at the December 2021 close, even as Adjusted EBITDA has now been positive for three consecutive quarters. This reads as the market applying the same broad 2022 growth-stock discount to Uber that hit its own equity holdings, not a reassessment of Uber's specific operating trajectory.

With approximately 1,963,660,253 shares outstanding as of May 2, 2022 (per the 10-Q's cover page) and a March 31, 2022 close of $35.68, Uber's market capitalization was approximately $70.1 billion. Against total liabilities of $22.99 billion and cash and cash equivalents of $4.18 billion, enterprise value was roughly $88.9 billion - down from the ~$101.0 billion calculated in the FY2021 post, on the stock's quarterly decline. Against TTM revenue of roughly $21.4 billion (Q2 2021's $3,929 million, Q3 2021's $4,845 million, Q4 2021's approximately $5,778 million, and this quarter's $6,854 million), that implies an EV/Revenue^» of roughly 4.2x.

	Mar 2022	Dec 2021
TTM Revenue	$21.4B	$17.46B
Enterprise Value	$88.9B	$101.0B
EV/Revenue	4.2x	5.8x

Uber's own GAAP earnings this quarter were dominated almost entirely by a non-operating $5.6 billion markdown, which makes GAAP earnings a poor guide to the multiple; Adjusted EBITDA has been positive for three straight quarters, a short run so far.

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