Wealth Advisor Rockville, MD

In 2018, Uber narrowed losses and continued to grow revenue, but the downside is that the company’s growth was at a much slower pace than the previous year.

According to the private company’s self-reported financials, full-year revenue for 2018, which was Dara Khosrowshahi’s first full year as Uber’s CEO, was $11.3 billion, up 43 percent year over year, reports CNBC.

Gearing up for a 2019 IPO, Uber is positioning itself as more than just an app for ride-sharing. Instead Uber says it will be a full platform for all types of transportation and logistics. Uber is coming out with a slew of new “moonshot” features, including Uber Freight, autonomous driving, bikes, scooters and the development of flying cars. But those pie-in-the-sky ideas are weighing on Uber’s long-term profitability as they are expensive to develop.

Uber’s Gross bookings, which is the amount collected before paying out drivers, was up 45 percent from the 2017, growing to $50 billion for the year. The adjusted losses decreased 15 percent in 2018 to $1.8 billion. That’s down from $2.2 billion in 2017, which excludes the company’s sale of its Russia and Southeast Asia businesses to Yandex and Grab, respectively. Including those sales, Uber actually saw GAAP losses of $370 million. GAAP losses in 2017 were $4.5 billion.

So while Uber’s growth rate is strong, it has decelerated over 2018. On a quarterly basis, Uber is reporting major losses and slowing growth. But Uber is expected to go public this year with a rumored value of over $120 billion. It will be at that point that investors will decide if Uber’s slowing growth merits that valuation.

In November 2017, Travis Kalanick left the company he founded shrouded in controversy and Khosrowshahi took over a company growing but riddled with board infighting. One of his first key moves was to cut ties with Russia and offload Uber’s unprofitable Southeast Asia business.

In line with bringing the company public, Khosrowshahi has hired a CFO and COO.

Nelson Chai, Uber’s CFO, remarked on the company’s 2018 in a statement: “Q4 set another record for engagement on our platform. In 2018, our ride sharing business maintained category leadership in all regions we serve, Uber Freight gained exciting traction in the US, JUMP e-bikes and e-scooters are on the road in over a dozen cities, and we believe Uber Eats became the largest online food delivery business outside of China, based on gross bookings.”

Uber’s main competitor Lyft is also gearing up for an IPO in 2019. The competitors are racing to get out first and even confidentially filed to go public on the same day.

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Wealth Advisor Rockville, MD