Home Business NewsBusinessAutomotive Uber market cap rose by 18% in Q3, but revenue plunged by $481m

Uber market cap rose by 18% in Q3, but revenue plunged by $481m

by LLB Finance Reporter
27th Oct 20 11:37 am

The year 2020 has been rough for the ride-hailing giant Uber, as its bookings and consumer activity nosedived amid the coronavirus lockdown. Although the company’s shares started recovering after a stock market crash in March, the record-low customer activity caused a sharp fall in revenues.

According to data presented by StockApps, Uber market capitalization increased by 18% during the third quarter of 2020, reaching $64.3bn at the beginning of this week. Nevertheless, the ride-hailing and food delivery app’s revenue in the first half of 2020 dropped by $481 million year-over-year to $5.7bn.

Market Cap Still 15% Below IPO Value

Uber had a private valuation of $76 billion ahead of its IPO in May 2019. However, the US ride-hailing and food delivery company has seen its valuation drop steeply as its stock price plunged. In September 2019, Uber market capitalization amounted to just under $52bn, revealed the Yahoo Finance data. By the end of the year, the combined value of the company’s shares dropped by another $1bn.

The downsizing trend continued in the first quarter of 2020, with market cap falling to $48.3bn in March, $32.2bn below the IPO value.

However, the second quarter of the year brought a recovery, with the combined value of Uber shares rising to $54.3bn in June. Statistics show this figure increased by more than $10bn in the last three months. Nevertheless, its $64.3bn market cap is still 15% below the IPO value from May 2019.

Number of Users Halved, Quarterly Revenue Plunged to 2017 Levels

Statistics show the ride-hailing giant had witnessed a remarkable revenue growth before the COVID-19 pandemic. In 2014, Uber generated $500 million in revenue. Over the next four years, this figure soared by 2700% to $14.1bn in 2019.

The company’s annual report revealed that ride-hailing services generated 75% of revenue in 2019, or around $10.7bn, almost 50% increase in two years. Uber Eats and Uber Freight followed with $2.5bn and $731 million in revenue, respectively.

Statistics also show that Uber’s quarterly revenue had been growing constantly before the coronavirus outbreak. In the second quarter of 2017, the company reported $1.6bn in adjusted net revenue. In the next twelve months, this figure surged to almost $2.6bn and continued growing.

Uber 2019 annual report showed that quarterly adjusted net revenue peaked at over $3.7bn in the fourth quarter of 2019. However, the year 2020 delivered a sharp fall, with revenue tumbling to $1.9bn in the second quarter, a 20% plunge year-over-year.

Besides the huge market cap and revenue drop, Uber has also witnessed a sharp fall in the number of users, as the pandemic devastated demand for its taxi services. The mobile transportation network company had more than 100 million monthly users worldwide before the coronavirus pandemic hit. In the second quarter of 2020, the number of customers active on Uber’s apps has dropped to 55 million, a 50% drop in six months.

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