Home Safety Apparel Uber Delivery delivers first quarterly adjusted profit

Uber Delivery delivers first quarterly adjusted profit

Uber is making its case as a superapp. The ride-hailing, freight-hauling, food-delivering platform reported its Q4 2021 and FY2021 earnings after the bell on Wednesday, recording its first profitable quarter for delivery in terms of adjusted earnings before income, taxes, depreciation and amortization.

The delivery segment’s adjusted EBITDA of $25 million helped drive a healthy quarter for Uber. For all segments, that figure was $86 million, topping the high end of Uber’s guidance and marking the second consecutive profitable quarter for the company by that metric, after it posted a figure of $8 million in Q3.

Read: Uber CEO: ‘We’ve just never been in a better position’

Read: Lyft reports first-ever full-year adjusted profit

For the year, Uber (NYSE: UBER) reported an adjusted EBITDA loss of $774 million, as the company struggled amid driver supply concerns and pandemic conditions during the winter and spring. But that was a significant improvement over a loss of over $2.5 billion for FY2020, and Q4 adjusted EBITDA of $86 million was way up from losses of $454 million a year ago.

“We outperformed our quarterly guidance and delivered $540 million of adjusted EBITDA improvement compared to Q4 of last year,” said CFO Nelson Chai. “Moving forward, we are poised to continue to grow at scale while expanding profitability.”

So far, much of that growth has been spurred by Uber’s delivery segment, and the Q4 numbers show it. Delivery gross bookings reached $13.4 billion for the quarter, an all-time high, while weekly bookings for delivery continue an impressive trend of steady growth.

(Courtesy: Uber)

“Delivery volume stayed strong as we continued to improve the profitability profile of our business,” said CEO Dara Khosrowshahi on the company’s Q4 2021 earnings call.

The segment turned in revenue of around $2.4 billion and, for the second quarter in a row, outperformed the company’s core mobility and ride-share segment. Monthly active platform consumers, basket size and order frequency remained stable quarter-over-quarter while growing 14%, 9% and 8% on an annual basis, respectively.

At the same time, couriers were in no short supply to match that demand. For Q4, the number of active delivery drivers on the platform grew by 73% year-over-year in the U.S. and 34% year-over-year globally.

Uber’s merchant base also remained strong. It reached over 825,000 active merchants on the platform in Q4, another record high since the company began reporting earnings in 2019 and a 27% year-over-year improvement.

Of course, Uber’s core mobility segment was no slouch, posting a segment-adjusted EBITDA of $575 million for FY2021, more than double what it recorded the year prior.

Neither was Uber Freight, which saw a 245% spike in revenue for the year and grew closer to adjusted profitability following Uber’s momentous acquisition of Transplace in November.

Watch: How will Uber Freight’s newest acquisition help push things forward?

But the star of the show this year for Uber was unquestionably delivery. The company added a slew of new verticals and partnerships during 2021 as it aims to deliver anything and everything.

Grocery and convenience are two products that stand out. Uber kicked off 2021 by partnering with grocery warehouse chain Smart & Final to enable on-demand and scheduled grocery delivery out of more than 170 locations. Then, it stepped things up a notch when it partnered with nationwide grocer Albertsons for same-day grocery delivery out of over 1,200 stores like Safeway, Acme and Jewel-Osco.

This year has been no different. Uber started 2022 with a bang when it expanded its convenience and pharmaceutical delivery partnership with CVS in January. Now, Uber Eats users are able to deliver from more than 7,000 CVS stores.

Other partnerships include delivery of health and wellness products in collaboration with telehealth provider Hims & Hers, cannabis delivery with Canadian company Tokyo Smoke, and a host of other merchant collaborations through Uber Direct, a white-label service rolled out in April of 2020.

As tensions rise between Uber and its merchant partners, the platform also introduced Grants for Growth, a relief program through which 100 merchants each receive $10,000, last month.

Meanwhile, Uber rival Lyft reported its own earnings on Tuesday, recording its first-ever profitable year in terms of adjusted EBITDA. While Uber isn’t there quite yet, the company projects adjusted EBITDA for Q1 2022 to be in the range of $100 million to $130 million, which would be the largest figure in Uber’s history.

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