"Uber reported strong growth in its third-quarter earnings report on Wednesday, but stumbled on the bottom line after absorbing a $479 million charge for what the company described as undisclosed legal and regulatory matters. The hit to profitability overshadowed a quarter that otherwise marked one of the largest trip-volume increases in the ride-hailing giant's history. Uber reported operating income of $1.11 billion for the quarter ended September 30, significantly below the $1.62 billion analysts had expected."
"The legal expense appeared in Uber's financial statements as part of "certain legal, tax, and regulatory reserve changes and settlements," a line item the company uses in calculating adjusted EBITDA. According to Uber's earnings release, these matters relate to "certain significant legal proceedings or governmental investigations" that have "limited precedent, cover extended historical periods and are unpredictable in both magnitude and timing.""
Uber delivered robust topline growth in the third quarter, with revenue of $13.47 billion, gross bookings rising 21% to $49.74 billion, and 3.5 billion trips, a 22% year-over-year increase. Operating income fell to $1.11 billion, below analyst expectations, after a $479 million charge linked to undisclosed legal, tax and regulatory reserve changes and settlements. The company characterized the matters as significant proceedings or investigations with limited precedent and unpredictable magnitude and timing. CFO Prashanth Mahendra-Rajah attributed part of the shortfall to these issues. Net income for the quarter reached $6.62 billion, or $3.11 per share.
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