Uber Technologies Inc (NYSE:UBER) business model was heavily disrupted by the coronavirus pandemic in 2020 but the company’s Q4 and full year earnings reveal how it faired and was able to adjust to the market changes and even achieve impressive revenue growth in 4Q2020.
The report indicates that the company’s revenue dropped by 16% in the full year 2020 compared to the revenue figures it reported in the previous year. Interestingly, its 4Q2020 revenue gained by 13% compared to 3Q2020. The performance reflects the pandemic’s impact in the first three quarters of 2020 and the recovery in Q4 as the markets slowly reopened.
Uber’s recovery and impressive revenue growth in 4Q2020 was supported by strong growth in delivery gross bookings which increased by 128% year-over-year. The company’s delivery business earned $44 billion from annual bookings during the year, which is impressive considering the unfavorable market conditions that prevailed during the year. The lockdown and stay-at-home measures supported strong demand for Uber’s delivery business.
Uber made some notable investments in 2020, such as acquiring Postmates and Cornershop. It also offloaded some other businesses such as Jump and ATG, allowing it to reduce costs. The acquisitions and divestitures are part of the company’s plan to streamline its operations to boost performance moving forward.
“These decisions have resulted in a much more focused and ultimately stronger company,” noted Uber CFO, Nelson Chai.
What to expect from Uber in 2021
Uber expects the ongoing economic recovery to contribute to a better performance in 2021 as normalcy resumes and more people return to work. Mobility is expected to be on the rise, thus a positive outlook for the company. Some of the other major events for the company include the sale of more Didi shares worth $293 million as part of a recent agreement. The company previously sold Didi shares worth $207 million. The sale as per the recent agreement is expected to close within 1Q2020.
The company also revealed that it recently secured a deal to buy out Drizly through a cash and stock agreement worth roughly $1.1 billion. The acquisition is currently pending regulatory approval although it is expected to close within the first half of 2021.