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You have to go past a lot of non-GAAP accounting to see that they actually lost $1.1B last quarter, almost all from operations. There is a nice chart showing a

You have to go past a lot of non-GAAP accounting to see that they actually lost $1.1B last quarter, almost all from operations. There is a nice chart showing all the things they are taking out to get their adjusted EBITDA of -0.5B. It seems like they are always taking out a bunch of one time charges to claim that there core business would be profitable. But every quarter they have those charges. I don't understand how people say their ride sharing business is profitable. I mean maybe it is and I just don't understand how people think that. I would love it if someone would walk me through that.

Animats 7y ago
Someday, I want to see a financial statement where the non-GAAP accounting makes the company look worse than GAAP accounting. Statistically, that should happen half the time. It doesn't.
- austhrow743 7y ago
  Non-GAAP accounting shown to the general public/investors is marketing material. Of course it's going to make them look good. That doesn't mean it's the only non-GAAP accounting being done. They're just using the useful stuff internally. The criteria for figures you use is audience dependent. Report creation 101. Decision makers, regulators, investors are all different audiences.
- Narkov 7y ago
  > Statistically, that should happen half the time. Uhh...no. Non-GAAP is financials manipulated against accounting standards to show a better picture. No company wants to show a worse picture.
  - wil421 7y ago
    Reminds me of the time when Uber’s lawyer said they are not a ride sharing company they are provide a marketplace (the app).
- btown 7y ago
  Having worked with investment bankers: Statistically speaking, bankers develop various hypotheses re: what "adjustments" might be added to a financial model to make the company look better to investors. They tell their junior analysts to run the numbers, this flows down the chain, and many late nights and Seamless orders ensue. Experienced bankers have pretty good priors, so most of these hypotheses make the company look better. Even so, all but the best outcomes are rejected, and the analysts whose analyses ended up being useless complain to each other over copious amounts of alcohol. Essentially, it's as if p-hacking were codified as an industry standard, which is to say, it's exactly p-hacking.
  - dbuder 7y ago
    And then, when they get caught they hang out the junior analysts out to dry, and everyone who had any power to stop it is promoted and safe. Example: Lane Cove Tunnel (no not the lawsuit about the exit ramp collapse, the one about traffic forecasting).
  - nabla9 7y ago
    During the late 90's stock market boom, the CEO of the biggest bank in Finland made the company bottom line to match his personal phone number as a joke. Getting first two numbers right was the hard part :)
- hyperbovine 7y ago
  What statistical model is this?
thewhitetulip 7y ago
wouldn't that violate accounting practices if they took one time charges? That's what constitutes fraud right?
- Narkov 7y ago
  They need to provide GAAP numbers and so long as everything else is clearly labeled (i.e. "non-GAAP"), there's no problems.
  - thewhitetulip 7y ago
    Ah.
kkotak 7y ago
You're an idiot if you lose $100 from your pocket, but you're a genius if you lose -$1.1B of other people's money every quarter.
- arcticbull 7y ago
  My personal goal is to become too big to fail. It's doable, I mean, it worked for Adam Neumann.
adjkant 7y ago
Stock based compensation is a big chunk of that which arguably doesn't really cost Uber anything really. I think the bigger takeaway is that its STILL 500 million dollars lost per quarter which is insane.
- cco 7y ago
  What do you mean it doesn't cost them anything?
  - kgwgk 7y ago
    They pass the cost directly onto the shareholders :-)
  - adjkant 7y ago
    https://www.ft.com/content/6999dc72-893e-11e9-97ea-05ac2431f453 https://www.ft.com/content/6999dc72-893e-11e9-97ea-05ac2431f... This explains it decently IMO > Assume that you own a business that has an overall value of $100m and generates $10m in annual income, and that you hire me as your manager. Assume also that my compensation is $1m and that rather than pay me with cash, you give me 1 per cent of the business as compensation. While you may maintain the fiction that this is a non-cash expense and that your income is still $10m, you are now entitled to only 99 per cent of that income in perpetuity. In effect, your share of the business is worth less and it will get even smaller over time, if you continue to pay me with equity. But if you are a common stockholder in any company that grants options or restricted stock to its employees, then you are in exactly the same position. While it's obviously bad for shareholders, it basically dilutes their profits in the future, but if those never come, who cares about that dilution? I think it would affect my opinion of the stock long term, but short term any way they get towards profitability minus stocks is a way that someone actually sees a dividend. But of course, most people actually looking to buy and sell individual stocks won't really care a ton about the dividends IMO. And it's not like people really use voting rights today on tech stocks even if they are offered. It's always fascinated me that stock games like that really come down to just betting on future performance compared to the opinions of others. It's comically confidence based and nothing else. So if Uber were to eve somehow reach profitability minus stock compensation, their business itself could actually take advantage, even if the shares of others were diluted in terms of dividends.* So if you're buying and selling stocks individually in the current pattern, Uber hitting that middle zone of technically nonprofitable but adjusted profitable would be a good sign for long term resilience, however that factors into the current confidence equation. How the stock market hasn't been classified as gambling at this point is wild to me. *I'm actually not personally clear on if it is a dilution or those specifics, its surprisingly hard info to find online easily. One thing is clear though: the company's cash flow itself is not affected at all.

Animats 7y ago

Someday, I want to see a financial statement where the non-GAAP accounting makes the company look worse than GAAP accounting. Statistically, that should happen half the time. It doesn't.

austhrow743 7y ago
Non-GAAP accounting shown to the general public/investors is marketing material. Of course it's going to make them look good. That doesn't mean it's the only non-GAAP accounting being done. They're just using the useful stuff internally. The criteria for figures you use is audience dependent. Report creation 101. Decision makers, regulators, investors are all different audiences.
Narkov 7y ago
> Statistically, that should happen half the time. Uhh...no. Non-GAAP is financials manipulated against accounting standards to show a better picture. No company wants to show a worse picture.
- wil421 7y ago
  Reminds me of the time when Uber’s lawyer said they are not a ride sharing company they are provide a marketplace (the app).
btown 7y ago
Having worked with investment bankers: Statistically speaking, bankers develop various hypotheses re: what "adjustments" might be added to a financial model to make the company look better to investors. They tell their junior analysts to run the numbers, this flows down the chain, and many late nights and Seamless orders ensue. Experienced bankers have pretty good priors, so most of these hypotheses make the company look better. Even so, all but the best outcomes are rejected, and the analysts whose analyses ended up being useless complain to each other over copious amounts of alcohol. Essentially, it's as if p-hacking were codified as an industry standard, which is to say, it's exactly p-hacking.
- dbuder 7y ago
  And then, when they get caught they hang out the junior analysts out to dry, and everyone who had any power to stop it is promoted and safe. Example: Lane Cove Tunnel (no not the lawsuit about the exit ramp collapse, the one about traffic forecasting).
- nabla9 7y ago
  During the late 90's stock market boom, the CEO of the biggest bank in Finland made the company bottom line to match his personal phone number as a joke. Getting first two numbers right was the hard part :)
hyperbovine 7y ago
What statistical model is this?

thewhitetulip 7y ago

wouldn't that violate accounting practices if they took one time charges? That's what constitutes fraud right?

Narkov 7y ago
They need to provide GAAP numbers and so long as everything else is clearly labeled (i.e. "non-GAAP"), there's no problems.
- thewhitetulip 7y ago
  Ah.

kkotak 7y ago

You're an idiot if you lose $100 from your pocket, but you're a genius if you lose -$1.1B of other people's money every quarter.

arcticbull 7y ago
My personal goal is to become too big to fail. It's doable, I mean, it worked for Adam Neumann.

adjkant 7y ago

Stock based compensation is a big chunk of that which arguably doesn't really cost Uber anything really. I think the bigger takeaway is that its STILL 500 million dollars lost per quarter which is insane.

cco 7y ago
What do you mean it doesn't cost them anything?
- kgwgk 7y ago
  They pass the cost directly onto the shareholders :-)
- adjkant 7y ago
  https://www.ft.com/content/6999dc72-893e-11e9-97ea-05ac2431f453 https://www.ft.com/content/6999dc72-893e-11e9-97ea-05ac2431f... This explains it decently IMO > Assume that you own a business that has an overall value of $100m and generates $10m in annual income, and that you hire me as your manager. Assume also that my compensation is $1m and that rather than pay me with cash, you give me 1 per cent of the business as compensation. While you may maintain the fiction that this is a non-cash expense and that your income is still $10m, you are now entitled to only 99 per cent of that income in perpetuity. In effect, your share of the business is worth less and it will get even smaller over time, if you continue to pay me with equity. But if you are a common stockholder in any company that grants options or restricted stock to its employees, then you are in exactly the same position. While it's obviously bad for shareholders, it basically dilutes their profits in the future, but if those never come, who cares about that dilution? I think it would affect my opinion of the stock long term, but short term any way they get towards profitability minus stocks is a way that someone actually sees a dividend. But of course, most people actually looking to buy and sell individual stocks won't really care a ton about the dividends IMO. And it's not like people really use voting rights today on tech stocks even if they are offered. It's always fascinated me that stock games like that really come down to just betting on future performance compared to the opinions of others. It's comically confidence based and nothing else. So if Uber were to eve somehow reach profitability minus stock compensation, their business itself could actually take advantage, even if the shares of others were diluted in terms of dividends.* So if you're buying and selling stocks individually in the current pattern, Uber hitting that middle zone of technically nonprofitable but adjusted profitable would be a good sign for long term resilience, however that factors into the current confidence equation. How the stock market hasn't been classified as gambling at this point is wild to me. *I'm actually not personally clear on if it is a dilution or those specifics, its surprisingly hard info to find online easily. One thing is clear though: the company's cash flow itself is not affected at all.