To The Moon

--Does EPS miss means totally miss?

$Uber(UBER)$ Q3 earnings 2022 has released before the first day of November. Revenue and profit were more differentiated from market expectations, but they still rose 10% before the market. The main reason is that company's confidence in future and raised its Q4 performance guidance.

From the financial performance point of view, it seems that there are some differences?

• Revenue was US $8.34 billion, up 72% year-on-year.Beat market expectations $8.10 billion,
• The adjusted gross profit was 3.17 billion US dollars, slightly lower than the expected 3.23 billion US dollars year-on-year;
• The comparable earnings of US stocks (GAAP) was-0. 61 US dollars.Miss market expectations Of-0.17 US dollars;
• Adjusted earnings before interest, tax and amortization (EBITDA) was $516 million, compared with $8 million in the same period last year.Higher than market expectations$459 million.

From the operational situation,

• The overall order amount was US $29.12 billion, a year-on-year increase of 26%, slightly lower than the expected US $29.63 billion, of which the travel business and take-out business were flat, both of which were US $13.68 billion, and UBER freight business was US $1.75 billion;
• The monthly active users were 124 million, a year-on-year increase of 13.8%, which was the same as expected;
• In terms of Take rate, it greatly exceeded expectations. The TR of mobile travel was 27.9%, and the TR of take-out reached 20.2%;
• The total ride orders reached 1.95 billion, a year-on-year increase of 19% and a quarter-on-quarter increase of 4%; Among them, travel orders increased by 25% year-on-year.

Our views:

First of all, we can't simply look at the company's performance from an EPS or net profit index. At first glance, UBER's profit this quarter fell short of expectations. In fact,From the EBITDA index which more fairly reflects the actual operation of the company, it is better than the market expectation.

At the same time, the revenue also exceeded expectations, including the merger and acquisition of UBER Freight and the impact of business changes in the UK, but it still exceeded expectations on the whole.

As for the difference between the total orders (Gross Booking) and expectations by 1.2%, it is not worse than expected.It is more because of exchange rate changes.Because the growth rate in original currency is 32%, and the growth rate in US dollar is 25%.

Then, from the business point of view, the growth rate of Q3's take-out orders returned to single digits, which actually almost reached a certain bottleneck. After all, food inflation now makes more people choose not to fire at home. Travel and take-out are two relatively complementary businesses. The growth rate of Q3's travel business is still 25% year-on-year and 4% quarter-on-quarter, which has certain seasonal factors, but it still reflects the recovery of the overall travel business.

UBER is one of the few companies that can translate inflationary pressures on energy directly and effortlessly to downstream consumers.

Take Rate rose again this quarter, which also proves that with the slow increase of travel costs,UBER is the beneficiary instead(Shared travel is somewhat better than individual travelDriving costs savings)

In addition, the management's confidence can also be seen from raising Q4 performance expectations.

The expected growth rate of Q4's total orders is 23-27%, including the headwind of 7 percentage points brought by the exchange rate, but it is better than the market expectation of 23.2%; The adjusted EBITDA is 600-630 million US dollars, and the market forecast is 564 million US dollars.

UBER, as one of the few companies whose performance in Q3 has greatly exceeded expectations, naturally undertakes the expectations of many investors (including institutions), so the market has higher expectations for it. This is mainly reflected in:

• Q3 and Q4 performance guidelines, Has been raised by Wall Street banks, Therefore, it also increases the difficulty of exceeding expectations
• From August 2 to October 31, the stock price performed better than the Nasdaq market.

It should be noted that UBER experienced a "policy negative" incident in September, because the Biden administration wanted UBER to provide social security to drivers in order to win votes. Although it fell by more than 10% on that day, it was quickly bought back by institutions. Under such circumstances, it shows that the organization is quite optimistic about UBER.

$Lyft, Inc.(LYFT)$$Opendoor Technologies Inc(OPEN)$$DoorDash, Inc.(DASH)$