Uber says it’s confident it’ll be profitable by the end of 2020, a year ahead of schedule

Uber on Thursday raised its profitable (adjusted) target by a year to the fourth quarter of 2020,media reported. Shares were up 5 percent in after-hours trading. Dara Khosrowshahi, chief executive, said the company would cut costs to bring more repeat customers and try to increase the use of upgraded ride-hailing services.

After reporting fourth-quarter results, Coslosasi shared his latest earnings targets with investors on a earnings conference call. Uber is still losing money, according to the results.

“The progress we have made in 2019 and our plans for 2020 give stake in my confidence that our team can overcome the difficulties and accelerate its pace towards our EBITDA earnings target to move the time forward from 2021 to the fourth quarter of 2020,” Cosrosasi said.

Uber says it's confident it'll be profitable by the end of 2020, a year ahead of schedule

Uber pledged in November to make a profit on an adjusted basis by the end of 2021 (excluding stock compensation and other expenses).

On Thursday, Uber said its full-year adjusted EBITDA forecast for 2020 was expected to be between $1.25 billion and $1.45 billion, unchanged from previous estimates.

Uber boosted fourth-quarter revenue by increasing subscribers to its ride-sharing service and food delivery business in the fourth quarter of 2019, but Uber’s high costs meant Uber had to continue to lose money to remain competitive.

Total revenue rose 37 percent year-on-year to $4.07 billion, according to the company’s results. Total revenue beat analysts’ average estimate of $4.06 billion, according to Refinitiv’s IBES.

But Uber’s net loss widened to $1.1 billion, or 64 cents per share, from $887 million, or $1.98 per share, a year earlier.

Three-quarters of the company’s revenue comes from ride-sharing services. Uber’s ride-sharing service is currently operating in more than 700 cities around the world. The core business is at its peak this quarter, and Uber’s ride-sharing business has turned a profit if it looks independently. It’s just that the rest of the company’s projects consume too much cash.

Uber said the company’s global monthly active user base increased to 111 million, in line with its expectations of 110.78 million.

Total bookings, excluding driver costs and other expenses, increased 28 percent year-on-year to $18.13 billion, higher than the $18.03 billion forecast.

However, Uber’s total cost rose 25.2 percent year-on-year to $5.04 billion in the fourth quarter, thanks to the company’s huge investment in food delivery platforms.

While Uber Eats’ revenue rose nearly 14 percent from the previous quarter, Uber has also invested heavily in attracting riders, with promotional incentives far outpacing revenue growth in the business. Compared to the previous quarter, promotional costs increased by 4% in revenue in the quarter.

To make a profit, Uber has gradually rolled out underperforming markets for its food delivery business.

In January, the company sold its Uber Eats business in India to rival Zomato in exchange for a stake in Zomato.

Uber’s share price rose as investors welcomed the decision to prioritize earnings growth.