Uber is about to report its second-quarter performance. The ride-hailing giant likely lost $5 billion in 3 months. (UBER)

Uber IPO Dara Khosrowshahi

  • Uber is set to report its second-quarter earnings after the closing bell Thursday. 
  • Analysts expect the company to report a loss of $5 billion on $3 billion in revenues. 
  • Those steep losses likely won’t be a big detractor, so long as the company is still growing. Here’s what analysts are expecting. 
  • Visit Business Insider’s homepage for more stories.

Uber is set to report its second-quarter earnings on Thursday afternoon, and investors are bracing for yet another period of heavy losses from the ride-hailing giant.

They likely won’t be dissuaded though, so long as the losses are coupled with continued growth.

Here’s what analysts are expecting, according to a Bloomberg poll:

  • Revenue: $3.05 billion
  • Losses per share: $3.23
  • Operating loss: $4.98 billion

A major chunk of that loss, at least $3.5 billion, is connected to Uber’s initial public offering earlier this year and stock-based compensation for many employees, the company has said in regulatory filings.

As an industry, the ride-hailing business is becoming more “rational” Wall Street analysts have said recently, as the two main competitors switch gears to compete on things other than pricing. This means fewer coupons to incentivize riders, and rising fares.

Read more: From food delivery to self-driving cars, here’s how all of Uber and Lyft’s side-businesses compare

On Thursday, Uber got a boost riding Lyft’s coattails after the smaller competitor reported second-quarter earnings that topped expectations while raising its guidance for the year. Investors will be hoping Uber’s situation shapes up much the same.

“We think Lyft is starting to prove that path to profitability,” Joseph Spak, an analyst with RBC Capital Markets, told clients. “And the read-thru to UBER is likely to be positive.”

For Uber though, there are plenty more metrics to watch, especially Uber Eats. The company has been pouring massive amounts of investment into the delivery arm, one of its fastest growing units, as a way to reach profitability.

“In the first quarter, Uber highlighted that it expects improvement in take rates and ANR across both rideshare and Uber Eats, as well as in contribution margins throughout 2019 as these metrics will be a key driver of the stock,” Daniel Ives, an analyst at Wedbush, told clients. “We believe based on the current North America dynamics there is room for upside to take rate.”

Read more: Uber’s CEO says elderly people are fueling its efforts to ramp up food delivery in Japan

The take rate is important, even if not specifically disclosed, because it represents what fraction of total bookings (the amount Uber receives from customers) before paying drivers or couriers.

Most analysts remain bullish on Uber, with 24 polled by Bloomberg recommending the stock as a buy, with 11 rating the name a “hold” and just 1 recommending “sell.” In Thursday’s earnings, they will be watching for the company’s ability to use its platform for more things beyond taxi rides, as its done with Eats.

“Uber highlighted last quarter it is working to better leverage Eats and rideshare users through loyalty offerings, and this is something we will also be looking for an update on as the company mentioned these were already off to a strong start,” Ives continued. “We ultimately believe that the biggest differentiator for Uber is that it is the only one among its competitors that is a leader in both massive opportunities on a global basis.”

More Uber news: 

  • Uber mistakenly charged riders 100 times the price on their receipt — and said it could take up to five days to get their money back
  • Uber and Lyft drivers reveal the scariest situations they’ve ever encountered
  • Uber Eats has massive competition after 2 rivals agreed on a $10 billion deal to become one of the world’s biggest food-delivery companies

SEE ALSO: An Uber Eats executive reveals the company’s surprising strategy for moving beyond taxi rides

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