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Comment by awa | Hacker News Reader

It's "Adjusted EBITDA" which being a non-GAAP measure in this case excludes Corporate G&A and Platform R&D. This line item was -644 million.

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PE-focused guy here. I see EBITDA daily.

Adjusted EBITDA is just a funny way to say "we found a way to make us look profitable by shifting whatever we want in the cost lines". Unless you know specifically what they are doing to manipulate it, it's basically a bullshit metric to make a company look better than it really is. Often you'll see investment bankers make adj. EBITDA claims and its the buyers job to sniff out really what is going on.

Even EBITDA (which is a standard measure with standard calculations) is considered by many to be a bullshit metric:

https://www.forbes.com/sites/brentbeshore/2014/11/13/ebitda-...

Look at WeWork's "Community-Adjusted EBITDA" for another example of the same thing. In their case, they back-loaded contracts on both sides, leasing and sub-leasing, then amoritized the sub-leasing revenue and didn't amoritize the leasing costs, showing huge positive net income at the start of the leasing terms.

There's a difference between GAAP EBITDA and made up EBITDA. A significantly positive GAAP/actual EBITDA means that the business is long term viable. Existing shareholders and/or creditors might get wiped out, but in the event that happens a viable business should rise from the ashes.

Community-Adjusted EBITDA was an absolute joke when WeWork came out with it. However, I kinda get what WeWork was trying to say, it was just stupid to term it that way. Either way, any analyst worth their salt sniffs that stuff out pretty easy. It's basically a PR attempt for (future) public markets, who have less sophisticated investors.

If so, what are some important metrics you usually look at?

For software companies...gross margin tells me everything (assuming they've calculated COGS correctly)

For all companies, FCF and to some extent, DCF.

Source?

The OP link, of course.

Scroll to the GAAP section, earnings are under "CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS".

The GAAP loss per quarter is $1.096B, which comes out to $0.64 per share.

Cash flow from operations was negative 3 billion excluding the "cash held by insurer" and capex was 0.5 billion. This puts unlevered free cash flow at closer to negative $3.5B.

The way they are breaking out segments seems to imply that theres heavy losses in non-North America so of they were to shut off the rest of world stuff maybe it looks better.

Does this imply a ~1 year runway considering $11B cash/cash equivalents on hand?

I believe that was an annual number. Not sure runway makes sense for an entity this big. They recognized billions of stock comp. There's enough enterprise value to generate cash in a variety of ways. The company might kick and scream to not do anything dilutive but its hard to see a scenario where they couldn't access the capital markets if backed against the wall (albeit at maybe an expensive rate).

But I'm not intimately familiar with this stock.

You're comparing all their lines of business but the OP talks specifically about the Rides business which they said generated a large EBIDTA profit and was more than enough to cover all G&A and R&D. It doesn't look like they break out G&A and R&D by line of business so it looks like the Rides business specifically is profitable even after paying everyone's salary at the company. Seems like the meme that they'll never be profitable has been disproven.

I know it's SOP for Silicon Valley to see massive losses for years while a business is established, but it seems like Uber has absolutely no reason to not be profitable within a year or less. Uber is, for all intents and purposes, a platform for user acquisition and operational cost savings for a decades-old industry (taxis) that are able to be profitable on a small scale all over the world. Car services were all making money charging sustainable rates to willing customers. If the model was just to normalize pricing a bit, gain efficiency at scale and smooth the customer experience with technology, it should be an absolute gimme to be profitable. I have a hard time understanding why their business isn't 90% smoke and mirrors.

> Car services were all making money charging sustainable rates to willing customers

I think a fairly good portion of car services were making money charging monopoly rates to customers who had no choice but to take a taxi. It sustained the car services, but sucked for everyone else (as anyone who taxied in SF pre-Uber will tell you, or waited on an hour-late pre-booked taxi to arrive in NZ to go into town on Friday night, or took a chance with an "unlicensed" [some random guy] taxi in London because the black cabs were nowhere to be seen)

For example: tourists, people who can't or don't drive for some reason, people who've been out drinking, etc...

I don't know about monopoly rates.

I take a private car service to the airport. There are a number of different services I could choose from but the one I use is reliable and competitive with competing service when I've checked. Yes, they're quite a bit more than Uber but they're reliable, including in situations where Uber would not be (very early morning pickups well outside of a major urban area).

I think you're right that Uber could easily be profitable as the jitney cab service it is. The problem is that being a modestly profitable grey-market business doesn't pay back the hundreds of millions your investors have sunk into you.

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