uploads/2019/08/Lyft.jpg

Lyft Reports Strong Q2 Revenues, Improved Outlook

By

Updated

Lyft (LYFT) stock rose 4.0% in the after-market trading on Wednesday. The company reported strong revenue growth for the second quarter. The company also raised its guidance for 2019. Lyft’s revenues rose 72% to $867.3 million in the second quarter. The revenues easily beat analysts’ expectation of $809.27 million.

Despite the rise in Lyft’s stock price in the after-market trading on Wednesday, the stock was hit by the company’s disclosure about ending its lock-up period early. Now, insiders can sell their shares earlier than anticipated. The stock rose 8.3% as of 8:43 AM ET in the pre-market trading on Thursday.

Article continues below advertisement

Lyft’s second-quarter revenue grew due to a significant increase in the number of active riders. The company’s revenue per active rider also improved. Active riders grew 41% to about 21.8 million in the second quarter. The revenue per active rider rose 22% to $39.77. Improved industry conditions and better operational execution drove the company’s second-quarter performance.

Second-quarter bottom line

Despite strong top-line growth, Lyft posted a loss per share of $2.23 in the second quarter compared to a loss per share $8.48 in the second quarter of 2018. Stock-based compensation and related payroll tax expenses of $296.6 million caused the earnings to fall. Also, there were losses of $141.1 million related to the changes in liabilities for insurance. The changes were due to regulatory requirements. Overall, the losses hurt the company’s bottom line.

On an adjusted basis, Lyft posted an adjusted loss per share of $0.68 compared to analysts’ estimate of an adjusted loss per share of $1.74.

Article continues below advertisement

Uber (UBER) is scheduled to release its results after the financial markets close on Thursday. Analysts expect Uber’s second-quarter revenues to be $3.36 billion. Uber will likely post an adjusted loss per share of $3.19. Lyft stock has fallen 23% since its IPO in March. As of Wednesday, Uber stock has fallen 4.5% since its IPO in May. Both of the stocks fell in July. Investors were wary about the companies becoming profitable.

Lyft’s improved outlook

Lyft expects its fiscal 2019 revenues to be $3.47 billion–$3.5 billion compared to the previous guidance of $3.275 billion–$3.3o billion. The company expects its 2019 adjusted EBITDA loss to be $850 million–$875 million compared to the previous outlook of $1.15 billion–$1.175 billion. Lyft expects its adjusted EBITDA loss in 2019 to be lower than the loss in 2018.

The company expects its third-quarter revenues to grow 54%–56% to $900 million–$915 million. In the third quarter, the adjusted EBITDA loss will likely be between $190 million and $210 million. Lyft expects the revenue per active rider to grow 23% in the third quarter. The guidance considers the modest price adjustments that the company made on select routes and cities. Lyft also expects its bike and scooter investments to increase its active riders and revenue per active rider.

Advertisement

More From Market Realist