Lyft swings to a profit on record rides, but its earnings outlook comes in light

By Emily Bary

Stock falls despite company's first quarter of GAAP profitability

Lyft Inc. turned its first GAAP profit in its latest quarter, while reporting a record number of rides and its largest quarterly haul of new drivers in years.

The company's outlook for the current quarter, however, proved lighter than what analysts were modeling, and shares were down 11% in Wednesday morning action.

The ride-hailing company surprised investors Wednesday morning with net income of $5 million, or 1 cent a share, whereas Lyft (LYFT) had posted a loss of $114.3 million, or 30 cents a share, in the year-earlier quarter. Analysts surveyed by FactSet had been expecting a loss again in the second quarter.

Lyft also reported adjusted earnings before interest, taxes, depreciation and amortization of $102.9 million, above the $98 million consensus view on the non-GAAP metric.

See also: Uber's stock rises after earnings as CEO cheers resilience of the customer base

Revenue came in at $1.44 billion, up 41% from a year before, while the consensus view was for $1.39 billion. Gross bookings, which captures the dollar value of transactions, amounted to $4.02 billion, while analysts had expected $4.06 billion.

"Lyft is escalating its war on primetime pricing (i.e. surge pricing) with a new monthly subscription service called Price Lock," Monness, Crespi, Hardt & Co. analyst Brian White wrote. "Although we believe Lyft's continued push to reduce the number of trips with primetime pricing is a positive for the rider, and will ultimately pay long-term dividends for Lyft, there is a near-term headwind to Lyft's gross bookings."

Lyft's count of active riders grew 10% to 23.7 million, while the company saw a record number of rides at 205 million. Lyft also brought in the highest number of new drivers on a quarterly basis since 2019.

"For over a year you've heard us say that customer obsession drives profitable growth," Chief Executive David Risher said in a release. "In [the second quarter] we delivered, and drivers and riders are choosing Lyft in record numbers."

For the third quarter, Lyft models gross bookings of $4 billion to $4.1 billion, along with adjusted Ebitda of $90 million to $95 million. Analysts were modeling $4.15 billion and $103 million, respectively.

White called the company's outlook "uninspiring."

Don't miss: Why Adobe and Uber are newly named top stock picks at Deutsche Bank

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

08-07-24 1146ET

Copyright (c) 2024 Dow Jones & Company, Inc.