Earnings Results: Lyft shares surge after ‘great’ quarter, improvement in driver supply

United States

Lyft Inc. shares rose sharply after it reported a 73% year-over-year increase in revenue during what its CEO called a “great” third quarter as drivers and riders continued to return to ride hailing, the company said Tuesday.

Lyft LYFT, -2.33% shares were up more than 12.5% after hours, after falling 2.3% in the regular session to close at $ 45.32. Shares of rival Uber Technologies Inc. UBER, -3.31%, which is scheduled to report earnings Thursday, also got a bump after hours, rising about 7% after closing the regular session down more than 3.3% to $ 42.89.

“We beat our outlook on every metric,” said Logan Green, co-founder and chief executive of Lyft, during the company’s earnings call. “It’s clear that Lyft riders are on the move.”

Green added that nights out and weekend use cases improved, and that airport rides nearly tripled year over year. He also said Citi bike rides, another Lyft offering, hit an all-time high in the quarter.

Chief Financial Officer Brian Roberts said 99 of Lyft’s top 100 cities “generated positive sequential rideshare ride growth in Q3.”

The company also said driver supply, which has been a concern during the coronavirus pandemic, rose 45% year over year. Because drivers are coming back, Roberts said Lyft expects to “taper” driver incentives in the fourth quarter.

Lyft said it achieved record revenue per rider of $ 45.63, and that it had adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) profit of $ 67.3 million.

The company fell short of analysts’ expectations of 19.6 million active riders, though, reporting 18.9 million active riders in the third quarter. That was up about 1.8 million from the previous quarter.

The San Francisco-based company reported a net loss of $ 71.5 million, or 21 cents a share, compared with a loss of $ 459.5 million, or $ 1.46 a share, in the year-ago period. Adjusted for stock-based compensation and payroll-tax costs, net income was $ 17.8 million, or 5 cents a share. Revenue rose to $ 864.4 million from $ 499.7 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast a loss of 2 cents a share on revenue of $ 862.4 million.

The company’s executives expressed optimism about a continued ride-hailing rebound as more people return to the office, and as cautious drivers return to the platform and/or switch from delivery to rides — which they said is more lucrative for drivers.

For the fourth quarter, the company expects revenue of $ 930 million to $ 940 million, while analysts had forecast revenue of $ 971.4 million. Roberts said Lyft expected adjusted Ebitda of $ 70 million to $ 75 million.

“We continue to expect that Lyft will achieve adjusted Ebitda profitability on a full year basis in 2021, which is an important milestone,” he added.

Lyft stock is down more than 5.5% so far this year, but has risen 89% in the past 52 weeks. By comparison, the S&P 500 Index SPX, +0.37% is up about 22% year to date and about 39% in the past year.