Lyft continues to post losses despite revenue growth

Marco Green
August 8, 2019

The move buoyed both companies' stocks.

The study concluded Uber and Lyft were responsible for 13.4 per cent of all VMT in San Francisco; eight percent in Boston; and 7.2 per cent in Washington, D.C. Chicago, Los Angeles, and Seattle were also probed.

The ride-hailing company on Wednesday posted revenue of $867.3 million United States, up 72 per cent from the same time past year. Analysts had expected 60% growth. Revenue totaled $867.3 million, which is more than the average of $809.27 million analysts forecast. Lyft also narrowed its forecast for adjusted losses, which excludes debt, interest and other costs. It still had losses of $644.2 million, however.

Both Lyft and Uber trade below the price at which they went public this year, but Lyft was up 6% in pre-market trading in NY on Thursday, while Uber was up 4.6%.

"We're focused on trying to win on brand preference and experience - not coupons", said Brian Roberts, chief financial officer, on the call.

Green said because of that positive momentum, the company expects 2019 losses to be better than previously expected. That's a 72% increase over the same period past year. Lyft's rival Uber is due to release its earnings after the closing bell tomorrow.

Enthusiasm for Lyft shares was dampened somewhat by a separate disclosure Wednesday.

Lyft shares temporarily turned negative after it announced plans to bring forward its lock-up period - the time after a public offering in which large shareholders are prohibited from selling shares - to August 19 from September 24. Uber's executives said earlier this year that it appeared that a longtime price war in the ride-sharing industry might be waning.

But Wall Street remains optimistic about the companies' prospects, despite persistent losses. That's more than the $1.58 per share that analysts surveyed by Yahoo forecast the company would lose. Both companies said in filings that they have never been profitable and don't foresee that happening anytime soon.

Both companies recently began to raise fares around the US, which is a main battleground accounting for nearly all of Lyft's sales.

Lyft is reporting strong revenue growth but deep losses in its second quarter, a trend that it has so far been unable to reverse.

In an earnings call following the markets' close on Wednesday, Lyft's President John Zimmer said the company aims to make driver earnings more consistent.

Investors will watch closely whether Lyft can continue to cut costs while maintaining revenue growth. Shares have faltered, two sets of shareholders sued the company for misrepresenting the strength of its business and its chief operating officer stepped down last week. Lyft is now facing public scrutiny over the safety of its service after the Washington Post and NBC's Today show reported on allegations of harassment from female customers.

Lyft is a popular ride-hailing service and competitor to Uber.

Still, Lyft's raising its outlook for revenue and adjusted losses for the full year were "welcome signs", said Wedbush analyst Ygal Arounian.

More than a third of the loss, or $296.6 million, came from stock-based compensation Lyft paid out after its IPO in March.

Lyft lost $2.23 per share in the second quarter, which was worse than the loss of $1.15 per share predicted by analysts polled by FactSet.

Other reports by Click Lancashire

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