- Lyft released first-quarter financials on Wednesday afternoon that easily topped expectations.
- The company’s revenue and total losses were better than Wall Street expected, and its stock price popped as much as 14%.
- The coronavirus pandemic has wreaked havoc for Lyft and Uber alike, as shelter-in-place orders across the country lead to fewer ride requests.
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Lyft surprised Wall Street on Wednesday with first-quarter financials that handily topped expectations while providing the first look at how badly the coronavirus pandemic is affecting the ride-hailing firm’s bottom line.
Here are the important numbers:
- Revenue: $955.7 million versus an expected $829.6 million
- Net loss (adjusted): $97.4 million versus an expected $179.6 million
- Losses per share: $1.31, in line with expectations
Shares of Lyft jumped as much as 17% in after-hours trading shortly following the release.
Active riders came in at 21.2 million, where analysts had expected 22.7 million. Still, the number is a 3% jump over the same period the previous year. Revenue per active rider, a closely watched metric in the industry, rose 19% to a record high of $45.06.
While only the quarter’s final few weeks were fully affected by the coronavirus, total rides volume fell as much as 75% in April, CEO Logan Green said, when a majority of the US was under some form of shelter-in-place orders. Now, rides have began to slowly increase again after a bottoming out the week of April 12.
“It’s clear that macro trends will continue to negatively impact our business,” he said. “Continued social distancing, altered consumer behaviour, and significant corporate cost-cutting will be significant headwinds for Lyft. These are the hard truths we’re facing.”
Because rides are so reduced, the company said it stopped on-boarding new drivers in March and there is now a waitlist.
To cut costs in the face of the crisis, Lyft in April announced roughly 1,000 layoffs — 17% of its workforce — and hundreds of other furloughs. Executives and high-level employees are also taking pay cuts, Lyft said at the time. Uber has also announced similar cuts.
Brian Roberts, Lyft’s chief financial officer, said on the call that a majority of the company’s costs are variable, which will help it weather the pandemic. Still, the company is not able to predict the full impact yet, and withdrew its full-year forecast in April.
“We cannot speculate what the rest of 2020 looks like,” Roberts said. And investors know it won’t be an easy recovery.
“Uber and Lyft face Herculean-like challenges looking ahead as the new reality will likely change the business models of these companies (and competitors) for the foreseeable future,” Daniel Ives, an analyst at Wedbush, said ahead of earnings. “Even in food delivery while consumer demand is there, competition is driving meaningful pressure on profitability.”
Asked point blank about the possibility of getting into delivery to offset the rides losses, the answer was a resounding now.
“We have no interest in launching a consumer food delivery service,” Roberts said.
SEE ALSO: Lyft is laying off nearly 1,000 employees — 17% of its workforce — as the coronavirus sends the ride-hailing industry into a nosedive
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