Friday, October 7, 2022

Lyft shares plunge on light guidance, continued driver incentives

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A traveler arriving at Los Angeles International Airport looks for ground transportation during a statewide day of action to demand that ride-hailing companies Uber and Lyft follow California law and grant drivers “basic employee rights” in Los Angeles, California, U.S., August 20, 2020.

Mike Blake | Reuters

Shares of Lyft lost more than a quarter of their value, dropping as much as 26% in after-hours trading Tuesday after the company provided light second-quarter guidance and warned investors it will have to keep spending on driver incentives.

Here are the key numbers:

  • Earnings per share: 7 cents adj. vs loss of 7 cents expected in a Refinitiv survey of analysts
  • Revenue: $876 million vs $846 million expected by Refinitiv
  • Active riders: 17.8 million vs 17.9 million expected, per FactSet
  • Revenue per active rider: $49.18 vs $47.07 expected, according to StreetAccount

For the second quarter, Lyft said it expects revenue between $950 million and $1 billion. Wall Street was estimating $1.02 billion, per StreetAccount.

Lyft reported a net loss for the quarter of $196.9 million versus a net loss of $427.3 million in the same period of 2021. The company said its loss included  $163.2 million of stock-based compensation and related payroll tax expenses.

Lyft reported 17.8 million active riders, narrowly missing estimates. It’s also a decline from the fourth quarter when Lyft said it had 18.73 million active riders.

Lyft heavily invested in driver incentives during the Covid pandemic and recovery, which has weighed on financials. The supply of drivers had seemed to stabilize but as gas prices shot up across the nation due to the war in Ukraine earlier this year, some investors feared drivers would leave their respective platforms and companies would have to increase their incentives.

Lyft said during its call with investors it will be investing more in driver subsidies in the coming quarter, though it believes that will help “pay off in a healthier marketplace.” It’s unclear how much the company will spend.

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