Lyft outperformed the streets in fourth-quarter earnings, but that wasn’t enough to reassure investors reacting to weak ride-hailing guidance in the first three months of 2023.
Lyft cut its first-quarter earnings forecast to $975 million, a drop of about $200 million. Analysts had expected the company to pledge his $1.09 billion in revenue. The guidance sent the stock plunged 25% to $12.13 in after-hours trading on Thursday.
Lyft CEO and co-founder Logan Green said the cold weather will reduce the use of ride-hailing services, bicycles and scooters, putting pressure on the company’s first-quarter outlook.
“Prime time is dropping dramatically quarter-over-quarter as the supply of drivers has increased,” Green added, adding that having more drivers will help Lyft keep its service levels competitive. , noted that it could lead to long-term growth. Green also attributed Lyft’s lower Q1 guidance to a slightly lower base price “to remain competitive with the industry.”
Lyft beats earnings expectations
Lyft reported fourth-quarter revenue of $1.2 billion on Thursday, up 21% from $969.9 million in the same period last year. Overall 2022 revenue will bring him to $4.1 billion, up 28% year-over-year to his $3.2 billion in 2021.
Lyft’s revenue, active riders and revenue per active rider exceeded analyst expectations with 20.36 million active riders and revenue per active rider of $57.72, up 8.7% and 11.5% from last year.
Still, shareholders were significantly affected by the company’s guidance in the first quarter.
Lyft needed a win after reporting third-quarter earnings, with the company’s earnings and active passengers falling short of Wall Street estimates, sending its stock down 22%. Despite the beat, Lyft’s stock fell 3.16% at the close, and he’s trading down nearly 24% after hours.
Lyft’s fourth-quarter net loss was $588.1 million, compared with $283.2 million in the year-ago quarter. Lyft attributes much of its loss to $201.3 million in stock-based compensation and related personnel costs.
The company also reported a loss of $29.5 million in employee severance and other employee expenses and a loss of $9.5 million in stock-based net compensation expense as a result of layoffs in the fourth quarter. In November, Lyft cut its workforce by 13% to cut operating costs. At the time, the company estimated the restructuring would cost between $27 million and $32 million.
All of these losses combined for Lyft’s full-year net loss of $1.6 billion, up from a net loss of $1.1 billion in 2021.
The company closed the quarter with $1.8 billion in cash.
Current state of the ride-hailing industry
Uber, Lyft’s main competitor and often referred to as the “older brother”, was posted. strong quarterly results Post-lockdown bookings and revenue growth continues on Wednesday. Uber said he hit over 2 billion rides worldwide in the fourth quarter, and on average he had about 1 million rides per hour, a record number of rides. Total bookings, or fares paid, increased by 31% year-on-year.
Uber’s total bookings, including deliveries and freight, increased 19% to $30.7 billion. That brings Uber’s fourth-quarter revenue to $8.6 billion, a 50% year-over-year increase, beating Wall Street’s estimates. With earnings per share of $0.29, the ride-hailing giant beat his EPS estimates by 240%.
This indicates that conditions in the ride-hailing market are improving. Riders keep the COVID-19 period firmly in their rearview mirrors. It’s also leading to a more competitive environment that is putting pressure on Lyft’s first-quarter earnings forecast.
“The better market balance we see today creates significant opportunities for long-term profitable growth,” Green said in a statement.To take advantage of this opportunity, you need to ensure competitive service levels. ”
Green said Lyft needs to be more competitive, meet more demand and reduce fixed and variable costs to deliver strong shareholder returns. This could mean more job cuts in the future, with Lyft chief financial officer Elaine Paul citing in its earnings call the potential workforce cuts and a more international workforce. Alluded to a shift in the labor force towards employment. It could also mean Lyft exiting other business units.
last July, Lyft ends in-house car rental service And laid off 60 employees. One of Lyft’s other verticals is micromobility, specifically its bike and scooter sharing business, but it doesn’t look like Lyft has backed off from that just yet. The company last week new dockable e-scooterhopes to be able to expand faster than a small dockless scooter business. Lyft’s balance sheet shows that the company has spent $115 million on the purchase of assets, equipment and a scooter fleet, but the company has It does not break down revenue from various mobility services.
Lyft is also looking to capture more transportation dollars from consumers, including through Lyft Pink memberships, which the company relaunched at half price last November. The company said membership doubled in the fourth quarter. Lyft also partnered with Chase to offer Sapphire Reserve cardholders his free two-year Lyft Pink membership status.
“Additionally, by integrating services for car owners, such as roadside assistance parking and maintenance, into the Lyft app, we will be able to provide even more value to the roughly 75% of Lyft customers who own a car,” said Green. says Mr.
