Lyft surprised Wall Street with strong revenue, better-than-expected earnings and most importantly, an improved outlook for the year.
Lyft surprised Wall Street with strong revenue, better-than-expected earnings and most importantly, an improved outlook for the year.
The ride-hailing company had $867.3 million in revenue in the latest quarter, up 72% from the same period last year and beating analyst predictions of $809.3 million. Lyft’s loss rose to $644.2 million, which included a stock-based compensation associated with the company’s initial public offering in March, from $178.9 million.
But perhaps the most welcome news for investors was Lyft’s updated annual outlook, which predicted smaller losses and higher revenue than previously expected. Lyft now forecasts annual revenue of $3.5 billion, up from $3.3 billion. It also expects that losses, excluding interest, taxes, and other costs, will be $850 million to $875 million, down from the previous $1.18 billion.
“This was a milestone quarter on our path to profitability,” said Lyft CEO Logan Green.
Lyft’s stock price jumped about 10% in after-hours trading just after the initial earnings report. But it later retreated after company announced some unexpected news: Lyft is moving up the date when major shareholders could sell their stock by about a month.
“One interpretation was that insiders were in a rush to get out, which investors typically don’t like to see,” White said.
After the quarterly conference call with investors, Lyft’s stock traded at $63.80, up about 5% from the market close. In regular trading, before the quarterly results, the company’s shares had gained nearly 3%
Lyft credited the extra publicity it received from its initial public offering in March for a 41% gain in active riders in the quarter, to 21.8 million. The company also said it had improved its system for matching riders with drivers, helping increase revenue per rider to $32.67, 22% more than in the same quarter last year an 5% more than in the first quarter of 2019.
But most importantly, during an earnings call with investors, Lyft executives suggested that the company’s worst losses were in the past. Last year, they peaked at $911 million, the executives said.
“Overall, the quarter was very, very strong,” said Tom White, analyst at D.A. Davidson. “They beat second-quarter expectations, and they raised the full-year guidance by more than they beat the quarter by.”
Lyft also said in June it had begun testing higher prices for rides on certain routes in an effort to grow revenue and close the gap on profitability.
The company also announced exclusive partnerships with Disney, Hilton, and AEG Worldwide venues to provide riders special offers and dedicated pickup spots. It also struck a deal with GEICO to sell drivers insurance that would cover them both when they’re on duty for Lyft and off duty. And Lyft continues to expand its car rental program for drivers, add rides in which passengers walk a short distance to a carpool, and grow its partnerships with public transportations agencies so that riders can also see nearby transit options.
“Our results benefited from strong market conditions, organic growth in riders, and the continued expansion of the core platform,” said Brian Roberts, Lyft’s chief financial officer. “We exited the quarter with substantial momentum.”
More must-read stories from Fortune:
—What you need to know about 8chan, the controversial site tied to the El Paso shooting
—Verizon’s unlimited plans are getting cheaper. Here’s what you should know
—What CEOs, bankers, and tech execs think about a coming recession
—How an alleged Amazon theft ring got the goods
—Boeing adds a second flight control computer to the 737 MaxCatch up with Data Sheet, Fortune‘s daily digest on the business of tech.
