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Lyft Soars on Strong Earnings Outlook Fueled by Record Trips

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(Bloomberg) -- Lyft Inc. shares surged after the company issued strong earnings guidance for both this quarter and the full year, signaling that the ride-hailing service’s plan to attract more commuters is working. 

Fourth-quarter adjusted earnings will total as much as $105 million, far surpassing analysts’ estimates of $85 million, the San Francisco-based company said in a statement Wednesday. Lyft’s estimates for gross bookings also beat projections. And it raised its full-year outlook for both bookings growth and adjusted earnings margin.

Lyft’s earnings serve as a counter-narrative to the disappointing results posted by its much-larger rival Uber Technologies Inc. in late October. Uber reported slower-than-expected growth in its ride-hailing business, sending its shares plunging almost 10%. That dragged Lyft’s shares down, too, as the stock prices traditionally move in tandem. Both of the rideshare firms have been battling governments over driver pay.

Shares of Lyft surged as much as 31% in New York trading on Thursday, marking their biggest intraday gain since February.

Commuters accounted for nearly half of Lyft’s weekday rides this past quarter, Chief Executive Officer David Risher said in a statement. And Lyft’s new Price Lock feature allows these customers to avoid price surges during the busiest hours, which can align with commuting hours.

“So it’s no wonder Price Lock is performing beyond our expectations,” Risher said in an emailed statement to Bloomberg. “By the end of September, we already had more than 200,000 active passes, and this number keeps growing.”

Lyft reported that 24.4 million unique riders took 217 million trips in the three months ended September, a record for both metrics. It reported a $12.4 million net loss, smaller than the $15.4 million deficit that investors had projected.

Adjusted earnings before interest, taxes, depreciation and amortization rose 17% to $107.3 million from a year earlier, also beating expectations. 

In August, Lyft posted its first-ever quarterly profit of $5 million by the measure of net income. Analysts don’t expect the company to turn consistent profits until at least 2025. While total riders and trips rose to a record, the company’s growth in gross bookings decelerated last quarter as part of a broader slowdown that analysts had expected. 

Earlier Wednesday, Lyft said it will begin bringing autonomous vehicles to its ridesharing platform in 2025 through partnerships with self-driving technology firms Mobileye Global Inc. and May Mobility. The announcement was a bid to catch up with Uber, which will offer rides in Waymo LLC’s AVs in certain US cities next year. Tesla Inc. also intends to enter the robotaxi space.

Risher said on a call with investors that he sees AV firms Waymo and Zoox “more as partners than as competitors” and that Lyft’s strategy is to “become a partner of choice to any AV stakeholder.”

Mobility companies have been pairing off in an effort to grab market share across the ride-hailing and delivery markets. Last week, Lyft and DoorDash Inc. entered a partnership offering discounts on rideshares to paid subscribers of the delivery service, following another agreement between Uber and Instacart. 

--With assistance from Natalie Lung.

(Updates share move in fourth paragraph. A previous version of this tsory corrected Lyft’s net loss and analysts’ estimated net loss in the seventh paragraph.)

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