Lyft reports a 61% revenue slowdown as the coronavirus hobbles ride-hailing, but still manages to beat Wall Street expectations
- Lyft on Wednesday reported second-quarter financial results that beat Wall Street's expectations.
- Unlike Uber, Lyft has no food delivery or international businesses to rely on for revenue as the COVID-19 pandemic continues to rage across the US.
- The company joined Uber's threat to shutdown their apps in California over labor disputes.
- Shares of the ride-hailing company initially jumped in late trading on news that ride requests were picking up again, before erasing their gains.
Lyft on Wednesday revealed its lowest quarterly revenue since 2017, as the coronavirus pandemic wallops its business.
Here are the key numbers from the earnings report, covering April 1 through June 31:
- Revenue: $339.3 million ($334 million expected)
- EPS: $-0.86 ($-0.99 expected)
- Net loss: $437 million
"While rideshare rides in the quarter were down significantly year-over-year, we are encouraged by the recovery trends we are beginning to see, with monthly rideshare rides in July up 78% compared to April," CEO Logan Green said in a press release. "Lyft's second quarter results reflect an operating environment that was not only challenging for our core ridesharing business, but also for our valued riders and drivers and the communities we serve."
Despite the rebound from April lows, active riders declined by 60% from the same period in 2019 thanks to shelter-in-place orders and a near shutdown in business travel. The gains outpaced the rate at which Lyft could get drivers back on the platform, executives said.
Unlike Uber, Lyft had no food-delivery business to lean on as the coronavirus pandemic hobbled rides requests. Moreover, Lyft only operates in North America, so the United States' failure to contain the spread of the virus has exacerbated its financial difficulties.
Shares of Lyft initially jumped as much as 4% in after-hours trading following the announcement, before sinking about 2% below Wednesday's close. The company's EBITDA loss was 20% better than it had forecast earlier this year, CFO Brian Robert said, but the bottom line beat was largely fueled by massive layoffs that helped to cut costs.
"These steps position the Company to achieve adjusted EBITDA profitability with 20 - 25% fewer rides than originally contemplated in our fourth quarter 2021 target," Roberts said.
On a conference call, executives said Lyft would also possibly shut down temporarily in California amid a long-running dispute with labor advocates over its classification of drivers as contractors instead of employees. The state makes up about 16% of total rides, Lyft said.
The companies, along with other gig-economy startups, hope to fund a shared benefits pool that can follow workers between apps while allowing them the same flexibility.
"Lyft cannot comply with the injunction at the flip of a switch," Green said.