Shares of ride-hailing company Lyft fell in Tuesday’s after-hours after the company reported its first-quarter earnings results and issued weak guidance for the current quarter.
For the first quarter, Lyft reported earnings per share of 7 cents, adjusted, compared to a loss of 7 cents that analysts have forecasted, according to Refinitiv. Revenue for the first quarter came in at $876 million surpassing the estimate of $846 million analysts had expected, according to Refinitiv.
The company reported active riders of 17.8 million and fell slightly short of the expectation of 17.9 million analysts had envisaged, according to FactSet. Revenue per active rider came in at $49.18 beating the estimate of $47.07 that analysts expected, according to StreetAccount.
The company’s guidance for the current quarter was below analysts’ expectations. While Wall Street estimates $1.02 billion for revenue, according to StreetAccount, Lyft said it expects revenue for the second quarter to come in between $950 million and $1 billion.
Following the weak guidance, Lyft’s stock declined 27 percent to $22.50 on Tuesday’s after-hours. Shares of its rival Uber were also down about 9 percent following its results.
In the first quarter, Lyft had a net loss of $196.9 million compared to a net loss of $427.3 million from the same period a year ago. According to the company, the loss covers $163.2 million of stock-based compensation and related payroll tax expenses.
Active riders of 17.8 million in the first quarter fell slightly short of estimates. It is also a sharp decline from the fourth quarter of 2021 when the company reported active riders of 18.73 million.
The company said it invested hugely into driver incentives during the pandemic and early post-pandemic periods. This, it said, ate deeply into its finances. There was also the problem of gas prices increasing due to the Russia-Ukraine conflict. Companies had to raise incentives for drivers out of fear that they’d switch to the next favorable platform.
The company plans to invest in driver subsidies in the coming quarters as it believes this will help it stay ahead of its rivals. The company, however, failed to mention how much it is willing to spend on this cause.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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