Investors gave Lyft a small bump on Tuesday after the U.S. rideshare company reported results that weren’t as bad as the company and Wall Street had expected. Shares of competitor Uber rose 4.5% in after-hours trading following the disclosure of its financial performance for the first three months of the year. At the time of writing, those gains have fallen to a lower gain of 2.5%.
As for its results, Lyft’s revenue fell 36%, to $ 609 million, in the first quarter of 2021 compared to the same period last year before the COVID-19 pandemic upset the world. economy and, more specifically, the carpooling industry. This income disparity can be directly linked to fewer active cyclists using its app. The company said it had 13.49 million active runners in the first quarter, down more than 36.4% from the 21.2 million runners in its network in the same period last year.
But while the company’s transportation base and revenues have plummeted, the declines haven’t been as extreme as the company or its supporters feared. As Lyft clamored at the top of its quarterly earnings presentation, its revenue during the period was $ 59 million above the midpoint of its forecast. This is the talk of investors for going above the average, which is apparently an A + in the current market. Lyft has also stuck to its previous forecast that it can achieve profitability from Adjusted EBITDA in the third quarter.
The company reported an adjusted EBITDA loss totaling $ 73 million in the first quarter, which was much better than expected. The company expected a larger Adjusted EBITDA deficit of $ 135 million for the period.
In addition to beating its own Q1 2021 targets to some extent, Lyft saw revenue growth of 7% from what it saw in Q4 2020, a detail Lyft pointed to as a sign. that the company was on the road to recovery. Lyft said ridership also improved by about 8% from the previous quarter.
The company remains deeply unprofitable, despite its partial takeover. Lyft reported a net loss of $ 427.3 million in the first quarter, a worsening of 7.3% from the net loss of $ 398.1 million recorded in the same period last year. These losses included $ 180.7 million in stock-based compensation and related payroll taxes and $ 128.0 million related to changes in insurance liabilities required by regulators attributable to historical periods.
Despite the losses, Lyft executives said they were supported by stronger demand for bikers, which has picked up in recent months.
The company has also focused on the sale of its stand-alone unit, called Level 5, which was announced last week. Lyft sold the autonomous vehicle unit to Toyota subsidiary Woven Planet Holdings for $ 550 million, the latest in a series of acquisitions driven by the cost and long time to market of autonomous vehicle technology. Uber also sold their autonomous driving technology, work that was once considered existential for the driving game.
Lyft’s so-called Level 5 division will become part of Woven Planet Holdings once the transaction closes in the third quarter of 2021. Lyft will receive $ 550 million in cash, of which $ 200 million is prepaid. The remaining $ 350 million will be paid out in payments over five years. Approximately 300 people from Lyft Level 5 will be integrated into Woven Planet. The Level 5 team, which at the start of 2020 had more than 400 people in the United States, Munich and London, will continue to operate from its office in Palo Alto, California.
Lyft has declared $ 2.2 billion in unrestricted cash, cash equivalents and short-term investments at the end of the first quarter of 2021.
Considering the quarter of the company as a whole, it’s easy to make both bearish and bullish arguments regarding its performance. On the downside, Lyft is smaller and losing even more money than it was a year ago. And the road to resuming operations will prove to be winding as COVID-19 refuses to screw it up, even in the face of rising immunization levels around the world.
On the bullish side of things, the following chart of Lyft’s earnings chart is perhaps the best single-frame argument that could be made for Lyft’s recovery to be deeply underway:
More information when Uber will publish its own performance in the first quarter of 2021 tomorrow.