Lyft Sees Record Revenue And Raises Its Outlook

Ride-hailing company Lyft Inc LYFT reported second quarter 2019 financial results much better than analysts' expectations. The company also increased its outlook for the third quarter and full-year 2019.

Lyft reported revenue of $867 million, 72 percent higher year-over-year as active riders increased 41 percent to 21.8 million and revenue per rider increased 22 percent to $39.77. Lyft's revenue came in well ahead of the consensus estimate of $809 million.

The adjusted net loss of $197 million was roughly $20 million worse year-over-year. Adjusted loss per share was $0.68, but well ahead of forecasts which ranged from a $1 per share loss to a $1.66 per share loss. These numbers are adjusted for items like stock-based compensation, insurance reserves, etc.

"Lyft's second quarter was marked by strong execution and important advances in our product and platform. This translated to record revenue driven by better than expected Active Rider growth and Revenue per Active Rider monetization," said Lyft's Co-founder and Chief Executive Officer Logan Green.

The company reported contribution (defined as revenue less the cost of revenue with the aforementioned items excluded from cost of revenue) of $399 million, an 88 percent year-over-year increase. Contribution margin increased 390 basis points to 46 percent in the quarter. The adjusted earnings before interest, tax, depreciation and amortization (EBITDA) loss of $204.1 million was $14 million worse compared to the second quarter of 2018.

Lyft increased its third quarter and full-year 2019 guidance as well. The company expects revenue of $900 million to $915 million in the third quarter, a 54 percent to 56 percent year-over-year increase, with an adjusted EBITDA loss of $190 million to $210 million. The revenue guidance is meaningfully ahead of the current consensus estimate of $841 million for third quarter 2019.

Lyft raised the full-year 2019 revenue forecast by roughly $200 million to a range of $3.47 billion to $3.5 billion, for an annual growth rate of 61 percent to 62 percent. This is also ahead of the current consensus estimate of $3.32 billion. Lyft improved its 2019 adjusted EBITDA loss guidance by $300 million to a range of $850 million to $875 million.

"We remain focused on reshaping transportation and we are pleased with the continued improvement in market conditions. This environment along with our execution is translating to strong revenue growth and sales and marketing efficiencies. As a result of this positive momentum, we anticipate 2019 losses to be better than previously expected and we are pleased to have updated our outlook," continued Green.

Marketing efficiencies may mean rider discounts were reduced. This expense appears on the sales and marketing expense line of the company's income statement. Sales and marketing expenses as a percentage of revenue declined 1,380 basis points to 20.9 percent in the quarter.

Earlier today, the New York City Taxi and Limousine Commission voted to permanently extend the cap on issuing new for-hire licenses. The one-year ban on new licenses was set to expire on August 14. The new rule also further limits the time drivers can spend operating without a passenger.

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