SAN FRANCISCO — In a significant milestone, Lyft Inc. reported its first quarter of GAAP profitability, surprising analysts and investors with stronger-than-expected financial performance. Despite this historic achievement, the company’s stock saw a dip due to conservative guidance for the coming quarter, reflecting broader market apprehensions.
In an exclusive interview with CNBC, Lyft CEO David Risher elaborated on the company’s latest earnings report and addressed the future economic landscape. “What just happened is we had our first profitable quarter ever in the company’s history,” Risher stated proudly. “That’s a big deal, and I’m going to look at the camera and say that to the team. They’ve worked hard. Record rides, record riders—all of those things are good.”
Navigating Market Realities
Despite the positive earnings, Lyft’s stock took a hit, largely due to its guidance for the next quarter, which was lower than what analysts had anticipated. Risher shared insights into this cautious outlook, drawing from advice he received from JPMorgan Chase CEO Jamie Dimon: “He said, just be careful about what you predict, what you can predict, what you can control. We can control great ETAs and deliver, and we’re super focused.”
When asked about the broader economic indicators, Risher remained optimistic, noting that Lyft’s daily operations continue to thrive. “I’m seeing 2 million people taking rides to get to the airport, school, whatever. Lyft is a really important part of people’s lives every single day. We don’t see anything to worry about; we just don’t.”
Competing in a Tough Market
Risher acknowledged the competitive landscape, particularly against Uber. “We’re stronger on the consumer side relative to them,” he said. “We’ve got segments like healthcare and B2B. We love our riders and our consumers.”
The discussion also touched on pricing strategies in the ride-hailing industry, which has seen intense competition. “We’re opening up a can of whoop ass on pricing,” Risher quipped, highlighting Lyft’s aggressive approach to maintaining affordability and driving growth. “Pricing, you go down 25% quarter-on-quarter, and that’s why we’re getting good growth.”
Financial Performance and Operational Highlights
Lyft’s financial results for Q2 2024 showed substantial growth:
- Gross Bookings: $4.0 billion, up 17% year-over-year.
- Revenue: $1.4 billion, up 41% year-over-year.
- Net Income: $5.0 million, compared to a $114.3 million net loss in Q2 2023.
- Adjusted EBITDA: $102.9 million, compared to $41.0 million in Q2 2023.
Operationally, Lyft achieved all-time highs in active riders and rides. The company reported 23.7 million active riders, a 10% increase year-over-year, and 205 million rides, a company record. Additionally, driver hours hit an all-time high, with the most new drivers onboarded in any quarter since 2019.
Erin Brewer, Lyft’s CFO, expressed confidence in the company’s trajectory. “Our platform is growing in a very healthy way as evidenced by the strength of our financial results, including strong cash flow generation and GAAP net income,” Brewer said. “We had a strong second quarter with more than a hundred million dollars in adjusted EBITDA, and we have solid momentum entering the second half of the year.”
Future Outlook
Looking ahead, Lyft’s guidance for Q3 2024 includes gross bookings of approximately $4.0 billion to $4.1 billion and adjusted EBITDA of $90 million to $95 million. While these figures fell short of analyst expectations, the company remains focused on sustaining its growth and profitability.
“For over a year you’ve heard us say that customer obsession drives profitable growth,” Risher reiterated. “In Q2 we delivered, and drivers and riders are choosing Lyft in record numbers.”
As Lyft continues to expand its services and improve its platform, the company faces both opportunities and challenges. The ride-hailing giant’s ability to navigate economic uncertainties and competitive pressures will be crucial in maintaining its upward trajectory and delivering value to its shareholders and customers alike.
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