May 8, 2019

Lyft (ticker: LYFT) doesn’t earn money yet and the stock trades for more than six times trailing 12-month sales. Weighing that kind of data is par for the course for investors in tech initial public offerings, but management has added to the challenge of figuring out what the stock is worth.

Specifically, the company isn’t going to disclose any longer the total amount riders spend when taking a Lyft. Today, the majority of what a passenger pays — gross bookings — is passed through to the driver, while the balance goes to Lyft, which the company reports as sales.

“We included bookings and take rate in the [pre-IPO filings] so investors could understand the monetization trends,” said CEO Brian Roberts on the company’s earnings conference call Tuesday night. “We’re now aggressively investing in new areas, including those where revenue equals bookings. So we really want to try to avoid investor confusion.”

Maybe Roberts is right, but investors, in the short term, will feel like the rug has been pulled out from under them.

“Lyft will no longer be giving bookings figures,” wrote Wedbush analyst Dan Ives in a Wednesday research report. “[That] could ruffle the feathers of investors looking to get these numbers on a quarterly basis and [corporate transparency] takes a hit.”

The company didn’t immediately respond to a request for comment Wednesday morning.

Gross booking trends are the purest metric investors have to gauge demand growth and the expansion of ride-hailing in the economy. Company revenue closely tracks gross bookings, but the conversion of gross bookings to company sales fluctuates over time as the company’s revenue mix — between, say, bookings on scooters and sedans — changes and as the company adopts new technologies such as autonomous taxis.

That’s not the half of it. Gross bookings are important to ride-hailing businesses in another way. They represent the amount of money Lyft would ultimately like to report as revenue.

Ride-haling profitability is hotly debated on Wall Street — how fast and how much money businesses such as Uber Technologies (UBER) and Lyft can earn on a sustainable basis. While the debate rages on, what most analysts agree on is that the big money will be available when autonomous-driving technology advances to the point where Uber and Lyft aren’t as reliant on human drivers to ferry customers to and fro.

Investors would like to know the gross bookings figure to better predict future profit margins. To a bullish Lyft investor, gross bookings are what future sales can be.

It’s as if Apple (AAPL) stopped disclosing sales and only told investors what gross profits were. That would generate questions about hardware and service mix, as well as pricing and margins. It would create more problems than it solved.

Lyft Forecasts a Profit by End of 2021, Sending Shares Surging

October 22, 2019

(Bloomberg) -- Lyft Inc. executives said the company would turn a profit by the end of 2021, a year earlier than analysts had expected. The comments sent the stock surging as much as 9% on Tuesday.

The ride-hailing company will hit that milestone because it’s focused on profitable growth, rather than scale at all costs, the founders said onstage at a Wall Street Journal technology conference in Laguna Beach, California. Lyft and Uber Technologies Inc. have been cutting back on subsidies for riders and drivers that had been racking up costs.

“We’ve never laid out our path to profitability, and we know that’s a question on a lot of investors’ minds,” said Logan Green, the chief executive officer and co-founder. “We’re going to be profitable on an adjusted Ebidta basis a year before analysts expect us to. We’re going to hit this target in Q4 2021.”

The comments also gave a boost to Uber’s stock, which was up about 4% at 1 p.m. in New York.

In the interview, Lyft’s co-founders downplayed other challenges to the company, including the recent gig worker legislation in California and lawsuits by women against the company who say they were harassed or assaulted by drivers.

Lyft shares plunge on light guidance, continued driver incentives

Tue, May 3 2022

Shares of Lyft lost more than a quarter of their value, dropping as much as 26% in after-hours trading Tuesday after the company provided light second-quarter guidance and warned investors it will have to keep spending on driver incentives.

Here are the key numbers:

• Earnings per share: 7 cents adj. vs loss of 7 cents expected in a Refinitiv survey of analysts
• Revenue: $876 million vs $846 million expected by Refinitiv
• Active riders: 17.8 million vs 17.9 million expected, per FactSet
• Revenue per active rider: $49.18 vs $47.07 expected, according to StreetAccount

For the second quarter, Lyft said it expects revenue between $950 million and $1 billion. Wall Street was estimating $1.02 billion, per StreetAccount.

Lyft reported a net loss for the quarter of $196.9 million versus a net loss of $427.3 million in the same period of 2021. The company said its loss included $163.2 million of stock-based compensation and related payroll tax expenses.

Lyft reported 17.8 million active riders, narrowly missing estimates. It’s also a decline from the fourth quarter when Lyft said it had 18.73 million active riders.

Lyft heavily invested in driver incentives during the Covid pandemic and recovery, which has weighed on financials. The supply of drivers had seemed to stabilize but as gas prices shot up across the nation due to the war in Ukraine earlier this year, some investors feared drivers would leave their respective platforms and companies would have to increase their incentives.

Lyft said during its call with investors it will be investing more in driver subsidies in the coming quarter, though it believes that will help “pay off in a healthier marketplace.” It’s unclear how much the company will spend.