(Reuters) – Ride-hailing company Lyft Inc on Monday projected current-quarter operating profit above Wall Street estimates, helped by cost-cutting measures and a resurgence in trips to airports and commutes to office.
Lyft joins bigger rival Uber Technologies Inc, which also forecast a bumper quarter ahead betting on cost controls and rising demand.
Uber and Lyft, which compete for market share in the ride-share space, are benefiting from cities reopening, travel booming and consumers shifting their budgets to convenience and services despite record-high inflation limiting other purchases.
The recovery comes as Uber’s delivery businesses picked up during the pandemic when the ride-share businesses of both companies suffered.
“Now, as we’re entering a recession, the opposite is true … transportation is durable because we need to get around, but delivery and takeout is less durable,” Lyft President John Zimmer said in an interview.
Lyft said it saw higher numbers of active riders, rides and drivers since the pandemic began and was “confident” in its ability to hit its 2024 financial targets.
Active riders rose 7.2%, the smallest quarterly growth recorded so far this year, but revenue per active rider increased 13.7%, the highest growth compared to the prior two quarters.
For the fourth quarter, the company expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a profitability metric keenly watched by investors, between $80 million and $100 million, compared with analysts’ forecast of $84.5 million, according to Refinitiv IBES data.
It forecast revenue between $1.15 billion and $1.17 billion, while analysts expect $1.17 billion.
Operating profit for the third quarter was $66.2 million, beating analysts’ estimate of $62 million.
Revenue rose 22% to a record $1.05 billion but fell short of estimate of $1.06 billion.
Lyft’s net loss, however, widened to $422.2 million, or $1.18 per share, from $99.7 million, or 30 cents per share, a year earlier, due to impairment charges related to the closure of Argo AI, the autonomous vehicle startup in which the company had a stake.
(Reporting by Nivedita Balu in Bengaluru; Editing by Maju Samuel)
