Picture: REUTERS/Lucy Nicholson
Picture: REUTERS/Lucy Nicholson

New York  — Lyft reported second-quarter results that were better than expected and boosted its forecast for the year. The performance was somewhat overshadowed, however, by the company’s decision to allow shareholders under lockup restrictions to sell earlier than expected.

The ride-hailing company projects at least $3.47bn in sales for the year, compared with an average analyst estimate of $3.32bn, according to data compiled by Bloomberg.

Revenue in the second quarter reached $867.3m, up 72% from the year before. Analysts had expected 60% growth.

Lyft also improved its forecast for adjusted losses, which excludes debt, interest and other costs. Lyft said the loss for the year will be as much as $875m, a $300m decrease from an earlier projection. It would mean Lyft will lose less in 2019 than in 2018.

In a separate disclosure Wednesday, Lyft said it would allow shareholders who are currently unable to sell stock to do so starting August 19.

The financial results initially sent shares surging 13% in extended trading, before the regulatory filing about the lockup period. It is  now trading near Wednesday’s closing price, which was about $60.


Investors are measuring the San Francisco-based company against a period of massive growth over recent years, when it gained on Uber Technologies.

Lyft’s larger rival reports its own financial results on Thursday. Both stocks trade below the price at which they went public this year.

Wall Street remains optimistic about the companies’ prospects despite persistent losses. Most analysts have buy ratings for the stocks. Lyft and Uber investors are betting they can upend the transportation industry and eventually find a path to profitability.

Both companies recently began to raise fares around the US, which is a main battleground accounting for almost all of Lyft’s sales. The price increases should help narrow losses.

Lyft’s second-quarter loss increased 12% to $197m. For the third quarter, it projects a reduction of as much as 29%, at $190m to $210m.

“The price adjustments that have been reported went into effect at the very end of June, so there was limited impact in Q2,” Lyft CFO Brian Roberts said. 

Investors will watch closely whether Lyft can continue to cut costs while maintaining revenue growth.

“We’re trying to get a sense that the unit economics in ride-sharing are good and that we’re not going to have to wait forever for some realisation of profitability,” said Tom White, an analyst at DA Davidson.

The financial report follows news last week that Lyft COO Jon McNeill is leaving after less than two years. The company provided few details about the reason for his departure.

Lyft is also facing public scrutiny over the safety of its service after the Washington Post and NBC’s Today show reported on allegations of harassment from female customers. Recent news raises questions about Lyft’s ability to differentiate from Uber, which has long struggled to retain high-profile executives and fend off criticism that it does not  do enough to ensure rides are safe.

For Lyft’s critics, there are still warning signs. When accounting for stock-based compensation, insurance costs and other expenses, Lyft’s net loss in the second quarter plummeted to $644.2m, from $178.9m a year earlier. Lyft reported a $1.14bn net loss in the first quarter, which was largely due to costs associated with the initial public offering in March.

Analysts had not  foreseen that Lyft would post another big net loss last quarter. They typically focus on Lyft’s adjusted figures, concluding that those numbers provide a better indication of the business’s long-term trajectory.