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Lyft 4Q sales top expectations, active riders jump 23%

Lyft (LYFT) reported fourth-quarter results that beat consensus expectations, topping $1 billion in quarterly revenue for the first time as riders grew more than expected.

However, shares fell in late trading after the company kept its timeline for hitting profitability unchanged, a week after competitor Uber pulled forward its target date for getting in the black by a full year.

Here were the main metrics from Lyft’s report, compared to consensus estimates compiled by Bloomberg and last year’s results:

  • Revenue: $1.02 billion vs. $985.8 million expected and $669.5 million Y/Y

  • Adjusted EBITDA loss: $130.7 million vs. $163.2 million expected and $251.1 million Y/Y

  • Active riders: 22.9 million vs. 22.8 million expected and 18.6 million Y/Y

  • Revenue per active rider: $44.40 vs. $43.16 expected and $36.02 Y/Y

For the current quarter, Lyft said it sees revenue of between $1.055 and $1.06 billion, topping consensus expectations for as much as $1.05 billion.

The company sees a first-quarter adjusted EBITDA loss of between $140 million and $145 million, or about in-line with consensus expectations for $143.1 million. During a call with investors Tuesday, Chief Financial Officer Brian Roberts said the first quarter would represent the company’s “peak quarterly loss in 2020,” after which the company would make strides toward profitability.

“Fiscal 2019 was an exceptional year across the board. We significantly improved our path to profitability while simultaneously reaching critical milestones toward out long-term strategy,” co-founder and CEO Logan Green said in a statement. “Continued strength in core rideshare drove our industry-leading growth, led by product innovation and operational excellence on every facet of our robust transportation platform.”

Uber competition

Lyft’s earnings results come on the heels of a strong report from competitor ride-hailing service Uber, which topped adjusted revenue expectations and posted a narrower-than-expected loss in the fourth quarter. Uber also upped the ante by pulling forward its expected date for hitting profitability by a full year, saying it expected to be profitable on an adjusted EBITDA basis by the fourth quarter of 2020.

Lyft’s shares had risen in sympathy after Uber’s better than expected quarterly report and profitability timeline, with Wall Street taking the results as a green-light for the ride-hailing industry as a whole.

“We believe Uber’s earnings should be positive for Lyft as the 4Q20 EBITDA profit target suggests ongoing rationalization in U.S. ride-share,” JPMorgan analyst Doug Anmuth said in a note Friday.

Lyft, for its part, previously said it expected to be profitable on an adjusted EBITDA basis by the fourth quarter of 2021. During a call with investors Tuesday, the company said it remained confident it could achieve its fourth-quarter 2021 target.

Over the past couple quarters, Lyft has been working to boost its profitability prospects by paring back incentives and discounts as the ride-hailing industry matures. The company reiterated during its call with analysts Tuesday that it would be cutting discounts as a percent of revenue in the first quarter, helping alleviate pressure on margins.

And in another recent cost-cutting move, Lyft announced in late January it cut 90 jobs, or about 2% of its workforce.

PARK CITY, UT - JANUARY 23: General view of pink lyft logo and sign on Main Street during the Sundance Film Festival on January 23, 2020 in Park City, Utah. (Photo by Mat Hayward/Getty Images)

Shares of Lyft, like those of Uber, are still trading well below their initial public offering price, which in Lyft’s case was $72 per share. However, the stock has risen by 22% in the months since its third-quarter earnings report and by 25% for the year to date.

While Lyft trails Uber in market capitalization and overall market share, recent Wall Street research has suggested Lyft grew its footprint in North America’s ride-hailing market this past year. Lyft operates only in the U.S. and Canada, while Uber’s ride-hailing business extends across the globe. According to a Raymond James survey published February 3, Lyft gained about 5 points of market share from Uber since December 2018, “and continues to show a higher frequency rate among users.”

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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