Lyft’s Revenue Growth Masks Active Riders Slippage

Lyft’s Revenue Growth Masks Active Riders Slippage

Lyft, the popular ride-hailing service in the United States, released its fourth-quarter financial results on Tuesday, revealing a mixed bag of growth that fell short of analysts’ forecasts in the area of active riders. The public company’s revenues in Q4 2021 were $969.9 million, up over 70% from the year-ago quarter, which was affected severely by the epidemic and accompanying economic disruptions. Lyft’s top line increased by 12% sequentially from its Q3 result.

Lyft’s net loss in the fourth quarter was $258.6 million, which included “$164.2 million of stock-based compensation and related payroll tax expenses and $122.3 million expense related to changes in the liabilities for insurance required by regulatory agencies attributable to historical periods,” according to the company. Lyft’s adjusted net income for the final three months of 2021 was $32.1 million, or adjusted earnings per share of $0.09. If you’re prepared to overlook that, the company’s net income was $32.1 million, or adjusted earnings per share of $0.09.

According to averages given by our sister publication Yahoo Finance, analysts projected the former unicorn and startup to announce revenues of $938.9 million and adjusted earnings per share of $0.09. Lyft also outperformed its own forecasts, although that’s less important than surpassing analyst expectations. Lyft reported its first adjusted EBITDA positive, a modified method of computing profit, in Q2 and Q3 2021. With $74.7 million in adjusted earnings before interest, taxes, depreciation, and amortization in Q4 2021, it outperformed those figures.

Lyft’s stock was down more than 3% in after-hours trade. Leading analyst comments on Lyft’s fourth-quarter data suggests that lower-than-expected unique rider counts may be to blame for the firm’s stock price decrease; the company recorded 18.728 million active riders in the fourth quarter, up from 12.552 million a year ago.

However, Wall Street had predicted a figure of slightly over 20 million for Q4 2021, possibly signaling lower-than-expected demand for Lyft and similar services. Importantly, the company’s active rider count declined in the fourth quarter of last year, compared to the third quarter, and is still below pre-pandemic levels: Despite the fact that rider numbers are still far below expectations, Lyft’s full-year revenues improved by 36% compared to 2020 due to increased overall ridership. In 2020, an average of 13.75 million active riders each quarter were recorded, compared to 17 million in 2021.

The increase in income overall is primarily due to higher revenue per active rider. Longer rides, many of which went to and from airports, have resulted in an increase in income per ride. Furthermore, Lyft claims that the peak was fueled by the high frequency of pickups and rides. Despite the fact that Omicron had a substantial influence on ride numbers, resulting in lower demand for rideshare, Lyft anticipates demand to begin to recover.

“In fact, we observed a bump in ridesharing rides in the latter week of January, which we consider as a positive indication,” said CFO Elaine Paul during Lyft’s 2021 Q4 and full-year earnings call on Tuesday. “In the end, given the anticipated impact of Omicron in Q1 and the unknown form of the recovery, which may extend into Q2, our near-term revenue growth acceleration will most certainly be hampered.” On our most recent earnings call, we stated that revenue growth in 2022 will be faster than in 2021. We’re cautiously optimistic that this will be the case going forward.”