On the worst day on Wall Street since last March, shares of rideshare service Lyft blew up briefly in after-hours trading after the company posted erroneous earnings projections in an earnings press release that sent investors into a frenzy.
Shares of Lyft were up 63% at one point in the post-market, spiking from a $12.13 per share at market close (a 2% drop) to just shy of $20, an area it hasn’t been close to since May 2022. That surge came after the company said in an earnings release that it expected “adjusted EBITDA margin expansion (calculated as a percentage of gross bookings) of approximately 500 basis points year-over-year.”
That’s a stratospheric jump. Unfortunately, it was based on a typo. The company’s chief financial officer had to issue a correction a short while later on the earnings call, saying the expected expansion was 50 basis points.
And just as quickly as shares shot up, they began to decline. By 6 p.m. ET, the stock saw after-market gains of more than 18%, a number that’s still impressive, but is a bit harder for investors to appreciate after the earlier jump.
The investor enthusiasm followed Lyft’s announcement of a 14% increase in gross bookings in 2023, with revenues of $4.4 billion, an 8% increase. The company’s earnings projection for the first quarter of 2024 also raised eyebrows. Lyft now says adjusted earnings before interest, taxes, depreciation, and amortization will come in between $50 million and $55 million.
Gross bookings for the first quarter are projected to be between $3.5 billion and $3.6 billion, topping analyst estimates of $3.46 billion. And, on top of this, the company now says it expects to be cash-flow positive for the first time in 2024.
“Lyft’s outstanding Q4 performance demonstrates our team’s incredible work to build a solid foundation for profitable growth,” said CFO Erin Brewer in a statement. “We’ve entered 2024 with a lot of momentum and a clear focus on operational excellence, which positions the company to drive meaningful margin expansion and our first full-year of positive free cash flow.”
That’s music to investors’ ears. Since its public offering in 2019, Lyft has lost money, which has kept its stock price muted. Arch-rival Uber, meanwhile, has grown—and grown profitable. Last week, Uber reported 2023 was its first year as a profitable company as bookings were up 24% in the just-completed quarter.
The two companies continue to battle for drivers and customers. And Uber has a big head start, holding about 70% of the U.S. rideshare market, according to market research firm YipitData. Lyft, though, said it expects ride growth to rise in the mid-teen percent range this year.
The earnings follow mass layoffs at Lyft last year. The company cut over 1,000 jobs in April.
Login to add comment
Other posts in this group
Amazon recently announced that it had deployed its one-millionth robot across its work
On this week’s Most Innovative Companies podcast, Cloudflare COO Michelle Zatlyn talks with Fast Company staff writer David Salazar about hitting $1B in revenue and going global, as well as
If you’ve built an audience around documenting your 9-to-5 online, what happens after you hand in your notice?
That’s the conundrum facing Connor Hubbard, aka “hubs.life,” a creator who
OpenAI should continue to be
WhatsApp should prepare to leave the Russian market, a lawmaker who regulates the IT sector
This is an edition of Plugged In, a weekly newsletter by Fast Company global technology editor Harry McCracken. You can sign up to receive it each Friday and read all issues
