Lyft tops $1 billion in quarterly revenue for first time, but stock dips as profit remains well down the road

Lyft Inc. reported its first quarter with more than $1 billion in revenue on Tuesday, but shares slipped in late trading as the ride-hailing company did not match its biggest competitor in moving up hopes for profit.

Lyft

LYFT, +0.41%

 reported fourth-quarter losses of $356 million, or $1.19 a share, on revenue of $1.02 billion, up from sales of $669.6 million a year ago. After adjusting for stock-based compensation and other effects, Lyft reported losses of $121.4 million, or 41 cents a share. Analysts on average expected adjusted losses of 53 cents a share on sales of $984 million, according to FactSet.

Lyft and rival Uber Technologies Inc.

UBER, +3.15%

 have continued to suffer huge losses after going public last year, hurting their young stocks. Sentiment has been improving in 2020, though, especially after Uber moved up its goal for profitability when announcing its fourth-quarter financial results last week. Lyft shares had increased more than 25% so far in 2020 before Tuesday’s report, easily outpacing the S&P 500 index’s

SPX, +0.17%

 gain of 3.8% in that time. Shares closed Tuesday up 0.4% at $53.94, then fell more than 4% in immediate after-hours action following release of the results.

Lyft reported losses of $2.25 billion in the first three quarters of 2019, but announced layoffs earlier this year as it looks to cut back and aims for profit. Chief Executive Logan Green said last year that Lyft would be profitable by late 2021, if it excluded some costs. Uber had also targeted 2021 for adjusted profitability, but said in its earnings-related conference call that the new goal is the fourth quarter of this year.

Lyft made no such grand pronouncements, instead pointing out that increased research-and-development spending and an additional $75 million devoted to “fund and support key 2020 policy initiatives” — also known as lobbying governments to keep from recognizing its drivers as employees. Lyft said that it expects 2020 losses on an adjusted-Ebitda basis of $450 million to $490 million, after totalling $678.9 million in 2019.

When asked by an analyst specifically, Chief Financial Officer Brian Roberts said that Lyft was maintaining its goal of hitting adjusted profitability in the fourth quarter of 2021.

“We believe investors trust us to make responsible decisions as we drive towards this profitability,” Roberts said. “And as we move through the year we will continue to share updates on our progress, so stay tuned.”

After facing another question about competitive dynamics and different results from the two companies, Roberts said that comparing Lyft to Uber was not “an apples-to-apples” comparison.

“It’s important to keep in mind that we are a single-segment company, and our competitor has five segments,” the CFO said. “They have five segments and then they have what they call G&A and centralized R&D — that specific cost center is almost five times larger than my total loss.”

Lyft also predicted that it would produce revenue of $1.055 billion to $1.06 billion in the first quarter of this year, and sales of $4.58 billion to $4.65 billion for the full year. Analysts on average were expecting revenue of $1.047 billion in the first quarter and $4.6 billion for the full year, according to FactSet.

“Investors may have been expecting more from full-year 2020 guidance, but Lyft’s guidance has proven to be conservative to date,” Wedbush Securities analyst Daniel Ives wrote in a note after Lyft’s numbers hit.

Lyft also disclosed some news in its conference call, revealing that it acquired rental-car partner Flexdrive last week. Roberts said that Lyft purchased the rental-car company — part of Lyft’s Express Drive program, which allows Lyft drivers to rent cars from partners and use them to drive on the network — for $20 million plus the assumption of debt and lease obligations.

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