Lyft shares plunge after lackluster revenue forecast, slowing passenger growth

By Nivedita Balu

(Reuters) – Ride-sharing company Lyft Inc on Monday forecast current-quarter revenue below Wall Street estimates as user growth on its platform slows, losing to bigger rival Uber Technologies Inc and making fall its shares by 13%.

Lyft’s active riders rose 7.2% to 20.3 million in the third quarter, the lowest quarterly growth on record so far this year, and missed the 21.3 million estimate, according to FactSet.

But revenue per active passenger rose 13.7% to $51.88, the strongest growth from the previous two quarters.

Uber controls a larger share of the ride-sharing market and operates outside the United States, while also benefiting from its food delivery business.

Expectations for Lyft were high after Uber reported a bumper quarter and said last week it saw no signs of consumer weakness.

Chart: Lyft passenger growth slows https://graphics.Reuters.com/LYFT-RESULTS/dwvkdgbzwpm/chart.png

“Lyft is losing market share to Uber because it lacks the cross-platform offering that Uber has built through ridesharing and Eats,” Third Bridge analyst Nicholas Cauley said.

However, Lyft executives, on a post-earnings call, told analysts they saw no concerning macro trends in the fourth quarter and were betting on cost-cutting efforts — from downsizing to shutting down. offices – and demand to increase profitability and growth.

“Historically in a recessionary environment…transportation is sustainable because we have to move around, but delivery and takeout are less sustainable,” Lyft President John Zimmer said in an interview.

For the fourth quarter, the company expects revenue of between $1.15 billion and $1.17 billion, while analysts expect $1.17 billion, according to Refinitiv IBES data. .

The company reported the impact of higher insurance rates in the current quarter as it pays for driver insurance.

It forecast adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a measure of profitability closely watched by investors, between $80 million and $100 million, versus an analyst forecast of $84.5 million.

“It’s more of a cost-cutting pace than a growth-driven pace,” said DA Davidson analyst Tom White.

(Reporting by Nivedita Balu in Bengaluru; Editing by Maju Samuel)

Earnest L. Veasey