Lyft posts big loss in first quarter as a publicly traded company

The ride-hailing company hits potholes on its road to profitability.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
3 min read

Lyft revealed its first quarter earnings on Tuesday.


Lyft's first quarter on the stock market has been a bumpy ride.

Everything looked good when the ride-hailing service's co-founders, Logan Green and John Zimmer, rang the opening bell on the Nasdaq exchange on March 29 to celebrate Lyft's first day as a publicly traded company. Shares rose 8.7% to close at $78.29. Shareholders rejoiced.

Lyft was seen as the little engine that could: the small, friendly, ride-hailing unicorn that beat the larger, shinier and richer Uber to the stock market. (Uber shares are expected to debut on Friday.)

It's been a downhill journey ever since. Shares have tanked, and two sets of stockholders have sued the company for misrepresenting the strength of its business. Over the past month, Lyft's shares have fallen about 24%. 

On Tuesday, Lyft offered more bad news in its earnings for the quarter that ended March 31. The company racked up a worse-than-expected loss of $9.02 per share, far bigger than the $1.81 loss forecast by analysts surveyed by Yahoo, though narrower than the $11.40 Lyft reported a year earlier. The earnings per share figures were adjusted, meaning they don't conform to generally accepted accounting principles.

In an earnings call following the markets' close on Tuesday, Lyft's co-founders repeatedly said 2019 will be the company's "peak loss year" and then it'll move on toward profitability. They also said they had a "great first quarter" and they're "proud of the momentum" with Lyft's "world-class growth."

"The first quarter was a strong start to an important year, our first as a public company," Logan Green, Lyft co-founder and CEO, said in a statement Tuesday.

Revenue for Lyft this quarter totaled $776 million, better than the $739.48 million analysts had forecast. Lyft reported that its number of active riders grew from 14 million a year ago to 20.5 million now. The company didn't say, however, if the revenue and active rider growth were affected by the ride discounts it's been offering users.

For the upcoming quarter ending in June, Lyft forecast revenue of between $800 million and $810 million, higher than the average analyst forecast of $782.32 million.

Shares fell 1.58% in after-hours trading to $58.40.

During the call, Lyft's co-founders pointed to several of its services that have room to grow, including rentable bicycles and scooters and its self-driving car initiative. The company announced a partnership on Tuesday with Waymo, the self-driving car unit owned by Google's parent company, Alphabet. Waymo will integrate 10 of its autonomous vehicles into Lyft's ride-hailing platform in Phoenix by the end of the third quarter this year. With the partnership, Lyft passengers will be able to get rides in these self-driving cars.

"We believe Lyft's ability to gain access to autonomous technology will be key to long-term margin expansion and creating shareholder value," said Asad Hussain, emerging tech analyst at market data research firm PitchBook. "While we believe these results should set a positive tone for the industry ahead of the Uber IPO, we would not be surprised by continued near-term volatility in the market given the high profile of these stocks and the relative immaturity of these business models." 

Uber's upcoming IPO -- and giving investors in ride-hailing businesses a choice -- has been one of the explanations given for Lyft's lackluster stock performance. Those two pesky stockholder lawsuits brought against Lyft aren't helping public perception of the company either. And, perhaps most importantly, there's the hard-to-escape fact that 2019 might not actually be Lyft's "peak loss year."

In its S-1 filing with the US Securities and Exchange Commission in March, Lyft acknowledged it has a "history of net losses" and cautioned "we may not be able to achieve or maintain profitability in the future."

While stockholders say a company's growth is important, they also say profitability counts too.

"This will be one of the first tests of Lyft as a public company," said Reena Aggarwal, professor at Georgetown's McDonough School of Business. "Eventually revenue growth has to transform into profits."

Originally published May 7, 1:24 p.m. PT.
Update, 4:15 p.m.: Adds additional information from Lyft's earnings call and a comment from PitchBook analyst Asad Hussain.