Ride-hailing volumes hit new ‘COVID high,’ CEO says, as Lyft beats expectations for adjusted earnings and revenue, but profit and sales guidance disappoint

Lyft Inc. said Tuesday that it had a better-than-expected first quarter, with Chief Executive Logan Green saying ride-hailing volumes hit “a new COVID high,” but shares plunged after executives’ forecast came up short.

Lyft LYFT, -2.35% shares initially increased more than 2% after results beat most analysts’ expectations except for ridership numbers, but then plunged as executives talked on a conference call about increasing investments in drivers and marketing for the second quarter to deal with increased demand. Shares sank 25.8% in after-hours trading, to $22.83, after ending the regular session with a 2.4% decline in the regular session to $30.76, their lowest close since Nov. 6, 2020.

Uber Technologies Inc. UBER, -3.03% shares were also declining in after-hours trading, falling more than 10%, before the company announced late Tuesday that it would move up reporting its results to Wednesday morning instead of afternoon, as previously scheduled. The stock then recovered a little, and was down less than 5% as of 7:15 p.m. Eastern.

In Lyft’s call Tuesday, executives predicted second-quarter revenue of $950 million to $1 billion, shy of the $1.02 billion expected by analysts, and adjusted Ebitda of $10 million to $20 million, well short of the $83 million analysts on average expected, according to FactSet.

The ride-hailing company said it had 17.8 million riders, compared with 13.49 million riders in the year-ago quarter, falling shy of analysts’ expectation of 17.9 million riders. Lyft’s revenue per rider was $49.18, above analysts’ estimate of $47.20.

Lyft reported a first-quarter net loss of $196.9 million, or 57 cents a share, compared with $427.3 million, or $1.31 a share, in the year-ago period. After adjusting for stock-based compensation and other costs, Lyft reported earnings of $24.6 million, or 7 cents a share, up from an adjusted loss of 35 cents a share last year. Revenue climbed 44% to $875.6 million from $609 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast an adjusted loss of 7 cents a share on revenue of $848.9 million.

Elaine Paul, chief financial officer of Lyft, in a statement attributed the company’s “outperformance” to “increased demand and resilient driver levels.” Yet Green said on the call that despite having 40% more active drivers in the first quarter year over year, “we want to continue improving service levels in preparation for further growth.” The executives said that rides are only about 70% recovered vs. the fourth quarter of 2019, so they are expecting to need more drivers.

But in response to an analyst’s question about whether Lyft is considering partnerships with the taxi industry, such as those being struck by Uber that will help that company’s driver supply, Logan said not at this time. He cited reliability and regulatory issues around pricing as reasons he thinks the partnerships would be “a challenge to take on,” though he said he will be watching how it all works out.

Shares of Lyft are now down 28% so far this year, while the S&P 500 index SPX, +0.48% has decreased about 12% year to date.

Last week, the company restated its 2021 results, saying an accounting error led it to report a smaller loss for the year than it actually had. The company said in a filing with the Securities and Exchange Commission that its loss for 2021 should have been $1.06 billion, or $3.17 a share, instead of $1.01 billion, or $3.02 a share.