Lyft shares fall nearly 25% after forecasting revenue below estimates

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

The company’s outlook was in contrast to that of its larger rival Uber (UBER), whose strong presence globally is helping it ride a boom in demand for ride-hailing services from travelers and office-goers

Lyft’s bigger presence on the U.S. West Coast, a region that analysts have said was trailing the rest of the United States in return to pre-COVID demand, could be hurting its recovery compared with Uber.

Company president John Zimmer said in an interview that the West Coast had “not fully” recovered but noted a “material improvement.”

Lyft forecast first-quarter revenue of about $975 million, which fell below analyst estimates of $1.09 billion, according to Refinitiv data.

Its forecast for first-quarter adjusted earnings before interest, taxes depreciation and amortization (EBITDA), a key measure of profitability that strips out some costs, was between $5 million and $15 million.

For the fourth quarter, Lyft reported an adjusted EBITDA of $126.7 million, excluding $375 million it had set aside for increasing insurance reserves. Analysts had forecast $91.01 million.

“We wanted to ensure we strengthened our insurance reserve … the purpose of doing that is to ensure we don’t have that type of volatility going forward, because we did such a large reserve on the high end of what we could expect given the size of our insurance book,” Zimmer said in an interview.

Active riders rose 8.7% increase to 20.36 million for the fourth quarter, Lyft said. Analysts were expecting 20.30 million, according to FactSet estimates.

Rideshare was “really back … we’re happy with the current marketplace conditions,” Zimmer said.

Revenue rose 21% to $1.18 billion, slightly above the average estimate of $1.16 billion.