Shares of Lyft fell as much as 12% moments after the company reported first-quarter earnings, as investors put more weight on the bleak outlook and lower quarterly revenue than other financial gains.
Shares have since leveled off in after-hours trading, and are now trading down 10%.
Lyft beat both its own and Wall Street’s revenue forecasts, but it wasn’t enough to calm investors focused on the carrier’s future.
The company finished the first quarter with $1 billion in revenue, up 14% from the same quarter a year ago. It should be noted that its revenues in the first quarter are less than the $1.2 billion in the fourth quarter. Analysts expected $977 million for the first quarter, and The company promised $975 million in feb.
This revenue gain comes on top of a net loss of $187.6 million, a 4.7% improvement over the $196.9 million it lost in the same period last year. It’s also much better than the $588.1 million in net losses recorded in the fourth quarter of 2022. Lyft attributed much of that loss in the fourth quarter to $201.3 million in stock-based compensation and related payroll tax expenses.
On an adjusted basis, Lyft earned $22.7 million, compared to $54.9 million a year ago. It’s an improvement from the $248.3 million adjusted loss in the fourth quarter of 2022.
The company’s operating cash flow was in negative territory for the quarter with a loss of $188 million. Lyft closed the quarter with cash and cash equivalents of $509.6 million, up from $281 million last quarter.
Lyft issued guidance for the second quarter of about $1 billion to $1.02 billion, a sign that the company doesn’t expect much growth in the next quarter. On an adjusted EBITDA basis, Lyft expects to earn between $20 million and $30 million, with an adjusted margin of 2% to 3%.
Notably, the company did not issue guidance for the full year, a move that could indicate that the company is unsure about its future or anticipating changes to come.
It was a tumultuous first quarter for Lyft as the company brought in… New CEO and Presidentissued Lay off 26% of its employees and drop certain offers such as joint ride. David Resher, the former Amazon executive who took over co-founders Logan Green and John Zimmer, said he wants Lyft to focus on Hail Riding Basics. Given these cost-cutting measures and the advent of warmer seasons, which are usually a boon for the ride-hailing industry, investors may hold off on revenue guidance in the second quarter mirroring the first quarter.
During Lyft’s earnings call Thursday, analysts and investors will want to know how the new leader will help Lyft continue to compete with Uber. Ride-Hill Rival Exceeding analyst expectations It has shown a strong financial foundation due to its business model that spans courier and delivery service.
Meanwhile, Lyft has been cutting excess fat from its business since last year when it was Car rental scheme closed. This quarter, the company is also closing its Fleet products focused on personal vehicle ownership and spinning Loop, the company’s cloud infrastructure, into a standalone company. Loop was operating in stealth mode and had a single-digit team, according to a Lyft spokesperson.
Lyft hasn’t shared much in the way of updates about its bikeshare business. Risher merely reiterated the company’s plan to create more of a cross-pollinating ecosystem between bikeshare and ride-hail, but he didn’t go into specifics. This side of the business is also expected to see some reductions as it becomes “leaner and more focused,” according to an April blog post from the company.