Ride-hailing company Lyft released its Q2 earnings after the bell on Tuesday, recording a massive 125% increase in year-over-year revenue and a 25% gain on last quarter’s revenue, while also recording profitable adjusted earnings before interest, taxes, depreciation and amortization for the first time in its history.
The company brought in $765 million in revenue for the quarter compared to $339.3 million last year. In its earnings call, Lyft’s (NASDAQ: LYFT) executive team said that this was significantly higher than company projections. Meanwhile, its net loss decreased to $251.9 million, compared to $437.1 million in 2020. The net loss margin for Q2 2021 was 32.9%, decreasing substantially from the 128.8% figure in Q2 2020.
Q1 2021’s losses included $207.8 million in stock-based compensation and related payroll tax expenses and $34.5 million related to depreciation and amortization. Adjusted net loss was $18 million for Q1 2021 versus $265.8 million a year ago.
Adjusted EBITDA for Q2 2021 was $23.8 million, up from losses of $280.3 million in Q2 2020 and a $96.8 million improvement over Q1 2021. The adjusted EBITDA margin for Q2 2021 was 3.1% versus losses of 82.6% in the second quarter of 2020 and losses of 12% in the first quarter of 2021.
“We had a great quarter. We beat our outlook across every metric and we have growing momentum,” said Logan Green, co-founder and CEO. “Since our inception, we’ve worked hard to defy the odds with a deep belief in our mission. We’ve consistently innovated and made big bets and this is just the beginning. We want to improve people’s lives with the world’s best transportation and we will continue working to deliver on this goal.”
Lyft also reported a marginal increase in its active rider base, which grew by nearly 100% year-over-year and added over 3 million riders in Q2 2021. Average revenue for active riders fell to $44.63 from $45.13 in Q1 2021, but was still up year-over-year from $39.06 in Q2 2020.
“Q2 was truly exceptional. We grew Active Riders by more than 3.6 million from the prior quarter, generated 125% year-over-year revenue growth and achieved Adjusted EBITDA profitability. At the same time, drivers shared in this outperformance with record hourly earnings,” said Brian Roberts, chief financial officer. “And in July driver earnings remained strong as demand for our platform continued to grow despite increases in reported COVID case counts.”
Lyft reported contribution (defined by revenue less cost of revenue minus several metrics) for Q2 2021 of $452 million versus $117.3 million in the second quarter of 2020, up a whopping 285% year-over-year and up 34% from $337.3 million in Q1 2021. Contribution margin for Q2 2021 was 59.1%, which was up by nearly 25 percentage points year-over-year and 3.7 basis points quarter-over-quarter. Contribution margin for Q2 2021 exceeded the company’s outlook of 56.5% to 57.5%, said Roberts in the earnings call.
Lyft reported $2.2 billion of unrestricted cash, cash equivalents and short-term investments at the end of the first quarter of 2021.
Lyft Q2 2021 consolidated balance sheet
Last quarter, the company reported a promising trend, as it saw revenues jump 7% year-over-year due in part to the return of many of its riders. In its earnings release on Tuesday, the company said its outlook for the remainder of 2021 is even brighter.
On Lyft’s Q2 2021 earnings call, Green noted that the company achieved adjusted-EBITDA profitability two quarters ahead of schedule, while revenue outperformed the midpoint of its outlook by over 10%. Lyft also saw an almost 60% year-over-year increase in drivers while also growing its fleet from June to July.
The company said that it expects revenue of $850 million to $860 million and a contribution margin of 58.5% to 59% for Q3, and it now projects that it will achieve adjusted-EBITDA profitability for FY 2021. According to Roberts, this is all while daily average rideshare volume for Q2 remained well below Q4 2019 levels, before the pandemic hit.
“We look forward to maintaining profitability as we self-fund initiatives that will maintain long-term shareholder value,” said John Zimmer, president, co-founder and vice chair.
Zimmer also noted the company’s ongoing efforts to push forth a new ballot initiative in Massachusetts that would grant its drivers new protections without classifying them as employees. Lyft’s treatment of its drivers caused a daylong strike across the country, according to strikers, and the company aims to quell unrest.
Lyft will continue to focus on “growth and profitability, with an emphasis on growth,” it said during the earnings call.