Wringing more revenue per rider helped drive record third quarter revenues for Lyft, (NASDAQ: LYFT) but the company still recorded nearly double the net loss compared to the same period last year.
The ride-hailing giant, whose stock has taken a beating since it went public last spring, lost $1.57 per share on a record $955.6 million in revenue, beating analysts’ expectations for the third quarter of 2019.
The number of active riders increased 28% during the quarter, from 17,391 during the third quarter of 2018 to 22,314 in 2019. Revenue per rider increased 27% year-over-year.
“Our third quarter results demonstrated the significant progress Lyft has made on our path to profitability,” said Logan Green, co-founder and chief executive officer of Lyft, in a statement.
Record revenue, he said, was generated by strong growth in both active riders and revenue per active rider.
Lyft’s Q3 revenues represented an increase of 63% year-over-year. The net loss for the third quarter 2019 was $463.5 million compared with a net loss of $249.2 million in the same period of 2018.
During a call with investors, Green and other Lyft executives referred repeatedly to the company’s favorable profitability trajectory, a tactic likely aimed at investors who appear to be souring on big name startups that are growing rapidly while losing massive amounts of money. (See. WeWork.)
Green repeated a statement he made last week, saying that he expects Lyft to be profitable on an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by the fourth quarter of 2021, which is one year earlier than analysts were expecting.
The company raised its guidance for the full year on both revenue and EBITDA. Revenue is now expected to fall between $3.57 billion and $3.5 billion, up from $3.47 billion to $3.50 billion.
EBITDA losses are now expected to be between $708 million and $718 million where the range was previously $850 million to $875 million.
Lyft also projected revenue between $975 million and $985 million for the fourth quarter, which significantly exceeds analysts’ expectations of $943 million in revenue.
“We believe the market is undervaluing our stock,” said CFO Brian Roberts, sounding slightly aggrieved on the call with investors. “We are continuously optimizing our platform for growth and leverage…enabling us to accelerate our path to profitability.”
Lyft did take a hit from a regulatory crackdown on ride-hailing and gig economy businesses this year.
Its net loss for the third quarter includes $86.6 million related to changes to the liabilities for insurance required by regulatory agencies.
And despite its favorable outlook, the company faces more regulatory headwinds in the coming year, primarily in the form of California’s AB5 limiting the use of contract workers.
Setting the stage for a massive political battle, Lyft is one of several gig economy businesses that is backing a new ballot measure that would retain drivers’ contract status while providing health care and other benefits.
The company’s upbeat projections for 2020 come less than a week before Uber (NYSE: UBER) is set to release its own Q3 earnings results.
Taking a swipe at Lyft’s primary competitor, Roberts said: “We’re not doing food. We’re not doing trucking. We’re 100% a transportation network company.”
In addition to ride-hailing, Uber operates UberEats, a food delivery service, and Uber Freight, a digital freight brokerage.
During the earnings call Roberts and Green outlined the company’s fast-growing verticals in non-emergency medical transportation and corporate travel, as well as more granular services such as Shared Saver, a service that allows users to shave a few dollars off their ride if they are willing to car pool and walk a certain distance to meet their driver.
Its end game appears to be Lyft Pink, a membership plan that gives users rider discounts, free bike and scooter access for a set fee per month.
“Our competition is personal car ownership,” said Green. “We believe in a future where Lyft can provide all of your transportation needs via membership plans that suit your needs.”
This is a breaking news story. Check back for updates.