Lyft's shares surged by more than 60%, buoyed by an earnings report that exceeded analysts' expectations and an optimistic financial outlook for the coming year. The ride-hailing service reported an adjusted earnings per share of 18 cents, doubling the 8 cents forecast by analysts surveyed by LSEG (formerly Refinitiv). This financial achievement comes alongside reported revenue of $1.22 billion for the quarter, aligning with market predictions.
Lyft's promising trajectory is underpinned by an anticipated gross booking range of $3.5 to $3.6 billion for the first quarter, surpassing the analyst consensus of $3.46 billion compiled by StreetAccount. This growth marks a pivotal moment for Lyft, as the company projects generating positive Free Cash Flow throughout 2024, a first in its operational history. This forecast is supported by strategic plans for reduced capital expenditures compared to the previous year.
Under the helm of new CEO David Risher, Lyft has embarked on a rigorous restructuring initiative, characterized by significant layoffs and the streamlining of management layers, all aimed at achieving profitability. Risher emphasized the potential for increased profitability through operational scaling and cost containment. The company has also focused on enhancing service areas like airport pickups and introducing new features to stimulate growth.
In response to concerns around driver earnings and job security, Lyft recently pledged to compensate drivers if their earnings fall below 70% of the passenger fares after external fees, reinforcing its commitment to driver welfare.
Lyft's foray into autonomous vehicles, in collaboration with Motional, has yielded over 100,000 self-driving rides across the United States. Despite the technological advances, Risher acknowledges the long journey ahead in gaining public trust in autonomous transport. He also hinted at ongoing discussions with major industry players to explore potential partnerships.
A notable contributor to Lyft's revenue growth has been the surge in rides to stadiums, which saw a more than 35% increase from the previous year. This uptick was largely fueled by high-profile events such as Taylor Swift's Eras Tour and Beyoncé's Renaissance World Tour, alongside other significant sporting events.
For the current quarter, Lyft anticipates adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to range between $50 million and $55 million, exceeding the analyst expectation of $46.3 million. The fourth quarter's adjusted core earnings of $66.6 million also surpassed the projected $56.2 million, signifying a robust end to the year and setting a positive tone for Lyft's financial journey ahead.
