Lyft Posts Record Q2 and Sees an Operating Profit of $1 Billillion by 2024

Lyft Inc., a ride-hailing company, forecast Thursday that it will post an adjusted operating profit for 2024, after reporting record earnings in its second quarter. The firm is betting on the strength of the rideshare market, which has been recovering from the pandemic lows.

Lyft shares rose more than 8 per cent in extended trading. The company reported profit that was higher than Wall Street expectations due to soaring ride demand and cost-cutting measures.

Earlier in the week, Uber Inc., a bigger competitor, reported positive quarterly results. It turned cash flow positively for the first-time and signaled demand for ridesharing, even though high inflation has forced many consumers to reduce their spending.

Both Uber and Lyft have seen an increase in drivers signing up for their services due to the rising cost of living. Customers also like to reserve a ride when offices close and their travel plans resume.

” We had most of our new drivers come in organically… there is a tailwind because more people are enjoying this supplementary income,” Lyft President John Zimmer stated in an interview to Reuters.

Zimmer has more potential for growth, as Lyft improves mapping, matches riders with drivers and offers new programs to users at different price points.

The company still warned about challenges in the 3rd quarter because of inflation and macroeconomics like higher insurance prices that may impact margins in the current quarter.

Lyft also tempers its views on the pace and expects full-year revenue growth slower than the 36 percentage achieved in 2021..

Fox Advisors’ Steven Fox stated that the market for ridesharing could grow as more people turn to ridesharing and the average car purchase price rises.

“Lyft, Uber want their services to become more affordable,” he stated.

Lyft’s adjusted EBITDA, a metric that excludes stock-based compensation and some other costs, was $79.1 million for the second quarter and surpassed analysts’ estimates of $18. 66 millions, according to IBES data by Refinitiv.

On an adjusted basis, Lyft earned 13 cents per share, compared to a loss of 3 cents analysts had forecast.

The company stated that it was targeting $700 millions in free cash flow for 2024..

By Nivedita Ba