Lyft shares get crushed on weak guidance for first quarter

Lyft beat the street on revenue in the fourth quarter, but it wasn’t enough to assuage investors who reacted to the ride-hailing company’s weak guidance for the first three months of 2023.

Lyft lowered expectations for revenue in the first quarter to $975 million. Analysts had expected the company to promise $1.09 billion in revenue. That guidance sent shares plummeting 25% in after-hours trading Thursday to $12.13.

Lyft reported Thursday $1.2 billion in revenue in the fourth quarter, a 21% increase from the $969.9 million it generated in the same year-ago period. Revenue for all of 2022 reached $4.1 billion, a 28% year-over-year versus $3.2 billion in 2021.

Lyft’s revenue, active rider and revenue per active rider results beat analyst expectations, closing out the year with 20.36 million active riders and $57.72 in revenue per active rider, which is up 8.7% and 11.5% from last year.

Still, shareholders were more affected by the company guidance for the first quarter.

Lyft needed a win after its third quarter earnings report, when the company missed Wall Street estimates for revenue and active riders, causing its stock to tank 22%. Despite the beat, Lyft shares dropped 3.16% at market close, and are trading nearly 24% lower in after hours. 

Lyft’s net loss was $588.1 million in the fourth quarter, compared to $283.2 million the year prior. Lyft attributes much of that loss to $201.3 million of stock-based compensation and related payroll tax expenses.

The company also reported a loss of $29.5 million in employe severance and other employee costs, as well as $9.5 million in net stock-based compensation expense, as a result of layoffs in the fourth quarter. In November, Lyft cut 13% of its workforce in an attempt to reduce operating expenses. At the time, the company had estimated it would incur $27 million to $32 million due to the restructuring.

All of those losses compounded to bring Lyft to a full year net loss of $1.6 billion, which is up from a net loss of $1.1 billion in 2021.

The company closed out the quarter with $1.8 billion in cash.

Source link