Yahoo Finance Lyft (NASDAQ:LYFT) Reports Strong Q1
Ride sharing service Lyft (NASDAQ: LYFT) reported Q1 CY2024 results topping analysts' expectations , with revenue up 27.7% year on year to $1.28 billion. It made a GAAP loss of $0.08 per share, improving from its loss of $0.50 per share in the same quarter last year.
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Lyft (LYFT) Q1 CY2024 Highlights:
Revenue: $1.28 billion vs analyst estimates of $1.16 billion (10.2% beat)
Gross Bookings: $3.69 billion vs analyst estimates of $3.59 billion (2.9% beat)
EPS: -$0.08 vs analyst estimates of -$0.16 (48.5% beat)
Gross Margin (GAAP): 40.9%, up from 36.7% in the same quarter last year
Free Cash Flow of $127.1 million, up from $14.94 million in the previous quarter
Active Riders: 21.9 million, up 2.35 million year on year
Market Capitalization: $7.06 billion
“Lyft is off to a strong start in 2024. We are executing well and bringing much-needed innovation to the market. That’s why drivers and riders are choosing Lyft more often,” said CEO David Risher.
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Gig Economy
The iPhone changed the world, ushering in the era of the “always-on” internet and “on-demand” services - anything someone could want is just a few taps away. Likewise, the gig economy sprang up in a similar fashion, with a proliferation of tech-enabled freelance labor marketplaces, which work hand and hand with many on demand services. Individuals can now work on demand too. What began with tech enabled platforms that aggregated riders and drivers has expanded over the past decade to include food delivery, groceries, and now even a plumber or graphic designer are all just a few taps away.
Sales Growth
Lyft's revenue growth over the last three years has been very strong, averaging 37% annually. This quarter, Lyft beat analysts' estimates and reported solid 27.7% year-on-year revenue growth.
Ahead of the earnings results, analysts were projecting sales to grow 14% over the next 12 months.
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Usage Growth
As a gig economy marketplace, Lyft generates revenue growth by expanding the number of services on its platform (e.g. rides, deliveries, freelance jobs) and raising the commission fee from each service provided.
Over the last two years, Lyft's users, a key performance metric for the company, grew 10.3% annually to 21.9 million. This is decent growth for a consumer internet company.
In Q1, Lyft added 2.35 million users, translating into 12% year-on-year growth.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track for consumer internet businesses like Lyft because it measures how much the company earns in transaction fees from each user. This number also informs us about Lyft's take rate, which represents its pricing leverage over the ecosystem, or "cut" from each transaction.
Lyft's ARPU growth has been decent over the last two years, averaging 5.6%. The company's ability to increase prices while growing its users demonstrates the value of its platform. This quarter, ARPU grew 14% year on year to $58.32 per user.
Key Takeaways from Lyft's Q1 Results
We were impressed by how significantly Lyft blew past analysts' revenue expectations this quarter as its gross bookings and number of rides conducted outperformed. We were also glad its EPS and free cash flow topped Wall Street's estimates-this was the second consecutive quarter of positive free cash flow, which is encouraging given its unprofitable history. Zooming out, we think this was an impressive quarter that should delight shareholders. The stock is up 3.4% after reporting and currently trades at $17.16 per share.
Lyft may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
