The ride-share service reported earnings after the bell Wednesday and immediately saw its stock soar after hours.
Lyft reported an estimated loss per share of $1.31, exceeding an expected loss of 62 cents. However, revenue came in with an unexpected beat. Revenue of $955 million far exceeded expectations of $882 million. The 23% year-over-year gain reflected a strong January and February that saw no or minimal impact from social distancing.
Lyft withdrew its full-year 2020 financial guidance and said it is taking severe measures in order to cut costs. In addition to layoffs announced earlier, Lyft said it is executing an “aggressive cost reduction plan” that will result in “an even leaner expense structure.” “While the COVID-19 pandemic poses a formidable challenge to our business, we are prepared to weather this crisis,” Lyft CEO Logan Green said in the press release.
As expect Lyft saw a steep decline in rides beginning in March and estimated a 75% drop in April. While Green said mid-April saw the beginning of a recovery in rides, the coronavirus and its resulting consumer environment will prove a “significant” challenge for the stock going forward. "We expect that rider demand on our platform will be down for the foreseeable future. At the same time, with record unemployment, we expect driver supply to outstrip rider demand, which will reduce our required spend on driver acquisition and engagement," Green said.
How should investors approach Lyft going forward and what does it mean for Uber earnings?
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