Lyft Q1 Report

Lyft Inc. posted strong growth in its first quarterly report as a public company, with revenue nearly doubling from the year before, even as losses continued to mount. The San Francisco-based ride-hailing company reported revenue of $776 million in the first three months of the year, up 95% from a year earlier and better than many analysts expected.

Lyft’s loss ballooned to $1.1 billion, largely due to $859 million of stock-based compensation—an expense related to the company’s initial public offering in March. The company said its adjusted loss was $211.5 million, versus $228.4 million a year earlier. Analysts surveyed by FactSet expected an adjusted loss of $274 million.

The results marked a solid debut for Lyft, which has aimed to portray itself as the faster-growing ride-hailing service compared with its much larger rival, Uber Technologies Inc. An IPO for Uber is expected Friday, and Lyft got ahead of the event by also announcing an extended partnership with Alphabet Inc.’s self-driving car unit Waymo, which said Tuesday it is letting people hail its robot taxis through the Lyft app in the Phoenix area.

The announcement could mark a significant step for Lyft, which like other ride-hailing companies including Uber, gives up a significant portion of revenue to its drivers. Analysts have suggested that automation is a key step for either of these companies to reach profitability. Lyft is also developing its own self-driving cars.

Lyft had a rocky start to trading, down more than 20% over the last month and nearly $13 off of its IPO price of $72 per share. The company debuted with a valuation topping $20 billion at the high end of its expected range, but its market cap has since sunk to about $17 billion. Lyft’s performance has been closely watched as its larger rival Uber prepares to go public later this week. But while Lyft focuses primarily on transportation, Uber has other businesses including food delivery, freight and plans for flying vehicles.

Executives said on the call with analysts that the competitive pressure in the market seems to be improving, meaning they can begin reducing driver incentives. “Lyft is about seven years old and if you look at the economics, you can see that as a percentage of revenue that this is the most rational the market has been,” said President John Zimmer.

Now that there are two strong players in the market that can both pickup riders in roughly the same amount of time in the same major markets, Zimmer said, the decision between the two comes down to brand preference.

Todd “Bubba” Horwitz