Lyft Reported 125% YoY Increase in Revenue in Q2 2021

The US-based ride-hailing giant Lyft reported its second-quarter (Q2) earnings on Tuesday. It has posted USD 765 Million in revenue, up by 125% year-over-year (YoY). Moreover, it has delivered an increase of 26% in revenue since Q1 2021. The company has beat Wall Street expectations by posting a loss of USD 251.9 Million, which was USD 437.1 Million in the same period of 2020.

Since its establishment, the company has achieved positive adjusted EBITDA for the first time of USD 23.8 Million. Usually, the tech startups who are running on losses, adjusted EBDITA figure plays a major role in knowing if the company is on the path of profitability. “It’s a significant milestone for a business and for our industry,” CEO and co-founder Logan Green said on Lyft’s earnings call. “Going forward we expect to maintain adjusted EBITDA profitability,” he added.

The COVID-19 outbreak had disrupted the ride-hailing market across the globe. The pandemic didn’t just halt the industry but had persuaded the drivers to leave the industry. However, the relaxation in restrictions by state government bodies around the world has helped the market recover and is anticipated to reach the pre-COVID level by end of the year. Lyft’s adjusted EBIDTA in Q2 2020 was negative USD 280 Million. Following the earnings report release, the company’s share rallied 7% in after-hours trading.

Lyft reported 17.14 Million active riders and generated USD 44.63 revenue from each rider. This is a significant increase of 3.5 Million active riders since the June quarter of 2020, while it generated USD 39.06 revenue per active rider last year in the same quarter. Its number addresses that it has not completely recovered from the COVID-19 outbreak as its active riders were 21.2 Million in Q1 2020. “The fact that the company is profitable while active riders are still 20% below pre-COVID levels suggests there is still plenty of upside in terms of Lyft’s profit potential,” said James Cordwell, an analyst with Atlantic Equities.

The company executives said on Tuesday that the company is striving to increase the drivers on the platforms as mobility has increased in the US. They are offering huge incentives and providing payment guarantees to drivers, an effort to expand their driver base. Last month, Lyft said that the company is resuming the share rides option in the US. “As the country reopens, we want our most affordable ride option to be available to our riders,” Lyft President John Zimmer said in a statement. In the earnings call, he said that it is tough to predict the future of the industry amidst the increasing COVID-19 virus cases due to the Delta variant of the virus.

Lyft Announced Partnership Last Month

Lyft sold its autonomous vehicle technology unit called Level 5 to Toyota for USD 550 Million. This deal is similar to Uber’s divestment of its self-driving technology division, Advanced Technologies Group, for around USD 4 Billion. This made it clear that the company doesn’t want to enter the robot-taxi market. However, the conclusion doesn’t hold true, as Lyft partnered with auto manufacturer Ford and autonomous driving technology company Argo AI to launch self-driving cars on its network.

“Each company brings the scale, knowledge and capability in their area of expertise that is necessary to make autonomous ride-hailing a business reality,” CEO Logan Green said. The partners are expecting to launched 1,000 self-driving cars over the period of five years. Moreover, Lyft will get a stake of 2.5% in Argo AI in exchange of data on its ride-hailing network. “This will really help us hone and figure out where the demand is and what peak demand looks like, which helps us figure out where we need to map, where we need to go, where we need to operate,” Argo CEO Bryon Salesky told TechCrunch.