- Lyft’s net loss contracts to £335.38 million in the fiscal second quarter.
- California court orders Lyft to classify its drivers as employees.
- Lyft tops analysts estimates for revenue and loss per share in Q2.
Lyft Inc. (NASDAQ: LYFT) said on Wednesday that its quarterly revenue came in 61% lower on a year over year basis. The company, however, expressed confidence that its core ride-hailing business saw a massive 78% increase in monthly rides in July versus earlier this year in April.
A California court recently disabled Lyft from classifying its drivers as independent contractors. The company has been ordered to treat them as employees that will make them eligible for benefits. In response, Lyft warned that from 21st August, it might be pushed into suspending its ride-hailing service in California. The court’s ruling also applies on Uber that also echoed a similar concern on Wednesday.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
California currently makes up roughly 16% of Lyft’s total rides.
Shares of the company initially jumped roughly 4.5% in after-hours trading on Wednesday but plummeted 5% later on. Lyft is currently trading at £23.25 per share, including the decline in extended trading. The stock had dropped to as low as £12.31 per share in March when the countywide social distancing measures weighed heavily on its rides volume.
Lyft’s Q2 financial results versus analysts’ estimates
According to Refinitiv, experts had forecast the company to print £258.57 million in revenue in the fiscal second quarter. In terms of loss per share, they had estimated 75.96 pence. In its report on Wednesday, Lyft topped both estimates posting a higher £260.11 million in revenue and a lower 66 pence of adjusted loss per share.
The U.S. ride-hailing company also said on Wednesday that it generated £29.97 of revenue for each of its 8.7 million active riders in the quarter that concluded on 30th June. In comparison, Lyft had reported 21.2 million active riders in the fiscal first quarter despite the Coronavirus restrictions.
Lyft hopes to turn profitable next year
At £335.38 million, Lyft said that its net loss in the second quarter was significantly lower than £494.28 million in the same quarter last year.
As per the San Francisco-based company, it is expected to turn profitable next year on an adjusted basis in the fourth quarter. The prominent sources of income for Lyft include its core ride-hailing business, scooter/bike sharing, and vehicle rentals unit that it launched only recently.
Lyft’s performance in the stock market remained largely flat in 2019. At the time of writing, the American ride-hailing company has a market cap of £6.98 billion.