Ride-hailing company Lyft reported fourth-quarter earnings on Tuesday, surpassing Wall Street’s top- and bottom-line expectations but disappointing when it came to active riders. The company’s stock was up more than 9% in after-hours trading, thanks to a beat on revenue and signs the business is recovering slightly from the pandemic.
The San Francisco-based company said its annual revenue declined 35% to $2.4 billion, while net loss narrowed to $1.8 billion from $2.6 billion a year earlier. Lyft’s bottom line was buoyed by aggressive cost cuts that included furloughing workers, trimming salaries and other operational changes, resulting in cost savings of $360 million last year, President John Zimmer said in an interview.
The company remains optimistic about the year ahead, with chief financial officer Brian Roberts stating on a call Tuesday to discuss the earnings, “we remain confident that Lyft will emerge on the other side of the pandemic structurally more profitable per ride than it was going in.”
Roberts reiterated that the company believes it can achieve profitability, excluding certain costs, by the fourth quarter of 2021. “In fact, there’s a chance we can achieve profitability in Q3,” he said. The company said in the earnings report that it expects to “experience a growth inflection beginning in the second quarter that strengthens in the second half of the year.”
Rival Uber has also set its sights on a measure of profitability this year. The company reports earnings Wednesday. Since going public in 2019, Lyft and Uber have struggled to win over investors who are concerned about their histories of steep losses and how they might eventually be able to turn a profit. Both companies went through layoffs prior to the pandemic as well as significant staff reductions spurred by the decline in ride volume once it took hold.