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Shares of Lyft (LYFT - Free Report) have plummeted 22.91% since Nov 7 despite better-than-expected earnings per share (on an adjusted basis) being reported for third-quarter 2022 on the said date. Quarterly earnings also improved on a year-over-year basis. The massive decline may be due to the lower-than-expected revenues reported by this ride-hailing company for the September quarter. Weakness pertaining to rider volumes also disappointed investors.
Earnings Report in Detail
Lyft’s third-quarter 2022 earnings (excluding $1.29 from non-recurring items) of 11 cents per share beat the Zacks Consensus Estimate of 8 cents and our estimate of 10 cents. In the year-ago period, this currently Zacks Rank #3 (Hold) player reported earnings of 5 cents per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Total revenues of $1053.8 million lagged the Zacks Consensus Estimate of $1054.7 million and our estimate of $1,056.7 million. However, the top line jumped 21.91% year over year on a 7.2% increase in active riders, which totaled 20.31 million in the reported quarter.
However, the number of active riders in the quarter was below the Zacks Consensus Estimate of 20.94 million. Also, year-over-year growth recorded in the September quarter was lower than the 15.9% year-over-year growth registered in the June quarter. Moreover, active riders increased only marginally (2%) sequentially. Another factor about active riders that might have disappointed investors is that the third-quarter 2022 figure was below the 22.3 million active riders in the third quarter of 2019 (pre-coronavirus era). This San-Francisco-based company’s revenue per active rider increased 13.7% year over year in the September quarter to $51.88.
Lyft’s adjusted EBITDA in the third quarter was $66.2 million, above our estimate of $58 million but lower than the year-ago figure of $67.3 million. Adjusted EBITDA margin for the third quarter was 6.3% compared with 7.8% in the year-ago period.
Total costs and expenses climbed 25.7% year over year to $1.34 billion in the quarter. Contribution improved 14.9% year over year to $590.4 million. Contribution margin decreased to 56% from 59.4% in the year-ago period. Lyft exited the third quarter with unrestricted cash, cash equivalents and short-term investments of $1.8 billion, flat sequentially.
Q4 Outlook
For the December quarter, management expects revenues in the band of $1.145-$1.165 billion. The Zacks Consensus Estimate is currently pegged at $1.16 billion. Our estimate is currently pegged at $1.13 billion. Management expects fourth-quarter revenues to grow 9-11% from the previous quarter’s reading and 18-20% from the year-ago reported figure. Adjusted EBITDA is expected in the $80-$100 million range. Adjusted EBITDA margin is anticipated in the 7-9% range.
Uber Technologies (UBER - Free Report) incurred a loss of 61 cents per share in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 17 cents. In third-quarter 2021, Uber delivered earnings of 23 cents per share.
Total revenues of $8,343 million outperformed the Zacks Consensus Estimate of $8,076.5 million. The top line jumped 72% year over year, backed by contribution from the acquisition of Transplace by Uber Freight and a change in the business model for Uber’s UK Mobility business. In the reported quarter, most of (60%) UBER’s revenues came from Mobility. Revenues from this segment jumped 73% year over year to $3,822 million.
PayPal Holdings (PYPL - Free Report) reported adjusted earnings of $1.08 per share for third-quarter 2022, beating the Zacks Consensus Estimate by 13.7%. However, the figure declined 2% on a year-over-year basis. Net revenues of $6.85 billion exhibited year-over-year growth of 12% on an FX-neutral basis and 11% on a reported basis. The figure surpassed the Zacks Consensus Estimate of $6.82 billion.
Growing transaction and other value-added services’ revenues drove the top line year over year in the reported quarter. Also, accelerating U.S. and international revenues contributed handsomely.
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Why LYFT Stock Plunges 22.91% Despite Q3 Earnings Beat
Shares of Lyft (LYFT - Free Report) have plummeted 22.91% since Nov 7 despite better-than-expected earnings per share (on an adjusted basis) being reported for third-quarter 2022 on the said date. Quarterly earnings also improved on a year-over-year basis. The massive decline may be due to the lower-than-expected revenues reported by this ride-hailing company for the September quarter. Weakness pertaining to rider volumes also disappointed investors.
Earnings Report in Detail
Lyft’s third-quarter 2022 earnings (excluding $1.29 from non-recurring items) of 11 cents per share beat the Zacks Consensus Estimate of 8 cents and our estimate of 10 cents. In the year-ago period, this currently Zacks Rank #3 (Hold) player reported earnings of 5 cents per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Total revenues of $1053.8 million lagged the Zacks Consensus Estimate of $1054.7 million and our estimate of $1,056.7 million. However, the top line jumped 21.91% year over year on a 7.2% increase in active riders, which totaled 20.31 million in the reported quarter.
However, the number of active riders in the quarter was below the Zacks Consensus Estimate of 20.94 million. Also, year-over-year growth recorded in the September quarter was lower than the 15.9% year-over-year growth registered in the June quarter. Moreover, active riders increased only marginally (2%) sequentially. Another factor about active riders that might have disappointed investors is that the third-quarter 2022 figure was below the 22.3 million active riders in the third quarter of 2019 (pre-coronavirus era). This San-Francisco-based company’s revenue per active rider increased 13.7% year over year in the September quarter to $51.88.
Lyft’s adjusted EBITDA in the third quarter was $66.2 million, above our estimate of $58 million but lower than the year-ago figure of $67.3 million. Adjusted EBITDA margin for the third quarter was 6.3% compared with 7.8% in the year-ago period.
Total costs and expenses climbed 25.7% year over year to $1.34 billion in the quarter. Contribution improved 14.9% year over year to $590.4 million. Contribution margin decreased to 56% from 59.4% in the year-ago period. Lyft exited the third quarter with unrestricted cash, cash equivalents and short-term investments of $1.8 billion, flat sequentially.
Q4 Outlook
For the December quarter, management expects revenues in the band of $1.145-$1.165 billion. The Zacks Consensus Estimate is currently pegged at $1.16 billion. Our estimate is currently pegged at $1.13 billion. Management expects fourth-quarter revenues to grow 9-11% from the previous quarter’s reading and 18-20% from the year-ago reported figure. Adjusted EBITDA is expected in the $80-$100 million range. Adjusted EBITDA margin is anticipated in the 7-9% range.
Following are a few other Q3 reports from the Zacks Computer and Technology industry:
Uber Technologies (UBER - Free Report) incurred a loss of 61 cents per share in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 17 cents. In third-quarter 2021, Uber delivered earnings of 23 cents per share.
Total revenues of $8,343 million outperformed the Zacks Consensus Estimate of $8,076.5 million. The top line jumped 72% year over year, backed by contribution from the acquisition of Transplace by Uber Freight and a change in the business model for Uber’s UK Mobility business. In the reported quarter, most of (60%) UBER’s revenues came from Mobility. Revenues from this segment jumped 73% year over year to $3,822 million.
PayPal Holdings (PYPL - Free Report) reported adjusted earnings of $1.08 per share for third-quarter 2022, beating the Zacks Consensus Estimate by 13.7%. However, the figure declined 2% on a year-over-year basis. Net revenues of $6.85 billion exhibited year-over-year growth of 12% on an FX-neutral basis and 11% on a reported basis. The figure surpassed the Zacks Consensus Estimate of $6.82 billion.
Growing transaction and other value-added services’ revenues drove the top line year over year in the reported quarter. Also, accelerating U.S. and international revenues contributed handsomely.