In a turn of events, Lyft’s Q2 adjusted EBITDA has finally grown profitable, boasting a near double-digit revenue beat as well.
Thanks to some major cost-cutting measures and the sale of the company’s self-driving unit, Lyft has finally turned an (adjusted) EBITDA profit. That’s a great turn for the ridesharing company, which has been notorious for its losses in a never-ending burn of money.
Lyft reported Q2 earnings on Tuesday, easily beating earnings and revenue estimates, boosted by both decreases in spending and increases in domestic travel. Shares of the company boosted upwards of 6% in the few minutes after hours. For comparison sakes, here’s the results from the company’s reports:
Since the beginning of the year, Lyft has seen its stock rise by nearly 20%, compared to relatively large losses seen by competing Uber. Down from a low of 40% gains, the company has still seen a significant recovery, thanks in part to growing travel trends and recovering statistics.
This beat was needed for the company, which has seen market share gains continue to fall as Uber fights back competitively. Compared to its larger competitor, Lyft is much less diversified, lacking Uber’s freight, food delivery, and alcohol delivery services, most of which are profitable.
Lyft is a much leaner play on not only the domestic US market, but also ridesharing. As the COVID-19 pandemic has had a harder impact on the company, Lyft has significantly cut costs, personnel, and bonuses, which has helped boost EBITDA profits this quarter.
Originally, the date was 3 months from now, meaning the second half of 2021 was the expected EBITDA positive period. But, thanks to the company’s cost cutting and profits from its sale of the autonomous vehicle development unit to Toyota, we’ve seen Lyft profits a bit sooner.
That’s why the company’s stock has exploded in after-hours trading, up yet another percent while writing this. Profits have been a huge miss for ridesharing and delivery companies for years, thanks in part to the high costs and low profits of running such a business.
Sign up for our newsletter to get bite-sized news about all five of our categories.
In both Uber and Lyft’s cases, the drivers receive money before Uber and Lyft, leaving them with the remaining amount. With an extreme spend on R&D and executive pay, it’s been incredibly difficult to see a loss under a few hundred million, let alone a profit.
Lyft’s profitability this corner is a great sign towards consistent profitability in the future, and it’s understandable why investors would be excited. After all, even I’m excited. So, there’s that.
Get in the know with Statural Bites, bite-sized newsletters with dedicated news for all five of our categories!
By signing up, you agree to Statural’s Terms and Conditions. Don’t worry, we don’t like spam and we won’t spam you. We value privacy and will NOT give third-parties your data or information. You retain the option to unsubscribe at any time.