Ride sharing service Lyft (NASDAQ: NASDAQ:LYFT) reported Q1 CY2024 results topping analysts' expectations, with revenue up 27.7% year on year to $1.28 billion. It made a GAAP loss of $0.08 per share, improving from its loss of $0.50 per share in the same quarter last year.
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Lyft (LYFT) Q1 CY2024 Highlights:
- Revenue: $1.28 billion vs analyst estimates of $1.16 billion (10.2% beat)
- Gross Bookings: $3.69 billion vs analyst estimates of $3.59 billion (2.9% beat)
- EPS: -$0.08 vs analyst estimates of -$0.16 (48.5% beat)
- Gross Margin (GAAP): 40.9%, up from 36.7% in the same quarter last year
- Free Cash Flow of $127.1 million, up from $14.94 million in the previous quarter
- Active Riders: 21.9 million, up 2.35 million year on year
- Market Capitalization: $7.06 billion
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Gig EconomyThe iPhone changed the world, ushering in the era of the “always-on” internet and “on-demand” services - anything someone could want is just a few taps away. Likewise, the gig economy sprang up in a similar fashion, with a proliferation of tech-enabled freelance labor marketplaces, which work hand and hand with many on demand services. Individuals can now work on demand too. What began with tech enabled platforms that aggregated riders and drivers has expanded over the past decade to include food delivery, groceries, and now even a plumber or graphic designer are all just a few taps away.
Sales GrowthLyft's revenue growth over the last three years has been very strong, averaging 37% annually. This quarter, Lyft beat analysts' estimates and reported solid 27.7% year-on-year revenue growth.
Ahead of the earnings results, analysts were projecting sales to grow 14% over the next 12 months.
Usage Growth As a gig economy marketplace, Lyft generates revenue growth by expanding the number of services on its platform (e.g. rides, deliveries, freelance jobs) and raising the commission fee from each service provided.
Over the last two years, Lyft's users, a key performance metric for the company, grew 10.3% annually to 21.9 million. This is decent growth for a consumer internet company.
In Q1, Lyft added 2.35 million users, translating into 12% year-on-year growth.
Revenue Per UserAverage revenue per user (ARPU) is a critical metric to track for consumer internet businesses like Lyft because it measures how much the company earns in transaction fees from each user. This number also informs us about Lyft's take rate, which represents its pricing leverage over the ecosystem, or "cut" from each transaction.
Lyft's ARPU growth has been decent over the last two years, averaging 5.6%. The company's ability to increase prices while growing its users demonstrates the value of its platform. This quarter, ARPU grew 14% year on year to $58.32 per user.
Key Takeaways from Lyft's Q1 Results We were impressed by how significantly Lyft blew past analysts' revenue expectations this quarter as its gross bookings and number of rides conducted outperformed. We were also glad its EPS and free cash flow topped Wall Street's estimates-this was the second consecutive quarter of positive free cash flow, which is encouraging given its unprofitable history. Zooming out, we think this was an impressive quarter that should delight shareholders. The stock is up 3.4% after reporting and currently trades at $17.16 per share.
