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Lyft disappoints as profitability remains elusive

By Hugh Wilson

Uber rival beats revenue expectations but refuses to forecast quicker path to profit

Uber rival Lyft reported quarterly revenues that topped Wall Street expectations, but slower growth forecasts and growing losses left investors disappointed.

Lyft revenue hit $1.02bn (£785.4m, €935m) in the fourth quarter, beating analyst estimates of $986m. The company reported 22.9 million active users, up 23 per cent on the same period in 2018.

Logan Green, co-founder and CEO of Lyft, said: “Fiscal 2019 was an exceptional year across the board. We significantly improved our path to profitability while simultaneously reaching critical milestones toward our long-term strategy.”

But shares in the company slumped by 4 per cent after it refused to update its roadmap to profitability. Lyft stuck by its target of achieving profitability on an adjusted basis by the end of 2021.

This was in stark contrast to larger competitor Uber, which also reported better-than-expected results last week and immediately brought forward its profitability target by a year. Uber now expects to hit the target by the end of 2020.

Lyft’s reticence could be due to soaring net losses, which hit $356m for the quarter, up from $249m in the same period in 2018. The company’s ridership growth slowed to 2.5 per cent in the second half of 2019, down from 6 per cent earlier in the year.

Despite investor disappointment, some analysts highlighted the company’s underlying strength. “Despite shares down on the print... we view this as a continuation of Lyft delivering across the board strength every quarter since it's become a public company," said Daniel Ives, an analyst at Wedbush, in a note to clients.

FURTHER READING: Lyft pulls electric scooters from US cities amidst market turmoil

FURTHER READING: Uber to be profitable by end of 2020 says CEO

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