LYFT Inc (NASDAQ: LYFT) stock rose over 6.6% on 11th November, 2020 (as of 10:17 am GMT-5; Source: Google finance) after the company beaten the topline estimates for the third quarter of 2020. The company has reported net loss for Q3 2020 of $459.5 million compared to a net loss of $463.5 million in the same period of 2019. Net loss margin for Q3 has increased to 92 percent compared to 48.5 percent in the third quarter of 2019. In Q3, contribution was $249 million, which reflects 112% increase from $117 million in the second quarter. Contribution margin expanded 15 absolute percentage points to 49.8% in Q3, up from 34.6% in the second quarter. LYFT ended the third quarter with 2.5 billion of unrestricted cash, cash equivalents, and short-term investments.
Lyft reported a third-quarter adjusted EBITDA loss of $239.7 million, which is lower than the $254.1 million loss expected by analysts. The company said the quarterly adjusted EBITDA loss was $25 million narrower than Lyft’s recent guidance, due to costs reduction initiatives. Lyft reaffirmed its target to reach profitability on an adjusted basis of earnings before interest, taxes, depreciation and amortization by the end of 2021. The company so far this year has implemented drastic cost cuts, including wide-ranging layoffs. Third-quarter active riders stood at 12.5 million, which represents a significant increase from the 8.69 million in the second quarter but lower than the 22.3 million riders who used Lyft during the third quarter of last year.
The company had reported 48 percent fall in the adjusted revenue to $499.7 million in the third quarter of FY 20, beating the analysts’ estimates for revenue of $486.5 million, according to Refinitiv data. However, it grew 47 percent from $339.3 million in the second quarter of 2020 due to strong engagement in the bike share and scooter operations
Moreover, the demand for rides continued to increase in the months from July to September, but active ridership remained down 44% on a yearly basis. Besides its core ride-hail business, Lyft offers bike, electric scooter and car rentals in several cities, but does not break out financial details of those units.
Meanwhile, the company has signed a partnership with GrubHub that allows Lyft’s loyalty-program members free restaurant delivery from GrubHub restaurants.