(Bloomberg) -- Lyft Inc. shares slid by the most in more than a year after the ride-hailing company posted second-quarter bookings and issued an outlook that fell short of Wall Street’s expectations.
Gross bookings — representing the value of transactions for rides excluding tips — totaled $4.02 billion in the three months ended June 30, falling toward the low end of the company’s own guidance range and missing investors’ projections. For the current quarter, the company expects $4 billion to $4.1 billion in bookings. Analysts projected $4.14 billion.
The miss overshadowed Lyft’s efforts to consistently reach profitability. The company posted its first quarterly profit of $5 million — by the measure of net income based on generally accepted accounting principles. But it has said it doesn’t expect to be profitable on an annual basis for years — an achievement that its larger rideshare rival Uber Technologies Inc. attained last year after more than a decade in business.
Lyft’s results challenge the narrative that US consumer spending has remained resilient for all gig-economy platforms and may stoke broader concerns amid softer spending in the fast-food restaurant and travel sectors. In contrast to Lyft, Uber reported strong earnings on Tuesday. The rival operates on a global scale and has expanded into other areas such as food delivery and taxi rides.
For its part, Lyft said it saw a 16% jump in rides to and from restaurants, bars and entertainment venues from a year earlier.
Lyft’s shares fell as much as 18% in New York on Wednesday to $9, the biggest intraday decline since May 5, 2023.
The company has struggled to gain market share from Uber and yet issued ambitious three-year growth targets in June that surprised analysts. Chief Financial Officer Erin Brewer said the road to profitability hinges on expanding ride volumes and promoting new products such as advertising offerings.
Lyft’s revenue growth has accelerated and its net losses have narrowed since David Risher assumed the role of chief executive officer a year ago. Risher focused on trimming costs, increasing customer satisfaction and luring riders with lower prices. The company has also made an effort to win over drivers by guaranteeing a certain percentage of take-home earnings.
The company revised its full-year expectation that it will convert more than 90% of adjusted earnings before interest, taxes, depreciation and amortization to free cash flow, up from at least 70% announced in May.
(Updates share move in first and fifth paragraph)
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