Lyft posts maiden net profit in second quarter

(Reuters) – Lyft (NASDAQ:) reported better-than-expected revenue in the second quarter and posted a net profit for the first time on Wednesday, driven by a booming ride-share market and company-wide cost cuts last year.

The company’s quarterly report, after rival Uber (NYSE:)’s strong results on Tuesday, underscores steady demand for ride-share services buoyed by summertime tourism and as people step out more for work and leisure events.

“We have solid momentum entering the second half of the year,” Lyft CFO Erin Brewer said.

Revenue rose 41% to $1.44 billion in the quarter ended June 30, beating analysts’ consensus estimate of $1.39 billion, according to LSEG.

Net income was $5.0 million, compared to a $114.3 million net loss in the previous corresponding period when the company booked $46.6 million in restructuring-related charges.

Since CEO David Risher took charge last year, Lyft has cut hundreds of jobs, narrowed the firm’s losses and managed to keep fare increases in check. The early efforts fueled a 36% surge in Lyft stock in 2023.

In June, Lyft hosted its first-ever investor day and projected annual gross bookings to grow at a steady 15% rate through 2027. It has also made a big push in advertising, a high margin business, with $50 million sales expected this year.

Lyft said it saw a record 23.7 million active riders and 205 million rides in the June quarter, helped by events such as Pride celebrations and college graduations, and wage commitments for drivers announced earlier this year.

However, Lyft’s outlook for the current quarter came in soft.

It forecast gross bookings – the total value of transactions on the Lyft app excluding tips – between $4.0 billion and $4.1 billion, compared to estimates of $4.13 billion.

Adjusted core earnings guidance of $90 million to $95 million also came in below the street target of $104.3 million.