13197

Lyft (NASDAQ:LYFT) Delivers Strong Q1 Numbers, Shows User Growth


Adam Hejl /
2022/05/03 4:20 pm EDT
Add to Watchlist

Ride sharing service Lyft (NASDAQ: LYFT) reported results ahead of analyst expectations in the Q1 FY2022 quarter, with revenue up 43.7% year on year to $875.5 million. Lyft made a GAAP loss of $196.9 million, improving on its loss of $427.3 million, in the same quarter last year.

Is now the time to buy Lyft? Access our full analysis of the earnings results here, it's free.

Lyft (LYFT) Q1 FY2022 Highlights:

  • Revenue: $875.5 million vs analyst estimates of $845.9 million (3.5% beat)
  • EPS (GAAP): -$0.57
  • Free cash flow was negative $182.6 million, compared to negative free cash flow of $48.7 million in previous quarter
  • Gross Margin (GAAP): 49.7%, up from 17.9% same quarter last year
  • Active Riders: 17.8 million, up 4.31 million year on year

“Q1 was better than we expected and rideshare ride volumes reached a new COVID high,” said Logan Green, co-founder and chief executive officer of Lyft.

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.

The 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 Growth

Lyft's revenue growth over the last three years has been strong, averaging 27.8% annually. Lyft's revenue took a hit when the pandemic first hit, but it has since rebounded strongly, as you can see below.

Lyft Total Revenue

This quarter, Lyft beat analyst estimates and reported an impressive 43.7% year on year revenue growth.

Ahead of the earnings results the analysts covering the company were estimating sales to grow 31.5% over the next twelve months.

There are others doing even better than Lyft. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. You can find it on our platform for free.

Usage Growth

As a gig economy marketplace, Lyft generates revenue growth by a combination of the volume of services users order and how much commission it earns.

Over the last two years the number of Lyft's paying users, a key usage metric for the company, grew 5.52% annually to 17.8 million users. This is an ok growth for a consumer internet company.

Lyft Active Riders

In Q1 the company added 4.31 million paying users, translating to a 31.9% growth year on year.

Key Takeaways from Lyft's Q1 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on Lyft’s balance sheet, but we note that with a market capitalization of $10.9 billion and more than $2.23 billion in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the exceptional revenue growth Lyft delivered this quarter. And we were also glad to see the user growth. Zooming out, we think this was a decent quarter. But investors might have been expecting more and the company is down 2.24% on the results and currently trades at $29.99 per share.

Lyft may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.