Lyft posts quarterly earnings that top street expectations

Lyft posted quarterly earnings that topped expectations, posting an adjusted loss per share of 35 cents and net sales of $609M vs. the expected loss per share of 53 cents and estimated loss per share of $558.5M. Yahoo Finance's Emily McCormick joined Yahoo Finance Live to break down Lyft's quarterly earnings.

Video transcript

ADAM SHAPIRO: We want to get to Emily McCormick because Lyft is out. And investors are trying to digest what they're telling us year over year is hard. But what the revenue picture-- I mean, year over year, it's down, but that's obvious. But what more can you share with us?

EMILY MCCORMICK: That's right, Adam. We did see Lyft still posting a decline year on year when it came to topline results. But when we compare that to what Wall Street had actually been expecting, Lyft did beat expectations on both the top and bottom line. So, already starting to see a rebound in ride hailing as mobility picks up during this economic recovery.

Now, going through these numbers, we saw first quarter revenue up $609 million, down 36% year on year. But that was better than the drop of 42% to $557 million that had been anticipated. And sequentially, this was an improvement of 7% from the sales posted in the final three months of 2020. And on the bottom line, we saw adjusted EBITDA losses coming in at $73 million. That also unexpectedly narrowed from the $85 million loss posted in the same quarter last year. And a loss of more than $140 million had been expected.

Now, taking a look at active riders, those were down 36% to about 13.5 million in the first quarter. Also better than the 12.7 million riders that had been anticipated. And again, this did grow sequentially. That was up by about one million compared to the fourth quarter of 2020.

And finally, I do want to note that Lyft co-founder and president John Zimmer did have a chance to speak with our own Brian Sozzi earlier. And Zimmer reiterated Lyft's goal of being adjusted EBITDA profitable this year, specifically in the third quarter. And Lyft has been working to cut costs over the course of the pandemic, including by selling its autonomous car unit to Toyota to help it get to profitability. Specifically, Zimmer said, quote, "I think it's a matter of time before we get back to pre-pandemic levels. But we will be emerging much stronger and actually more profitable per ride than we were going into the pandemic."

Now, taking a look at shares here, we are seeing them trade slightly higher, trading topically, but, again, a bit above the flat line here in late trading, following this top and bottom line beat. Adam and Seana.

SEANA SMITH: All right, Emily, thanks so much again. Shares moving up just over 1%. Jeff, when you take a look at some of these names of reopening trade picking up a little bit of momentum, we have Lyft shares up since the start of the year. We're seeing the after hours accelerate just a little bit. How are you looking at some of these reopening plays and trying to identify the attractive names?

JEFF KLINGELHOFER: Well, again, I'll go back to-- I think the appropriate thing to do here is to play defense, right? If you were fortunate enough to identify the reopening trade before the economy started to reopen, I think it was a great trade. But the challenge here is now many of these names are trading well above their pre-pandemic levels.

And so the challenge for investors is really digesting, has all this fiscal and monetary stimulus reset us to a new baseline that's notably higher than pre-pandemic? And I just don't think it has. So, by and large, we're, again, playing more defense than offense, although there are some pockets of value. And really, you're focusing on those names that can continue to post that high levels of growth, which I don't think most can. And that's what's causing markets to take a step back.

ADAM SHAPIRO: Scott, I want to finish this by coming back to our discussion about inflation. Because when you look at Lyft and the pressure they have on, demand is going up, but they don't have the drivers. And you look it as the economy opens up, they don't have the workers. Where does that put us, say, six months as an investor? Prices going up, how do we keep up with this?

SCOTT WREN: Well, you have to decide, is inflation going to be transitory, or is it going to be something we're going to be worried about over the next two, three, four or five years? And for us, as we come out of this hole, we think we're going to see some substantial inflation numbers here. But we see that easing off. So I mean, that's really the call investors have to make. If inflation gets up and running and the Fed has to do something about it, that's typically how cycles end. We don't think that's going to be the case.

So we want to be-- as opposed to Jeff, we want to be a little more assertive. We like materials. We like industrials. We like financials. We still like technology as well. So we want to combine a little bit of growth with some value. We just think this has more legs, although certainly, the returns we're going to see over the next 18 months are going to be nothing like what we've seen the last 12 months. It's going to be much more modest going forward.

ADAM SHAPIRO: Scott Wren, Wells Fargo Investment Institute senior global equity strategist and Jeff Klingelhofer, Thornburg Investment Management co-head of investments, both, thank you for joining us here on Yahoo Finance Live.