Lyft shares soared early Thursday after the company reported a double-digit increase in third-quarter revenue, surpassing Wall Street estimates, and showcasing a promising outlook for gross bookings in the ongoing three-month period. Gross bookings, which measure the scale and impact of Lyft’s platform, are anticipated to be between $4.28 billion and $4.35 billion in the fourth quarter.
This forecast indicates a year-over-year growth of 15% to 17%. The metric increased by 16% year-over-year in the September quarter, reaching $4.11 billion. For the fourth quarter, Lyft expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to fall between $100 million and $105 million, following a third-quarter reading of $107.3 million.
The adjusted EBITDA margin, expressed as a percentage of gross bookings, is projected to be around 2.3% to 2.4%, down from 2.6% in the previous quarter. Lyft's guidance for both gross bookings and adjusted EBITDA in the fourth quarter exceeds Wall Street expectations of $4.23 billion and $86 million, respectively. Chief Financial Officer Erin Brewer commented on the earnings call, stating, "Our fourth quarter outlook includes both the impact of the DoorDash partnership as well as the renewal of our third-party insurance agreements.
Our experience with large-scale partnerships indicates that achieving broad consumer adoption occurs over time." Lyft and DoorDash recently unveiled a partnership that enhances benefits for rides and delivery. Looking ahead to 2024, Lyft anticipates an adjusted EBITDA margin of around 2.3%, an increase from its previous forecast of 2.1%.
Gross bookings are expected to grow by 17% year-over-year, with rides growth projected in the mid-teens range annually. Before market opening, Lyft’s stock jumped approximately 22%. Lyft’s third-quarter performance and fourth-quarter guidance reflect "improving fundamentals amid more rational competitive dynamics, showcasing that management’s strategy aimed at enhancing customer experience, product innovation, and strategic pricing is yielding positive results," stated Truist in their client note. The company recorded a net loss of $0.03 per share for the third quarter, consistent with the same period last year and aligning with Capital IQ’s consensus estimate on a GAAP basis.
Revenue surged by 32% year-over-year to $1.52 billion, exceeding street expectations of $1.44 billion. Active riders at Lyft rose by 9% from the previous year to reach 24.4 million in the quarter, while the number of rides increased by 16% to 217 million..