Take Lyft, the popular ride-sharing company, which recently pulled off an incredible mid-course correction on its fiscal fortunes. It posted a net income of $2.57 million for the most recent quarter. That’s a dramatic improvement from the very last number a year ago. It’s a positive swing of $31.55 million from a projected net loss to an actual profit of 1 cent per share, though their last earnings were an expected 8 cents lost per share.
The positive financial results are a direct result of Lyft’s continued rebound as it starts to open up its business. Beyond these positives, the company’s gross bookings hit $4.16 billion, showing a 13% year-over-year increase. The figure came in just above analysts’ predictions. This was against their estimate of gross bookings at $4.15 billion, underscoring Lyft’s impressive lead in bringing on more riders. Lyft just announced an astounding 16% increase in rides, to a new high of 218.4 million rides. This was well above the FactSet consensus of 215.1 million rides.
Second, the company did make a rather remarkable record with 16 consecutive quarters of gross bookings increases. This accomplishment points to a marked increase in consumer adoption and use of these services. David Risher, Lyft’s CEO, on a hopeful note about the company’s new path, said,
“Our team is stronger than it’s ever been, and the consumer demand is absolutely there.”
Despite Lyft’s stock price drop, the company’s bottom line has rebounded dramatically. In response, the company announced a plan to repurchase $500 million in shares during the coming year. This strategic move combines to maximize shareholder value and is a testament to the company’s confidence in its future growth potential.
In yet another signal of investor pressure, in a related story, Engine Capital has terminated its proxy campaign at Lyft. They have pulled their nominations for the company’s board of directors. The investment firm pointed to Lyft’s recent news of starting a $1 billion share buyback as the determinant in its decision. Engine Capital and Lyft had already made some history together on capital allocation shareholder proposals and Engine remarked that,
“Following a series of productive conversations, the Board has taken an important first step by committing to significant share repurchases in the coming quarters.”
All of these developments are incredibly encouraging signs for Lyft, as it continues to chart a course through an ongoing crisis within the competitive ride-sharing landscape. Lyft appears poised to capitalize on the growing consumer appetite. With prudent fiscal decisions, the firm appears well-positioned to continue its positive progress and rebound further toward profitability.