Ride hailing company Lyft releases results of its second-quarter earnings

Lyft, a major ride-hailing company, released solid second-quarter profits on Thursday. Investors had doubts about Lyft's capacity to cover the costs of higher spending to recruit and retain drivers earlier this year. However, it was able to record its best-ever quarter thanks to drastic internal cost-cutting initiatives and a post-COVID travel spike.

With second-quarter sales of $990.7 million, up from $765 million during the same period last year, Lyft slightly exceeded Wall Street revenue projections. Additionally, it represents an increase of 13% from the Q1 revenue of $875.6 million for Lyft.

Year over year and quarter over quarter, the second quarter's net loss increased.

Although Lyft recorded a 4 percent increase in rides in July, the business adjusted its outlook on the recovery rate and reduced projections for Q3 and full-year revenue growth. However, the company still expects operations to normalize through September.

The company anticipates Q3 revenues somewhere between $1.040 billion and $1.060 billion, which Paul stated would represent increase of between 5% and 7% from Q2 and between 20% and 23% from third quarter of the previous year.

Compared to Q2 2021's $251.9 million loss and Q1's $196.9 million loss, Lyft lost $377.2 million this quarter. Stock-based remuneration of $179.1 million and related payroll tax obligations account for the additional weight.

Although Lyft reported some losses, there have been notable gains from the previous year. The firm's adjusted EBITDA for the second quarter was $79.1 million, up $24.3 million from the prior quarter and $55.3 million from the second quarter of 2021.

While Lyft's shares have largely stayed flat over the past month, shares rose 16% after competitive Uber posted strong quarterly earnings. Lyft was up 4.07 percent after hours trading at $17.39.

The drop in per-rider revenue and active ridership from quarter to quarter was one of the key factors that hurt investors on Lyft's performance last quarter, despite an increase in revenue amid the pandemic. Active ridership increased from 17.8 million to 19.7 million between Q1 and Q2. However, revenue per rider remained largely unchanged at $49.89 per rider, compared to $49.18 in Q1 2022.

However, even that little increase is a high point for Lyft. As travel picks up again after COVID, a portion of the rise in revenue-per-rider can be ascribed to more trips to the airport. In fact, according to Lyft, its airport trips accounted for 10.2% of all rideshare, an all-time record high. Additionally, the business reported that bike and scooter rides significantly doubled in Q2 compared to Q1.

Lyft anticipates revenue growth for the entire 2022 fiscal year to be below the 36 percent realized in 2021. Additionally, the business anticipates a marginal decline in operating expenses in third quarter lower than the cost of revenue. As a result, Lyft anticipates adjusted EBITDA for the third quarter of $55 million to $65 million.