Lyft’s Net Loss Widens. Lyft has previously said it expects to be profitable on an adjusted EBITDA basis by the fourth quarter of 2021. By Todd Horwitz, Bubba Trading

 

Lyft Inc. said it is still on track to reach a measure of profitability by the end of next year, even as it posted a wider fourth-quarter net loss compared with the year-earlier period. For the three months ended Dec. 31, the ride-hailing company’s net loss widened to $356 million, bringing its losses for the year to $2.6 billion. That compares with a loss of $911 million in 2018.

Excluding interest, taxes, depreciation and amortization on an adjusted basis, Lyft posted a loss of $130.7 million for the quarter, narrowing from $251.1 million a year earlier. Analysts polled by FactSet had estimated an adjusted Ebitda loss of $165 million on average. The San Francisco-based company has said it expects to have a profitable quarter by that measure by the end of next year.

Lyft has previously said it expects to be profitable on an adjusted EBITDA basis by the fourth quarter of 2021. It did not address its profitability target in its earnings press release, and CFO Brian Roberts told CNBC’s Deirdre Bosa that he would address profitability on the call with analysts Tuesday afternoon but would not answer CNBC’s questions about a timeline.
On the call, Roberts reiterated Lyft’s profitability target of the fourth quarter of 2021 and executives focused on Lyft’s strategic partnerships and research and development efforts. They emphasized the company is investing heavily in innovative products and “stretching every dollar” when it comes to operating the business.

Key to Lyft’s future profitability is eliminating discounts and making more money on each ride. “Our focus is on profitable growth. You can say the entire industry is focused on profitable growth,” Chief Financial Officer Brian Roberts said in an interview Tuesday.

Mr. Roberts said the company spent 18% of revenue on sales and marketing during the fourth quarter, significantly less than the 33% it spent in the year-earlier quarter. For the full year, sales and marketing costs accounted for 20% of revenue, compared with 37% in 2018, he said.

The chief executive of Lyft’s rival, Uber Technologies Inc., acknowledged last week on a call with analysts that the era of growth-at-all-costs is over. At the same time, Dara Khosrowshahi moved up Uber’s timeline for being profitable on an adjusted Ebitda basis to the fourth quarter of this year. Previously, Uber expected to reach that milestone by the end of next year. Lyft didn’t move up its profitability timeline to match Uber’s. Its shares fell 5.6% in after-hours trading Tuesday, despite fourth-quarter results beating analysts’ estimates across the board.
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Todd “Bubba” Horwitz

Financial Markets and Political Commentary

 

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.