Connect with us

1Neus – Your Source of Hottest News Around the World

1Neus – Your Source of Hottest News Around the World

Lyft is about to reveal for the first time just how bad the coronavirus’ impact has been on its business. Here’s what to expect. (LYFT, UBER)


Business

Lyft is about to reveal for the first time just how bad the coronavirus’ impact has been on its business. Here’s what to expect. (LYFT, UBER)

Lyft is about to reveal for the first time just how bad the coronavirus’ impact has been on its business. Here’s what to expect. (LYFT, UBER)
  • Lyft is set to report its first-quarter financials on Wednesday. 
  • It’s the first look investors and analysts will have into the coronavirus’ impact on the ride-hailing firm. 
  • In recent weeks, Lyft has cut jobs and withdrawn its forecast for the year, but hasn’t hinted at how bad things might be. 
  • Visit Business Insider’s homepage for more stories.

Lyft is set to unveil its first-quarter financial performance on Wednesday afternoon, offering investors and the public their first look at the impact the coronavirus is having on the No.2 ride-hailing firm.

Unlike Uber, which has disclosed some details about the dropoff in its core ride business, Lyft has remained relatively quiet aside from withdrawing its 2020 guidance.

Here’s what Wall Street is expecting from Lyft for the first-quarter, of which only the final weeks were impacted by the full force of the coronavirus:

  • Revenue: $829.6 million
  • Net loss (adjusted): $179.6 million
  • Losses per share (adjusted): $0.64

Ride-hailing has been hit hard by shelter-in-place orders around the world, and Lyft is no exception.

Data from SuperFly, a firm that tracks anonymized spending data from 2 million users, showed Lyft revenue sinking to about 10% of its revenues earlier in the year. The impact could be even greater on Lyft’s second-quarter, with no meaningful uptick yet detected in SuperFly’s data.

Lyft data from SuperFly



SuperFly


And while Lyft doesn’t have a delivery arm as large as Uber’s to make up for some of the ride-hailing losses, its limited global footprint of only North America could prove to be a positive in the long run.

“As Uber is exposed to earlier-hit markets in Europe and Asia, we expect demand for the company to have been more greatly impacted than Lyft in 1Q20E,” Dan Ives of Wedbush told clients Wednesday. “Given Uber’s greater exposure to business and airport travel use cases, we also expect that the company will see a relatively greater flow-through impact on revenue, with a Y/Y contraction of -41% in Rides revenue vs. -17% for Lyft.”

In order to cut costs, Lyft announced in April it would lay off nearly 1,000 employees, or roughly 17% of its total headcount. Executives and high-level employees are also taking pay cuts.

“It is now clear that the COVID-19 crisis is going to have broad-reaching implications for the economy, which impacts our business,” CEO Logan Green said in a press release at the tine. “We have therefore made the difficult decision to reduce the size of our team. Our guiding principle for decision-making right now is to ensure we emerge from the crisis in the strongest possible position to achieve the company’s mission.”

On the call following Wednesday’s earnings release, company leadership will likely be pressed for insight into the effect of such cost-cutting. Lyft’s market value has been cut in half since February as the coronavirus pandemic catalyzed a larger market selloff.

“Uber and Lyft face Herculean-like challenges looking ahead as the new reality will likely change the business models of these companies (and competitors) for the foreseeable future,” Ives said in his note to clients. “Even in food delivery while consumer demand is there, competition is driving meaningful pressure on profitability.”


Loading
Something is loading.

Subscribe to our newsletter

We hate SPAM and promise to keep your email address safe

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top Stories

To Top