Lyft misses quarterly revenue estimates on competition, weak US travel demand
(Reuters) -Lyft missed second-quarter revenue estimates on Wednesday, pressured by mounting competition from Uber and softening U.S. travel demand, sending its shares down 7% in after-hours trading.
Larger rival Uber Technologies (NYSE:UBER), which offers ride-hailing, food and grocery delivery business globally, beat revenue estimates and issued an upbeat forecast for the third-quarter earlier in the day.
Demand for travel to the U.S. has fallen this year, and analysts expect the slump to continue through 2025 as economic uncertainty, trade tensions and visa backlogs make the country less appealing to international visitors.
Lyft (NASDAQ:LYFT), which is expanding beyond its North America, posted revenue of $1.59 billion in the second quarter, missing estimates of $1.61 billion, according to data compiled by LSEG.
Rides on its platform grew 14% to a record high of 234.8 million, slightly below estimates of 235.9 million, according to 27 analysts polled by Visible Alpha.
Lyft recently completed its nearly $200 million acquisition of European mobility platform FreeNow and has signed a deal with China’s Baidu (NASDAQ:BIDU) to introduce the search engine giant’s robotaxis in the region.
Meanwhile, Uber, which has 20 global partnerships for self-driving technology, said it was in talks with private equity firms and banks to finance the deployment of robotaxis.
Lyft on Wednesday also announced a partnership, set to launch later this year, with United Airlines that will allow the carrier’s customers to earn rewards on all Lyft rides.
With partnerships including DoorDash (NASDAQ:DASH) and Chase already in place, Lyft’s entry into Europe positions the company to extend such collaborations into international markets.
Lyft said it expects gross bookings to be between $4.65 billion and $4.80 billion for the third quarter, well above estimates of $4.59 billion.
The company also reported earnings of 10 cents per share for the June quarter, more than double analysts’ expectations of 4 cents.
With growth stagnating in major U.S. metros, ride-hailing companies are shifting their focus to medium and smaller car-dependent cities to tap into new markets and drive revenue.
It forecast current-quarter core earnings of $125 million to $145 million, largely in line with Wall Street estimates.
