3Q23 results beat consensus expectations
- 3Q23 adjusted EBITDA of US$92m (+124% q-o-q, +39% y-o-y) beat consensus comprehensively, on margin surprise.
- Active riders were 22.4m in 3Q23, up 4.2% q-o-q (up 10% y-o-y) but still slightly below pre-pandemic levels.
- LYFT guides 4Q23F adjusted EBITDA between US$50m-US$60m, where the midpoint guidance is 13% above consensus.
LYFT beat the adjusted EBITDA estimate on margin surprise. In 3Q23, LYFT reported adjusted EBITDA of US$92m (+124% q-o-q, +39% y-o-y), above the consensus estimate of US$83m and above its guidance of US$75-US$85m. The margin surprise was due to the recent cost restructuring measures resulting in lower-than-expected operating expenses. Revenue was US$1,158m (+13% q-o-q, +9.8% y-o-y) in 3Q23, inline with consensus and management guidance, helped by workers returning to the offices and a higher number of airport rides. Active riders were 22.4m in 3Q23, up 4.2% q-o-q (up 10% y-o-y), still slightly below pre-pandemic levels (22.9m in 4Q19). This does not compare well with UBER whose monthly active platform consumers (MAPC) reached 142m in 3Q23, up 3.6% q-o-q (up 15% y-o-y). The increase in active riders was driven by LYFT offering lower prices to maintain competition with UBER. This has resulted in LYFT’s market share reaching up to 29% as of September 2023 from 27% in January. LYFT guides 4Q23F adjusted EBITDA between US$50m-US$60m, where the midpoint guidance is 13% above consensus estimates. LYFT has not issued a 4Q23F guidance range for revenue but expects it to grow by mid-single digits sequentially and that is 2% above the consensus estimate of US$1,197m for 4Q23. The company expects to generate an adjusted EBITDA between US$50m-US$60m in 4Q23F, midpoint guidance is 13% above consensus estimates. However, the management guidance for adjusted EBITDA for 4Q23 is a decline of 35%-46% q-o-q due to the impact of third-party insurance contract renewals effective from the 1st of October 2023.
UBER projects a higher increase in gross bookings and adjusted EBITDA in 4Q23 compared to LYFT. LYFT beat consensus by 11% with its adjusted EBITDA of US$92m in 3Q23, while UBER surpassed consensus by 8% with its adjusted EBITDA in 3Q23. However, LYFT beating consensus by 11% was primarily due to the cost restructuring measures, including staff layoffs. UBER anticipates a 3% – 6% sequential increase in gross bookings for 4Q23 vs LYFT’s guidance of 0% – 2.8% q-o-q. LYFT expects its adjusted EBITDA for 4Q23 to decline by 35%-46% q-o-q due to the impact of third-party insurance contract renewals, while UBER is guiding a 7%-13% q-o-q increase in adjusted EBITDA.