Lyft’s cost-cutting measures are paying off amid rising inflation and a possible economic slowdown, the company said on Thursday.
The ride-hailing firm also reported adjusted EBITDA, excluding certain items, of $79.1 million, its highest earnings call in history. Still, Lyft reported a net loss of $377.2 million, which is broader than the same quarter a year ago.
Lyft announced in late May that it would slow hiring and assess budget cuts as the broader tech sector began reining in costs due to macroeconomic concerns. Last month, the company also retrenchment of 60 employees and closed its car-rental business.
“We are taking a prudent approach to managing our business,” Lyft CFO Elaine Paul said on the company’s conference call with investors. “First of all, like many companies, we are keeping a close eye on consumer behavior. Even in a recession, transportation is a historically sustainable category of consumer spending.”
The company also offers a range of transportation options, from bike-shared rides to priority pickups, which can attract a wider base of users.
For the second quarter, Lyft reported revenue of $991 million, which beat Wall Street’s estimates and is up 30% year-over-year and up 13% from the first quarter.
Lyft said it expects revenue in its third quarter to be between $1.04 billion and $1.06 billion, a growth of between 5% and 7% over the current quarter. The company also anticipates Q3 adjusted EBITDA of $55 million to $65 million.
Lyft reported gains in active ridership to reach 19.9 million, its highest number of ridership since the COVID-19 pandemic began. This is in line with analysts’ expectations. Revenue per active rider was also the second largest on record at $49.89.
A key item for the company was figuring out how to intentionally spend on driver incentives.
When Lyft reported its first-quarter results and warned it would spend more on driver incentives in Q2, investors panicked. But those incentives seem to be paying off. Lyft said it is still on track for its rideshare volume to reach and exceed pre-COVID-19 levels.
Lyft CEO Logan Green said the company’s total number of active drivers is the highest in two years. More than half of its new drivers in Q2 were also organic signups. Some drivers may supplement their income with gig work in an attempt to offset rising inflation.