Lyft Inc on Wednesday said that a price war with rival Uber Technologies Inc was easing, boosting shares of both companies and allowing Lyft to raise its outlook for the year and forecast a faster path to profitability.
Lyft said increased revenue per rider would lift third-quarter sales and full-year revenue above Wall Street estimates.
That sent Lyft shares up 5 percent and shares of Uber up 3.8 percent in after-hours trade.
“We believe these price adjustments are an industry trend,” Lyft chief financial officer Brian Roberts said on a call with analysts.
He said last year was likely the peak of losses for Lyft, an improvement from the company’s previous target of reporting its biggest loss this year.
Lyft shares temporarily turned negative after it announced plans to bring forward its lock-up period — the time after a public offering in which large shareholders are prohibited from selling shares — to Aug. 19 from Sept. 24.
Lyft estimated that about 257.6 million shares could become eligible for sale when the trading restrictions ended.
A loss of US$2.23 per share in the quarter was worse than the US$1.74 per-share loss expected, on average, by analysts, IBES data from Refinitiv showed.
On average, Lyft received US$39.77 in revenue from each of its nearly 22 million active riders in its second quarter as a public company, a 22 percent rise in revenue per rider and a 41 percent increase in riders from the same period last year.
Lyft chief executive officer Logan Green said in a statement that this year’s losses would be “better than previously expected.”
The company forecast third-quarter revenue of US$900 million to US$915 million, above the average analyst estimate of US$840.9 million.
Lyft also raised its forecast for full-year revenue to between US$3.47 billion and US$3.5 billion, up from its prior range of US$3.28 billion and US$3.3 billion.
Its revenue in the second quarter rose 72 percent to US$867.3 million, above the average analyst estimate of US$809.3 million, according to IBES data from Refinitiv.
However, its net loss widened to US$644.2 million from US$178.9 million a year earlier as costs more than doubled to US$1.54 billion from a year earlier.
On a per-share basis, it narrowed to US$2.23 per share from US$8.48 per share, a year earlier, as the number of outstanding shares rose.
Shares of Lyft are down 25 percent since their market debut on March 29, erasing about US$5 billion from its market capitalization, as investors continue to question whether the ride-hailing industry can be profitable.