By Akash Sriram
(Reuters) -Lyft beat estimates for fourth-quarter profit on Tuesday and said it would generate positive free cash flow for the first time in 2024, as the ride-share platform reaps the benefits of cost cuts.
Shares of the company surged about 25% in extended trading. In 2023, the stock gained about 36%.
Under new CEO David Risher, the company implemented an aggressive restructuring plan last year, including layoffs and elimination of management layers in pursuit of profitability.
“As we can drive our scale North and hold our costs flat, we’re going to drop more money to the bottom line,” Risher told Reuters, adding that improving airport pickups and implementing other features helped growth last year.
Last week, Lyft, which has a strong presence in the West Coast, announced it would pay the difference if drivers made less than 70% of what riders paid after external fees every week.
Concerns about safety, job security, and generalized fear of artificial intelligence has made the sentiment around autonomous vehicles more hostile. Lyft, in partnership with Motional, has provided over 100,000 self-driving rides across the U.S.
“It is going to take us a long time to get to the point where people feel comfortable with the technology,” Risher said. “We’re also always in discussions with the other big players to see how we can partner with them.”
Meanwhile, rides to stadiums grew more than 35% last year from 2022, mainly driven by Taylor Swift’s Eras Tour, Beyoncé’s Renaissance World Tour and other sporting events, Lyft said.
Revenue stood at $1.22 billion in the quarter ended Dec. 31, in line with analysts’ estimates.
It forecast current-quarter adjusted earnings before interest, taxes, depreciation and amortization of $50 million to $55 million, higher than expectations of $46.3 million.
The company’s adjusted core earnings of $66.6 million in the fourth quarter beat expectations of $56.2 million.
(Reporting by Akash Sriram in Bengaluru; Editing by Anil D’Silva)
