Lyft is scheduled to announce Q2 earnings results after market closes on Thursday, August 4, while Uber will post its financial results before market opens on Tuesday, August 2.
Latest Results
Uber reported a net loss of $5.9 billion for the first quarter, which was primarily due to its equity investments.
Adjusted EBITDA was $168 million, up $527 million from the same quarter a year ago. Uber's revenue was up 136% year over year to $6.9 billion.
Lyft reported a first-quarter net loss of $196.9 million, or 57 cents a share, compared with $427.3 million, or $1.31 a share, in the year-ago period.
Revenue climbed 44% to $875.6 million from $609 million in the year-ago quarter.
Q2 Guidance
For the second quarter, Uber anticipates gross bookings of between $28.5 billion and $29.5 billion.
In addition, it expects adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, of between $240 million and $270 million.
Lyft CFO Elaine Paul said the company expects revenues between $950 million and $1 billion in the second quarter.
Lyft expects Q2 contribution margin will be approximately 56%, which reflects the impact of growth investments on leverage. As a result, the company expects adjusted EBITDA of between $10 million to $20 million for Q2.
Lyft’s adjusted EBITDA came to $54.8 million in Q1, implying that the company is about to eat heavily into its limited adjusted profitability in the second quarter.
3 Most Important Things to Watch
Inflation headwinds are a cause for concern
Analyst Justin Patterson from KeyBanc Capital Markets said to Uber is well positioned to be the leader in ride-sharing, and a scale player in food delivery, but he sees exchange rates and inflation increasing risks to company forecasts. Patterson added that he views Lyft as a "later-stage recovery play" as driver-supply shortages and inflation headwinds lead to slower improvements in profitability.
Both Uber and Lyft will have to deal with macroeconomic conditions affecting their businesses in the near term.
Social outings are the primary use case for ride-sharing, followed by work commutes, airport travel, and urban commutes with limited parking. The June consumer price index data showed that inflation has continued to climb, which posts a headwind for both companies.
Inflation has drastically raised the price of food. We believe more consumers will opt for dining at home as a lower-cost option."
Besides the rising costs of goods, customers are no longer stuck at home due to the pandemic restrictions that influenced them to order food straight to their doors, ending the "pandemic tailwind.
The costs of driver incentives are weighing on Lyft, Uber
Incentives to improve driver supply could weigh on margins beyond 2Q.
Driver supply dynamics could be swaying prices in Uber's favor and may erode Lyft's near-term US market share. Uber & Lyft may seek partnerships similar to Amazon-Grubhub to boost their trip frequency.
Lyft may lower its full-year 2022 guidance of 36% or higher revenue growth in the earnings call, amid fiercer competition with Uber, which is reflected in trailing 2Q engagement metrics, based on Sensor Tower data.
Uber offers an additional $1 per ride to drivers who switch to an EV — which can earn them up to $4,000 a year under the company’s Green Future program. Last month the San Francisco-based company revamped its driver app with an “EV hub” that features a charging map and made rides in EVs a premium option for passengers.
Slowing demand and higher gas prices may block recovery
Uber and Lyft shares have had a difficult year. Uber stock has fallen 45% so far in 2022 while Lyft stock has tumbled 68%. Both companies have struggled with driver supply and higher gas prices, causing them to raise prices on rides with temporary fuel surcharges.
Uber Eats (UBER) daily active users fell 7% year-over-year in June, compared to 2% growth in April and May. The analyst also noted that desktop traffic also slowed, as overall food delivery demand likely slowed in the month.
Lyft app downloads fell 10% year-over- year in 20, a stark contrast to a 30% increase for Uber's mobility app, while its monthly active users grew 18% vs. 27% for Uber.
Analyst Opinions
According to Zacks, Uber is expected to post quarterly loss of $0.25 per share in its upcoming report, which represents a year-over-year change of -143.1%.
Revenues are expected to be $7.35 billion, up 87.1% from the year-ago quarter.
Lyft is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +16.7%.
Revenues are expected to be $999.1 million, up 30.6% from the year-ago quarter.
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