Lyft said Tuesday it lost $1.14 billion in the first three months of the year, primarily due to stock-based compensation and other expenses connected to its initial public offering.
With those costs excluded, Lyft’s net loss for the quarter was $211.5 million, a staggering amount by some standards, but roughly on par with the $234 million it lost in the same period a year earlier.
While it mostly kept its losses in line with the previous year, Lyft managed to nearly double revenue. Lyft posted revenue of $776 million for the quarter, a 95% increase from the year prior.
Despite the steep losses, Lyft CFO Brian Roberts stressed that the the company sees “a path to profitability” in its core ride-sharing business. “We anticipate that 2019 will be our peak loss year,” Roberts said on a conference call with analysts Tuesday.
Lyft stock dipped 3% in after hours trading following the earnings report, but rebounded and turned positive.
It was the first time Lyft reported earnings results since going public at the end of March. Its Wall Street honeymoon proved to be short-lived. Lyft’s stock fell below its IPO price of $72 a share on its second day of trading and continued to drop after.
Shares hovered around $60 on Tuesday ahead of the earnings results, more than 15% below the IPO price, as investors weigh concerns about a company that lost nearly $1 billion in 2018 and is waging a costly battle with the much larger Uber.
On the call Tuesday, Lyft executives claimed the ride-hailing industry is becoming more “rational,” with more emphasis on winning over customers through experience and the power of the brand, rather than through subsidized rides.
In an investor note this month, Wedbush analyst Daniel Ives said investors chose to take “a wait and see approach” to Lyft ahead of the earnings report and with Uber set to make its Wall Street debut later this week.
“Let’s not sugarcoat it, Lyft’s stock has been a head-scratching train wreck since the IPO,” Ives said.
Some saw Lyft’s lackluster debut as a warning sign for the growing list of tech unicorns racing to go public. Yet, more recent IPOs like Pinterest and Zoom remain well above their IPO price. Pinterest had comparatively modest losses, however, and Zoom is profitable.
Uber is losing even more money than Lyft. It reported a $1.8 billion net loss last year. And WeWork, another unicorn looking to go public, lost even more than that in the same period. But it might be a mistake to write off Lyft or Uber for the long haul. Some companies with lackluster IPOs, including Facebook, later turned into market darlings.