Lyft reported Tuesday its second consecutive quarter of adjusted profitability as riders returned to the U.S. ride-hailing company's service.
The ride-hailing service, which competes with Uber in the ride-hailing business, reported revenues of $864.4 million in the third quarter, a 73% pop from the $499.7 million in the same year-ago period. Analysts expected revenue of $862.68, per Yahoo Finance data. If that Q3 revenue growth seems high, remember where the world — and ride-hailing companies — were this time last year. Lest you forget, last year Lyft and Uber were grappling with a business heavily affected by the COVID-19 pandemic. In short, business is getting back to normal-ish.
It's worth noting that revenue also grew 13% from the $765 million reported in the sequentially preceding quarter.
Lyft's second-quarter results beat analyst expectations for earnings and revenue, pushing shares up 14% in after-market trading.
Two items stand out in the third-quarter results: positive adjusted EBITDA, one metric of profitability, and an increase in average revenue per rider. Let's break it down.
Lyft reported a net loss of $71.5 million in the third quarter, a narrowing (meaning improvement) from the $459.5 million it reported in the same period last year.
On an adjusted EBITDA basis, Lyft reported $67.3 million worth of profit. Adjusted EBITDA strips out a number of costs. However, it's worth noting that this is the second consecutive quarter of adjusted EBITDA for Lyft, a metric that it has long promised to push into positive territory.
The company has shown it continues to improve on that metric. Its EBITDA was a positive $23.8 million in the second quarter. And, for comparison, in the same quarter a year ago, Lyft reported an adjusted EBITDA loss of $239.7 million.
The tl;dr? Lyft's adjusted EBITDA is improving.
Moving on to what drove (ahem) those revenues, let's turn to the company's active riders. Lyft reported 18.9 million riders in the third quarter, a 51% increase from the same period last year and 11% more than the second quarter. That third quarter number is actually lower than what was expected and it's still off from the peak of 22.9 million riders in the fourth quarter of 2019.
However, the average revenue per rider hit a record $45.63, a 14% increase year over year. That figure was spurred by a 6% sequential increase in ride frequency and. of course. prices for those rides.
Another interesting nugget is that new rider activations increased 47% year over year.