,FILE PHOTO: The Lyft Driver Hub is seen in Los Angeles, California, U.S., March 20, 2019. REUTERS/Lucy Nicholson
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(Reuters) - Lyft Inc on Tuesday posted an adjusted quarterly profit three months ahead of target as it kept costs down while rides rebounded.
The company made an adjusted profit before interest, taxes, depreciation and amortization for the first time in its nine-year history. For the three months ending in June it posted adjusted earnings of $23.8 million. The adjustments exclude one-time costs, primarily stock-based compensation, which drove a $252 million net loss.
Lyft shares rose sharply following the results but later pared gains to trade 1% higher after hours. Shares of Uber Technologies Inc were up 2%, as the Lyft results raised expectations for its larger rival, which releases its own quarterly report on Wednesday.
"Our business model has never been more healthy," Lyft President John Zimmer said in an interview with Reuters, citing greater profitability from technology and efficiency improvements the company has made over the last couple of years.
Zimmer said the company would be able to keep costs down even when ridership returns to pre-pandemic levels.
"We expect to remain profitable on an adjusted basis going forward and are hopeful that the country will continue to come back," Zimmer added.
Lyft on Tuesday said its platform had continued to grow in July despite increasing concerns over the more contagious Delta variant of the coronavirus spreading throughout the United States.
Company executives told analysts on a conference call late on Tuesday that they are carefully watching the spread of the Delta variant and also that they expect revenue per ride to decrease as incentives to attract drivers remain high in the third quarter.
"We are cautiously keeping an eye on new developments and expect continued volatility and variability among cities," Chief Financial Officer Brian Roberts said. "Future conditions can change rapidly and may impact our outlook."
Rising COVID-19 cases created a little uncertainty in the near term, said James Cordwell, an analyst with Atlantic Equities.
"The fact that the company is profitable while active riders are still 20% below pre-COVID levels suggests there is still plenty of upside in terms of Lyft’s profit potential," Cordwell added.
Analysts had expected an adjusted EBITDA loss of nearly $50 million, according to Refinitiv data. Lyft originally had said it would achieve the profitability goal by the end of this year, then moved the target ahead to the third quarter.
The earlier-than-expected profitability announcement came as ridership grew by more than 3.6 million from the first three months of the year to more than 17 million riders during the second quarter - a time when U.S. cities lifted pandemic-related restrictions and more Americans returned to the road.