Ride-hailing service Lyft is sticking with its prediction that it will be profitable by the end of next year. This while its annual loss more than doubled in 2019 to over $2.6 billion.
But the San Francisco company's annual revenue jumped 68% and ridership grew.
Lyft's prediction of a profit in the fourth quarter of 2021 is a year behind rival Uber, which earlier this month said it would make money in the fourth quarter of this year.
The static profit guidance from Lyft disappointed investors. Its shares dropped 5.6% in extended trading Tuesday to $50.92 after the company released its fourth-quarter and full-year numbers.
Lyft is predicting another big revenue gain this year, with a narrower adjusted pretax loss of $450 million to $490 million. Last year the company lost $678.9 million before taxes.
Lyft said its annual revenue grew to $3.62 billion, up from $2.16 billion in 2018.
The annual net loss included $1.6 billion in stock-based compensation and payroll tax expenses, plus $270.3 million in charges for insurance liabilities, Lyft said.
For the fourth quarter, Lyft lost $356 million compared with a $248.9 million loss a year earlier. Excluding one-time items, the company lost 41 cents per share. That beat Wall Street estimates of a loss of 53 cent per share, according to FactSet.
Revenue for the quarter was just over $1 billion, up 52% from $669.5 billion a year ago. That also beat estimates of $984.1 million.
Active riders, those who took at least one ride during a fourth quarter, grew 23% for the period, to 22.9 million, Lyft said. Revenue per rider rose by the same percentage, to $44.40, Lyft said.
Uber also continues to lose money, but the larger rival is now predicting a profit in the fourth quarter of this year, CEO Dara Khosrowhsahi said earlier this month on a conference call.
Lyft said it will focus on building a strong business, meaning that it would target riders who spend more and ride more often.
“This is our strategy and our focus on profitable growth coming to life," co-founder and CEO Logan Green said on a conference call with analysts. “We really want to win on product innovation, on customer experience, brand preference, not on things like coupons or incentives.”
In the third and fourth quarters, Lyft cut incentives below the industry average, but it hit the business, Green said. So toward the end of the year, it restored them to match competitors, he said. Yet it still beat its outlook for sales and marketing expenses, he said.
The larger Uber lost $1.1 billion in the fourth quarter of 2019, about 24% worse than the same time last year. But revenue for its rides business nearly tripled in the final three months of last year as the company picked up more passengers around the world.